When I was 13, my dad gave me Benjamin Graham’s The Intelligent Investor (nerd alert in the Fox household). Ostensibly this is one of Warren Buffet’s favorite books and was to be the undergirding for sound financial decision making. It’s funny, because I didn’t take away much at the time-but revisited the book decades later when I heard someone say “the weight of climate change” at NY Climate Week. It prompted memory of two quotes from that book echo in my head whenever I think about climate investing in this volatile age:
“The stock market is a device for transferring money from the impatient to the patient.”
“In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”
Those tenets have stuck with me-and become outsized in the last calendar year. “Greenhushing” is real. At Propeller, we see it everywhere: the word climate is being phased out of more pitch decks and certainly policy papers. It leads to pressure on climate investors. The pressure germinates from LPs, from co-investors, even from the subtle (or screaming) instinct to follow the herd. And today, that herd is crowding under two giant tents: “AI” and for lack of a better way to encapsulate it – “American Dynamism” – i.e. the re-shoring of industry, the rise of defense-tech, etc. Both terrific theses in their own right, but they’ve become catch-alls so broad you could drive a fleet of container ships through them.
And that is why I think back to Benjamin Graham’s two temporal lessons on patience: pressure is short term, but pressure doesn’t mean weight. At Propeller, I’ve been pondering where the alpha is in sticking to a weighing machine thesis over a pressure thesis; especially in our ocean<>climate work?
The answer, I think, lies in resisting the pull of discourse and anchoring ourselves in the trendlines driven by physical realities. What I mean by physical realities is how the laws of physics are being exercised in a changing climate. They are realities that are driven by scientific law, not social law. Physical realities materialize as the weight the physical world puts on society over time. Charting a weight over time yields a vector. This vector can grow, shrink, go up or go down. Climate change is disrupting a lot of those vectors that have been otherwise historically very steady. And I believe, within those vectors are also the challenges that great entrepreneurs will solve to alleviate the increasing, more frequent weights of climate change.
I’m most certainly not the first to posit this. I really have enjoyed following work from Tom Chi, Sanjeev Krishnan and others to invest in physical truths or realities. Because at the end of the day, shifts in markets are sentiment, but shifts in the oceans are physics, chemistry and biology. I recently listened and read a bit by Sanjay at S2G on how we are moving from the “age of moderation” into the “age of volatility.” I highly recommend reading both their work.
Here I hope to share more of my viewpoints on the shape and change of these vectors in relation to the ocean AND their ties to financial markets. For investors and entrepreneurs, that weighing machine is going to be heavily loaded by ocean forces in the decades ahead.
The Ocean’s Physical Realities
Here are the realities we track every day:
- Volatility of storms - this is increasing. The distribution of storms is not only getting a fatter tail, but also a longer tail.
- Rising ocean temperatures - there’s a lot of focus on how Florida waters feel like an uncomfortable bathtub, but there are gnarlier outcomes: some species will die, and others including harmful algae will prosper. There is also more water vapor, which means more rain and snow on the way.
- Shifts in circulation patterns - more freshwater from melt is shifting the density and salinity of the layers of the ocean, so it doesn’t turn over the same way - in fact it will either slow down, and per above, under heat conditions, move faster.
- Saltwater intrusion (with acidity and erosion as multipliers) - more water in the sea + more volatility means saltwater is coming on land more frequently and farther in than before. Furthermore, with more CO2 in the water, it’s becoming more acidic and corrosive. So while saltwater is always damaging when exposed too long, it’s getting worse. (Thanks Simon Freeman for the reminder here)
- Diminished biomass (driven by deoxygenation and species migration) - changing ocean conditions, in temperature, acidity and also loss of oxygen (shout out to ) means that species are migrating away. Also, we’ve just massively depleted them over centuries. Read the Unnatural History of the Sea by Callum Roberts.
These aren’t abstract risks. They’re balance-sheet items, or P&L influencers, in waiting. I’d like to hope Benjamin Graham would’ve described them as being weighty. And they show up across the classic ways to grow or destroy financial value:
How Ocean Forces Translate into Financial Value
Asset Growth
- Fish stocks are migrating. Some geographies will see new opportunities to harvest or farm species that were never viable before. For the winners, that’s asset growth. For those losing ground, it’s depreciation.
Asset Depreciation
- Coastal agriculture is staring down the barrel of saltwater intrusion. Once-arable land turns saline, eroded, unproductive. It’s a slow-burn depreciation, but one with massive implications for food systems.
Liability Growth
- Storm volatility is escalating alongside insurance premiums. Anyone underwriting coastal assets is about to see their liabilities climb, whether through property insurance, or disaster recovery.
Liability Reduction
- On the positive side, aquaculture failures—once common—are declining as the tech matures. Better genetics, feed, sensors, and husbandry mean fewer mass die-offs. That reduces liabilities for operators and their insurers.
Asset-to-Liability Inversion
- The most underappreciated shift: coastal real estate. What was once a prized asset—sometimes a generational one—can flip overnight into a liability. Not just “devalued,” but actively costly to maintain, insure, or remove. Think Miami condos, Norfolk naval housing, or entire island resorts. Financial markets aren’t yet structured to absorb this kind of inversion.
Why This Matters
The ocean isn’t a backdrop. It propels the bulk of the world’s weight every day - circulating it around the globe. Ignore it, and you miss the biggest line items in tomorrow’s financial statements. We need to make sure that even if the language changes in any political regime, good problem solvers and entrepreneurs don’t move from focusing on the shifts driven by our physical realities. And for those with that focus, we are here, eagerly waiting to be wind in your sales. The weighing machine is happening. The ocean is loading it up more and more each day. And my bet is the smart money—and smart founders—will get ahead of the tide.
Sources and thanks:
- NOAA (https://www.ncei.noaa.gov/access/billions/time-series)
- EPA (https://www.epa.gov/climate-indicators/climate-change-indicators-sea-surface-temperature)
- NASA (https://science.nasa.gov/earth/earth-atmosphere/slowdown-of-the-motion-of-the-ocean/)
- Thank you Michael Lowry @ Yale Climate Connections and as always our friends at NOAA. (https://yaleclimateconnections.org/2022/08/most-bleak-federal-report-yet-on-high-tide-sunny-day-tide-floods/)
- Incredible work by all the collaborators at GO2NE https://www.ioc.unesco.org/en/go2ne