Laughing Down the Road to Climate Change Hell

How to pad your portfolio in the age of climate hysteria [Morning Reckoning] May 28, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Laughing Down the Road to Climate Change Hell Baltimore, Maryland May 28, 2024 [Greg Guenthner] GREG GUENTHNER Good Morning Reader, I didn’t find out about my county’s new plastic bag ban until I was left standing dumbfounded with an arm full of groceries at a crowded (and bagless) self checkout station. An annoyed clerk finally walked by and handed me a paper bag, charged me five cents, and sent me on my way. Thanks to the bag ban, I have a new grocery store routine. Every last-minute trip to pick up bread, milk, and bananas now involves me forgetting to return my reusable bags back in my car. I won’t remember this detail until I’m halfway through my shopping, leaving me digging into the pile of brown paper bags at checkout, paying a few extra cents, and swearing I’ll remember those pesky bags on the next trip. For the record, I don’t mind paying an extra dime every time I go to the store. A bag of chips that used to cost a buck goes for $4.99 these days, so a couple of brown paper bags aren’t going to bust my grocery budget. But I did have the distinct feeling that the plastic bag ban wasn’t actually saving anything – not the planet, not sea turtles, and certainly not me. And I didn’t have to dig very deep to confirm my suspicions. A quick search led me to a report from the Freedonia Group examining the effects of a similar single-use plastic bag ban enacted in New Jersey in 2022. The report cites that the ban worked as intended, curbing the use of plastic grocery bags 60% statewide. Of course, this doesn’t tell the full story. The issue is consumers instead started using those thick, reusable polypropylene bags. And – you guessed it – these bags require a lot more plastic (and energy) to make and aren’t even recyclable. Even worse, the report finds most of these reusable bags are only used two to three times on average before they end up in a landfill or lost somewhere in your house. I can relate. My family owns a polypropylene bag that we’ve stuffed with at least two dozen other reusable bags we’ve accumulated over the years. It sits in a closet, and occasionally gets rifled through to find “the big bag” used to gather overdue library books. In the end, unused piles of those non-recyclable bags and forgetful consumers like me are negating any intended positive effects of the plastic bag ban. The final tally for post-ban New Jersey: greenhouse gas emissions increased 500%. Mission accomplished! [WARNING: The AI Wealth Window Is About to Accelerate]( NVIDIA just announced what will be the most powerful chip of all time – “The X Chip” – a microchip so powerful that it will send the current Wealth Window into OVERDRIVE unleashing an accelerated Wealth Window like nothing we’ve seen before. But James Altucher is warning you: do NOT just invest in any AI stock… Because this announcement is creating a 100X catalyst for a specific little-known A.I. firm, already trading on the NYSE, in 2025. [Click here to learn how to play this announcement.]( [LEARN MORE]( Cruising for the Climate Even if ban-happy jurisdictions ran the numbers (which they won’t), I doubt the powers-that-be would reverse course. Sucking on soggy paper straws, cutting up six-pack rings, and toting around reusable sacks are the perfect low-effort “solutions” for the social media scrambled minds of the performative climate change generation. Carry your reusable bags at all times. Throw paint at an office building. Sit in the middle of the street. The road to climate change hell is paved with good intentions. The last decade has also brought about a profound shift in the way the media reports on climate issues, which has also managed to leak into the finance world. I won’t even bother to dive into ESG today – that’s a whole other can of worms. But we do need to discuss how the media is reframing every topic as a climate change concern. Don’t like a product or service? Just complain about how it’s a threat to the environment. You can find a perfect example of this phenomenon in the criticisms of Royal Caribbean's new mega cruise ship, Icon of the Seas. The world’s largest cruise ship cost $2 billion and just launched its maiden voyage packed with 7,600 passengers who are currently tearing across the big boat’s six waterslides, seven pools, and (I assume) more than a few seafood buffets. But the launch “sparked renewed concerns about the environmental impact of cruise tourism,” frets a CNBC piece. The boat runs on liquified natural gas, which burns more cleanly than conventional marine fuels. The issue with LNG is it contains high levels of methane, which is what has the climate alarmists up in arms. I’m not sure what anyone can do to please these people. Do they want folks cruising in older boats? No boats at all? Perhaps we could fly all 7,600 passengers to Hawaii instead? Would that produce a smaller carbon footprint? I’m not even going to attempt to crunch those numbers. Thankfully, I’ve found a hidden benefit to the hysteria… Building a “Green” Portfolio Charts don’t lie: The climate complainers are becoming extremely proficient at spotting strong investment candidates. The louder they scream about a company’s environmental issues, the stronger the trend. RCL shares have gained more than 200% off the October 2022 lows, compared to a gain of 37% in the S&P 500. That’s some serious climate change alpha. This little trick doesn’t just work on party boats. If we mosey on over the energy space, you’ll see the dirty coal stocks are beginning to firm up as they approach breakout levels. Arch Resources (ARCH) has posted a nice little run, gaining almost 30% over the last six months. I doubt the clean energy folks are too happy about that! But what about some of the alternative energy names? Will the climate complaint trick work in reverse? Let’s check in on solar. Most of these stocks remain well off their 2021 highs. In fact, the Invesco Solar ETF (TAN) has dropped almost 50% over the past 12 months. Score another point for “team dirty”. If you’re looking to find strong trends in this market, just follow the loudest climate change gripes. It’s the best way to help your portfolio go green. Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Urgent Publisher Warning]( Hi, I’m Matt Insley. I’m the Publisher at Paradigm Press. Today, I have [bad news to share]( regarding the future of Jim Rickards’ newsletter. [>> Click here now for my announcement.]( [LEARN MORE]( In Case You Missed It… Three No-Cost Ways to Improve Employee Morale Sean Ring, Editor [Sean Ring] SEAN RING Good morning Reader, I gave you ten steps to build your [Free State of Me]( a few years ago. (Feel free to read or reread that article, as it’s been a while.) One piece of advice is to start an online business, but many people don’t know how to do that. With that in mind, I thought I’d briefly shift our focus to microeconomics. Microeconomics deals with the behavior of individuals and firms in making decisions about allocating scarce resources and the interactions among these individuals and firms. It’s critical to understand many microeconomic concepts to run a successful business, but perhaps none more so than how to keep your employees or freelancers motivated. Daniel Pink authored a book called Drive, published in 2009. It’s not about cars but what drives us to do the things we do. There’s an [excellent YouTube video]( that summarizes his findings. I encourage you to watch it after you read this. In this Morning Reckoning, I’ll relay to you his excellent points. Just Pay People More! Not so fast! This works. Just not universally. Only in the right jobs with the right people. This is the most shocking finding among economists. For decades, the mantra was, “If you want higher performance, pay people more.” And this works for people doing mechanical jobs. That is, digging ditches or smashing rocks. However, this incentive no longer works once a job requires even basic cognitive skills. (As a former banker, I found this hard to believe. But bankers are a weird lot. Study after study replicates this finding.) Once the work task goes above rudimentary cognitive skills and into something like creativity, the motivation game changes. Innovative employees need something else: things that don’t involve money. Of course, you still have to pay people. But with intelligent employees, Pink says the trick is to pay them enough “to take money off the table.” Pay them enough so they don’t have to worry about cash. Once you’ve paid them well enough not to worry about their bills, what else do these employees need? The Three Things Smart Employees Need Autonomy, mastery, and purpose keep good employees motivated. I’ll explain each in turn. Autonomy According to Pink, autonomy is the ability to direct one’s work. Autonomy allows employees to feel empowered in their positions rather than like their success is out of their hands. Autonomous employees manage their time and decide how to do their work rather than having someone else dictate it. This sense of control gives them the freedom to be productive and engage in their job tasks. Anecdotally, one of the things I love most about my job here at the Reckoning and the Rude is that my publisher, Matt Insley, never tells me what to write about day-to-day. (Though he does give great advice, particularly about my headlines!) Mastery Pink discusses the second element of employee motivation as mastery. Mastery is the desire to get better at what you do. When employees are allowed to improve themselves and hone their skills, it creates a sense of satisfaction that leads to increased motivation and productivity. Why do people play musical instruments on the weekends for free? Because they want to master something (and enjoy their melodious tunes, too, I’m sure). When we focus on mastering a skill or task instead of just completing it, we often reach new levels of engagement and creativity that are essential for any organization’s success. Purpose Finally, Pink proposes that purpose is a crucial factor in motivating employees. When one feels connected with the purpose behind their job tasks and understands how their work contributes towards something larger than themselves, it gives them a sense of meaning. That can help drive them forward even when things seem challenging or boring. It helps them stay focused on long-term goals (rather than getting caught up in short-term frustrations) and keeps them motivated throughout the journey toward achieving those goals. Of course, purpose gets confused with wokeness sometimes. I’ve heard horror stories about developers getting hired at tech firms and immediately concerning themselves with hiring policies rather than writing code. That’s no good. Businesses must profit to stay in business. First, they must create revenue. Then, they must collect that revenue and convert it into cash. If you don’t have profits, you won’t have a business. But you don't have a business if you don’t have cash. So, the purpose and the business must intertwine to work well. Wrap Up Motivating competent employees requires more than just cash. Strange as it may sound, they need autonomy, mastery, and purpose to flourish. And this isn’t some kumbaya stuff. It’s core to a business's success and has been proven repeatedly. Motivation is an inherent part of any organization’s internal success strategy. To maximize your company’s potential, you’ll need motivated employees. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. He has spent the better part of the past two decades developing long-term and short-term strategies with a single goal in mind: to help everyday investors generate outstanding returns and control their financial futures. Greg’s charts, analysis, and insights have appeared in Marketwatch, Forbes, Yahoo Finance, and many other financial publications. 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