Investors and traders are quite rightly focusing on the two hot areas of the market right now: iron ore and gold.
Most of the associated stocks are barnstorming their way up. And no wonder: the margins on offer are huge.
But consider for a moment a sector not loved. In fact, reviled! Thermal coal.
ABC News reports that the price of the stuff has fallen 25% in the last month.
I doubt I’m going to get you excited talking about coal stocks.
But it’s the general, long-term trend away from coal and towards renewables that should have us excited.
South Korea recently announced their 15-year plan for their electricity market. They want renewables to go from 15% to 40% market share.
What other hints of this transition can we see happening out there?
The companies behind the Agnew mine out in Western Australia just completed a hybrid renewable project that delivers 70% of the power needed.
We can expect more projects like this. I told you the other week how the big banks are going to stop lending money to the coal industry.
They’re also calling for more investment into ‘green’ technology as part of Australia’s response to COVID-19.
That’s alongside super and insurance funds too.
No need to write in with your opinion about this. Whether you think climate change is real, or coal should stay is irrelevant.
The market is moving this way and there’s not a damn anyone gives what you and I have to say on the matter.
(OK. OK. Chip in with your thoughts at firstname.lastname@example.org.)
Take a look at the price of Tesla Inc [NASDAQ:TSLA] to see what I mean here…
For years I have read Musk was a madman, and Tesla was a money pit and its valuation absurd.
That was when it was at about US$200 bucks a share. It’s over US$800 now.
Ages ago I took a different approach and said to treat TSLA stock like an option.
That was to admit that you might lose the lot but you could make a killing if Musk pulled it off.
The debate still rages. And Musk is still in the news, baiting the doubters and taunting the short sellers.
The Australian Financial Review reported the other day that Musk is planning to introduce a ‘million mile’ battery in China, either this year or next.
This could finally bring down the price of an electric car to its petrol equivalent.
These cars could also share the grid.
We have to watch the developments here. This has the power to upend so many different industries in so many different ways.
I watched a powerful presentation on this very theme last Sunday. A man called Tony Seba delivered it.
Señor Seba forecasts massive disruption for the 2020s. Part of this is the convergence of multiple technologies at the same time.
One is that we have battery costs going down. That makes electric cars increasingly viable.
We also have autonomous driving technology almost ready to break out.
What does this imply? Great social and technological change.
Don’t take your cue off the mainstream media here.
I happened to be watching the last part of A Current Affair (ACA) last night. My daughter was waiting for Lego Masters to come on.
ACA had the most absurd example of an advertisement masquerading as a news story I’ve ever seen. It was so bad it was hilarious.
It was a long sequence about the company 13Cabs and how they’re helping restaurants compete because they don’t charge commissions like UberEats.
The director’s instruction was clear. Get the 13Cabs brand in as many shots as possible, especially when recreating the exciting scene of a driver picking up the food to deliver to the customer.
And we got to see more than one example! It was interspersed with interviews about cabs driving hamburgers around. And they say journalism is dead.
Point being: companies like 13Cabs are going the way of the dodo.
Food delivery will be autonomous within a decade. Technological disruption is coming to smash multiple existing industries.
Index and passive investors will soon discover that when you buy ‘the market’ you get the very good stocks, but the very bad as well.
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