Guest contribution by Leo Goldstein
The COVID-19 epidemic and the response to it have devastated the economy. However, alternative energy stock indices have quadrupled on average, including a 150% growth ahead of the US election.
The market performance of Alt-Energy (alternative energy) can be captured in the performance of the leading Alt-Energy ETFs (Exchange Traded Funds): QCLN, PBW and TAN. In addition to Alt-Energy, these ETFs also hold non-energy manufacturing and service companies that are critically dependent on climate alarmism. Thus, the assets of one of these ETFs can be used as a financial index to track climate alarmism.
After no growth and no moderate losses in the past five years, Alt-Energy grew by an average of 150% in the first year of COVID-19 (October 25, 2019 to October 30, 2020; see Fig. 1 below). More tellingly, most of these gains came during the era of draconian and highly politicized lockdowns. see fig. 2 below.
There is no economic explanation for this steep rise in Alt-Energy’s valuation. A society that is shut down or blocked uses less energy and thus all energy supplies would suffer. Even alt-energy companies that mainly produce carbon credits would suffer, as carbon credits are mainly bought by companies that produce or consume real energy. In addition, the substantial loss of income from the sudden economic downturn would leave little or no budget for anything other than dealing with the current crisis.
One possible explanation for Alt-Energy’s growth is the growing political forces of climate alarmism / global governance. Many companies openly celebrated the COVID-19 pandemic as an opportunity to take power, starting with “Address[ing] the climate emergency and the transition to net CO2-free emissions ”. On June 3, 2020, Klaus Schwab, the head of the World Economic Forum, called for a major reset and stated:
“There are many reasons to do a major reset, but the most urgent one is COVID-19.”
“[the pandemic] showed how quickly we can radically change our lifestyle. Almost immediately, the crisis forced companies and individuals to abandon practices that had long been considered essential, from frequent air travel to work in an office. Likewise, the population groups have mostly shown the willingness to make sacrifices … “
Valuation of old energy ETFs quadrupled between October 25, 2019 (prepandemic) and February 12, 2021 (the first date of this letter). Of course, almost half of those gains came after the November 3rd election. Since this is an expected outcome for political thugs if their party wins, this article only covers the period before the election: October 2019 – October 2020.
During that period, the S&P 500 index, which tracks some of the largest companies, only grew 8%. Small businesses are largely devastated and private sector employment is in tatters. The following diagrams compare the old energy with the S&P 500.
The blue line stands for the S&P 500. The pink, brown and purple lines stand for Alt Energy ETFs. The green and red bars at the bottom of the chart are trading volumes that are not in use. All periods start and end on Friday. The diagrams show changes from the first day of the period in percent.
Figure 1. The first 12 months of COVID-19 worldwide; October 25, 2019 – October 30, 2020; weekly
(Yahoo! Finance)
Note the jump in Alt Energy ETFs in February 2020 at the start of the pandemic.
Figure 2. 6 months of irrational standstills, May 1, 2020 – October 30, 2020; Every day
(Yahoo! Finance)
May 1, 2020 to October 30, 2020 was the time of unjustified standstills and closures. Some states had shutdowns and others had shutdowns after it became clear that COVID-19 had a low death rate, especially among younger people. At this point, COVID-19 treatments and prophylaxis were found and “the curve” was bent. See COVID-19 hospital admission rates and death rates (which were approximately four weeks ago).
Remarks:
- This article was written first before Alt-Energy Texas failed. The blackouts in Texas have shown how dependent we are on a reliable power supply from the grid. There are almost no local emergency power options. Even gas-powered heating devices need electricity to work. In many cases, people have lost their internet services (thanks in part to Obamanet) before they even lost power. Most people rely entirely on the internet for information, emergency and / or evacuation orders, etc. Many don’t even have AM / FM radios. This is a big problem that I hope states will address.
- It should be noted that prior to the pandemic, Alt Energy ETFs had a relatively low beta. The beta values for PBW, TAN and QCLN were 1.0, 1.2 and 1.5, respectively, as measured against S&P 500.
- Big tech is another industry that has seen significant gains during the shutdowns and lockdowns. In the case of Big Tech, the cause is known. Lockdowns forced most business interactions and personal relationships through the internet, which is dominated by big tech. My observation from early June remained correct – countries suffering from the “domination” of big tech (America and Europe, excluding Russia and Ukraine) had the worst results during COVID-19, especially when considering indoor population density and health capacities have been adjusted.
- Legacy energy or “clean energy” refers to energy sources other than fossil fuels, nuclear power plants, and large hydroelectric plants.
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