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COMMENT

Carbon bubble a risk to Canadian investors? If you accept climate change, are we going to be able to burn all carbon sitting in reserve? Risk that these assets will be stranded, either by government regulation or by economics. Carbon bubble of about 20 trillion dollars. Proven reserves of about 27 trillion dollars. Lower demand or higher price may make us want to keep reserves in the ground. If it happens all at once, investors will get burned. Lot of oil, gas, materials, mining on the TSX, plus banks have a lot of exposure here. Won’t happen in next 2 years. But horizon of 20, 30, 40 years will see a serious writedown of carbon assets on these publicly traded companies.

Unknown
BUY

A yieldco that he likes from a dividend perspective. Has some natural gas, so not a pure play on renewable energy. But if you want to take a step toward green investing, this company makes a lot of sense. A lot of the volatility in this stock is due to the broader stock market. Tension between growth plays versus impending crash. Really likes it. Slated to do well.

electrical utilities
DON'T BUY

A play on hydrogen fuel cells. Went heavy toward autos, and explosive growth just hasn’t come through. Sector has consolidated around lithium ion. Market is going with the best technology, and the cheapest, and that’s lithium ion. Worries about Ballard. Bigger opportunities for hydrogen are in larger transportation, like ships.

misc industrial products
BUY

Good time to buy? Geothermal play in Latin America, especially Nicaragua. Very much a growth play. Only one project up and running, but tremendous opportunity here. Canada already has renewable infrastructure. But a lot of countries don’t yet. Bit more of political risk, that’s why it’s a growth play and not a dividend play.

INDUSTRIAL PRODUCTS
WEAK BUY

Sell and cut losses? Would own it for the dividend. Might want to consider buying more. Primarily a coal utility, but spun off wind assets, which he likes. Unfortunately now, about 41% of their portfolio are Australian nat gas assets. Doesn’t love it, prefers pure play renewable energy stocks. Lots of opportunity here, and not going to be short of cash. Would want clarity on projects and strategic direction moving forward.

Energy Infrastructure, Industrials & Utilities
WEAK BUY

Have to be careful with tech companies in this space. Something becomes a darling, and the market thinks everything will move in this direction. Doesn’t see this happening. Doesn’t want to bet on one technology here. Natural gas is seen as a bridge fuel. But with energy moving in a greener direction, what will happen to natural gas? Be a little bit cautious. Likes them, but they’re not going to transform the system. Nice medium term solution until we move to full electric.

0
WEAK BUY

Interesting Alberta company. Very efficient process for recovering waste heat. Their fate is tied to fate of companies in the oil sands. Really likes this technology. In 10, 20 years time, would want to see them pivot to other forms of waste.

oil / gas field services