TAKING RISK TO SUCCEEDALTERNATIVE ENERGY INVESTING RISK
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Taking risk to succeed shouldn’t mean committing financial suicide. Investing is risky. Alternative energy investing is extra risky. _________________________________________________________________ FEW WINNERS, LOTS OF LOSERS Huge success stories like Intel or Microsoft rise to the surface only rarely. Any guide to investing in high-risk growth stocks will tell you that the odds of finding one of these jewels are small. For every winning investment, there are dozens of losers, and only a very rare few of the winners rise to the level of an Intel or Microsoft. Sadly, it’s more likely that you will run into one of the alternative energy investment scams; which is yet another reason we strongly suggest staying with mutual fund and ETF investing. _________________________________________________________________
PICK A WINNER - - - AND LOSE
In addition to the already high risk level of most new technology investments, alternative energy capital investments face the addition risk of succeeding, only to have big oil companies discover huge oil reserves that can drop energy prices to disastrous levels. Just after the Arab Oil Embargo in the early 1970s, billions were lost by folks taking risks to succeed in alternative energy investments. They lost money not because the ideas were bad, but because vast oil discoveries like the North Sea Oil Deposits were developed just when billions of dollars were being dumped into alternative energy technologies. The new oil developments were so large that the price of oil dropped far below the price alternative energy technologies needed to support operations. And oil prices remained cheap for over two decades. If oil prices today drop below about $35 a barrel, most alternative energy technologies will find it difficult, if not impossible, to produce energy at a price that can keep them afloat financially. That equates to roughly the same percentage drop in oil prices that occurred in the 1980s. Should you avoid alternative energy investing risks because you fear that oil companies, who are also taking risk to succeed, will discover yet more vast oil deposits that will drive oil prices down to $35 a barrel, or less? That’s a very good question. _________________________________________________________________
HERE'S WHAT WE SUGGEST:
1, Read our Fossil Fuel Oil page. As you read be sure to explore subjects like peak oil theory, biogenic oil theory, and abiogenic oil theory. By learning something about those subjects in particular, you will be better equipped to understand what’s involved in taking risk to succeed with alternative energy against big oil. 2. Read our Canadian Oil Sands and Green River Oil Shale pages to understand more about the vast unconventional oil deposits already under development by big oil companies. 3. Read about the Global Warming Controversy . As you read, decide which side of the argument you’re on. If you believe that we are, indeed, into a cycle of global warming caused by human activity, then you will want to be careful about which alternative energy investments you get involved with. Some alternative energy projects such as oil sands and oil shale mentioned above are not ‘green’ in that they typically produce more CO2 than conventional oil production. You may also have a problem with nuclear power as an alternative energy resource. Electric cars and plug-in hybrids will use electricity from the electrical power grid. A lot of folks, including a number of ‘green’ advocates, now believe that nuclear power can safely provide that power for generations to come. Check out our Pros And Cons Of Nuclear Power page and its links to help you decide. 4. Read more. The areas mentioned above are good starters and we hope they help you make good energy investment decisions; but they are just primers, so keep reading. You may want to start by reviewing the Energy Investing pages for a brief introductory guide to investing in high risk growth stocks like alternative energy. 5. Evaluate the risks as you see them and make an investment decision. Taking risks to succeed in alternative energy investments should mean taking well evaluated and well understood risks. _________________________________________________________________
Taking risk to succeed in alternative energy investments involves extra financial risks you need to be aware of. But it’s worth repeating that, given the worsening political and economic problems that stem from the global oil industry as it exists today, not investing in alternatives may be the greatest risk of all. If you do make alternative energy investments, be absolutely sure that you invest ONLY money you can afford to lose. This is a high-risk game. Treat is like a trip to your local casino. _________________________________________________________________ _________________________________________________________________
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