Oct 11, 2017
Our focus on owning tomorrow’s winners today often gives us a fascinating glimpse into what our lives will be like in the future – such as the possibility of living on Mars or vehicles that drive themselves. We’re seeing such innovation and breakthroughs in so many areas, from technology to medicine to robotics and on and on.
After the devastating hurricane season we’ve had, you might be wondering how next-generation advancements can help. I wish we had a way to control the weather, but it is not yet a viable NexGen trend. That’s not to say we won’t get there. Some areas (including California) do what is called cloud seeding, which is spreading particles (like silver iodide) into the clouds to get rain to fall. I also remember reading how China tried to keep rain away during the 2008 Olympics opening ceremony by shooting rockets into the air.
Short of controlling the weather, I would suggest that NexGen energy can help deal with and perhaps one day even reduce the impacts of natural disasters. I think about Puerto Rico, which was ravaged by Hurricane Maria in late September. Here we are three weeks later and a full 90% of the island’s 3.5 million residents remain without electricity. According to reports, it could take up to six months for the main electric grid to be fully repaired.
Can you imagine going six months without power? It’s practically impossible to rebuild homes, businesses and lives. I remember after Hurricane Sandy hit New York in 2012 that most of my friends and colleagues were without power for days and weeks. I was lucky enough to live in an area of Manhattan that did not lose power, but I saw how it affected the lives of so many and really shut down the economy at the southern tip of Manhattan where Wall Street is located.
We’ve made progress since 2012. And Tesla (TSLA) CEO Elon Musk has stepped up to the plate big time. First, he sent hundreds of Powerwall batteries to those in need. These are smaller batteries kept in homes that can store power from solar panels. He has even offered to provide massive batteries and solar panels to the local government. Governor Ricardo Rosselló said late last week that he is considering accepting the generous proposal, and if he does TSLA would build a microgrid (or a local energy grid) that would run independently of the main grid that sources the island’s power. In other words, a secondary or backup power grid!
This actually wouldn’t be the first time Tesla has built a microgrid on an island. The company installed over 5,300 solar panels and 60 Powerpack batteries – a massive commercial battery – on the American Samoa island of Ta’u. The grid can collect and store enough energy to power to the entire island for three straight days. Tesla has also built a microgrid on Hawaii’s Kauai.
My thoughts and prayers go out to those suffering from the devastation left behind by all of the recent hurricanes, and I hope Tesla’s initiative speeds up the process in Puerto Rico so those folks can get on with the work of rebuilding their lives.
As you may know, storing power in batteries is one of my top NexGen trends. It’s not just about microgrids, as important as they are. It’s also about backup power for homes and businesses. It’s about powering electric vehicles (EVs), and we hear new headlines almost every day about how EVs are set for explosive growth in the coming years. Oh, and don’t forget about your smartphone either. We all want those batteries to last longer.
This is one of the most powerful trends out there, so naturally I continue to watch for the best ways to make money. If you think about growing demand for energy storage, you simply have to look at lithium-ion batteries, which are the batteries that power electrical grids, electric vehicles, smartphones and tons more.
One way to profit from the lithium trend is through exchanged-traded funds (ETFs) like the Global X Lithium & Battery Tech ETF (LIT), which invests in the full business cycle of the lithium industry from mining the metal to refining it all the way to battery production. There are 27 stocks within this ETF representing a total of 10 countries. LIT is already up nearly 60% so far this year, and there is no doubt in my mind that the future for this NexGen trend is unlimited.
Looking at individual names, you have to consider TSLA. It’s a volatile stock so you have to be somewhat careful, but it’s in the sweet spot as it manufactures both batteries and solar panels – on top of its line of EVs. I expect it to be a strong leader into the new world of energy storage and consumption.
I’m also watching Panasonic (PCRFY), which makes the electric cells used within the batteries and is the exclusive battery cell supplier for Tesla’s Model 3. The Japanese company is in the process of diversifying itself away from smartphones and consumers goods toward autonomous driving and battery production, and I see it playing a key role in the NexGen energy space. I’ll be letting my subscribers know the moment we get the right buy signal.
Those are just a couple of ideas in a rapidly growing sub-sector of energy. There are great opportunities available to us right now, and I know there will be even more in the future. By focusing on this trend now, we stand to profit significantly as expansion in lithium meets the world’s growing energy needs.
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