Thursday, May 7, 2015

Is Elon Musk the "Übermensch"

By Jared Dillian

Elon Musk just unveiled something called the “Tesla Powerwall,” a means to store solar created electricity in people’s homes… with the potential to put the entire utility industry out of business.

As you probably know, Musk also has these electric cars that people seem to like to drive… with the potential to put all the major car manufacturers out of business. Oh, and the dealerships too.

Musk also has a spaceship company. It is his stated goal to leave Earth and set up shop on Mars. He has already put the US government out of business when it comes to space.

How did he manage to do all this stuff? He made $34 million selling a software company when he was 24, which he freerolled into PayPal, which he made $165 million selling in 2002. He then freerolled that into SpaceX and Tesla.

Oh, and another thing. Musk thinks the state of California is incompetent to build a choo-choo train going from San Francisco to Los Angeles, so he drew up plans for a “Hyperloop,” basically a giant pneumatic tube that can get you there in 35 minutes for $20.

He said he didn’t have time to build it, so he gave the plans to the state for free. (Jerry Brown is going ahead with the snail rail. Unions need to get paid, you know.)

Feel Terrible About Yourself Yet?

I’m not done. He is chairman of a company called SolarCity, which is the second biggest residential solar panel maker in the country. They will come to your house and install solar panels, so you don’t have to buy electricity from the grid.

Now—if you watch the video of Musk’s Powerwall speech, you’ll start to see the genius of his plan.
You have these giant batteries you keep in your house (which take up little space and hang flat on the wall).
You have solar panels on your roof to generate electricity.

You store the electricity in the battery when the sun goes down.

You charge your car off the battery.

Everything—every house, every car, every business--is now powered by what Elon Musk calls a “giant nuclear fusion reactor in the sky, which runs all the time.” Not oil or gas or coal.

I wouldn’t consider myself a big environmentalist, but still, this excites me. Have you ever heard of something called “Moore’s Law” where computing power grows at an exponential rate? It applies to solar panels too. It won’t be long before solar power is cheaper than conventional energy sources.

The politics of it are a little tricky. I don’t like subsidizing solar, and SolarCity’s entire business model is based on solar tax credits. But soon, it won’t matter—the technology will exist for solar power to compete directly with fossil fuels. And the higher oil prices go, the better solar will look.

Growing Eyes in the Back of Your Head

Elon Musk is a pretty inspirational character, but he seems to have made a lot of enemies along the way. Democrats don’t like him because he’s a creature of business and finance. Republicans don’t like him because he lives off subsidies. Not bad for a guy who calls himself half Democrat, half Republican.

The car companies sure don’t like him. If oil gets back above $100, they will like him even less. The history of the auto industry is full of all kinds of backstabbing and intrigue (see Preston Tucker).

If everyone starts driving electric cars, the oil companies aren’t going to like him very much, either.

And the utilities are really going to have it out for him. But they suck. Of all the terrible businesses out there, including the tobacco companies, I despise the utilities the most—even if it isn’t really their fault.

The utilities generate and distribute electricity pretty much the same way they have for the last 100 years. No innovation at all. Why not? Well, because we decided they were utilities! If you put a cap on the rate of return someone can earn, there isn’t a lot left over for innovation. So be very careful what you start calling a public utility.

SolarCity gives us the promise of distributed generation, where electricity is generated at the home or business, and if it’s generated in excess, it’s sold back to the grid. This already happens in dribs and drabs, and is starting to have an impact on the power trading business.

If enough people generate their own electricity, you don’t really need utilities anymore.

It’s not hard to see where this is going. The utility companies are going to fight back, hard. But not in the free market—on Capitol Hill.

If Musk is permitted to succeed—which is a big if—there’ll be no more carbon emissions and a cheap, endless power source.

Yes, We Can

This is save the world type stuff. Pretty ambitious. But will it work?

I can’t say this cynically enough: A lot of it depends on Musk managing the politics....not the engineering.
I owned both Tesla (TSLA) and (SolarCity) SCTY for a time. I traded them pretty well, which doesn’t happen often. I don’t currently own them.

One thing I love to say: Whenever you have a disruptive innovation, it’s a lot easier to bet against the losers than on the winners. And the utilities are clearly the losers.

It’s a long term thesis, maybe 20 years, but this is like betting against BlackBerry (RIMM) in 2008—one of those trades that will seem really obvious seven years from now.

Then again, utilities have never been a growth business. It’s all about the dividends. And stupid dividend investors will hang on to a trade far longer than economic sense dictates. See tobacco.

I have a hunch that 20 years from now, we won’t be burning coal for electricity. But not because of any government decree, but because the free market will have done what the politicians couldn’t do for themselves: make renewable energy sources cheaper.

Jared Dillian
Jared Dillian

The article The 10th Man: Übermensch was originally published at

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Sunday, January 11, 2015

Beyond Tesla: The Huge Profit Potential of Lithium

By Tony Sagami

One of the stocks that I get the most questions about is Tesla. I’m not sure whether investor interest is due to the gorgeous lines of the Tesla Model S, its amazing high performance engine, the high flying stock, or the energy saving nature of all electric vehicles….. but Tesla is a very popular subject.

Tesla cars don’t just look fast; they are fast! The Tesla Model S can go from 0 to 60 mph in a stunning 5.9 seconds and travel up to an impressive 319 miles on a single charge.

The Tesla Model S is shockingly modestly priced by luxury car standards. The basic model has a MSRP of $69,900, but the price tag can quickly escalate to $100,000 with optional add ons. Of course, a cheapskate like me would never pay that much for a car—even an electric car—but lots of status-conscious consumers have.

And you won’t see me buying Tesla stock either. Even though it’s well off of its 52 week high, it’s still trading for almost 80 times earnings and 29 times book value.

However, a lot of technology is incorporated into electric vehicles. The most profitable way to invest in electric vehicles is not through Tesla stock, but instead from the industry that makes batteries possible.
I’m talking about lithium, one of the most valuable natural resources of the new electronic world thanks to its unique and extremely valuable characteristics:

  • Lithium has such a low density that it floats on water and can be cut with a butter knife. And when mixed with aluminum and magnesium, it can form lightweight alloys that produce some the highest strength to weight ratios of all metals.
  • Lithium tolerates heat better than any other solid element, melting at 357°F.
  • Lithium batteries offer the best weight-to-energy ratio, making lithium batteries ideal for any application where weight is an issue, such as portable electronics.
  • That same high energy density and low weight characteristic makes lithium batteries the best choice for electric/hybrid vehicles due to car gas mileage. A car’s biggest enemy is weight.
  • Lithium has a very high electrochemical potential, meaning that it has excellent energy storage capacity.
Lithium is a key mineral of the future, but there are limited ways to invest in it because unlike other commodities, there is no vehicle to invest in the physical metal.

On top of that, few options exist to invest in it because the market is dominated by only a handful of producers: Chemical & Mining Company of Chile (SQM); FMC Corp. (FMC); Rockwood Holdings (ROC); and privately held Talison Lithium.

The Chemical & Mining Company of Chile is primarily a potash fertilizer company; FMC Corp. is a diversified chemical producer with a less than 15% of its revenues from lithium; and Talison is a privately held Chinese company.

That leaves Rockwood Holdings as the purest play on lithium by a wide margin, with close to a 50% share of the global lithium market. It’s the OPEC of lithium. It’s also trading around $80 a share right now… a lot cheaper than Tesla—the car and the stock!

Of course, timing is everything, so I’m not suggesting that you rush out and invest in lithium or any of the above stocks tomorrow morning. Instead, wait for my buy signal in Just One Trade.
Tony Sagami
Tony Sagami

30 year market expert Tony Sagami leads the Yield Shark and Rational Bear advisories at Mauldin Economics. To learn more about Yield Shark and how it helps you maximize dividend income, click here.

To learn more about Rational Bear and how you can use it to benefit from falling stocks and sectors, click here.

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Saturday, July 6, 2013

World's First Solar Powered Family Car to Compete

The Solar Team Eindhoven (STE) of Eindhoven University of Technology presented the world's first solar powered family car. "Stella" is the first "energy positive car" with room for four people, a trunk, intuitive steering and a range of 373 miles. This is the car being entered by the student team in the Cruiser class of the World Solar Challenge that starts in Australia in October 2013.

Everything you need to create your own Solar Energy!

Thursday, March 21, 2013

Students Battle it out in the Eco Marathon

We follow three student teams across the Americas, capturing their trials and tribulations as they prepare for Shell Eco-marathon in Houston, Texas, USA. In the first episode find out why Canada's Alérion Supermileage team is struggling in their determination to regain victory. See why the Let's do it again team in the USA must step up the pace and uncover the tensions within the e³- USFC team in Brazil. These innovative engineers of the future will soon do battle in ultra energy efficient cars.

Wednesday, January 23, 2013

Qatar Prepares for Carbon Neutral World Cup

Chevron is helping the nation of Qatar meet its pledge to host a carbon-neutral FIFA World Cup in 2022. The Chevron Center for Sustainable Energy Efficiency at the Qatar Science & Technology Park supports research, demonstration and training in solar power and energy efficiency.

A solar test site adjacent to the center is testing 25 different solar panels to find the technology best suited to weather conditions in the region. Watch how Chevron and Qatar are researching innovative ways to reduce the carbon footprint for the 2012 World Cup soccer tournament.

For more about energy efficiency at Chevron, visit Chevron Energy Issues or visit more Chevron Human Energy Stories.

Wednesday, January 2, 2013

How Battery Energy Storage Can Improve Overall Performance of the Grid

Battery energy storage technology is rapidly advancing to meet critical challenges of the grid, including growing demand, aging infrastructure and system constraints. In this video, Teresa Hanson, editor in chief of PowerGRID International and EL&P interviews a battery energy storage specialist on how these systems are becoming a practical, viable solution to improving overall performance of the grid.

Friday, December 21, 2012

Hanna Fathi: Powerland Cairo... Trash talking

Hanna Fathi of Cairo shows us a way to put waste to work using garbage and cow manure to make menthane gas.

Saturday, December 8, 2012

Great Idea or Big Polluter....BioLite's CampStove Invention

Mad Money host Jim Cramer speaks with BioLite's CEO Jonathan Cedar and its Chairman John Levy, about its latest "CampStove" product.

Monday, September 10, 2012

Is the Dream of Investing in Solar Still Alive?

Charles Yonts, Head of Sustainable Research, CLSA discusses the demand for solar energy and the role of alternative energy post the Fukushima disaster.