With the December Copenhagen conference on climate change rapidly approaching, all eyes will be on America and China, the world’s two biggest greenhouse gas polluters, which combine to account for 40% of global carbon-dioxide emissions. Their commitment and leadership during the talks will be critical for laying the framework and principles for establishing a successor to Kyoto.
Whilst international agreements are undoubtedly important, the likelihood of targets being hit and the globe being saved will be just as dependent (if not more so) on the specific carbon reduction policies adopted by individual countries. With all nations embracing the adoption of renewable and alternative energy, but at different speeds, Tiburon Partners has recently launched a UCITs III compliant global long/short equity fund focused on alternative energy and natural resources to allow investors to benefit from these dynamic trends.
Tiburon Terra will focus its fundamental based investment process on identifying companies expected to benefit and/or suffer from environmental and climate change issues. Tiburon believes the long/short approach is best suited to » Read more: The case for traditional and alternative energy
The current well publicised issues surrounding Japan have provided a feast for the financial press to present negative comments over the last two months. Budget deficits, the strong yen, erosion of competitive advantages within Asia in the corporate sector, are all undeniably worrying but the key as always is to look ahead rather than become fixated with current affairs. Whilst the track record of the BOJ hardly inspires confidence, the 4-4 split on interest rates late in CY 2009 provided a good example of their reluctance to act, monetary policy is unquestionably too tight and would appear likely to ease further in 2010 despite recent comments citing a recovery in the Japanese economy. The plethora of negative expectations on the US $ is hard to argue against today but if 
Two main themes stand out in China over the past few months. 
It seems increasingly consensual that the weak dollar/ strong everything else trade will continue to year end, spurred by ‘liquidity’ and the vested interests of the financial community. While this is by no means impossible, it looks to us more like a case of wishful thinking than any underlying positive economic dynamic. Try as we might, we find it very hard to square the longer term damage done to the western economies by the circa 10% rise in genuine unemployment (i.e. the series that does not churn job seekers off the register when benefits run out) over the last year or so, the weak trend of wages and the ease with which employers can now actually cut salaries and benefits (a relatively new phenomenon in our view) and the catastrophic state of Government finances all around the world with anything other than an anaemic recovery. Yet market valuations and in some cases stock prices themselves are scaling recent highs, as if the events of the last eighteen months were merely a bad dream. Being bullish when markets are priced for Armageddon is easy and normally correct. Staying bullish when valuations are well above long-term norms requires a bit more than hoping for a greater fool.
John Payne & Steven Miller – October 2009
November 14th, 2009Investment into the markets is being made on a gradual basis. We believe that valuations are reflecting near full value in some of the major mining stocks, which generally performed strongly during October. However, valuations in the oil and gas sector remain very attractive. While valuations remain fair overall in the renewable energy sub-sector, some companies are seeing significant competition and in turn margin pressure from Chinese turbine and PV module manufacturers. » Read more: John Payne & Steven Miller – October 2009
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