Author Topic: Does climate change affect your investment strategy/outlook?  (Read 3227 times)

Jacobi

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Does climate change affect your investment strategy/outlook?
« on: August 08, 2019, 10:24:05 AM »
What about in terms of where you invest in a place to live? Do people here consider the potential upcoming effects of water/food shortage, flooding, etc? This article in the Times today made me start reflecting:

https://www.nytimes.com/2019/08/08/climate/climate-change-food-supply.html?action=click&module=Top%20Stories&pgtype=Homepage

nereo

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Re: Does climate change affect your investment strategy/outlook?
« Reply #1 on: August 08, 2019, 10:38:54 AM »
It's certainly impacted how we've shopped for a home, and what we are willing to spend our money (i.e. investments) to protect that purchase.  We've been much mroe careful to examine (for example) not just the history of flooding in the area over the last few decades, but whether there has ever been in 200+ years. We're also opting for multiple fuel/energy sources, and putting substantial effort into energy conservation.  Some of those steps have an obvious and rapid ROI, while others are more driven by our desire to reduce our own impact.

In terms of actual investments... I've maintained a mostly SP500 distribution, but we're thinking more and more about changing that allocation to one that holds more environmentally responsible companies and dumps the worst of the lot while maintaining a high amount of diversity.  VFTSX is one we're looking at closely.

J Boogie

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Re: Does climate change affect your investment strategy/outlook?
« Reply #2 on: August 08, 2019, 10:54:16 AM »
Yes, I have a moderate position in Albemarle which is a dividend aristocrat lithium producer.

Lithium-based investing is not for anxious short term investors but I believe the best lithium producers will be as profitable as the oil producers of the past century (while car stocks haven't been anywhere near as much of a success story).

The companies with the most advanced technologies for extraction/refinement will be the biggest winners as battery technology is constantly evolving, requiring producers to be nimble and future focused - deciding which platforms to build upon and which to abandon.

I have considered United Rentals or Caterpillar as earth moving equipment seems like it will be somewhat in demand to cope with rising sea levels, but I think there is probably a better entry point over the 5-10 years depending on slowdown/recession potential (URI went from mid 30s in 2007 down to 3 something during the great recession, so obviously a very bad stock during recessions).

bacchi

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Re: Does climate change affect your investment strategy/outlook?
« Reply #3 on: August 08, 2019, 10:58:26 AM »
We're looking for a suitable place to retire and it is definitely affecting our choices. Water access is essential, especially in the west where it's likely to become more arid. Coastal property is out and we're also examining flood plains, as nereo mentioned.

To put it bluntly, we'd never buy property in Miami.

BicycleB

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Re: Does climate change affect your investment strategy/outlook?
« Reply #4 on: August 08, 2019, 11:20:41 AM »
Like others, I consider it mostly in housing, not stock/bond investment. But I rent out rooms in my house (roughly that's half my cash inflow), so that's still investment for me.

Between 2000 and 2010, I studied possible sea level rise from climate change and determined my city would not suffer from that in this century; we're 130 meters or more above sea level. Similarly, flooding due to rain could increase, but my house is nearly 10 feet above the pool that would form on the other side of the street if we had a much-bigger-than-100-year flood. I have improved drainage somewhat to ensure water gets off my property, just to be safe, but the worst we'd suffer is to shelter in place for a few days. We're a refugee destination when the coast floods, so potentially a beneficiary in the sense of rising prices for a property owner.

Longer term, I found and used the calculator map that projects typical weather in 2080. My somewhat green city will become desert, it says. I learned some tidbits of my city's apparently very good plans to preserve and extend water, and read studies about our water usage mix that convince me the city will remain livable, especially for the next 30-40 years (my expected lifespan...50something here). So I'm accepting whatever risk that brings.

Calculator Map:
https://fitzlab.shinyapps.io/cityapp/
Article discussing it:
https://www.wired.com/story/this-scary-map-shows-how-climate-change-will-transform-your-city/

As the city grows, I sometimes consider moving to a place with less traffic. Because of rising temps and water fluctuations, I tend to think somewhere north, with good water supplies. Occasionally I investigate. But I'm not likely to move soon; no conclusions yet.

Overall, I concluded I'm safe personally. But I advocate for carbon prices and climate mitigation, simply as a citizen.

PS. Re financial investments, I figure that climate change, like other resource constraints, is a general hindrance to business profits and stability. This should reduce progress. But on the other hand, technology continues improving, and continues to spread to people who didn't have it, as does knowledge more generally. So I assume progress will continue, just at a non-optimal rate. Fwiw, I think that slowing population growth will also slow down major economies and their stocks, but not enough to destroy returns, only enough to keep them moderate. Just guesses, but those are the ones I have.
« Last Edit: August 08, 2019, 11:41:43 AM by BicycleB »

Jacobi

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Re: Does climate change affect your investment strategy/outlook?
« Reply #5 on: August 08, 2019, 11:41:17 PM »
For those of you who are on the younger side, do you fear some kind of collapse of the economic order before reaching retirement age (in the ordinary sense of retirement age) in 30-40 years? Could climate related upheavals render stocks useless if we are without adequate basics in society?

Hirondelle

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Re: Does climate change affect your investment strategy/outlook?
« Reply #6 on: August 09, 2019, 12:30:45 AM »
Half my country is under sea level, so yes this is a relevant topic for me.

I don't have any real estate at the moment and honestly the country barely ever floods on a regular basis because we're quite prepared for floods and have lots of protective measures. It's more the altered heavy rainfall/long drought cycles that bother me. Also because I rent a tiny place there isn't much I can do to improve my own footprint housing-wise.

Investment wise I have part of my portfolio in a somewhat more environmentally friendly fund than S&P500/VTI/VSTAX. I also have some money invested in bonds for solar panels and electric lease cars. 

nereo

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Re: Does climate change affect your investment strategy/outlook?
« Reply #7 on: August 09, 2019, 04:39:27 AM »
For those of you who are on the younger side, do you fear some kind of collapse of the economic order before reaching retirement age (in the ordinary sense of retirement age) in 30-40 years? Could climate related upheavals render stocks useless if we are without adequate basics in society?

Well first I'd say it's important to know what stocks are, and what they represent.  At their core stocks are shares of ownership in companies.  So in order for stocks to become 'useless', companies need to become useless - and I think that's unlikely (if not impossible) to happen.  Certainly there are some companies which will be better suited to deal with climate change, and others which may go belly up.
But companies always need to adapt or die, and the better ones will shift their business model to meet new challenges.

The only way I can see stocks being worth nothing is if the entire financial sytem - including our use of currency and bill pay and banking - goes belly up.  At which point we're pretty much talking about a system where governments have broken down and we are reduced to teh strongest prevail.

ender

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Re: Does climate change affect your investment strategy/outlook?
« Reply #8 on: August 09, 2019, 04:42:56 AM »
For those of you who are on the younger side, do you fear some kind of collapse of the economic order before reaching retirement age (in the ordinary sense of retirement age) in 30-40 years? Could climate related upheavals render stocks useless if we are without adequate basics in society?

Not really.

It's not really actionable anyways even if it happens.

davisgang90

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Re: Does climate change affect your investment strategy/outlook?
« Reply #9 on: August 09, 2019, 04:51:22 AM »
Nope.

Malkynn

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Re: Does climate change affect your investment strategy/outlook?
« Reply #10 on: August 09, 2019, 05:45:58 AM »
For those of you who are on the younger side, do you fear some kind of collapse of the economic order before reaching retirement age (in the ordinary sense of retirement age) in 30-40 years? Could climate related upheavals render stocks useless if we are without adequate basics in society?

Not really.

It's not really actionable anyways even if it happens.

Precisely, it's not something you can prevent through some kind of investment strategy.

That said, that doesn't mean it's not actionable. It may not be actionable in terms of investment strategy, but it may be actionable in terms of life choices.

It's certainly moved me further towards focusing on living my best life now, which has had a huge impact on my housing choices, how much I'm working, and whether or not I'm willing to put off certain things I really want to do.

I'm not really worried about stocks being useless, but I am deeply concerned about the future political climate and civil unrest, what life is going to look like, and whether the retirement life I imagine will even be possible.

Villanelle

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Re: Does climate change affect your investment strategy/outlook?
« Reply #11 on: August 09, 2019, 12:08:59 PM »
It doesn't affect my equities investing.

It might affect future real estate choices.  One likely possibility for our retirement location is Las Vegas, but with water potentially becoming more scarce there, it might make us think twice.  Our two "if we end up with significantly more money than we need or are gifted winning lottery tickets" locations are areas that might be affected by flooding.  One has flooding issues now with significant rains, and the other is quite close to the ocean.  For the latter, while it doesn't get hurricanes now, it's entirely plausible that climate change could push storms further north on the west coast, meaning an area not built for hurricanes would start seeing them.

We are a ways out from these choices, but climate change might be on thing we consider when making them.  It might also cause us to consider things like solar and/or a home battery system when we otherwise wouldn't if it was merely a financial consideration. 

PDXTabs

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Re: Does climate change affect your investment strategy/outlook?
« Reply #12 on: August 12, 2019, 09:51:30 AM »
It affects my outlook but not my strategy. That is, I expect lower returns that were historically possible so I assume that I will need to save more than my grandfather did. But my strategy is still the same, I save with global market cap weighted index funds.

To quote the Federal Reserve Bank of Richmond:
We document that seasonal temperatures have significant and systematic effects on the U.S. economy, both at the aggregate level and across a wide cross-section of economic sectors. This effect is particularly strong for the summer: a 1F increase in the average summer temperature is associated with a reduction in the annual growth rate of state-level output of 0.15 to 0.25 percentage points. We combine our estimates with projected increases in seasonal temperatures and find that rising temperatures could reduce U.S. economic growth by up to one-third over the next century.
- Temperature and Growth: A Panel Analysis of the United States

theolympians

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Re: Does climate change affect your investment strategy/outlook?
« Reply #13 on: August 12, 2019, 11:35:56 PM »
No

harvestbook

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Re: Does climate change affect your investment strategy/outlook?
« Reply #14 on: August 14, 2019, 09:12:15 AM »
Personally, at my age, I figure new technologies may offset some or all of the change, and perhaps some natural responses will moderate extremes. Problems lead to solutions, or at least attempts, and that means economic growth. And I'm old enough that I likely won't see the worst effects.

My daughter and her friends think we've robbed them of a future and see little need to invest, or even really make big plans for a long life.

PDXTabs

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Re: Does climate change affect your investment strategy/outlook?
« Reply #15 on: August 14, 2019, 09:33:21 AM »
and perhaps some natural responses will moderate extremes

So far, all the evidence that we have is the opposite. That is, to the best of anyone's knowledge if we hit 2C of warming we will end up in a warming feedback loop.

We note that the Earth has never in its history had a quasi-stable state that is around 2C warmer than the preindustrial and suggest that there is substantial risk that the system, itself, will ‘want’ to continue warming because of all of these other processes – even if we stop emissions.

https://www.theguardian.com/environment/2018/aug/06/domino-effect-of-climate-events-could-push-earth-into-a-hothouse-state
https://www.pnas.org/content/115/33/8252

My daughter and her friends think we've robbed them of a future and see little need to invest, or even really make big plans for a long life.

We probably have, but that just seems like a reason to save more to me.

Malkynn

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Re: Does climate change affect your investment strategy/outlook?
« Reply #16 on: August 14, 2019, 10:09:25 AM »
My daughter and her friends think we've robbed them of a future and see little need to invest, or even really make big plans for a long life.

We probably have, but that just seems like a reason to save more to me.

Which is a great option if you are making money doing something fulfilling. However, it could be the worst possible option for someone who is miserable in their job as it assumes that increased savings will actually significantly bigger against future climate-based outcomes.

Now, obviously, not saving is just silly, but not living for today when facing an uncertain future is also silly.

Living with an expert in emergency management, and having multiple close friends in senior positions in the environment department...yeah...I'm not under the misapprehension that my savings are going to protect me in any meaningful way if major systematic breakdown occurs.

I save for a future where everything stays relatively fine. I live my best life NOW and refuse to put off happiness and be solely FIRE-focused because of the possibility of a future that isn't relatively fine.

PDXTabs

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Re: Does climate change affect your investment strategy/outlook?
« Reply #17 on: August 14, 2019, 03:39:34 PM »
Which is a great option if you are making money doing something fulfilling. However, it could be the worst possible option for someone who is miserable in their job as it assumes that increased savings will actually significantly bigger against future climate-based outcomes.

That's true. I'm functioning on the assumption that at least some nations will maintain relative order even if water, food, transportation, etc get more expensive. Also, that with enough money you might be able to make it to one of those nations, especially if you move before the SHTF.

Malkynn

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Re: Does climate change affect your investment strategy/outlook?
« Reply #18 on: August 14, 2019, 03:47:50 PM »
Which is a great option if you are making money doing something fulfilling. However, it could be the worst possible option for someone who is miserable in their job as it assumes that increased savings will actually significantly bigger against future climate-based outcomes.

That's true. I'm functioning on the assumption that at least some nations will maintain relative order even if water, food, transportation, etc get more expensive. Also, that with enough money you might be able to make it to one of those nations, especially if you move before the SHTF.


Yeah...I'm not operating under the assumption that I can amass enough wealth to financially outgun everyone else with the same intention.

That said, more wealth will *definitely* help in the event that things stay relatively stable and where the resources to relocate or reinforce are enough to work around the fallout.

Blueberries

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Re: Does climate change affect your investment strategy/outlook?
« Reply #19 on: August 15, 2019, 08:58:11 AM »
Climate change has impacted housing location(s), but not my investment style. 

For those of you who are on the younger side, do you fear some kind of collapse of the economic order before reaching retirement age (in the ordinary sense of retirement age) in 30-40 years? Could climate related upheavals render stocks useless if we are without adequate basics in society?

No, I really don't.  I believe there has been this same type of worry in every single generation that has been on this planet.  I then look at how we've overcome those issues and I think we'll be fine for a long while.  People always think "this time is different", but it isn't.  I worry about climate change being the real "different", but I don't anticipate the extreme damage happening during my lifetime.

Laserjet3051

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Re: Does climate change affect your investment strategy/outlook?
« Reply #20 on: August 15, 2019, 09:53:31 AM »
No. Not one iota.

PDXTabs

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Re: Does climate change affect your investment strategy/outlook?
« Reply #21 on: August 15, 2019, 09:57:09 AM »
Climate change has impacted housing location(s), but not my investment style. 
I believe there has been this same type of worry in every single generation that has been on this planet.  I then look at how we've overcome those issues and I think we'll be fine for a long while.  People always think "this time is different", but it isn't.  I worry about climate change being the real "different", but I don't anticipate the extreme damage happening during my lifetime.

I think that you have an overly optimistic view of how the world has been treating people over the last three millennia. How many highland Scots got to keep their traditional way of life, of did outside forces take it from them? How many Native Americans got to keep their traditional way of life, of did outside forces take it from them? How many West Africans got to keep their traditional way of life, of did outside forces take it from them? How many East Africans got to keep their traditional way of life, of did outside forces take it from them? How many Black Sea Germans got to keep their traditional way of life, of did outside forces take it from them? How many European Jews got to keep their traditional way of life, of did outside forces take it from them? Because my family is a mixture of Scottish, Black Sea German, and African American.

I think that we can expect to see climate change as an issue on par with WWII. So in a sense it won't be different, but I have yet to see the global mobilization that we saw for WWII.

FIRE@50

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Re: Does climate change affect your investment strategy/outlook?
« Reply #22 on: August 15, 2019, 10:02:13 AM »
Some companies will find ways to adapt or even new companies will be created that find ways to innovate and profit from climate change. They will rise up and be included in the S&P 500. Those that don't will fall out. This happens all the time regardless of what the stimulus was.

As far as where I live, I won't be buying property in a floodplain regardless of what the climate is doing.

Malkynn

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Re: Does climate change affect your investment strategy/outlook?
« Reply #23 on: August 15, 2019, 10:19:28 AM »
Climate change has impacted housing location(s), but not my investment style. 
I believe there has been this same type of worry in every single generation that has been on this planet.  I then look at how we've overcome those issues and I think we'll be fine for a long while.  People always think "this time is different", but it isn't.  I worry about climate change being the real "different", but I don't anticipate the extreme damage happening during my lifetime.

I think that you have an overly optimistic view of how the world has been treating people over the last three millennia. How many highland Scots got to keep their traditional way of life, of did outside forces take it from them? How many Native Americans got to keep their traditional way of life, of did outside forces take it from them? How many West Africans got to keep their traditional way of life, of did outside forces take it from them? How many East Africans got to keep their traditional way of life, of did outside forces take it from them? How many Black Sea Germans got to keep their traditional way of life, of did outside forces take it from them? How many European Jews got to keep their traditional way of life, of did outside forces take it from them? Because my family is a mixture of Scottish, Black Sea German, and African American.

I think that we can expect to see climate change as an issue on par with WWII. So in a sense it won't be different, but I have yet to see the global mobilization that we saw for WWII.

It also wasn't a given that WWII turned out well. No matter the outcome of the war, the markets would have been fine, but that says nothing about the consequences for individuals.

My main concerns are things like mass climate refugee issues and the subsequent rise of fascism.
I don't worry about markets, I worry about civil liberties and conflict. I mean, Hong Kong is a financial powerhouse and people are being beaten in the streets. There's more to the success of a life plan than the hard numbers of the markets.

The markets will end up fine, it's what it takes to get and keep them there that concerns me.

PDXTabs

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Re: Does climate change affect your investment strategy/outlook?
« Reply #24 on: August 15, 2019, 10:56:50 AM »
No matter the outcome of the war, the markets would have been fine, but that says nothing about the consequences for individuals.
...
The markets will end up fine, it's what it takes to get and keep them there that concerns me.

I'm not even convinced of that. The Russian markets went to 0 after the soviet revolution (my family got out ~10 years before the revolution). The French markets were negative for decades following WWII.

Blueberries

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Re: Does climate change affect your investment strategy/outlook?
« Reply #25 on: August 15, 2019, 11:03:47 AM »
I think that you have an overly optimistic view of how the world has been treating people over the last three millennia. How many highland Scots got to keep their traditional way of life, of did outside forces take it from them? How many Native Americans got to keep their traditional way of life, of did outside forces take it from them? How many West Africans got to keep their traditional way of life, of did outside forces take it from them? How many East Africans got to keep their traditional way of life, of did outside forces take it from them? How many Black Sea Germans got to keep their traditional way of life, of did outside forces take it from them? How many European Jews got to keep their traditional way of life, of did outside forces take it from them? Because my family is a mixture of Scottish, Black Sea German, and African American.

I think that we can expect to see climate change as an issue on par with WWII. So in a sense it won't be different, but I have yet to see the global mobilization that we saw for WWII.

You have misunderstood my response.  I was responding to fearing an economic collapse before retirement, which had nothing to do with my views on how people are treated.

Malkynn

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Re: Does climate change affect your investment strategy/outlook?
« Reply #26 on: August 15, 2019, 11:08:31 AM »
No matter the outcome of the war, the markets would have been fine, but that says nothing about the consequences for individuals.
...
The markets will end up fine, it's what it takes to get and keep them there that concerns me.

I'm not even convinced of that. The Russian markets went to 0 after the soviet revolution (my family got out ~10 years before the revolution). The French markets were negative for decades following WWII.

Yes, I meant it in the broadest and longest of terms, and in no way meant that our particular markets will be fine, just that there is always opportunity for prosperity in the face of a crash, we don't get to decide or predict who prospers though.

PDXTabs

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Re: Does climate change affect your investment strategy/outlook?
« Reply #27 on: August 15, 2019, 10:23:04 PM »
You have misunderstood my response.  I was responding to fearing an economic collapse before retirement, which had nothing to do with my views on how people are treated.

All of my examples were of people that thought that they understood their economic environment and then suddenly the rules were changed. In some cases these were politically based changes, but not in all cases. Furthermore, I'm sure that the economic changes around climate change will bleed into politics in many if not all nations.

Body Surfer

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Re: Does climate change affect your investment strategy/outlook?
« Reply #28 on: August 17, 2019, 02:44:24 PM »
We spent a few weeks at the beach this summer. Both the air and water temperature were averaging 5 degrees cooler. Somehow we survived. According to many solar scientists were are heading into a solar-minimum time period. It won't be getting warmer, but cooler.

bacchi

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Re: Does climate change affect your investment strategy/outlook?
« Reply #29 on: August 17, 2019, 03:04:30 PM »
We spent a few weeks at the beach this summer. Both the air and water temperature were averaging 5 degrees cooler. Somehow we survived. According to many solar scientists were are heading into a solar-minimum time period. It won't be getting warmer, but cooler.

So do you plan to change your investment strategy/outlook?

You can take advantage and buy some beachfront property in Miami. Just wait a few years and the flooding streets will stop flooding. I hear Tangier Island is also a good place to pick up a cheap house.

https://www.miamiherald.com/news/local/environment/article215421425.html

Quote
Miami Beach (of course) was No. 1 on the list of cities where lost property value has been the steepest, with more than $337 million in potential worth washed away in the last decade and another $337 million more at risk by 2033.

nereo

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Re: Does climate change affect your investment strategy/outlook?
« Reply #30 on: August 18, 2019, 05:45:41 AM »
We spent a few weeks at the beach this summer. Both the air and water temperature were averaging 5 degrees cooler. Somehow we survived. According to many solar scientists were are heading into a solar-minimum time period. It won't be getting warmer, but cooler.

Wrong.  just... wrong.  In so many ways.

Indexer

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Re: Does climate change affect your investment strategy/outlook?
« Reply #31 on: August 18, 2019, 02:26:16 PM »
Doesn't impact my investing.

I won't be buying any real estate near the ocean though.

VaCPA

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Re: Does climate change affect your investment strategy/outlook?
« Reply #32 on: August 18, 2019, 03:15:21 PM »
Yes, I have a moderate position in Albemarle which is a dividend aristocrat lithium producer.

Lithium-based investing is not for anxious short term investors but I believe the best lithium producers will be as profitable as the oil producers of the past century (while car stocks haven't been anywhere near as much of a success story).

The companies with the most advanced technologies for extraction/refinement will be the biggest winners as battery technology is constantly evolving, requiring producers to be nimble and future focused - deciding which platforms to build upon and which to abandon.

I have considered United Rentals or Caterpillar as earth moving equipment seems like it will be somewhat in demand to cope with rising sea levels, but I think there is probably a better entry point over the 5-10 years depending on slowdown/recession potential (URI went from mid 30s in 2007 down to 3 something during the great recession, so obviously a very bad stock during recessions).

Or to build more landfills. I think waste management is closer to being a crisis than climate change, although they are both related as environmental issues. I'm pretty surprised nobody ever talks about it.

JohnnyZ

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Re: Does climate change affect your investment strategy/outlook?
« Reply #33 on: August 19, 2019, 02:54:06 AM »
What about in terms of where you invest in a place to live? Do people here consider the potential upcoming effects of water/food shortage, flooding, etc? This article in the Times today made me start reflecting:

https://www.nytimes.com/2019/08/08/climate/climate-change-food-supply.html?action=click&module=Top%20Stories&pgtype=Homepage

In terms of where I'll live, sure. I'll avoid coasts, flood plains, but also places far inside the lands where it'll be too hot.


We spent a few weeks at the beach this summer. Both the air and water temperature were averaging 5 degrees cooler. Somehow we survived. According to many solar scientists were are heading into a solar-minimum time period. It won't be getting warmer, but cooler.

Wrong.  just... wrong.  In so many ways.

+1. It's so sad to still read this kind of BS.

ClimateMind

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Re: Does climate change affect your investment strategy/outlook?
« Reply #34 on: August 29, 2019, 01:36:09 PM »
I guess I will break with the general consensus here - climate change has not, so far, changed my investment strategy, but that's partly because I don't know what else to do. I do feel significantly less confident in the idea or early retirement via stock market dividends, than I did, say, 5 years ago. The more I read about the feedback loops that are being triggered with methane release, melting sea ice, etc., I find myself questioning the logic of maxing out my 401k in stocks (or bonds or REITs for that matter) at the expense of other types of investment, in the future, and in the present.

On a very practical level, I've been wondering if a good retirement plan should involve having a piece of land somewhere and a capacity to obtain water and live off the grid. I'm not talking about a bunker full of guns, but I am concerned about food shortages becoming an issue sometime in the next, say, 10-20 years (no one really knows), due to agricultural disruption. I am not sure I want to live in a big city with nowhere to go in such an event. Of course, buying land costs money (and time), so there's an opportunity cost - money I'm putting into my 401k is not being put into other things that might have practical implications on my (and my family's) stability and security in the long term.

On a less practical but more happiness-level, I think, what am I forgoing now for a future retirement stache that may not exist. Should I (an my family) be saving less and enjoying ourselves more - not lavishly, but just, you know, taking more time off work, buying that canoe we always wanted, etc.

So, to answer the original question, yes, but I'm not sure what else to do.

TheAnonOne

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Re: Does climate change affect your investment strategy/outlook?
« Reply #35 on: August 29, 2019, 02:17:52 PM »
I think that humans will simply adapt. It might not be pleasant, but I don't see the doomsday, at least to rich countries. Coastal cities in the US are extremely wealthy and will be able to install protections. Remember the climate crisis is something that will unfold over the rest of the century. In that time we could probably rebuild most cities inland.

There are a good number of promising technological solutions as well. Including carbon capture. I can't say they will "solve" everything but maybe lessen the blow, especially deployed at scale.

PDXTabs

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Re: Does climate change affect your investment strategy/outlook?
« Reply #36 on: August 29, 2019, 03:29:29 PM »
On a very practical level, I've been wondering if a good retirement plan should involve having a piece of land somewhere and a capacity to obtain water and live off the grid. I'm not talking about a bunker full of guns, but I am concerned about food shortages becoming an issue sometime in the next, say, 10-20 years (no one really knows), due to agricultural disruption. I am not sure I want to live in a big city with nowhere to go in such an event. Of course, buying land costs money (and time), so there's an opportunity cost - money I'm putting into my 401k is not being put into other things that might have practical implications on my (and my family's) stability and security in the long term.

I definitely have a friend who has invested in Willamette Valley farmland as part of his portfolio. It isn't my strategy, but I'm not sure that it is a bad strategy.

Jacobi

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Re: Does climate change affect your investment strategy/outlook?
« Reply #37 on: August 31, 2019, 10:38:03 PM »
Thanks for all of the replies. I guess I'm sort of baffled that more people don't see news about the Amazon wildfires, etc. and think, "50-year retirement plan? I'm not sure our planet will be stable and habitable in 10 years!" But maybe I'm naive.

ClimateMind

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Re: Does climate change affect your investment strategy/outlook?
« Reply #38 on: August 31, 2019, 11:27:09 PM »
Jacobi,

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Thanks for all of the replies. I guess I'm sort of baffled that more people don't see news about the Amazon wildfires, etc. and think, "50-year retirement plan? I'm not sure our planet will be stable and habitable in 10 years!" But maybe I'm naive.

Well you are not alone, as you see from my post. But it's one thing to think, "Oh shit, I'm not sure this is a good idea," and another thing to come up with an alternative. Can you share how it has impacted your retirement strategy? Or your future planning if you are assuming widespread societal breakdown?

There are a good number of promising technological solutions as well. Including carbon capture. I can't say they will "solve" everything but maybe lessen the blow, especially deployed at scale.

Well, to put it mildly, I really hope you are right about that!

Trevor Reznik

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Re: Does climate change affect your investment strategy/outlook?
« Reply #39 on: September 01, 2019, 03:00:03 AM »
If you really believe in it I guess you could retire earlier and take a higher withdrawal rate, factoring in the end of habitable life on the planet!

maizeman

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Re: Does climate change affect your investment strategy/outlook?
« Reply #40 on: September 01, 2019, 06:00:03 AM »
On a very practical level, I've been wondering if a good retirement plan should involve having a piece of land somewhere and a capacity to obtain water and live off the grid. I'm not talking about a bunker full of guns, but I am concerned about food shortages becoming an issue sometime in the next, say, 10-20 years (no one really knows), due to agricultural disruption. I am not sure I want to live in a big city with nowhere to go in such an event. Of course, buying land costs money (and time), so there's an opportunity cost - money I'm putting into my 401k is not being put into other things that might have practical implications on my (and my family's) stability and security in the long term.

In scenarios where society doesn't break down, it's probably more effective to have saved up a lot of money you can use to buy food grown by people with lots of experience farming even if shortages cause the price of food to shoot up than buying farmland and trying to grow food yourself if you can no longer afford to buy it.

In scenarios where the food shortages are bad enough to cause society to break down (no food for sale in the cities at any price), having a legal deed to land may not do a good job of giving you de facto control of that same land to grow food for you and your family in a scenario where people are starving.

There are some middle ground options as well like moving to smaller cities and towns closer to agricultural regions. Or buying and moving to the farm well before any sort of crisis, so you have time to gain experience raising crops and building connections and social capital with your  new neighbors in a non-crisis situation where losing your first sorghum crop is an annoyance rather than a disaster.

If you find yourself thinking a lot about being able to grow food to feed your family, I highly recommend "The $64 Tomato," not to discourage you but to get a humorous introduction to many of the challenges involved. https://www.amazon.com/dp/B003I1WXY4/

Malkynn

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Re: Does climate change affect your investment strategy/outlook?
« Reply #41 on: September 01, 2019, 07:55:01 AM »
On a very practical level, I've been wondering if a good retirement plan should involve having a piece of land somewhere and a capacity to obtain water and live off the grid. I'm not talking about a bunker full of guns, but I am concerned about food shortages becoming an issue sometime in the next, say, 10-20 years (no one really knows), due to agricultural disruption. I am not sure I want to live in a big city with nowhere to go in such an event. Of course, buying land costs money (and time), so there's an opportunity cost - money I'm putting into my 401k is not being put into other things that might have practical implications on my (and my family's) stability and security in the long term.

In scenarios where society doesn't break down, it's probably more effective to have saved up a lot of money you can use to buy food grown by people with lots of experience farming even if shortages cause the price of food to shoot up than buying farmland and trying to grow food yourself if you can no longer afford to buy it.

In scenarios where the food shortages are bad enough to cause society to break down (no food for sale in the cities at any price), having a legal deed to land may not do a good job of giving you de facto control of that same land to grow food for you and your family in a scenario where people are starving.

There are some middle ground options as well like moving to smaller cities and towns closer to agricultural regions. Or buying and moving to the farm well before any sort of crisis, so you have time to gain experience raising crops and building connections and social capital with your  new neighbors in a non-crisis situation where losing your first sorghum crop is an annoyance rather than a disaster.

If you find yourself thinking a lot about being able to grow food to feed your family, I highly recommend "The $64 Tomato," not to discourage you but to get a humorous introduction to many of the challenges involved. https://www.amazon.com/dp/B003I1WXY4/

Agreed.

In addition, starvation isn't the main concern when it comes to food shortages, violence is, along with the erosion of civil liberties that goes along with violence

In a major food shortage, owning land and growing food may entitle someone to exactly ZERO say over how that food is distributed.

DH worked for years in emergency management, assessing cities and regions for how robust they are against every imagined threat. There's even a Zombie Apocalypse plan, no joke.

The myriad fallout patterns of civil disruption are almost unfathomable when you actually look at them. Whether someone in a city or someone on an isolated farm is more robust, it really comes down to too many factors to individually anticipate.

A lot of people ask DH what's the best way to be prepared, and he says "live a life without regrets".

If climate change has any affect on people's investing perspective, it should be to accept that you can't financially maneuver your way to total safety and security, and you cannot control for the future, so don't forget to live today.

PDXTabs

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Re: Does climate change affect your investment strategy/outlook?
« Reply #42 on: September 01, 2019, 10:35:35 AM »
Thanks for all of the replies. I guess I'm sort of baffled that more people don't see news about the Amazon wildfires, etc. and think, "50-year retirement plan? I'm not sure our planet will be stable and habitable in 10 years!" But maybe I'm naive.

I don't see any evidence of catastrophe on that time-frame, but if you post some links to the contrary I'd be happy to read them.

SwordGuy

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Re: Does climate change affect your investment strategy/outlook?
« Reply #43 on: September 01, 2019, 10:43:23 AM »
For those of you who are on the younger side, do you fear some kind of collapse of the economic order before reaching retirement age (in the ordinary sense of retirement age) in 30-40 years? Could climate related upheavals render stocks useless if we are without adequate basics in society?

My wife and I grew up with drills where we got under our school desks to "prepare" for the nuclear bombs going off.    So, no, we really don't worry about those things.    There's nothing we can really do that will prevent them from happening.

There are a host of things that can go horribly wrong with "life as we know it" and, looking back at ALL of recorded history, there always has been such a list of things that could devastate the society people lived in.

We do reasonable precautions and don't sweat it.

ChpBstrd

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Re: Does climate change affect your investment strategy/outlook?
« Reply #44 on: September 10, 2019, 03:02:17 PM »
We're looking for a suitable place to retire and it is definitely affecting our choices. Water access is essential, especially in the west where it's likely to become more arid. Coastal property is out and we're also examining flood plains, as nereo mentioned.

To put it bluntly, we'd never buy property in Miami.

How strange is it that America’s most booming real estate markets are either 10 feet above sea level on the coasts or in areas undergoing desertification like California or Arizona?