June 2, 2006

California Energy Circuit, Vol. 4, Issue 22

 

 

(excerpt)

 

For those of us without the inclination or means to invest in the stock market, stock indexes are a useful and entertaining fiction, not unlike the constellations described in horoscopes. Basically, you take a group of publicly traded companies—however loosely related in terms of size, location, industry sector, or trading platform—and combine them into a defined entity called an “index.” Then you follow their ups and downs through the financial universe of daily stock market trading. ...

 

Jamie Wimberly, CEO of the Distributed Energy Financial Group and co-creator of DESI, points to the WilderHill grouping as a seminal influence. “What Rob did was give institutional investors a vehicle to get into this sector in ways they couldn’t before,” he said. Part of the reason that DESI was created last year was to put that same kind of focus on distributed energy technologies. “We think this is real and this vision has social benefits associated with it,” Wimberly said.

 

“We’re witnessing a slow but sure transformation from centralized operation of the grid to a smart grid. With an index you can start thinking about that change and get away from a standard-industry-code way of looking at the economy.” ...

 

DEFG this week issued results of a survey that shows professionals believe the distributed energy sector will have positive income growth this year, and that it represents a good investment.

 

For me, a professional nonparticipant in the stock market, the value of these indexes comes less as investment vehicles and more as a way to understand how the energy industry is evolving. They are useful for identifying which companies will be capturing new economic opportunities as well as contributing solutions to social problems while meeting energy policy goals.

 

Stock price indexes are not the only way to judge the value of these firms and measure their success or failure, but like the daily horoscope, they are readily accessed in newspapers and on the Internet.