The Chemours Company had a fantastic start to 2023

The Chemours Company is a diversified chemical company serving multiple industries. Here are its products:

Exhibit 1:

Here's the graph of the monthly returns of the Vanguard S&P 500 Index ETF and the Chemours Company:  

Exhibit 2:

Source: Data Provided by IEX Cloud, Graph Created Using Microsoft Excel and RStudio

The Chemours Company averaged a monthly return of 2.59% compared to a 1% return for the Vanguard S&P 500 Index ETF (Exhibits 3 & 4). 

Exhibit 3:

Source: Data Provided by IEX Cloud, Calculated Using Microsoft Excel

Exhibit 4:

Source: Data Provided by IEX Cloud, Calculated Using Microsoft Excel

A linear regression of the monthly returns of the Vanguard S&P 500 Index ETF and the Chemours Company estimates the beta (the coefficient of the Vanguard S&P 500 Index) as 1.82. Yahoo Finance estimates the beta as 1.88 based on five years of monthly returns.   

Here's the output from the linear model:  
 

Call:

lm(formula = CC_Monthly_Return ~ VOO_Monthly_Return, data = VOOandCC)

Residuals:

     Min       1Q   Median       3Q      Max 

-0.23930 -0.07880  0.01016  0.07621  0.29157 

Coefficients:

                   Estimate Std. Error t value Pr(>|t|)    

(Intercept)        0.006698   0.018764   0.357    0.723    

VOO_Monthly_Return 1.825643   0.325520   5.608 1.45e-06 ***

---

Signif. codes:  0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1

Residual standard error: 0.1224 on 42 degrees of freedom

Multiple R-squared:  0.4282, Adjusted R-squared:  0.4146 

F-statistic: 31.45 on 1 and 42 DF,  p-value: 1.45e-06

The stock had a great January 2023 with a return of 18% compared to a 6.2% return of the Vanguard S&P 500 Index ETF.  

Here's the chart of the monthly returns of the Vanguard S&P 500 Index and the Chemours Company:

Exhibit 5:

Source: Data Provided by IEX Cloud, Calculated Using Microsoft Excel

Few Things to Know About Our Current Energy Transition from Fossil Fuels to Renewables.

In a discussion hosted by Bridgewater Associates (the world's largest hedge fund), Daniel Yergin discussed the current energy transition, geopolitics, and government. Daniel Yergin emphasizes a few things about our energy transition:

• Energy transition to oil from coal took nearly a hundred years. 
• Instead of trying to control oil supplies, now we are trying to control materials used in batteries and solar panels. Increasing lithium and cobalt prices pose a challenge for electric vehicles. 
• Electric vehicles may need subsidies to make them affordable. 

Governments can offer subsidies, but the loss of revenue due to the subsidies need to be compensated by higher taxes, lower social benefits, or higher deficits. The world is grappling with excessive debt levels and does not have the flexibility to take on more deficit spending. Take the example of Japan, where the outstanding government bonds have crossed one thousand trillion yen for the first time.    

You can watch the Daniel Yergin discussion on YouTube.