I have written a lot about Technochasm and how rapid technological change without Godly leadership is causing chaos at all levels of society. As a result, it is becoming more difficult to invest wisely. God has gifted me with business skills so that even before I was born again at 46, I had managed several large corporations including The Ramsay Group, which at the time, in the 1970s, was the largest surgical, dental, and scientific supply company in Australia. Since retiring and giving my company to my three boys, I have needed to invest wisely to survive hence I subscribed to a number of investment advisory services to learn the art. I have enjoyed the journey and have done well so feel I should share some of the wisdom with my Christian brothers and sisters that follow my blog.
Start with a “macro” analysis or “top-down” investing. Look for big-picture trends that drive huge, multiyear moves in entire sectors of the market. The type of trends that can spin off dozens of triple and even quadruple-digit gains in a span of a few years. When investors use the global macro strategy, they identify investment opportunities from a broad, global, top-down perspective, rather than by examining stocks one by one (a micro, bottom-up perspective). Global macro traders find moneymaking opportunities by watching geopolitical events and going deep on business cycles, disruptive technologies, stock valuations, commodity price trends, even interest rates … and even further afield. Look for opportunities in any asset… in any country… in any direction. Companies with “hyperscalibilty“.
Macro Analysis for me revealed these top three investment opportunities
- ROBOTICS/ ARTIFICIAL INTELLIGENCE
- INFORMATION (Internet of Things)
There is no doubt that the move to Green Energy will happen over time, but it will not happen soon so the need for Natural Gas and Oil will still be in demand through the 2050’s. Money has moved out of this sector for emotive reasons so that share prices are at attractive levels and even dividend payments make them a good investment. Companies in Natural gas that are transitioning to green hydrogen are my choice. Moreover, of the new Energy opportunities I believe Nuclear and Hydrogen are the two best options.
NATURAL GAS/LNG – 1. Omega Oil & Gas (OMA): Omega Oil and Gas has two exploration permits in the Surat Basin in Southeast Queensland, ATP 2037 and ATP 2038. The two permits represent an area of over 250,000 acres and are located approximately 50 km away from critical gas transmission infrastructure. As an Aussie, I have put Omega Oil & Gas first but in reality, the next company should take first place. Note it is in both my Natural Gas and Hydrogen markets. 2. TotalEnergies (TTE): “Natural gas is a key energy for the transition to renewables. First and foremost, it plays a major role in power generation thanks to its flexibility and ability to meet the rapid growth in demand fuelled by the electrification of uses. Increase the share of gas to 50% of our sales mix by 2030. Consolidate the Company’s position among the top 3 in LNG.” Natural Gas is a widely available resource, well redistributed worldwide thanks to LNG. It is a simple and immediate solution for decarbonizing electricity and industry, especially in high energy-consuming sectors (steel, cement, etc.). An ideal partner for renewables, which are intermittent and seasonal by nature. A core component of numerous coal-consuming countries’ roadmaps toward their Net Zero ambition. A source for massively developing blue hydrogen with carbon capture and storage (CCS) technologies, 3. Tellurian Inc is responsible for 36% of the global LNG and 79% of the US LNG in production today. As well as TotalEnergies and Tellurian check out Kimbell Royalty Partners (KRP)
HYDROGEN – 1. Plug Power Inc: “Plug, the leader in building an end-to-end green hydrogen ecosystem that addresses every step of operations, is proud to offer its customers cost-effective green hydrogen, which is quickly becoming the molecule of choice for customers both large and small. Led by a team with nearly five decades of experience, Plug’s PEM electrolyzer solutions produce carbon-free green hydrogen using renewable electricity and water. Plug offers electrolyzer solutions that cover a variety of applications from mobility to power to chemical industries.” 2. Total Energies: “As a multi-energy company, we produce and market oil and biofuels, natural gas and green gas, renewables and electricity. Our presence across the entire value chain of these energies – from production and processing to distribution in various forms – enables us to invent technological solutions and innovate for our customers. Our integrated business model is our strength and sets us apart. Efficient, profitable and innovative, it is a guarantee of quality for our customers. French companies TotalEnergies (TTEF.PA), Air Liquide (AIRP.PA) and Vinci (SGEF.PA) announced the launch of what they said would be the world’s largest clean hydrogen infrastructure fund, as companies increase their presence in the green energy sector.”
NUCLEAR – I have a high priority to find companies involved in providing resources for nuclear reactors and or makers of nuclear reactors. Uranium: Australia’s known uranium resources are the world’s largest. Currently, it accounts for 17% of all energy exports. Australia accounts for almost one-third of the world’s uranium deposits — 27.53 percent as of 2019 — and there is a slew of future exploration and expansion projects brewing in the country. With 31 known uranium deposits, the list of potential new mines or mines being brought back online is long.
Small Modular Nuclear Reactors is where government money is being invested. Nuclear-powered subs have proved small nuclear is relatively safe as problems can be contained. 1. TerraPower: Received an $80 million U.S. Gov grant for a Natrium nuclear reactor. In August 2020, TerraPower first introduced the Natrium technology, co-designed with GE Hitachi Nuclear Energy. It features a cost-competitive sodium fast reactor combined with a molten salt energy storage system. The schedule, mandated by Congress, requires the Natrium plant to be complete by 2028. TerraPower is on track to make this schedule work to secure key regulatory approval in the near term with a goal of starting construction in 2024. 2. NuScale Power: A global leader in small-scale modular nuclear reactor technology. VOYGR™ SMR plants are powered by the innovative NuScale Power Module™, the first and only small modular reactor (SMR) to receive design approval from the U.S. Nuclear Regulatory Commission (NRC). The NuScale Power Module design is based on proven pressurized water-cooled reactor technology and was developed to supply energy for electrical generation, district heating, desalination, commercial-scale hydrogen production, and other process heat applications. 3. BWXT Nuclear Microreactors: BWXT will build the first advanced full-scale transportable nuclear microreactor in the USA under a contract awarded by the US Dept. of Defence (DoD) Strategic Capabilities Office. To be completed and delivered in 2024 for testing at the Idaho National Laboratory. 4. Westinghouse is currently developing the eVinci™ Microreactor, a next-generation, very small modular reactor for decentralized remote applications. Others worth watching are Kairos Power, Rolls Royce, and Rosatom (Rosatom, Russia’s state nuclear corporation, will this month begin work at the future site of a small-scale nuclear power plant in the far eastern Siberian territory of Yakutia)
BATTERY STORAGE – 1. Altech Batteries Ltd (Na/Al) Lithium batteries will eventually be replaced because the metal is “rare” and therefore expensive, and the batteries can explode (flammable). Hence Altech Batteries Ltd – working with Sodium and Aluminium. 2. POSi Energy – Silicon Power, announced the demonstration of a new lithium-silicon anode that allows a revolutionary performance step-up in lithium-ion batteries. It is still using Lithium but adding Si adds to performance and safety. 3. Ivanhoe Electric Inc in Resources VRG Energy – vanadium redox flow batteries. Also, see Resources for Ivanhoe Electric.
RARE EARTH MINERALS – 1. Lynas: The Lynas Mt Weld mine in Western Australia is acknowledged as one of the world’s premier rare earth deposits. Lynas also operates the world’s largest single rare earth processing plant in Malaysia where it produces high-quality separated rare earth materials for export to manufacturing markets in Asia, Europe, and the United States. 2. Ivanhoe Electric Inc: a) A technology company focused on next-generation geophysical surveying and modeling for the mining industry (“Typhoon” – a geophysical data-acquisition system that uses a proprietary high-resolution, pulse-imaging process. The raw data Typhoon acquires then feeds into an analytical process that uses geophysical modeling and artificial intelligence (AI) to “map” subterranean metal deposits), b). A mining company focused on U.S.-based “electric metals” projects like copper and nickel (The Arizona project, called Santa Cruz, was an operating mine from 1974 to 1984, Typhoon has revealed it is the “second-largest undeveloped copper deposit in the lower 48 states. Ditto for Ivanhoe’s Tintic Project in Utah. c). An energy storage company focused on long-duration solutions for the utility and enterprise markets. VRB Energy develops and manufactures advanced grid-scale vanadium redox flow battery (VRFB) storage systems. They provide long-duration power for up to 12 hours per day, which is more than three times what the typical lithium-ion batteries deliver. Secondly, because VRFBs do not degrade like lithium-ion batteries do, they can operate three to four times longer than the typical seven-year lifetime of lithium-ion energy storage installations. Third, VFRBs are much safer than lithium-ion batteries.
COPPER – 1. Freeport-McMoRan Inc. (FCX)
ALUMINIUM – Alcoa, the current valuation is cheap enough that the stock could deliver outsized gains over the next several months, especially as world stockpiles are low. According to the IAI, renewable energy needs will create demand for aluminum to replace existing copper cabling for power distribution. In total, the electric sector will require an additional 5.2 million metric tons by 2030, according to the group.
LOW EARTH ORBIT SATELLITES – 1. Starlink is owned by SpaceX. SpaceX is leading the way, but I would hold off on any investment until late 2023. 2. Amazon announced the next steps in its upcoming Project Kuiper satellite internet services. The project plans to launch 3,236 satellites into low Earth orbit, offering high-speed, affordable broadband anywhere with a view of the sky.
QUANTUM MICROCHIPS – 1. Archer Materials, 2. Quantum Scape Corp
SENSORS – 1. Allegro Microsystems: With more than 30 years of experience developing advanced semiconductor technology and application-specific algorithms, Allegro is a global leader in power and sensing solutions for motion control and energy-efficient systems (650 patents). Through innovations in e-Mobility, Clean Energy, and Automation, they are helping move the world toward a safer, more sustainable future. Each year they ship over one billion units into these applications to support 10,000+ customers around the globe, including over 50 automotive OEMs. Their global engineering, manufacturing, and support, combined with their agility, make Allegro a trusted partner to both large enterprises and regional market leaders worldwide.
ARTIFICIAL INTELLIGENCE – 1. Microsoft spent nearly $20 billion to buy Nuance Communications, “a pioneer and a leading provider of conversational AI and cloud-based ambient clinical intelligence for healthcare providers.” Incredibly, 90% of the world’s hospitals use Nuance’s solutions. Earlier this year, Microsoft poured $10 billion into OpenAI, the creator of the ChatGPT bot that has become an “overnight” sensation. Microsoft previously invested $1 billion in the AI company in 2019. 2. Intel Because of the recent release of ChatGPT, an AI-powered “chatbot” that can do everything from answering questions to writing essays, AI-focused investing has become the newest Wall Street sensation. Intel tops the companies producing AI chips. IBM has already structured a joint venture with Intel to develop AI chips – and why Nvidia has stated publicly that it will consider contracting with Intel for the first time to produce some of its chips. Intel is building three-chip manufacturing facilities in the USA. The company’s NCS2 is its latest chip that was developed specifically for deep learning. Also, the brand-new Gaudi2 AI chip, designed by Intel’s Israel-based Habana Labs, is twice as fast as its first-generation predecessor. 3. GE Health Care Technologies (GEHC) GE has spun off this company using AI in health care. 4. Palantir (PLTR) AI for defense
CLOUD STORAGE – Amazon
ELECTRIC DRIVERLESS CARS – 1. Aeva Technologies Inc (Lidar helps cars see: Aeries II is the world’s first 4D LiDAR sensor with unparalleled capabilities), 2. Apple, 3 Tesla
HYDROGEN POWERED – Trucks, Aeroplanes, Boats
Blockchain – Bitcoin, Ethereum, Chainlink, Aave
Biogenetics – 1. Genetic Engineering, 2. AI – GE Health Care Technologies (GEHC)
The foundational patents for CRISPR genetic editing technology belong to the Broad Institute (Harvard & MIT) – March 2022. The decision is likely to affect companies that licensed rights to CRISPR-cas9 gene editing from the University of California as well as its partners the University of Vienna and Nobel laureate Emmanuelle Charpentier. Among them are Intellia, CRISPR Therapeutics and Caribou Therapeutics.
ROBOTICS – 1. ABB (Swiss company HQ Zurich) “Pioneering digital technology company ABB today announced a major, new US$150 million investment in Shanghai, China to build the world’s most advanced, automated, and flexible robotics factory – a cutting-edge center where robots make robots. The new Kangqiao manufacturing center, near ABB’s expansive China robotics campus, will combine the company’s connected digital technologies, including ABB Ability™ solutions, state-of-the-art collaborative robotics, and innovative artificial intelligence research to create the most sophisticated and environmentally sustainable “factory of the future.” It is expected to begin operating by the end of 2020. Today’s announcement marks a significant milestone for ABB as China’s #1 robotics manufacturer as well as a critical global growth investment for the company in the world’s largest robotics market. In 2017, one of every three robots sold in the world went to China, which purchased nearly 138,000 units. Today, ABB employs approximately 5,000 people in Shanghai, and the company’s robotics businesses in China employ more than 2,000 engineers, technology experts and operational leaders in 20 locations across the country.“
2. Midea Group (Revenue $39 bill) – Chinese company with manufacturing also in Germany for the European market, Denso Corp (Revenue $47.4 bill) – a Japanese company that builds industrial robots and programmable logic controllers used in manufacturing factory automation. The company also provides automatic identification products, code readers, and semiconductors. 3. Sony (Revenue $79.2 bill), Sony wants to drive robot development for everyone. Sony’s robotics platform was born from this idea. “We will provide all the fundamental technology we have fostered for many years to help you build basic functionality that requires the most development stress. Developers can focus their work on areas they want to concentrate on. This leads to dramatically shorter effort to put a variety of high-quality robots to practical use. Sony will kick-start a revolution of sharing in today’s development environment where it is normal for companies to hold onto their problems“. 4. Siemens AG (Revenue $97.4) The second-largest robotics company in the world is Siemens AG. Siemens AG is a global major player focusing on the areas of power generation, smart building infrastructure and distributed energy systems, and automation and digitization in the process and manufacturing industries, 5. Honda Motor (Revenue $142 bill) Honda Robotics developed the “most advanced humanoid robot”, ASIMO (Advanced Step Innovative Mobility) with the aim of creating robots that will coexist with and be useful to humans.
DRONES– 1. IAI (Israel) A leader in defense, aerospace, and commercial markets, IAI leverages state-of-the-art technology and decades of combat-proven experience delivering solutions to your national defense and security challenge. 2. Fortem Technologies is a leader in drones for military operations. 3. Aero Vironment – Unmanned Aero Systems Tactical Missile Systems etc.
NEW TECHNOLOGIES – Corning Inc (combine unparalleled expertise in glass science, ceramic science, and optical physics with proprietary manufacturing and engineering platforms to develop category-defining products that transform industries and enhance lives): 1. Optical Communications – 5G buildout… 2. Display Technologies… 3. Specialty Materials – Gorilla Glass laminates: mobile phones, car windows, etc … 4. Environmental Technologies… 5. Life Sciences.
Alkegen: Alkegen has just joined two of the leading specialty materials manufacturing companies Unifrax and Lydall to create one new innovation-driven company to bring to market the most effective materials for a number of industries, Additives and Reinforcements, Aluminium Non-Ferrous Metals, Appliances, Automotive, Battery and Energy Storage, Catalysis, Ceramic and Glass, Filtration and Separation. Fire Protection – Commercial and Industrial, Foundry, Hearth, Iron and Steel, Petrochemical, Power Generation, Transportation.