Why Al Gore Won’t Like Big Data

Haruhiko Kuroda has held out the prospect of further monetary easing from the Bank of Japan, should the government’s plans to raise taxes weigh on prices and activity in the world’s third-largest economy.‘ – Financial Times

In life there are some things that surprise us.

Then there are other things that don’t surprise us at all.

The statement that the Bank of Japan is open to further monetary easing is one of the things that doesn’t surprise us at all.

In fact, the only thing that surprises us is that ‘doing a BoJ’ hasn’t entered the lexicon as a meaning for money printing. Who knows, maybe it will one day.

But there is one thing that may surprise you. We say that because it surprised us. And on hearing the news, it could surprise former US vice president Al Gore too…

We’re sure you know that apart from being an ex US vice president, Al Gore’s other job is an environmental campaigner and fundraiser.

In 2010, Al Gore was looking for an office building in New York City. It was to house his firm, Generation Investment Management. The VP settled on the new Bank of America Tower in the Bryant Park area of Manhattan.

At the ceremonial opening of the building in 2010, VP Gore said:

Any serious effort to solve the climate crisis must start with recapturing the enormous amounts of energy wasted due to inefficiency. Roughly 30 percent of the carbon dioxide emissions here in the United States come from heating, cooling, and lighting buildings. I’m honored that my firm, Generation Investment Management, is based here and I applaud the leadership of the Mayor and all of those who helped make this possible.

The Bank of America Tower was the standard for green buildings. But three years later, VP Gore may not be so enthusiastic about the Bank of America Tower…especially if he read a recent article in the New Republic

Beware the ‘Toxic Tower’


Just three weeks ago, the New Republic reported:

Gore’s applause, however, was premature. According to data released by New York City last fall, the Bank of America Tower produces more greenhouse gases and uses more energy per square foot than any comparably sized office building in Manhattan. It uses more than twice as much energy per square foot as the 80-year-old Empire State Building.

Oh dear.

That is a surprise. One of the world’s supposedly greenest and most environmentally friendly buildings turns out to be a ‘Toxic Tower’.

Interestingly, VP Gore’s investment firm still resides at the Bank of America Tower. We wonder if the ‘Veep’ is still honoured to be based there.

But anyway, what does all this have to do with financial markets and investing?

Well, it just so happens we came across this story while researching for the latest issue of Australian Small-Cap Investigator (published yesterday).

However, our angle wasn’t environmental. More interesting to us is the ‘Big Data’ side of things. By ‘Big Data‘ we mean the storage and transfer of almost every business and personal interaction you have.

Just about the only thing not stored or transferred electronically is a face-to-face conversation. Although, with the advent of Google Glass, even regular conversations will be captured for posterity in a database somewhere.

And it’s this ‘Big Data’ that’s partially to blame for the ‘Toxic Tower’…

The Environmental Problem of ‘Big Data’


It’s not surprising the Bank of America Tower is so energy inefficient. You only have to think about the stock news footage you see of a bank’s trading desk. Five or six computer monitors for each trader. Add to that the monitors and TV screens dotted around the trading floor.

Many of these trading desks run 24 hours a day from Sunday evening New York time (when Asian markets open) through to Friday late afternoon New York time (when the American markets close).

Look, we’re not having a pop at the building owners or even those who use it. To us it’s certain that the demand for power from computer storage and transfer systems will increase rather than decrease.

You only have to look at the huge Google ‘server farms’ that take up thousands of square metres in the middle of nowhere. And for what reason do these ‘server farms’ exist? To store the thousands of emails (such as this one) in your Gmail inbox.

Or to store those cute holiday snaps, or the Tweet you posted yesterday telling everyone what you had for breakfast or which TV star you hate/love.

Every time you save or send something on or from your computer you’re taking up space. And that means using more electricity and more resources. When you think about it, this is a relatively recent trend as more and more of people’s daily lives moves online.

Does that mean ‘Big Data’ is an environmental problem? We guess it does mean that. But don’t panic; entrepreneurs and capitalists – given the opportunity – will soon find a solution to this issue.

Meanwhile, the trend towards more and more online data is great news for companies involved in data storage and transfer.

That’s why we see this as more of an opportunity than a problem. Companies that can exploit this trend (which is yet to reach its full potential) by providing new or improved solutions are set to benefit from this in the years ahead. We believe the stock we outlined in the latest issue of Australian Small-Cap Investigator is one of those companies.

It’s a huge opportunity, and it’s only set to get bigger.

Cheers,
Kris+

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Kris is never one to pull punches when discussing market developments and economic events that can affect your wealth. He’ll take anyone to task — banks, governments, big business — if he thinks they’re trying to pull a fast one with your money. Kris is also the editor of Microcap Trader — where he reveals the best opportunities he’s discovered in the markets. If you’d like to more about Kris’ financial world view and investing philosophy then join him on Google+. It's where he shares investment insight, commentary and ideas that he can't always fit into his regular Money Morning essays.
Kris Sayce is the Publisher and Investment Director of Australia’s biggest circulation daily financial email, Money Morning Australia.Kris is a fully accredited advisor in shares, options, warrants and foreign-exchange investments. Kris has close to twenty years’ experience in analysing stocks. He began his career in the biggest wasp’s nest in the financial world — the city of London — as a finance broker back in 1995.
It’s there where he got his ‘baptism of fire’ into the financial markets, specialising in small-cap stock analysis on London’s Alternative Investment Market. This covered everything from Kazakhstani gold miners to toy train companies.After moving to Australia, Kris spent several years at a leading Australian wealth-management company. However he began to realise the finance and brokerage industry was more interested in lining its own pockets with fat fees, commissions and perks —rather than genuinely helping out the private investors they were supposed to be ‘working’ for. So in 2005 Kris started writing for Port Phillip Publishing — a company which was more attuned to his investment outlook. Initially he began writing for the Daily Reckoning Australia— but eventually, took over Money Morning. It’s now read by over 55,000 subscribers each day. Kris will take anyone to task — banks, governments, big business — if he thinks they’re trying to pull a fast one with your money! Whether you agree with him or not, you’ll find his common-sense, thought-provoking arguments well worth a read. To have his investment insights delivered straight to your inbox each day, take out a free subscription to Money Morning here. Kris is also the editor of Tactical Wealth and Microcap Trader where he reveals the best opportunities he’s discovered in the markets that you could profit from. If you’d like to learn about the latest opportunity Kris has uncovered, take a 30-day trial of Tactical Wealth here or Microcap Trader here. Official websites and financial e-letters Kris writes for:


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