Since this newsletter has just moved over to the Substack platform as of July 16, 2021, it feels like I should re-publish the first edition from January 4, 2021 to provide context to the portfolio (actually, there were half-dozen editions in 2020 before the official Portfolio was created on 1/1/21).
Below is the inaugural edition on the Clean Energy SPAC Portfolio 2021. Subscribe today to have each new edition sent to your in-box.
Happy New Year! And good riddance to 2020. :-)
Welcome to the 2021 Clean Energy SPAC Portfolio
In December we identified 44 SPACs investing in clean energy and have purchased 36 of them to include into our portfolio to begin 2021. All stocks were purchased on the morning of 12/31/20 on the Public.com website where you can see the portfolio live whenever you would like (link to my Public profile to follow along in real-time: public.com/DTfromGB ). The beginning value of our portfolio is exactly $10,000 to start out 2021. Each month the Portfolio Return Comparison Table will be reported out. Therefore, a portfolio update will be emailed on a monthly basis, targeting the first Monday of each month. (a reduction from the weekly updates I had been sending for the last six weeks - you're welcome).
Finding Benchmarks to compare our returns
S&P 500 and NASDAQ are the most common benchmarks, but for this portfolio we need a couple more. Since most of our holdings are considered Small Cap firms, it makes sense to add the Russell 2000 index (use $IWM, an ETF). It seems to make sense to add a Clean Energy ETF. Although there are many to choose from, I selected the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) because it invests in mainly domestic firms (take a look at that 2020 performance!). Here is a description of this fund:
QCLN is a unique member of the Alternative Energy Category, as this ETF invests in companies that are engaged in a variety of different activities related to several green energy sub-sectors. By including companies focused on biofuels, solar energy, and advanced batteries (among others), QCLN casts a wide net of exposure. That, along with a relatively deep basket of individual companies, may make it appealing for those seeking broad-based exposure to alternative energy sources.
For anyone that thinks this is a "sure thing" portfolio, likely to appreciate a ridiculous percentage again in 2021, you should read from the skeptics. Here is a good article warning about SPACs (let me know if this link doesn't work for you). SPACMANIA - Buyer Beware | Seeking Alpha
Here is the initial portfolio for the market open on Monday.
(Note: since I bought the stocks in the morning of 12/31, there is an individual ticker discrepancy between the "buy" price and the end of year "close" price. In the end, the whole portfolio difference was only 36.72 which I added to cash balance to ensure we have exactly $10,000 portfolio balance on 1/1/21).
Investment Strategy
Invest $100 into new SPACs that are searching for companies in the clean energy space.
Add $50 more to SPACs when they announce the target company (as long as the firm is considered clean energy; if not clean energy, then sell).
Add another $50 when the reverse merger finalizes and the stock begins to trade under the new ticker symbol.
Hold until 12/31/21 to track and compare against our benchmarks.
Evaluate each new IPO-ed SPAC in 2021, and if it is searching for target companies in the clean energy space, invest $100 of our portfolio cash into them as soon as possible.
If I were starting out today to invest in these stocks, I would pick out 1-2 of the transitioned companies, 2-3 of the announced companies, and 3-4 of the searching companies to create a mini-portfolio of the ones I liked best. Keep the investment level small to get started, but get into the game (some online brokerage platforms allow you to set up model portfolios, but not with real money. This is another way to play along.)
Note that there are 8 other stocks previously identified, but were not available on Public.com to purchase. If/when they do become available, they will be added to our portfolio. Below is that list:
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Public.com investing: public.com/DTfromGB
Twitter: Clean Energy SPACs (Dan) (@DTfromGB) / Twitter
You Tube: (646) Clean Energy SPACs - YouTube
(no new videos yet, but plan to start doing a few videos in the future)
This note is for educational and entertainment value only. It is not investment advice.
Let me know if you have any questions. Next edition is planned for Monday, February 1st.