Author Topic: Investments in Energy and Transportation  (Read 1763 times)

radram

  • Pencil Stache
  • ****
  • Posts: 956
Investments in Energy and Transportation
« on: December 11, 2017, 07:58:00 AM »
Hello all.

I am interested in a very specific subset of the MMM community. I have always taken a subset of our stache (5% or so), and purchased companies instead of index funds. I think it is fun. I do not know if I have outperformed the market, but I don't really care. I probably have not. That said, I do WANT to outperform, so I am always looking for my next purchase to be just a little better than the market as a whole. I am only buy and hold, never buy on margins, never short stocks.

I saw a video focusing on the subject of this thread. I was so impressed with the thinking and reasoning, I am convinced he hit it right on the head as to where these 2 industries are headed. The only thing that might be off is the time frames. I've got plenty of time, so I don't really care if he is off by a decade or more.

20 seconds in, he gives an analogy of a 1900 photo of NYC with only 1 car. 13 years later, there was only 1 horse. He called this a technology disruption, and it is the basis of his research.

He then takes 1 hour to describe what he thinks are the NEXT technology disruptions, and when they are likely to occur. I want my next stock purchases to be based on research that leads me to purchase stocks best positioned to benefit these conclusions.

I am interested in your ideas for what to buy for a 20+ year time horizon based on his research.

1st request: Watch this entire video:
https://www.youtube.com/watch?v=2b3ttqYDwF0

Next, join the discussion.

I don't think this is as simple as "buy Tesla" and be done. I think tremendous growth is already built into their current price. I am more interested in companies that are not as sexy that have been "hidden" from future expected growth. Examples might include makers of the sensors that make the autonomous vehicles work, or Dyson(watch the video).

What do you think?

Around 1989, I was in a  Computer Science course in college, when my professor was explaining the difference between the telephone and cable, and how in the future converting to digital would allow for remarkable things like placing a phone call through the cable company. It sounded so simple and reasonable, and when it came, I was like "of course". I already knew all this. What I did NOT do was buy stock in companies that could benefit from this disruptive technology. I do not want to sit on the sidelines this time.

I will be basing my next purchases assuming the content of the video is exactly right in it's assumptions. I know the risks. I am all in(with a max of 5% of my new investments :). What would you buy if you KNEW these 2 markets were about to disrupt their respective markets, as described in the video?

Anyone else thinking of investing real money?

Eucalyptus

  • Bristles
  • ***
  • Posts: 366
  • Location: South Australia
Re: Investments in Energy and Transportation
« Reply #1 on: December 12, 2017, 12:57:33 AM »
This does make a lot of sense (not for the average investor) if you have the right expertise to help you make the right decisions. The idea of tech disruption is a good one.

I'd be interested in playing along and putting a ver small single digit % of my portfolio into similar things based on smart decisions.

Haven't watched your video yet...later :-)

boarder42

  • Walrus Stache
  • *******
  • Posts: 7845
Re: Investments in Energy and Transportation
« Reply #2 on: December 12, 2017, 01:39:22 AM »
I've watched this a few times. The problem is who wins. In tech it's who gets there first and markets it best. Myspace vs Facebook almost identical concepts. In the grand scheme 5% of your stache nets you very little accelerated returns of you're right.  Go back to who the big additional were in the early 1900s. And look at who the big 3 are today. I haven't done this but I assume they don't line up well. It's easier to pick out who loses here. Oil big time.

Linea_Norway

  • Walrus Stache
  • *******
  • Posts: 6775
  • Location: Norway
Re: Investments in Energy and Transportation
« Reply #3 on: December 12, 2017, 02:26:04 AM »
Trying to predict the future...

Perhaps nuclear fusion will be a big hit in 20 years. I recently heard on a podcast that it can be done on small scale. But someone needs to get it to work on big scale. There is a lot of focus on it. Which company that will win the race is the big question.

Solar and wind energy will guaranteed be a big thing. Maybe also wave energy (from the sea).

About the oil companies: Statoil (the Norwegian oil company) is now investing in wind energy. They have seen the light and are trying to get a foot into the sustainable market. Oil companies that don't do this will not survive in the future I think.

The company discovering the next antibiotic that can resist the multiresistant bacteria will do well. But that will be after long medical trials that are expensive. I am not sure the medical world is going to earn so much money. Research is expensive.

Maybe genetic modification of crops will be the next big thing. If we are going to get more extreme weather on the planet and higher temperatures on average, some crops might need extra help to survive in the changed climate. As food will get more and more scarce when the population grows, we will need to protect the crops against fungus and other things that ruin it. Maybe genetic modification will be much more accepted world wide, than it is today.

(Didn't watch the video)
« Last Edit: December 12, 2017, 05:54:28 AM by Linda_Norway »

boarder42

  • Walrus Stache
  • *******
  • Posts: 7845
Re: Investments in Energy and Transportation
« Reply #4 on: December 12, 2017, 05:35:43 AM »
did you watch the video?

Tony isnt really trying to predict something that is as far off and needs more research on the level you're comparing it to.

Self driving cars are here and being tested in many markets.  GM plans to be 100% driverless by 2019 in their test markets.

This doesnt compare to fusion - unless i'm missing small test markets where these reactors are working.- or pharma test trials - as i'm not aware of an FDA approved trials for the drug you're talking about

Its one thing to try to predict what will be next its another thing for that to already be in beta testing and likely to follow a standard technology curve in regards to price and performance.  Tony isnt really reaching very far in his predictions - just taking the curves that exist and applying a variant of moores law.  b/c batteries and solar panels havent followed the rule of the semi conductor - but self driving capabilities OTH have due to the fact that its really just computer processing power and sensing technology.

The play for self driving cars is likely nvidia for their processor - but they've already had run up - and who ever is making the lidar so small and cheap - but again they likely have already had some run up.  But anyone who is implementing the AI will likely be using both of these as they are the leaders. - that is unless something better comes along.

lemonlyman

  • Stubble
  • **
  • Posts: 154
Re: Investments in Energy and Transportation
« Reply #5 on: December 12, 2017, 06:17:30 AM »
According to the Tony Seba, fusion is dead before it's invented. Even if energy is generated at zero, the transportation costs of that energy (power lines) will cost more than putting solar on your roof.

I've watched most of his talks. Ramez Naam has similar conclusions. My investments are in sector ETFs since picking the winner is nearly impossible. 12 years isn't a very long time to mass adoption of these technologies. For energy, I have TAN, GEX, and PZD. For batteries, I use the LIT lithium etf. I just got the BOTZ etf for AI. This isn't a huge part of my portfolio. I just think they're going to be right, but if they're not, I won't regret giving it a shot.

radram

  • Pencil Stache
  • ****
  • Posts: 956
Re: Investments in Energy and Transportation
« Reply #6 on: December 12, 2017, 06:32:46 AM »
did you watch the video?

Tony isnt really trying to predict something that is as far off and needs more research on the level you're comparing it to.

Self driving cars are here and being tested in many markets.  GM plans to be 100% driverless by 2019 in their test markets.

This doesnt compare to fusion - unless i'm missing small test markets where these reactors are working.- or pharma test trials - as i'm not aware of an FDA approved trials for the drug you're talking about

Its one thing to try to predict what will be next its another thing for that to already be in beta testing and likely to follow a standard technology curve in regards to price and performance.  Tony isnt really reaching very far in his predictions - just taking the curves that exist and applying a variant of moores law.  b/c batteries and solar panels havent followed the rule of the semi conductor - but self driving capabilities OTH have due to the fact that its really just computer processing power and sensing technology.

The play for self driving cars is likely nvidia for their processor - but they've already had run up - and who ever is making the lidar so small and cheap - but again they likely have already had some run up.  But anyone who is implementing the AI will likely be using both of these as they are the leaders. - that is unless something better comes along.

I have thought a lot about Nvidea. Their problem is Intel. Intel has been known to swallow competition(AMD). While Nvidea is better poised than AMD, Intel has a P/E that is 1/3 that of Nvidea.

I do like the idea of a lidar play. But you are right when asking "which one".

As I think more about it, I would love to see something like "The A-EV Index fund", that simply buys all of the converging technologies, and all the players  in each market. That would have you losing up to 100% on the losers in the field, while gaining perhaps 1000% or more on the winners.

Here is an example:
https://www.investopedia.com/markets/etfs/carz/

The problem with CARZ is that it seems to only be interested in automakers, and I think that is a mistake based on the research of the video, since automotive is not what is poised to take off. It is the tech that goes into those cars. In fact, if the video is accurate, the auto industry is actually poised to DECLINE substantially as new cars travel 10 times farther in their lifetime and fewer cars are on roads.





boarder42

  • Walrus Stache
  • *******
  • Posts: 7845
Re: Investments in Energy and Transportation
« Reply #7 on: December 12, 2017, 06:47:40 AM »
did you watch the video?

Tony isnt really trying to predict something that is as far off and needs more research on the level you're comparing it to.

Self driving cars are here and being tested in many markets.  GM plans to be 100% driverless by 2019 in their test markets.

This doesnt compare to fusion - unless i'm missing small test markets where these reactors are working.- or pharma test trials - as i'm not aware of an FDA approved trials for the drug you're talking about

Its one thing to try to predict what will be next its another thing for that to already be in beta testing and likely to follow a standard technology curve in regards to price and performance.  Tony isnt really reaching very far in his predictions - just taking the curves that exist and applying a variant of moores law.  b/c batteries and solar panels havent followed the rule of the semi conductor - but self driving capabilities OTH have due to the fact that its really just computer processing power and sensing technology.

The play for self driving cars is likely nvidia for their processor - but they've already had run up - and who ever is making the lidar so small and cheap - but again they likely have already had some run up.  But anyone who is implementing the AI will likely be using both of these as they are the leaders. - that is unless something better comes along.

I have thought a lot about Nvidea. Their problem is Intel. Intel has been known to swallow competition(AMD). While Nvidea is better poised than AMD, Intel has a P/E that is 1/3 that of Nvidea.

I do like the idea of a lidar play. But you are right when asking "which one".

As I think more about it, I would love to see something like "The A-EV Index fund", that simply buys all of the converging technologies, and all the players  in each market. That would have you losing up to 100% on the losers in the field, while gaining perhaps 1000% or more on the winners.

Here is an example:
https://www.investopedia.com/markets/etfs/carz/

The problem with CARZ is that it seems to only be interested in automakers, and I think that is a mistake based on the research of the video, since automotive is not what is poised to take off. It is the tech that goes into those cars. In fact, if the video is accurate, the auto industry is actually poised to DECLINE substantially as new cars travel 10 times farther in their lifetime and fewer cars are on roads.

correct thats the concern i have with any company outside of tesla or others in the sole new A-EV space- ford GM etc. while they will have to adapt and become transportation providers rather than focusing on vehicles sold- i dont know who will adapt correctly and who will fall by the way side.  and will that business model be more lucrative than their current model of making cars to sell to suckas.  i dont think it will be as lucrative. transportation as a service vs sales of transportation vehicles. 

i could be wrong as the market already values Tesla higher than Ford and GM i believe. 

People keep talking about whether or not tesla can scale.  well in the end they dont have to b/c we need 60% less cars.  it will be an interesting ride i just dont have a clue really how to get on the ship before it takes off and likely will just keep my standard AA unless something happens. 

I'm more excited for the overall reduced cost of living the AI is going to bring to our lives.  it transcends auto and i'm most excited with medical AI to lower that insane cost down.

radram

  • Pencil Stache
  • ****
  • Posts: 956
Re: Investments in Energy and Transportation
« Reply #8 on: December 12, 2017, 07:14:46 AM »
correct thats the concern i have with any company outside of tesla or others in the sole new A-EV space- ford GM etc. while they will have to adapt and become transportation providers rather than focusing on vehicles sold- i dont know who will adapt correctly and who will fall by the way side.  and will that business model be more lucrative than their current model of making cars to sell to suckas.  i dont think it will be as lucrative. transportation as a service vs sales of transportation vehicles. 

i could be wrong as the market already values Tesla higher than Ford and GM i believe. 

People keep talking about whether or not tesla can scale.  well in the end they dont have to b/c we need 60% less cars.  it will be an interesting ride i just dont have a clue really how to get on the ship before it takes off and likely will just keep my standard AA unless something happens. 

I'm more excited for the overall reduced cost of living the AI is going to bring to our lives.  it transcends auto and i'm most excited with medical AI to lower that insane cost down.

Looks like you see what I see. I agree it will be a better world for all, rising tide raising all ships and all that. I do stand too benefit with our current AA as well. I am just looking at having a little fun at trying to "beat the market". Being FIRE it is just not worth me spending anything else other than a little excess in this specific market.

If I was a new graduate just starting out, with my first $5,000 and more investment money coming every year in the future, I might take a different approach and invest ALL of my first year funds in this market, following up with just total market from then on.

And yes Tesla market CAP at anything near GM is insane, unless they end up being the only maker in this market. Then they are WAY undervalued. I don't see it.

But when you factor in that Tesla is also the leader in changing power, it does make things interesting.