Bill Schnieders: Schnieders Capital Management was formed in 2002. We deal with high net worth clients. Our clients are primarily family groups, but we also manage some institutional money, both from corporations and foundations. As an investment philosophy, we tailor portfolios to individual client needs. We first try to satisfy income requirements and then put in as much growth as possible (within the parameters of each client's growth objectives and risk tolerance) by using the major investment themes that we see. So while there are a lot of similarities in our portfolios, each one is custom designed.
TWST: What is the main investment style that you have used for your portfolios?
Jim Schnieders: As we connect the dots on what's really happening around us,
energy has been a primary focus. A subset of this theme, and a strong growth
area we see going forward, is the rise of renewable energy. If you look at
what's happening, Europe has really taken a lead on this. Europe has mandated
standards that 20% of their energy needs come from renewable sources by the year
2020. In the US, 22 states have adopted similar mandates including California.
What we see happening are tremendous advances taking place in some of these
renewable technologies. At the end of the day, we have a country like Germany,
which in aggregate gets less sun on a typical day than Seattle, that is now the
world's largest solar market. Because of Germany's high use of renewables, they
were actually one of the few countries that decreased their petroleum use last
year. What we see happening on the technology front are advances in the solar
side such as thin film solar technologies and the move to megawatt-level
windmills. We believe that what has worked in Europe can work in America as
well.
We think that the key inflection point here or the tipping point could be as
early as four years from now when renewable energy reaches grid parity. Grid
parity is the point where you can buy renewable energy at the same price as
traditional fossil fuels. Most analysts estimate this at about a dollar per
watt. Due to the volatility of this sector we have been investing in the Power
Hill Clean Energy Index (PBW).
Tickers included in this excerpt: AIV, APA, CHV, COP, EGP, GE, IBM, JNJ, XOM
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.