As concerns about climate change push the world economy toward a lower-carbon future, investing in oil may seem a risky bet. For the long term, that may be true.
Yet for the moment, at least, oil and gas prices appear likely to continue to rise as the economy recovers from the pandemic-driven shutdown of millions of businesses, big and small.
These countervailing trends — increasing demand now and falling demand at some point, perhaps in the not-too-distant future — create a dilemma for investors.
The good news is that an array of traditional mutual funds and exchange-traded funds are available to help them navigate these uncertain waters. Some funds focus on slices of the industry, such as extracting crude oil and gas from the ground or delivering refined products to consumers. Others focus on so-called integrated companies that do it all. Some spice their holdings with some exposure to wind, solar or other alternative energy sources.
International Energy Agency forecast that oil consumption was not likely to return to prepandemic levels in developed economies.
“World oil markets are rebalancing after the Covid-19 crisis spurred an unprecedented collapse in demand in 2020, but they may never return to ‘normal,’” the I.E.A. said in its “Oil 2021” report. “Rapid changes in behavior from the pandemic and a stronger drive by governments toward a low-carbon future have caused a dramatic downward shift in expectations for oil demand over the next six years.”
alternative energy funds. Many enable investors to zero in on discrete segments of the industry.
The biggest holdings of the Invesco WilderHill Clean Energy E.T.F. are producers of raw materials for solar cells and rechargeable batteries or builders and operators of large-scale solar projects. The $2.9 billion fund yields 0.49 percent and has an expense ratio of 0.7 percent.
The First Trust NASDAQ Clean Edge Green Energy Index Fund focuses on applied green technology. Its biggest holdings are Tesla, the American maker of electric automobiles; NIO, a Chinese rival in that field; and Plug Power, which makes hydrogen fuel cells for vehicles. Also a $2.9 billion fund, it yields 0.24 percent and has an expense ratio of 0.6 percent.
The First Trust Global Wind Energy E.T.F., as its name suggests, targets wind turbine manufacturers and servicers, led by the Spanish-German joint venture Siemens Gamesa Renewable Energy and Vestas Wind Systems of Denmark, as well as operators such as Northland Power of Canada. This $423 million fund yields 0.92 percent and has an expense ratio of 0.61 percent.
A year after starting construction on its first European auto assembly plant on the outskirts of Berlin, Tesla is complaining that German regulations are too slow and inflexible, risking a delay in the opening of the facility.
“Obstacles in German law governing permits are slowing down the necessary industrial transformation and thus the transformation of transport and energy,” Tesla said in a 10-page letter, which was seen by The New York Times.
Tesla wants to open its“gigafactory” as soon as June, and is hiring up to 12,000 workers to build as many as 500,000 electric vehicles a year. But the Office of Environment in Brandenburg, the federal state that encircles Berlin, has yet to say the factory can open.
Tesla sent the letter to the top administrative court in the region in support of a lawsuit filed by Environmental Action Germany that charges the federal government with not doing enough to keep to the targets of the Paris Climate Accord. The letter is similar to a “friend of the court” brief, which are not common in German courts, and it was unclear whether the German judges would even consider it.
Elon Musk, the chief executive, clashed with officials last year over his efforts to keep the plant running during the pandemic.
Government authorities insist they have done everything in their power to speed up the regulatory process for Tesla, including securing logging and building permits, completing a process that normally takes 11 months in just four weeks. Along the way, the Tesla plant has faced protests by environmentalists and extensive public hearings. Many of the complaints center on the amount of water the plant will consume.
In the letter, Tesla charges that any delay in opening the plant would hinder European emission goals by keeping fossil-fuel burning vehicles on the road.
Tesla cars are popular in Germany, but not everyone is applauding its move.
“It’s surprising that Tesla feels badly treated at all,” wrote the conservative-leaning Welt, a daily newspaper, noting that the future factory — sometimes known as Germany’s fastest construction project — was given every advantage on state and federal level.
The Tesla letter said that the permit process was too slow and not flexible enough in dealing with changes to the original application.
“This discourages necessary investment in clean energy projects and infrastructure and makes it virtually impossible for Germany to meet its climate targets,” it read.
PORTLAND, Ore. — Under the rear hood of Chris Steinbacher’s Lamborghini Huracán sits a Chevy engine. Sure, it’s a twin turbo, and, yes, it pumps a menacing 900 horsepower to the wheels, but the pedigree is Detroit, not Italy. And the rest of the car was basically put together in Portland.
Lamborghini purists may want to cover their eyes now.
The left-for-dead Lambo is one of Mr. Steinbacher’s salvaged supercars. He bought it — what was left of it, anyway, after a fire burned it nearly in two — for $40,000, and it was delivered via forklift. (A new Huracán can approach $300,000, and Mr. Steinbacher’s now-tricked-out 2016 model hovers in that same stratosphere.) Parts for this resurrection cost about $50,000, a discounted total that he kept down with the help of sponsors on his YouTube channel, B Is for Build, which has close to 1.5 million subscribers.
Flooded Ferraris and mangled McLarens are easily found on auction sites like Copart and Impact Auto Auctions. Most people playing in this realm work strictly with cash, Mr. Steinbacher said, although financing can sometimes be arranged. What happens after your wreck rolls off the delivery trailer is far more complicated, but with more money and dedication, a dream car may be within reach.
supercars at a small fraction of the used market price, Mr. Steinbacher was “kind of hooked,” he said. He started to buy totaled cars and fixed them up in his backyard.
Fixing cracked-up cars isn’t easy “unless you’re one hell of a gambler,” Mr. Steinbacher said. “The hunting part isn’t hard — anyone can Google around and find salvaged-car auction sites and find supercars on there.” Most times the car will require a shipment, however, and you might not see it in person, let alone get a test drive.
“You’ve got six to 10 pictures to try and assess the extent of the damage and how much it’s going to cost to fix,” he said.
This is a skill that can take years and many mistakes to master. “Eventually I turned a camera on to track my progress,” he said, “and started posting it on YouTube.”
Rich Rebuilds. A computer science major in college, Mr. Benoit “kept working my way up to Teslas, Audis and now the BMW i8,” he said.
“Supercar is a funny word,” Mr. Benoit added. “I’ve built many high-end cars, like Teslas, Audi RS7s, but the i8 is my first ‘supercar’ per se.” All have been built in his family’s garage. His personal favorite retrofit? Swapping a V-8 engine into a Tesla.
Tommy’s Window Tinting.
Specialty Equipment Market Association show, known widely as SEMA.
LS Chevy V-8 engine and transmission swap, twin turbos and a custom carbon-fiber body rounded out his one-of-a-kind Lambo.
To Mr. Steinbacher’s knowledge, no one had fashioned a manual-transmission Huracán before. Much less one that once looked as if it had hung over a campfire like a singed marshmallow.
His next vision is to take a donated 2016 Huracán chassis and build it into a full-blown Mint 400 off-road racecar, “turning it into a purpose-built endurance desert racer,” he said.
Tim Min once drove BMWs. He considered buying a Tesla.
Instead Mr. Min, the 33-year-old owner of a Beijing cosmetics start-up, bought an electric car made by a Chinese Tesla rival, Nio. He likes Nio’s interiors and voice control features better.
He also considers himself a patriot. “I have a very strong inclination toward Chinese brands and very strong patriotic emotions,” he said. “I used to love Nike, too. Now I don’t see any reason for that. If there’s a good Chinese brand to replace Nike, I’ll be very happy to.”
Western brands like H&M, Nike and Adidas have come under pressure in China for refusing to use cotton produced in the Xinjiang region, where the Chinese government has waged a broad campaign of repression against ethnic minorities. Shoppers vowed to boycott the brands. Celebrities dropped their endorsement deals.
But foreign brands also face increasing pressure from a new breed of Chinese competitors making high-quality products and selling them through savvy marketing to an increasingly patriotic group of young people. There’s a term for it: “guochao,” or Chinese fad.
HeyTea, a $2 billion milk tea start-up with 700 stores, wants to replace Starbucks. Yuanqisenlin, a four-year-old low-sugar drink company valued at $6 billion, wants to become China’s Coca-Cola. Ubras, a five-year-old company, wants to supplant Victoria’s Secret with the most non-Victoria’s Secret of products: unwired, sporty bras that emphasize comfort.
The anger over Xinjiang cotton has given these Chinese brands another chance to win over consumers. As celebrities cut their ties to foreign brands, Li-Ning, a Chinese sportswear giant, announced that Xiao Zhan, a boy band member, would become its new global ambassador. Within 20 minutes, almost everything that Mr. Xiao wore on a Li-Ning advertisement had sold out online. A hashtag about the campaign was viewed more than one billion times.
China is undergoing a consumer brand revolution. Its young generation is more nationalistic and actively looking for brands that can align with that confidently Chinese identity. Entrepreneurs are rushing to build up names and products that resonate. Investors are turning their attention to these start-ups amid dropping returns from technology and media ventures.
When patriotism becomes a selling point, Western brands are put at a competitive disadvantage, especially in a country that increasingly requires global companies to toe the same political lines that Chinese firms must.
a jump in Tesla deliveries. IPhones remain immensely popular. Campaigns against foreign names have come and gone, and local brands that emphasize politics too much risk unwanted attention if the political winds shift quickly.
Still, interest in local brands marks a significant shift. Post-Mao, the country made few consumer products. The first televisions that most families owned in the 1980s were from Japan. Pierre Cardin, the French designer, reintroduced fashion with his first show in Beijing in 1979, bringing color and flair to a nation that during the Cultural Revolution wore blue and gray.
Chinese people born in the 1970s or earlier remember their first sip of Coco-Cola and their first bite of a Big Mac. We watched films from Hollywood, Japan and Hong Kong as much for the wardrobes and makeup as the plot. We rushed to buy Head & Shoulders shampoo because its Chinese name, Haifeisi, means “sea flying hair.”
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“We’ve gone through the European and American fad, the Japanese and Korean fad, the American streetwear fad, even the Hong Kong and Taiwan fad,” said Xun Shaohua, who founded a Shanghai sportswear company that competes with Vans and Converse.
Now could be the time for the China fad. Chinese companies are making better products. China’s Generation Z, born between 1995 and 2009, doesn’t have the same attachment to foreign names.
Even People’s Daily, the traditionally staid Communist Party official newspaper, is getting into branding. It started a streetwear collection with Li-Ning in 2019. That same year, it issued a report with Baidu, the Chinese search company, called “Guochao Pride Big Data.” They found that when people in China searched for brands, more than two-thirds were looking for domestic names, up from only about one-third 10 years earlier.
makes up only about 40 percent of China’s economic output, much less than it does in the United States and Europe.
Patriotism aside, entrepreneurs argue that their ventures rest on a solid business foundation. Similar trends happened in Japan and South Korea, both now home to strong brands. Local players better know the abilities of the country’s supply chains and how to use social media.
Mr. Xun’s sports brand has half a million followers on Alibaba’s Taobao marketplace and sells at the same prices as Vans and Converse, or even slightly higher. He said his brand competed by making shoes that fit Chinese feet better and offering colors favored locally, such as mint green and fuchsia. He sells exclusively online and teams up with Chinese and foreign brands and personalities, including Pokemon and Hello Kitty. At 37, he’s the only person in his company who was born before 1990.
The guochao fad has also reinvigorated older Chinese brands, like Li-Ning. For many years, sophisticated urbanites considered the brand, created by a former world champion gymnast of the same name, ugly and cheap. Its signature red-and-yellow color combination, after the Chinese flag, was mockingly called “eggs fried with tomato,” an everyday Chinese dish. Li-Ning was losing money. Its shares were on a losing streak.
Then the company introduced a collection at New York Fashion Week in early 2018. Its edgy look, combined with bold Chinese characters and embroidery, created buzz back home. Its shares have risen nearly ninefold since then. Now Li-Ning’s high-end collections sell at $100 to $150 on average, on a par with those of Adidas.
National Basketball Association and Dolce & Gabbana passed pretty quickly, this bout could linger, many people said.
“In the past, some Western brands didn’t understand or failed to respect the Chinese culture mostly because of lack of understanding,” Mr. Xun said. “This time it’s a political issue. They have violated our political sensitivities.”
Then, like any savvy Chinese entrepreneur who knows which topics are sensitive, he asked, “Could we not talk about politics?”
Around 50 groups have filed amicus briefs in a coming Supreme Court case pitting charities against the state of California in a fight over donation disclosures. The Capitol riot on Jan. 6 put a spotlight on corporations’ direct and indirect political donations; justices agreed on Jan. 8 to hear the case and arguments will take place later this month.
Business interests want to create a “broad expansion of dark money rights,” according to a new brief from 15 Democratic senators, referring to untraceable donations that are often routed via nonprofit groups. The court case is an influence campaign disguised as a technical legal fight, the senators said. The case pits California against a charity, the Koch-affiliated Americans for Prosperity Foundation, over private access to tax documents. The Chamber of Commerce and National Association of Manufacturers are among the trade groups supporting the foundation’s demand for anonymity.
Anonymous donors work like covert intelligence operations, the senators wrote. The donors give millions annually to “social welfare” groups that spend it in an effort to influence politics and policy. The senators pointed to congressional appropriations rules blocking disclosure efforts by the I.R.S. and S.E.C. over the past decade as evidence that the groups have swayed lawmakers behind the scenes. The case is the latest attempt “by powerful interests to both cement and obscure their influence over the public sphere,” the senators argued.
The federal government is with California, more or less, telling the justices in a brief that the nonprofits’ constitutional claim is wrong but that the case should be sent back to the lower courts for more analysis.
Get to know social tokens
As the “suits” finally get into Bitcoin, the crypto crowd has moved on to the next big thing: BitClout, a “polarizing” open-source crypto social network that monetizes influencers via personalized tokens that can be traded by users, essentially quantifying a person’s reputation.
BitClout’s recent launch has generated outrage because the company didn’t ask permission from people featured on the platform, instead launching with “reserved” currencies linked to celebrities like the Tesla founder Elon Musk, the pop star Katy Perry and about 15,000 others. Influencers can claim their coins, which requires buying in, but in the meantime fans can still buy and trade their tokens, BitClout’s white paper explains.
Silicon Valley bigwigs have backed BitClout, including Sequoia Capital, Andreessen Horowitz, Social Capital, Coinbase Ventures, Winklevoss Capital and the Reddit co-founder Alexis Ohanian. A crypto wallet on the platform reportedly holds more than $150 million worth of Bitcoin, thought mostly to have been raised from these A-listers.
The company’s founder goes by “DiamondHands,” a reference to investors who steadfastly hold speculative assets, popularized during the meme-stock frenzy.His true identity is an open secret among crypto insiders; signs point to Nader al-Naji, a former Google software engineer who has not denied the claim. Brandon Curtis of the exchange Radar Relay recently sent a cease and desist letter to Mr. al-Naji, protesting the commercialization of his persona without permission, and his counsel confirmed to DealBook that his profile was removed after that letter was sent.
“BitClout is trying to create ownership through code instead of law” but may find itself “throttled,” said Michael Heller, a Columbia law professor. “People don’t much like strangers messing with their reputations,” he added, and the “right of publicity” lets them police who can profit off their clout.