Money Talks is a collection of daily columns from The Business Network, which airs weekday mornings on CBC Radio One at 5:45 a.m. ET (6:15 a.m. ET in N.L.).

By Duncan Stewart, director at Deloitte Canada Research in Toronto
(Listen to the original audio)

There is an old joke about betting on the ponies: any idiot knows that one horse runs faster than another. The trick lies in knowing which horse!

The first quarter of 2008 is behind us, and yet again investors in Clean Technology companies are green - but not with envy.

In what was a turbulent three months for most equity markets, some CleanTech stocks continued to set new highs. The Dow was down 5 per cent in Q1, and the technology laden NASDAQ declined 11 per cent. But a basket of Canadian green stocks that I follow was actually up 5 per cent.

But, as I have pointed out before, this performance is hardly sector-wide. Let's take a look at some Canadian examples.

Supplier of cheap silicon to the solar business, Timminco was up 11 per cent -- not bad. But that's nothing compared to recent IPO, 5N Plus. It supplies Cadmium Telluride to thin film photovoltaic manufacturers and saw its share price rise 34 per cent for the quarter.

Meanwhile other Canadian solar stories did less well. Xantrex helps solar panels make their electricity usable, but fell 25%. Recent IPO Day4 Energy, with what looks like an interesting new technology, fell 33 per cent in the quarter despite announcing some large contracts.

Moving out of solar, clean coal company AlterNRG rose 36 per cent. But RailPower, after a meteoric rise in late December, fell 50 per cent to the end of March.

Sorry for the avalanche of numbers, but investors in the CleanTech space need to be very aware of how much of successful investing will depend on which horse runs faster.

And given how new the sector is, many environmental investors are likely to only own only one or two names. If they are right ones, those will be happy investors.

But if they end up betting on the wrong horse, they might turn their backs on the whole sector.

That would likely be a bad thing - both for their portfolios over the long run and also for the up and coming Canadian companies who are building a whole new industry, and need investor support to do that.

For the Business Network, this is Duncan Stewart in Toronto

(Click on the comment link below to share your view)