By Shelburne, Vermont Financial Advisor Josh Kruk
May 6, 2022
My investing career started in the bond market. Bond people have a reputation for being a bit dour and pessimistic. Basically, we’re thought of as cranky, glass-half-empty types. It kind of makes sense. If you buy a bond and hold it until it matures, your upside is that you get your money back plus interest. If you buy the wrong bond (e.g., Lehman Brothers bonds in 2008), your downside can be a loss of most of your investment. With a skewed payoff profile like that, it's no wonder that bond people are constantly looking under rocks for the thing that could go terribly wrong.
If you ask people who know me well, they’ll tell you the shoe fits. That’s probably why my head started to go to a pretty dark place when reading this week about another round of wildfires starting up in the western states and the severe ongoing droughts in those same areas. In Nevada, they’re at the point of removing grass so they don’t have to water it anymore. It's easy at times to get into a negative spiral.
A helpful solution to these mini-funks has been to actively seek out a counter-balance. One thing I’m perpetually positive about is human ingenuity and our inherent desire to solve puzzles. Challenges are often best overcome by incentivizing and unleashing the creativity of smart people. Every year, Bloomberg’s “Pioneer” program identifies a group of early-stage innovators working on cutting edge technology to accelerate decarbonization. This year’s focus areas included increasing renewable energy storage capacity, scaling up carbon removal technology, and decarbonizing aviation.
The twelve companies identified in 2022 are not household names and are still a long way from really moving the needle. But a quick tour through their websites revealed some pretty interesting technologies and talented, mission-driven entrepreneurs striving to make them a reality. My favorite is this one because it involves recycling carbon dioxide to create useful products. Even after watching their video, I can’t say I truly understand how it works, but the idea is pretty compelling.
The fun part is that this is only a small sample of the ideas, climate-focused and otherwise, being worked on by people and companies that none of us have heard of yet. Most of them will ultimately fail. But some will be game-changing. It’s one of the reasons the world never ends up looking like what you thought it would look like 10 years ago. Which is a good thing for those of us in the glass-half-empty camp.