In its recent research paper, Morgan Stanley found that green stocks saw a huge price rise, despite negligible changes in the underlying company’s performance in 2020.
Do you guys think this green buzz is justified given the long term prospects or are we in a bubble fueled by speculation and empty promises (ahemm Tesla ahemm)?
I think a lot of the rise has to do with Biden’s new trillion-dollar infrastructure deal which shall pump hundreds of billions a year in sustainable tech-esque companies.
Companies that have even the slightest bit of “Green Energy” outlook over the next few decades are potential beneficiaries of the said fiscal stimulus. I think this is what the market may be pricing in.
What do you think?
Great point about the infrastructure package. However, I feel the prices are usually unsustainable because it is premised on weak fundamentals. These green firms are evaluating themselves on the basis of the patents that they have which are not yet commercialized. They do not know if these patents will reach the development stage or if they will even be profitable or not.
At the same time, there will be outliers that make it big in the sustainability arena. I guess we’ll just have to keep our eyes and ears open.