AE: The Next Stock Market Wave

[retire@40]

Every decade or so there is a new technological breakthrough or invention that causes the stock market to soar, like the Internet, for example.

Although the price of oil is driving down the stock market today, I believe in less than a decade we will be on the verge of a major technological breakthrough that will make oil less relevant. Just like CDs replaced records, and DVDs replaced tapes, so will this Alternative Energy (AE) replace oil as our main source of energy.

AE will be the driving force that will spawn an entirely new international industry. It will be an industry that produces energy on the cheap and will be able to transport that energy from one area of the globe to another very efficiently.

Although the entire market should benefit from this new technology, there will be a few players that will surge and make new millionaires and billionaires. It's always difficult to determine which companies to invest in now or when the time comes that will become the next Google, but I hope to be ready when I see it.

 

[Dawg52]

Although the entire market should benefit from this new technology,

Any way we can all help speed up the process?

 

[REWahoo]

Any way we can all help speed up the process?

Buy more tinfoil?

 

[Khan]

AE will be the driving force that will spawn an entirely new international industry. It will be an industry that produces energy on the cheap and will be able to transport that energy from one area of the globe to another very efficiently.

Cap'n, I canna change the laws of physics.

 

[Leonidas]

Cap'n, I canna change the laws of physics.

Can't you re-reroute the plasma inducers, or create a Tachyon field by reversing the deflector thing-a-ma-jiggy?

 

[TromboneAl]

I agree. Let's say someone comes up with a electric energy storage system that isn't too expensive, lets you drive 200 miles, and only takes 8 minutes to recharge. Then, whap, we're in business. Some companies are already promising this. If EEStor is for real, or air cars can be made to work, or mass produced batteries become cheap enough then it's revolution time.

It's not like we need to invent transporters or air cars, we just need a somewhat better way to store energy.

 

[lifeisgood]

Being against alternative energy is like being against motherhood. Still, if getting just 5% of our gas from ethanol helps make food so expensive that poor people are going hungry, imagine the unintended side effects of these other technologies.

 

[RDamien]

Yeah either alternative energy or the Singularity that some people feel we are on the verge of, or even at the beginning of.

Either via "supercomputers" AI or a collaboration of individuals using the processing power of computers linked via the internet or similar network.

 

[haha]

Yeah either alternative energy or the Singularity that some people feel we are on the verge of, or even at the beginning of.

The singularity is like the second coming. And it will probably improve things about as much as the first coming did.

Ha

 

[xtradoe]

If I knew what the next wave was going to be I would quite my job (for sure!) so I could use my whole 401k to buy the "next big thing" ..... I know, not smart but, hey no big risk, no big reward!!

I remember several years ago this young kid, like 13 years old, told me about Amgen, he said you should buy it, I was like right Kid! never heard of it ...... that stock did balloon a year or so later...... I was like hmmm!! I wonder where that kid is today?

 

[RDamien]

The singularity is like the second coming. And it will probably improve things about as much as the first coming did.

Blasphemy!

 

[2B]

At the risk of bringing this thread back to the investment theme, I agree there are waves of innovation and new companies will emerge. It's possible that this may be in the "alternative energy" asset class. The one thing I remember from some finance/investing book I read is that more great fortunes were made selling the 49'ers shovels and supplies than by actually going out and digging for gold.

 

[Zoocat]

Every decade or so there is a new technological breakthrough or invention that causes the stock market to soar, like the Internet, for example.

Yes, and the possibilities are probably beyond our imagination! For example, have you heard of the Lifestraw?
Vestergaard Frandsen : LifeStraw®

Although based on current technology, the Lifestraw is completely innovative and will probably change and extend lives in third world countries immensely. Very exciting!

 

[unclemick]

Well now - being one of the few on this forum blessed with a downloaded Curmudgeon Certificate:

There is this old phart in Omaha( named Buffett or something like that) who has pointed out some technology biggies that weren't blindingly obvious great investments in prior decades - radio, autos, airplanes.

Now that Budweiser may get bought out - I'm struggling here.

Me I'd be betting in the biological/genetic area - if I knew what to invest in.

In 1968 - pssst plastics, 2008 - pssst cornflakes!



heh heh heh - balanced index, full auto, soldier on.

 

[ziggy29]

There is this old phart in Omaha( named Buffett or something like that) who has pointed out some technology biggies that weren't blindingly obvious great investments in prior decades - radio, autos, airplanes.

Buffett on the airline industry:

"Sizing all this up, I like to think that if I'd been at Kitty Hawk in 1903 when Orville Wright took off, I would have been farsighted enough, and public-spirited enough--I owed this to future capitalists--to shoot him down. I mean, Karl Marx couldn't have done as much damage to capitalists as Orville did."

 

[ERD50]

...

AE will be the driving force that will spawn an entirely new international industry. ...

It's always difficult to determine which companies to invest in now or when the time comes that will become the next Google, but I hope to be ready when I see it.

... more great fortunes were made selling the 49'ers shovels and supplies than by actually going out and digging for gold.

I agree that AE will be big, also agree it is near impossible to pick who the winners will be within the field. The ones that pick correctly will attribute it to skill, and we will never know.

Tying 2B's astute observation into this - are there industries that supply goods/services to AE in general, and can be expected to do well, simply due to increased demand for their services?

I encouraged my kid when he was thinking about a biochem major for this very reason. And there is demand for biochems from the bio-fuel industries today, so that seemed to have played out. So what else - engineering firms to build the plants? Land to plant crops? Silicon processors for solar panels (hitting the basic commodities, rather than the specific solar maker)?

Anything else? - ERD50

 

[2B]

I encouraged my kid when he was thinking about a biochem major for this very reason. And there is demand for biochems from the bio-fuel industries today, so that seemed to have played out. So what else - engineering firms to build the plants? Land to plant crops? Silicon processors for solar panels (hitting the basic commodities, rather than the specific solar maker)?

Anything else? - ERD50

As a chemical engineer I am currently in the "build the plants" business. It is very cyclical but right now it is booming. I was an operating manager for a chemical manufacturer but was too easy a target during a downsizing.

If your kid is math capable and not inspired with a driving scientific curiosity, engineering is a good way to go. There are research related engineering options but the midset is still more scientific than plow mule engineering (which is what I'm doing). There is a reasonable level of technical knowhow and skill is occasionally rewarded. The nice thing about being a grunt engineer is you can make a good upper middle class living by being mediocre. The math and science ability precludes many from the field.

If McCain does get elected and the 42 nuclear plants get built, there aren't enough engineers in the US to support them. I doubt he has a snow balls chance of getting elected so the dem approach of crying about evil companies making money and ruining the environment will carry the day. We will continue to pay more and more for energy. They will pass a lot of "mandates" for companies to reduce energy consumption and improve efficiency whether it makes technical sense or not. While they're at it, I'm hoping they repeal the first and second laws of thermodynamics. That would really make things easier for alternative energy options.

I could be surprised and the dems might actually develop a credible energy policy but that would imply abandoning many of their core supporters.

Of course, the repubs have hardly distinguished themselves with an energy policy in the decade plus they had complete control of Congress. You would have thought that two presidents with an "oil background" might have done better. They really didn't have the background and didn't accomplish any credible forward movement.

I suspect we'll get the same kind of repub-dem cooperation we got during the Depression. A repub Congress and Prez screw things up and disaster looms. The dem replacements muck it up even worse in the name of taking "strong action." Hopefully, we won't need WWIII to pull out of whatever is in our future.

 

[rogersteciak]

Based on the book Engines that move markets ... - Google Book Search, I think I can predict how the alternative energy market will unfold:

1. Alternative energy technology works and many new companies are started.
2. Some companies go public and experience huge increases in their stock prices.
3. The general public gets "bubble fever" and they buy, buy, buy any stock with an alternative energy connection to it.
4. More alternative energy companies are started, putting industry capacity at too high a level.
5. The early insiders cash out and become very wealthy (as they should given all of the risks they took).
6. Overcapacity in the alternative energy industry drives down prices, forever changing the energy landscape and improving the general welfare of society.
7. The retail investors lose their shirts as the alternative energy bubble pops and all of their related stocks become worthless.
8. A few years go by and the disenheartened public latches on to the next-big-thing bubble, repeating the boom-to-bust stock market cycle.

The way to play this market (in my opinion) is to solarize your home when prices plummet in a few years and then buy the fallen stocks of profitable alternative energy companies that survive the subsequent industry shakeout.

 

[clifp]

Based on the book Engines that move markets ... - Google Book Search, I think I can predict how the alternative energy market will unfold:

1. Alternative energy technology works and many new companies are started.
2. Some companies go public and experience huge increases in their stock prices.
3. The general public gets "bubble fever" and they buy, buy, buy any stock with an alternative energy connection to it.
4. More alternative energy companies are started, putting industry capacity at too high a level.
5. The early insiders cash out and become very wealthy (as they should given all of the risks they took).
6. Overcapacity in the alternative energy industry drives down prices, forever changing the energy landscape and improving the general welfare of society.
7. The retail investors lose their shirts as the alternative energy bubble pops and all of their related stocks become worthless.
8. A few years go by and the disenheartened public latches on to the next-big-thing bubble, repeating the boom-to-bust stock market cycle.

The way to play this market (in my opinion) is to solarize your home when prices plummet in a few years and then buy the fallen stocks of profitable alternative energy companies that survive the subsequent industry shakeout.

Cynical but almost certainly true. I am seeing a steady stream of alternative energy start ups come to my (and now Nords) Angel investor meeting. I think virtually the entire club is interested in investing in alternative energy to the point where pretty lousy businesses are getting serious interest.


Hawaii is probably the best place in the planet for alternative energy. On the supply side strong predicable wind, easily tapped geothermal energy, wave energy, ocean current, oh and off course sunshine and lots of it over much of the island. On the demand side we have the highest energy prices in the US, a fairly large number of affluent "green" consumers.


Despite all of these positive factors, most of the alternative energy providers are only competitive with fossil fuels, due to tax incentives by state and federal government

 

[BunsGettingFirm]

Just heard on NPR this morning that scientists are cultivating a bug that can eat agricultural waste and poop out oil. There are many technical challenges ahead, and the foremost is finding enough little reading material for the bacteria.

 

[cute fuzzy bunny]

Isnt the "AE" already here and available, just still considered somewhat distasteful for widespread deployment?

Everyone else in the world seems to be fine with building and running nukes and using the ridiculously cheap electricity.

Seems to me its a matter of time before reasonably priced pure electric cars are available, but if we're still making most of our electricity from coal, oil and gas then they really arent the solution to anything.

 

[unclemick]

Bring on bio Willie - cause I always liked Blue eyes Crying in The Rain.

heh heh heh -

 

[al_bundy]

i hear wind power is big in texas, they produce more energy from wind than california which mostly produces hot air

 

[jimnjana]

...more great fortunes were made selling the 49'ers shovels and supplies than by actually going out and digging for gold....

Excellent Point 2B and very much on target.

Jim

 

[Leonidas]

i hear wind power is big in texas, they produce more energy from wind than california which mostly produces hot air

We're shooting to be the Saudi Arabia of wind someday.

Of course, wind energy has some problems that have to be worked out. Like several months ago when the darn wind stopped blowing and the Texas Grid (we have our own grid unlike the rest of the country) had to start cutting power to major users. Seems that the wind is not dependable. The more wind energy fed into the grid the more problematic such things like a lack of wind will become.

About five miles from my house is a coal fired plant and if they need more juice they just have to toss more coal on the fire. We are already the Saudi Arabia of coal.