02 November 2008

Review: Investing in Renewable Energy by Jeff Siegel of Green Chip Stocks

Book cover of Book cover via AmazonInvesting books are almost as tough to time as investments. Books are time-bound. What's happening when you write it will no doubt change by the time the book is published. The market may peak or collapse. Or the stock you recommend may tank. The company you featrue, as happened with VeraSun (VSE) this week, may go bankrupt.

Better to stick to the web for real-time recommendations and commentary (see my StockTwits post from a few weeks ago).

And investing books in an emerging sector in a volatile market are even tougher to time.

2007 was a banner year for alternative energy. The clean tech sector garnered more than $117 billion in new investments that year.

By January 2008, alt-energy stocks were imploding and pundits were crowing about the bursting of the next bubble.

Then all hell broke loose, the credit and mortgage crisis hit, the economy tanked, and the price of oil plummeted from its all-time highs.

October 2008 will go down in history as one of the blackest months on Wall Street.

What a time to launch a book, let alone a book about alternative energy investing.

But that's exactly what happened with Jeff Siegel, who, along with Chris Nelder and Nick Hodge, have just released Investing in Renewable Energy: Making Money on Green Chip Stocks (Wiley, 2008).

The good news is the authors run an investment advisory service that focuses exclusively on renewable energy and the organic and natural foods markets. You can subscribe to his service and e-newsletter at GreenChipStocks.com.

To their credit, they do print a disclaimer about the relevancy of printed media in an age of instant analysis, and suggest you don't take investment advice from the book without doing your own research.

That said, there is enough worthy and relevant information in this book to make it worth having on your shelf along with last year's The Clean Tech Revolution, by Ron Pernick and Clint Wilder, if only for the insights into the sector and the general knowledge about what to look for. (See my review of Clean Tech Revolution here.)

Messrs Siegel, Nelder, and Hodge do know the sector well and have thoroughly researched the various technologies, from solar and wind to geothermal and efficiency. They don't spend as much time visiting with companies as Pernick and Wilder did, but they do offer insights into the benefits and drawbacks of some well-known and some lesser known publicly traded stocks in the sector.

Their overall premise is that "green chip" investing will pay off in ways that blue chip investing once did. Recent Green Chip newsletters indicate they are still bullish on the sector, albeit with tempered enthusiasm over the short term.

"There is little doubt that the companies operating within this industry today," write the authors, "will ultimately become the dominant players int he overall energy generation and transportation mix of tomorrow."

Why? Because "our insatiable energy consumption and lack of conventional supplies to meet our growing demand," the authors write, "this is probably one of the safest long-term bets you can make."

I'd emphasize the LONG term in that sentence and, if you buy this book, make sure you subscribe to Green Chip Stocks as well to keep up on market conditions that will affect the overall profitability of renewable energy.

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