Enough Energy

“Some say the world will end in fire, some say in ice.”

Robert Frost penned that line over 40 years ago to describe his ambivalence about the future. That’s the way many investors feel about the current energy debate. The natural gas people say hey, our energy is clean and cheap. Coal people say, we can squirrel away our carbon and then we’d be cleaner than gas. If it works.

Washington has gotten into the act now with new proposals about cap and trade and global climate change. The gas and coal companies both maintain that their resource is abundant in the U.S. and would reduce our dependence on imports. But it’s unclear how Washington will develop legislation that benefits both industries and reduces greenhouse gasses. Some would say it’s impossible.

So as an investor, which do you choose? Gas, coal, or neither? One way to decide is to support both. If you have even a little money, you can purchase shares of both gas and coal companies. Then, as the economy grows and businesses need more power, you’d benefit. And if the legislators change the rules in one direction or another, you’ll do just fine.

Investors can afford to be ambivalent sometimes by playing both sides of the fence. Such an approach reduces risk, but positions you for better returns in the future. Fire or ice? Sometimes it pays to choose both.

Douglas R. Tengdin, CFA
Chief Investment Officer
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