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It matters if said "global leaders" happen to manage loads of cash. When Blackrock's CEO states his firm will divest away from fossil fuels in 2020, this has (

by avip 7y ago

It matters if said "global leaders" happen to manage loads of cash. When Blackrock's CEO states his firm will divest away from fossil fuels in 2020, this has (sadly imo) roughly the impact of e^9 climate scientists ringing alarm bells for a decade.

xiphias2 7y ago
Saying that Blackrock's getting out of coal, or that it will take a position of $1T in sustainable energy is just saying that they will invest profitably. At this point it's cheaper to build new sustainable energy plants (and sadly natural gas) than to maintain running coal plants.
- hodder 7y ago
  “...is just saying they will invest profitably”... Couldn’t be more false. Existing coal companies can easily make money for investors when they trade at earnings yields of 25%. no new coal plants need to be built. Coal can even be phased out. If you get 6-7 more years of earnings at a flattish 25% earnings yield you can do very well. This is why deep value investing works on average.
  - Cthulhu_ 7y ago
    As a layman: Governments all over are phasing out and closing coal plants in favor of newly built sustainable energy plants. That means sustainable energy companies will be on the rise while coal will be on the decline.
    - hodder 7y ago
      Which makes intuitive sense but doesn't take into consideration the price you pay for the investment, which is the primary factor in determining your returns.
there_the_and 7y ago
The Blackrock letter did not state that they are divesting from fossil fuels in 2020. It stated that they are planning to remove companies that generate more than 25% of their revenue from thermal coal production (i.e., thermal coal producers that are not diversified, meaning the large diversified thermal coal producers are not affected) from their discretionary active investment portfolios, which only accounts for a minority of their assets. Note that thermal coal is already declining in the US and other markets due to increased competition primarily from natural gas, a fossil fuel which, like oil, the letter says nothing about. https://www.blackrock.com/corporate/investor-relations/blackrock-client-letter https://www.blackrock.com/corporate/investor-relations/black...
taneq 7y ago
In all fairness, if he's doing so because of the climate scientists' bell ringing then you could argue that it's their impact that's being seen.

by avip 7y ago

xiphias2 7y ago

Saying that Blackrock's getting out of coal, or that it will take a position of $1T in sustainable energy is just saying that they will invest profitably. At this point it's cheaper to build new sustainable energy plants (and sadly natural gas) than to maintain running coal plants.

hodder 7y ago
“...is just saying they will invest profitably”... Couldn’t be more false. Existing coal companies can easily make money for investors when they trade at earnings yields of 25%. no new coal plants need to be built. Coal can even be phased out. If you get 6-7 more years of earnings at a flattish 25% earnings yield you can do very well. This is why deep value investing works on average.
- Cthulhu_ 7y ago
  As a layman: Governments all over are phasing out and closing coal plants in favor of newly built sustainable energy plants. That means sustainable energy companies will be on the rise while coal will be on the decline.
  - hodder 7y ago
    Which makes intuitive sense but doesn't take into consideration the price you pay for the investment, which is the primary factor in determining your returns.

there_the_and 7y ago

The Blackrock letter did not state that they are divesting from fossil fuels in 2020. It stated that they are planning to remove companies that generate more than 25% of their revenue from thermal coal production (i.e., thermal coal producers that are not diversified, meaning the large diversified thermal coal producers are not affected) from their discretionary active investment portfolios, which only accounts for a minority of their assets. Note that thermal coal is already declining in the US and other markets due to increased competition primarily from natural gas, a fossil fuel which, like oil, the letter says nothing about. https://www.blackrock.com/corporate/investor-relations/blackrock-client-letter https://www.blackrock.com/corporate/investor-relations/black...

taneq 7y ago

In all fairness, if he's doing so because of the climate scientists' bell ringing then you could argue that it's their impact that's being seen.