I just read an interesting article, entitled “Don’t let ‘Climategate’ Melt Down Your Portfolio” by Avner Mandelman, that all investors should read, especially those who have put their money into “Green” stocks. In the article the author writes:
“If someone is pushing a theme for investing, check to see how they might profit from it.”
I think that’s excellent advice !
“You’ve probably read about “Climategate” – how thousands of hacked e-mails from climate scientists revealed that they colluded to fudge their conclusions about global warming, told each other to destroy incriminating e-mails and perhaps even dumped raw data to mask the fraud.
Why did it work? Because the falsified conclusions appealed to people’s good nature, and because the conspirators co-opted above-average rhetoricians to deliver their message.
Now why am I going on about this? For two reasons: First, because global warming is an investment theme that a few brokers are pushing; so, if you are a theme investor, be careful. Second, this sort of revelation is a perfect teaching moment of the madness of crowds.
Similar irrational manias included global cooling in the 1970s (when investors were urged to invest in thermal insulation, and the like); the Club of Rome’s fear that we’re running out of resources; the Internet dot-com bubble, when insane stock prices for companies without revenues were the norm; and others of the same ilk: mass hysterias that allowed a few media-savvy promoters to take the money of the many, by preying on their credulity, their emotions or both. Like global warming now.”