Hot Stocks: Investing for Impact and Profit in a Warming World
Released July 8, 2020 from Rowman & Littlefield
Hot Stocks is the first published guide to assist individual investors in navigating the impact of global warming on their equity portfolios. The direct costs of climate change and efforts to mitigate them may become the most important drivers of the capital markets over the next two decades.
The book drills down on how Climate Change will depress or support stocks in sectors such as hydrocarbon energy, automakers, renewable power providers, regional banking, property insurance, heavy equipment manufacturers, Real Estate Investment Trusts (REITs) and agricultural chemicals. The analysis then pivots away from a US-centric focus to identify those nations around the world whose economies are best positioned to successfully adjust to the impact of rising prevailing temperatures, as well as those likely to suffer the most from the trend.
It is the opinion of this author that there is no reason an investment strategy attempting to maximize returns in an era of changing climate cannot be both lucrative and ethical. As investors and customers turn away from companies that harm the environment, the cost of capital for these firms will rise. Many such businesses will be unable to modify their practices sufficiently and will eventually face insolvency. Avoiding or even actively shorting the securities of such companies will improve investment performance. Conversely, a portfolio positioned for an era of climate change will help drive capital to those firms whose efforts maximize the chances that our progeny will not be confined to lives in the polar regions of the planet.
"[Ellman] shows how climate changes will strengthen or weaken stock sectors such as automakers, property insurance, petroleum, manufacturers, and more. Ellman also provides a global look at nations whose economies will be most and least impacted by rising temperatures. Readers new to the stock market will find this book easy to read and understand and will appreciate the investing perspective. Seasoned investors will find this guide insightful if they are thinking of adjusting their portfolios in relation to climate change." -- booklist
"Hot Stocks is an authoritative and wry guide to a business landscape going haywire. What should smart investors buy in a warming world? This book." -- McKenzie Funk, author of Windfall: The Booming Business of Global Warming
"This book is strictly for prospective and professional investors. This go-to title advises investors on the strengths and weaknesses of companies in light of climate change. It covers key industries so that an investor can determine which industry is best to invest in. Although the author focuses more on U.S. stock there are also some recommendations on the international scale. The intent of this work is to not only show how companies fear global warming with traditional industries feeling the brunt, but to also explain how new markets can prosper in a warming world. This is also supported by various statistics that an investor can apply in the decision-making process..." -- Library Journal
"A thoughtful and comprehensive look at investment strategies for public stocks that factor in our changing climate. Ellman brings depth of analysis, and some humor, to a complex and timely topic." -- Barney Schauble, Managing Partner at Nephila Advisors, LLC, Chair of Ceres
"A brisk and eye-opening tour through the major sectors of the stock market that makes clear how important the impacts of global warming will be for equity investment returns." -- Andrea Mitroff, Former Managing Director, Global Equities Lead Portfolio Manager, TIAA
"James Ellman's insightful analysis of the catastrophe that is climate change shows how we can turn lemons into lemonade by investing wisely." -- Jordan Hymowitz, Founder and Managing Partner of the hedge fund Philadelphia Financial Management of San Francisco, LLC
"Hot Stocks is easy to read, compelling, and game-changing. James Ellman shows a deep understanding of the science of climate change and the coming disruption in geopolitics, technology, infrastructure, government policies, and consumer behavior that will put traditional financial holdings at high risk. Sector by sector, he explains the perils and advantages for specific companies, regions, and countries. The reader emerges with a new way of analyzing future winners and losers to build the strongest financial position in the gathering storm." -- Margaret Cheney, Commissioner, Vermont Public Utility Commission