July 4th, 2011

An Introduction to the Quercus Trust

The Quercus Trust is an estate planning fund that was set up by millionaire mathematician turned philanthropist, David Gelbaum, who made his money off of stock prediction algorithms that he formulated while still a teenager. The firm has holdings in a large number of greentech companies and the primary interest seems to be solar power.

Although the amount that has been invested by the trust has been quite substantial to say the least (approximately $400million spread out over about 40 companies) Quercus has remained very low profile for many years. The firm does not issue press releases and interviews with its founder, Mr. Gelbaum, are extremely rare. This apparent secretiveness has caused many people to speculate about the nature and workings of the company.

However, while the lack of publicly available info on the company can seem somewhat suspicious, and the elusiveness often raises questions (Even their webpage only reveals a mysterious picture of acorns.) the real reason for the low profile may very well be the extremely private nature of founder, David Gelbaum.

Mr. Gelbaum seems to take the term ‘low-profile’ to a whole new level, and, until recently, he had successfully remained off the radar and out of the spotlight. Although he frequently donated millions to charitable and conservational organizations, he always did so anonymously and recipients of the funds were asked to sign confidentiality agreements.

It wasn’t until February 8, 2010 when he decided to accept the position of CEO of Entech Solar (one of the solar power companies that Quercus Trust has invested in) that he decided that taking on a more public role is what would best benefit the company.

Albeit, David Gelbaum’s idea of ‘public’ is what other would call somewhat reclusive. He has only had a handful of official interviews to date, and some of those were over the phone. He does occasionally make public appearances, but these are always low-key and he avoids all the publicity hoopla that many other company execs use to boost their businesses. Though widely circulated last year on social media sites like Facebook and Twitter, rumors that Gelbaum had appeared showing off a new muscular physique in his own insanity workout review were quickly squashed by his publicist. No copies of the supposed video seem to exist online.

So, while the Quercus Trust’s inner workings are shrouded by a veil of mystery, it doesn’t necessarily mean that they are doing something wrong. In fact, some people feel that the lack of attention-whoring is refreshing, and they can see that it allows Gelbaum to focus on his investments and continue to finance, and be involved in, many promising new start up companies that are focusing on renewable energy and sustainable resources. There are even unconfirmed reports he might venture into the education area by acquiring and giving the hooked on phonics program a makeover. However, that is mere speculation at the moment.

Many of his investments could be viewed as him supporting science experiments, which is not usually a very sound investing decision. These projects could go either way, but if they turn out as hoped, Mr. Gelbaum could be looking at very large returns in the not too distant future.

Here is rough list of the companies the Quercus Trust has holdings in:

Solar Power:

-          Daystar

-          Solar Enertech

-          Emcore

-          Spire

-          Octillion

-          Ascent Open Energy

-          Akeena

-          Enviromission

-          Cyrium

-          Sencera

Smart Grid and Energy Services:

-          Beacon

-          Standard Renewable

-          GridPoint

Biofuels:

-          BlueFire

-          Dynamotive

-          Environmental Power

-          LiveFuels

Batteries, Storage and Electronics:

-           Firefly

-           Electro Energy

-           Axion

-           Ener1

-          Odyne

Buildings and Efficiency:

-           China Solar

-           Thermoenergy

-           Energy Focus

-           Lighting Power

Food and Water:

-          Thermo Energy

-           Promethean

-           Colorep

-          World Water

Ocean Power:

-          Hydro

Hydrogen:

-          Nanoptek

Wind:

-          Magenn

These companies make up the majority of Quercus Trust’s portfolio.

July 4th, 2011

David Gelbaum’s Quercus Trust

David Gelbaum is the greentech industry’s largest private investor. He has invested over $400million in clean-tech and sustainable resource companies through his personal family fund, Quercus Trust. Many of the companies that he supports through his investments could be considered ‘science experiments’, and don’t look like they will be taking off and making money any time soon. But, Gelbaum doesn’t seem to mind waiting, as he’s sure that these investments will pay off in the long run. He is very interested in the area of solar power, with at least eleven of the 40 or so companies he has in his portfolio being devoted to some form of solar energy. With the prices of diesel and other fuels constantly rising, there is no doubt that his solar investments may one day earn him much more than his original investment.

Aside from him seeing into the future and anticipating the future needs of a world that is now so dependent on fossil fuels, he is also interested in greentech because of his love for the environment and his dedication to conservation. He is the largest single donor to the Sierra foundation, anonymously donating more than $100million to the conservationist group, and he has personally bought up thousands of acres of pristine mountain and desert land, only to hand it over to the government on the condition that they turn the land into a protected area. His giving doesn’t stop there either, and he has donated hundreds of millions to other worthy causes and charities.

Despite his enormous wealth, the Quercus Trust founder lives a very quiet lifestyle, shunning publicity and doing everything as anonymously as he can. He takes a big interest in every company he invests in, and is involved in a lot of the decision making and behind-the-scenes planning of the companies. In the beginning of 2010 he even became the CEO of Entech Solar, one of the first solar companies that Quercus Trust had invested in. Until that time, he had been virtually unknown, but decided to come out from behind the curtain, so to speak, to help Entech Solar boost their image. He has given a handful of interviews since that time, but has still remained very low-profile. Recently, there has also being talk of him venturing into new pastures by buying Radiancy the beauty company which make No! No! Hair Removal and Luminess Air. This rumor was originally reported in this no no hair removal review although since then there has been no news of this piece of speculation becoming a reality.

To date, Quercus Trust’s portfolio holds stock in at least eleven solar power companies, three smart grid and energy service companies, five battery, storage and electronics companies, four companies in the buildings and efficiency category, four in food and water, and one each in ocean power, hydrogen and wind energy.

These investments will probably take years to mature and make any type of profit. But, until then, Quercus Trust will continue to support them and help them make the progress that they need to in order to bring new green technologies to people everywhere, for a better future for everyone. There has been a lot of speculation about and whether or not David Gelbaum can continue to invest in these small start-up companies. But, as far as anyone can tell, he is in it for the long haul and is dedicated to facilitating the success of the ideas these companies are working on.

July 4th, 2011

Equity Investment Tips

If you are thinking about getting into equity investing, but you’re not quite sure how to go about it, here are a few tips.

Since equity is not a short term investment, you should only use money that is ‘extra’. Keeping invested in a company for at least five years is a good policy and, if you can be patient, ten would be even better. Short term, you may even lose money on your investment, but long term, you have a very good chance of making a profit, or at very least coming out even.

When choosing an investment, the main thing that you should look for is how the company manages their existing resources. Looking at a company’s management efficiency is one of the only ways that you can determine whether or not the investment will make you money in the long run. The equation used to determine the return on equity, or ROE, is the sum that you get when you divide the company’s income by its book value or equity.

Looking at the ROE of a company is a good way to determine whether it is a good investment or not. But you should keep in mind that the ROE may not be 100% accurate all the time. Some companies manipulate their earnings to make it look like they are making more than they actually are. And high tech companies may have intangible assets that are not recorded on the books, but which raise the market value of the company.

One of the best ways to go about investing in equity is through a mutual fund or exchange traded fund. These platforms make it easier for you to diversify your investments, and reduce the risk of big losses. They can also help reduce your investment costs.

Investing in equity gives you stake in whatever company you choose to invest in, so choose wisely. Avoid making emotional decisions that would bias you towards or against certain companies. For instance, don’t invest in an obviously failing clock making company just because you like clocks. And, don’t discriminate and avoid investing in a successful honey producer, just because you hate bees. Silly examples; yes, but you get the point. Be smart, and try to think into the future as much as possible.

To be a successful investor, you need to be able to diversify your investment portfolio. This means that you should invest in companies and markets that are not closely interrelated. This can be difficult, because most markets are interrelated in some way. But, by investing in a wide range of markets, you reduce the risk of loss if one the markets starts failing. If you have all your assets tied up in one area, then if that company or market starts doing poorly, your total investment will be at risk.

Knowledge is power, especially when it comes to investing. The more you know about the different markets and companies you are invested in, the more capable you will be of making sound financial decisions that will ensure your future prosperity. So, do your research, and find out as much as you possibly can before making a final decision.

July 4th, 2011

What is Equity Investment?

Investing in the stock exchange has always been big part of business in the United States, but now, with the many stocks lower than they have been in years, more people than ever are investing in the stock market. Many of the investments are equity investments. This is because, although investments on equity don’t give immediate returns, in the long run they are safer bets than many other types of investments.

Thousands of people are already inadvertent equity investors, because the money deposited in a bank or credit union is then invested in the bank’s portfolio. Most equity investors never hold the actual securities, or certificates, that they own. Often they rely on the bank that they hold their account with, or with a fund manager, who has access to the stock certificates.

Equity can be defined as the value of a property, or company, minus any debts or liabilities incurred by the company. Investing in company’s equity means that you will own a share of the company, in form stock certificates, and these stocks are devaluated by the amount of debt held by the company. For this reason, it is important to look at the company’s management efficiency, and determine whether they are making the most profit off of the resources that they have available.

One unlikely source to look for investment opportunities is the web. Even though the dot com bubble has well and truly gone, there are still opportunities to be had. These can range from small and low risk investments – such as this beer making website which was recently acquired – to more obscure offerings like holiday advice portals and specialist music networks. While some of these may seem lacking in the value, to the training eye these are excellent low cost, high reward profit centers and should not be ignored or dismissed.

The most common form of equity investments though are professionally managed equity investment funds, like mutual funds. These types of funds are called pooled share funds. This sort of fund makes things easier on inexperienced investors, as the fund manager will do most of the work. Segregated funds are what institutions and individuals make use of if they want to be more active in the investment. Venture capitalists are investors that invest in the equity of start-up companies. These ‘loans’ are higher risk than investing in an established business, but if the company takes off, they investor will get very high returns on the initial investment.

The stocks that are owned through equity investment do not usually entitle the share holder to actively have a say in the direction and management of the company. It doesn’t give the individual the rewards and responsibilities of direct oversight. The only type of stock that even comes close to giving individual share holders a say in the company, are common stocks in certain companies. These sometimes give stock holders voting privileges pertaining to the particular kind of stock they hold. A share in the company’s equity simply means that you will have a portion of the company’s gains or losses, which result from the management decisions of the company, on a daily basis.

July 4th, 2011

Getting Started with Equity Investments

Equity investment is probably the most common form of investment, as it is relatively low risk, and can give great returns if the individual is willing to wait a few years. Although the stock market will always be a risky environment to keep your money in, smart investing strategies, like good equity investment, will help to reduce the risk of major losses. The equity market has been very reliable and the returns have been excellent over time, and most experts feel that it will continue like this in the future.

One misconception that many people have, when it comes to equity investing, is that you must wait for the perfect time to invest. While good timing is always great, it is impossible to predict how the stock exchange will change from one moment to the next. You may be able to read certain signs and observe trends, but the truth is that everything can change without any prior notice. Even professional investors that are paid huge sums to try to predict stock market movement don’t always get it right. For instance, there was a recent story circulated about an investment made in an Online Opera Directory service which very quickly fell flat for it’s investors. You will find that most people have been burnt at least once by a similar investment and the trick is to learn from these mistakes so they don’t happen again.

 So when is the best time for you to start investing? The answer: as soon as you have money to invest. Setting aside a portion of your monthly earnings and designating it towards your equity investments is the best thing you could possibly do. It may not be much, but the sooner you start investing, the better. The stock market is always going up and down, so investing early gives you the time you need to ride out any inevitable falls in the stock market, and puts you in place to reap the rewards of the next ‘up’ market.

Consistent investing is the best way to build wealth. Dollar cost averaging is a very good strategy that will help to reduce the average costs of you investments over a period of time. Dollar cost averaging, also called a constant dollar plan, is a strategy in which you invest a fixed amount in one particular portfolio or investment, periodically. This means that you buy more stock when stocks are down, and less when they are up. This can help you to decrease the occurrence of some forms of financial risk that can happen when investing a large lump sum in something. However, when using this strategy, it is important to think about the transaction costs, which would build up month by month, and determine whether the benefits outweigh the cost.

Exchange traded funds and mutual funds are often safe bets to invest in. They help to diversify your stock portfolio and reduce the risk of under performance if you only invest in one particular stock or market niche. Diversity is the key to any investment strategy, and investing in one of these funds can help you to diversify your stock holdings without too much hassle.  Index mutual funds and exchange traded funds can also help you save on investment costs, since they are often very low cost investments and can even be as low as 0.20 %.

Investing in anything can be scary, but the rewards can also be very great. If you are ready to take the plunge and start investing for your future wealth, then having the right tools is the key. The most important weapon you should be armed with is knowledge. So, learn as much as you can and try your best to understand the environment you are investing in, before you make any large investments.