Cramer Goes Green
The Supreme Court’s job has always been to explain and enforce the laws of our constitution. And while most Supreme Court cases set important precedents, few of them will ever make you a dime. Until now. Cramer would be dropping the ball if he didn’t discuss what he thinks is a landmark decision the Court handed down on April 2 in which it rewrote the equation for investing in clean energy. In fact, Cramer says this decision is so important he’s declaring April 2 “Green Day,” and not just because he loves the band.
Cramer thinks the decision from the case Massachusetts v. the Environmental Protection Agency could make you mad money. First, a little background: the state of Massachusetts sued the EPA for not regulating carbon emissions from cars, and the Court ruled that the EPA has both the authority and responsibility, as mandated by the 1970 Clean Air Act, to regulate these emissions (or have a bulletproof excuse as to why they can’t). Cramer is putting on his lawyer hat for a second to explain that the states almost universally hate the federal government on this issue, and they all have the standing, and now maybe the encouragement, to sue.
Now the EPA, whether they want to or not, has to enforce this law. It’s nirvana for the environmentalists, Cramer says, because it means lower auto emissions, cleaner power plants and cleaner manufacturing. And while Cramer loves the planet as much as the next guy, he’s most interested in how this precedent could make you money.
The fact is, it’s now no longer economic to do the wrong thing. Companies aren’t going to be able to pollute anymore and think they’ll just get away with it. Because of this, Cramer is doing a complete 180-degree turn. He’s now recommending investing in companies that make clean energy and that cut pollution. If it’s green, it’s time to give it a second look, he says.
The President and CEO of GE Infrastructure (GE is the parent company of CNBC) came out on the General Electric conference call and said the Supreme Court ruling “encourages people to think about alternative energy technologies.” So if they get it, he thinks other companies will too.
The Green Day decision is going to put a higher multiple on every company that’s levered to cleaning up the environment, Cramer says. There will be multiple expansion for everything green. And with “green” stocks about to get more expensive, Cramer wants you in them.
It’s now going to be possible to make money controlling automotive and power plant emissions, as well as for solar and wind power, so Cramer is getting a lot more positive on this entire group. He always thought alternative energy was solely levered to the price of oil, but with the Supreme Court essentially mandating multiple expansion, it’s a lot trickier now. Clean energy is now levered to the Supreme Court and the states, where the leadership actually believes in the existence of global warming, unlike the Bush Administration, Cramer says.
Bottom line: The rules have changed. And Cramer, who has never been much of a supporter of green anything because it hasn’t proven to be a way to make money, is changing his position on companies that make it easier to be green. Thanks to the Supreme Court, the sea change is here - and if you get in at the right time, you could make some money.
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