To be fair to myself, I might say that my personal portfolio represents the first two methods of diversification due the fact I donât really have the investing cash to risk on a philosophy. And in fact the year-to-date results of my â50/50 safe and greedyâ IRA are handily doubling the performance of the S&P 500, even after last weekâs post-rate hike sell off. But perhaps that sell off, the worst since a similar scare in the first week of March, means itâs time to examine the returns of the kind of investment style I started EnviroInvestors.com to preach.
The site began in December last year as a practical response to Jared DiamondÃ¢ÂÂs apocalyptic social history, Ã¢ÂÂCollapse,Ã¢ÂÂ and its warning that ecological devastation will basically make moot all those gains from Ã¢ÂÂemerging marketsÃ¢ÂÂ stock funds if developing nations and world superpowers donÃ¢ÂÂt turn to more sustainable economic practices. My idea was to join the grassroots shareholder movement to persuade companies that sustainability-focused business practices make good sense on more than a feel-good level. I started out writing about sustainability indexes, environmental awards, and companies like Interface floorcoverings, which has a stated goal of becoming the world leader in sustainable home interior products by 2020.
Considering that self-interest may be a stronger driver than altruism for most investors, I began last month to think I simply needed to go after the next hot stock Ã¢ÂÂ the next Berkshire if you will Ã¢ÂÂ like everybody else. Then I went back and looked at the results of the pro-environment companies IÃ¢ÂÂd wrote about in the high of my sustainability vision quest.
What I found surprised me.
Most of the companies IÃ¢ÂÂd screened for the Enviroinvestors philosophy Ã¢ÂÂ through awards and corporate press releases Ã¢ÂÂ have actually done very well. Maybe even better than my 50/50 portfolio.
LetÃ¢ÂÂs take a look:
l The first company I wrote about back in December was Whirlpool (WHR), as the appliance-maker joined the Dow Jones Sustainability World Index. Whirlpool went on to buy Maytag, and its stock is up nearly 6 percent.
l Two days later, I called Novelis (NVL) a Ã¢ÂÂStrong buy for the sustainability-focused investor.Ã¢ÂÂ The aluminum recycler is up 33 percent since then.
l I then wrote about buying into Lloyds TSB (LYG) on a tip and after reading its environmental platform. The bank is up 11.8 percent.
l No big news for Interface (IFSIA), but I thought Enviroinvestors.com owed them some play as a leader in a visionary business model that must put them out on a limb sometimes with Wall Street. Maybe I should stop being such a doubting Thomas: Interface is up 45 percent since that post and traded much higher through April.
l Running low on news ending out 2005, I ran analyst John DorfmanÃ¢ÂÂs 2006 picks through the enviroinvestors screen, and liked Devon Energy (DVN) and Schnitzer Steel (SCHN). This year, DevonÃ¢ÂÂs down 4 percent, SchnitzerÃ¢ÂÂs up 26 percent.
l In my first post of 2006, I praised Potlatch (PCH) for a biofuels initiative, but called its $50 price too high for its earnings. The forest-products company is down 31 percent since then.
The site soon joined PETA in talking up Safeway (SWY), which has since dropped 2 percent. Maybe that makes it a better buy Ã¢ÂÂ like two of the other companies I adore as a retailer were back then in January. Starbucks (SBUX), up 14 percent; E-Trade (ET) up 12 (good for investors, maybe not for folks like me who donÃ¢ÂÂt get free checks anymore). I recommended shopping at Target (TGT) over Wal-Mart (WMT), and touted Whole FoodsÃ¢ÂÂ (WFMI) reusable green bags. Wal-Mart is up 3.5 percent, Target dropped the same, and Whole Foods has had a roller-coaster ride down 5 percent.
Warner Brothers (TWX) helped make âSyrianaâ carbon neutral, but its stock hasnât moved much. American companies added to a top 100 sustainability list released at the World Economic Forum in Davos have been a mixed bag. Intel (INTC) is down despite a dividend scheme, and Johnson & Johnson (JNJ) flat, but UPS (UPS) and Bank of America (BAC) are up, 8 and 10 percent.
I pumped ArcadisÃ¢ÂÂ (ARCAF) principles and financials: itÃ¢ÂÂs up nearly 50 percent since late January.
So what have I learned from reviewing the first couple months of my little-followed, pro-environment, investing philosophy? Well, since three of my strongest recommendations Ã¢ÂÂ Novelis, Interface and Arcadis Ã¢ÂÂ are up 33, 45 and 49 percent in just a few months, maybe altruism does pay.