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Green Investing Isn’t Just About Energy
12/05/2011 3:30 pm EST
Focus: ALTERNATIVE INVESTMENTS
While renewable power such as solar and wind comes to mind when people bring up environmentally conscious investing, this industry is green but rarely is described that way, says Fred Fuld.
Fred, I know you look at environmentally conscious investing. Are you still seeing a demand for that—an interest in environmentally conscious investing?
Yes, I am. I still have investors ask about green investing, and it’s still a big area in terms of interest.
Unfortunately, the whole industry has been suffering for several reasons, primarily the loss of funding or credits from various governments, like the United States government, Germany, and some other European countries that have been supporting alternative-energy investing. But there’s still that interest there.
How does the decline in the price of crude oil affect the interest in alternative energy investments?
That does have an effect. Obviously when the price of oil goes down, people start to look away from the green investments and look toward other areas, because obviously that competition from the high oil price isn’t there. If oil does go back up, and I’m sure it will in the next few years if not the next year, then people will take a closer look at green investing.
And when we’re talking green, we’re looking at solar, we’re looking at wind, anything else?
Yes. One of the areas that I’ve been paying a lot of attention to besides the typical ones—the oil, the wind, and all these others that you’ve probably heard about—is something called cloud computing. A lot of people aren’t aware that cloud computing is actually a green investment.
OK. The way cloud computing works is, it’s outsourcing your servers to other companies that specialize in it. What happens is, companies can use their existing computers to basically tie into these other servers that are operated by other companies.
They don’t have to upgrade their own computers as often, so there’s less disposal in landfills. You can basically have a dumb computer and run from these other services with cloud computing.
For those of you that don’t know what cloud computing is, an easy way to give an example would be if you have a Yahoo (YHOO) e-mail account, or a Gmail account, something like that, you don’t have the server in your home or your office that runs that e-mail for you. It’s basically held at Yahoo or Google (GOOG).
It’s a way of cutting back on those expenditures on computers. It also saves on staff for the corporations that utilize cloud computing, and I think it’s an underexamined area in the green energy field.
Does it also cut down on all the technology that we have to carry around—the phone, the laptop?
That’s right. Yes. As a matter of fact, the deployment of software is much easier. Instead of sending a tech person out to your cube to install a particular type of software, it’s all done remotely and it’s all centralized, so there are cost savings for the corporation in that area also.
This is a rather new initiative. Do we have a lot of players? Will they be shaken out?
There are actually a lot of players. For some corporations—like Amazon (AMZN), as an example—it’s a small portion of their business, but it is a growing portion. There are other companies like Citrix (CTXS), that’s heavily involved in it, and that’s almost a pure play.
There are actually quite a few companies that are actually getting into cloud computing, and it’s a growing area.
Do you own any of these? Have you invested in any of these for yourself?
Not currently. One of the reasons why is I talk a lot about the investments that I find interesting, and I don’t like to own what I talk about, especially when I give speeches. I try to make sure that every stock that I mention is a stock that I currently do not own.
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