This pitch has been circulating for about six months, but has been updated with a new headline and “deadline” — instead of the big news coming on July 27 or October 27, which was the pitch earlier in the year, the date is now February 2, 2023. The company did report strong earnings in July and “meh” results in October, but the “spinoff” news that Enrique Abeyta has been promoting has not even been hinted at by the company. What follows is mostly a repeat of an article we posted on July 21, though I’ve added some updates throughout to catch up with the recent news and the minor changes to the ad.
Enrique Abeyta is pitching subscriptions to the Empire Stock Investor newsletter, which is the “entry level” letter from that publisher ($49 first year, renews at $199), with a tease about his favorite electric vehicle stock… so that’s the Thinkolator’s task this day, to get you some answers about that stock and start you on your research.
(Incidentally, I’m not sure why Enrique is headlining this teaser pitch instead of Whitney Tilson, who heads up Empire Financial for publishing partner MarketWise and is listed as the editor and stock picker for Empire Stock Investor, but maybe Whitney’s just too busy with his crossover pitches for Louis Navellier, or didn’t have a new idea to pitch this month.)
Here’s a little taste of the tease, to get you warmed up…
“My #1 EV stock for 2022 just launched a new vehicle that’s up to 50% cheaper than the competition.
“It’s the first electric version of a line of vehicles that singlehandedly makes more money than McDonald’s, Nike, Coca-Cola, and Starbucks.
“If any EV can take this movement mainstream, it’s this one.
“And the top brass at this firm knows it.
“Its executive chairman recently bought $13 million worth of shares…
“This is a company that I believe EVERYONE should own.
“And at just $12 a share, it’s also a stock that everyone can afford.
“But here’s the main reason I’m pounding the table on this stock…
“I believe it’s about to make a HISTORIC business move that could take its shares even higher.
“It involves Wall Street’s favorite seven-letter word.
“It’s a word that billionaire hedge fund manager Joel Greenblatt says can ‘make you a lot of money.'”
What’s that all about? Well, the $12 a share is old news now, it bounced back up to about $16 after the July earnings call and then fell to $12, but has bounced back up to $13.50 or so now. But he says you have to act quick (every good promo needs a deadline, after all — otherwise, the copywriter would have to live with the risk that you might take your time to think it over, which no salesman wants)…
“I’ll both blow the lid off this major move – and give you the full scoop on my #1 EV stock for 2022.
“You’ll want to move on this special situation quickly.
“That’s because if you don’t position yourself for this set-up by
July 27October 27 February 2, you run the risk of missing out on this once-in-a-decade opportunity.”
So what’s the story? Well, the seven-letter word that Abeyta hints at must be “spinoff,” going by the quotes he pulls from legendary investors Joel Greenblatt and Peter Lynch, and it’s certainly true that spinoffs and mergers and other “special situation” investments can be great investments. So presumably it’s a company involved with the EV industry that might spin off one of its businesses. Let’s see what else Abeyta says…
Back in July he shared some “big picture” thoughts, for those who are feeling a little jumpy about the markets (that’s pretty much everyone these days, I’d wager) — this isn’t in the ad any more:
“I Don’t Blame You If You’re Afraid to Invest Right Now – But I’m CERTAIN You’ll Regret It
Are you getting our free Daily Update
"reveal" emails? If not,
just click here...“I’m telling you all this not to brag – but because we’re in a situation where my skill set will be extremely valuable to you.
“Inflation is at a 40-year high. Groceries, gas, used cars, and airfare are all up by double digits since last year.
“The Fed is hiking interest rates and slashing its balance sheet by as much as $95 billion a month.
“The Russia-Ukraine war continues to send shockwaves through the global markets.
“About 40% of economists are predicting a recession in the next 24 months.
“And investors from all walks of life are waking up every morning to a sea of red in their portfolios.
“And sure, you can sell all your stocks or put your head down and wait for all this to blow over…
“But if you do so, you’ll miss out on what could be the best moneymaking opportunity of the decade… A chance to turn a small stake into a GIGANTIC return… starting on July 27.”
But he has us a lot less of that “fear” stuff in this latest ad… he uses a little more “greed” in the FOMO pitch and just emphasizes that you need to get in before the big announcement…
“… if you regret missing out on the Covid-19 market rebound, you’ll doubly regret missing out on this.
“I’ll give you all the details on the $12 stock at the heart of this game-changer – and why you need to swing into action by
October 27February 2.”
So… what is it? Well, his optimism stems from the broad “reset” going on in the automotive industry, so we can start there…
He talks up past “master resets” in the market that brought new winners and surprise losers, including Amazon’s “master reset” of retail that destroyed Circuit City and others, Apple and Microsoft’s reset of the computer business at the expense of IBM and the mainframe computer companies, who didn’t “believe” in the personal computer, and AT&T being caught flat-footed by the telecom revolution that sent Qualcomm, Blackberry and others to new heights.
This isn’t a new idea, of course, that industries get disrupted and have winners and losers, but it is awfully had to see around the corner and pick the companies that will win… especially when all the potential winners are so much more expensive than the possible losers, and when the actual trajectory of the technology is not very predictable within a tight time frame (fully autonomous cars have been “a couple years away” since 2014, for example, the end zone keeps getting pushed off a bit further on the horizon as companies hit technological and societal hurdles, and a lot of “disruption” works like that — fast and obvious in retrospect, a decade or two later… frustrating and volatile when it’s happening).
So what’s the story with electric vehicles? They’re obviously becoming a much larger piece of the auto market, up to about 5% of new auto sales in the US now, and the trend is in their favor — but who’s going to win, and how long will it take?
Here’s some more from Abeyta’s ad:
“We’re talking about a complete overhaul.
“Assembly lines will be stripped out of factories and replaced with completely autonomous ones…
“And entire plants will become immediately obsolete and shuttered on the spot…
“Volkswagen’s CEO Scott Keogh describes it as ‘one of the biggest industrial transformations probably in the history of capitalism.'”
Abeyta also echoes the pitch from his colleague Whitney Tilson’s older “TaaS” promo that ran a couple years ago, talking up the ways in which drivers will save money because of electric and autonomous vehicles, to further emphasize his point that things are going to change in a big way…
“… the auto industry’s Master Reset is set to…
“Put as much as $38,129 back in consumers’ pockets…
“Give drivers the chance to make up to $5,000 a year by doing virtually NOTHING…
“Provide as much as 10 days of backup power during natural disasters…
“And give investors dozens of chances to multiply their money many times over.”
That $38K number is the estimate for how much EV owners might save over the life of a vehicle, since electric vehicles have far fewer moving parts, much lower expected repair costs, and, of course, don’t suffer from high gasoline prices (though how much electricity will cost for most folks in the future, nobody knows). Those are guesses, and it’s going to be a long time before we have real world numbers, but clearly there should be some savings. At least until batteries have to be replaced, since that makes up a large portion of the cost of an EV.
The “make $5,000 by doing nothing” bit is not actually a reference to lending your car out for the autonomous taxi services that have been teased so often over the years, that’s a “grid storage” opportunity — using your EV battery as backup storage for the grid, and selling the electricity back during peak hours. I suppose that’s technically possible, particularly if you have a bunch of solar panels and some battery backup beyond your vehicle, but my sense is that “vehicle-to-grid” stuff is a little bit more of a pipe dream at this point.
And the “as much as 10 days of backup power during natural disasters” is a little more direct, a few electric vehicles on the market now do offer two-way charging — meaning that they can operate as a backup generator for your home if they’re fully charged up (assuming you don’t need to drive anywhere). That’s likely to be reality a lot sooner than the “earn money by selling your battery power to the grid” bit, even if it’s more of an auto selling point than it is a real world use for most drivers.
Which leads to a hint, as well…
“… my #1 EV stock for 2022 is way ahead of them.
“This company – which again trades for only $12 a share – just launched a vehicle that can provide full power to your home for three days.
“Dial back your energy usage, and it could power your home for 10 days.”
That’s almost enough to ID this “secret” stock by itself, to be honest, I’m sure you’ve seen the ads… but we’ll run down the other clues just to be sure…
Abeyta also points out that after battery prices eventually come down, as they have gradually been doing as manufacturing gets more efficient, and prices of EVs stop being so much more expensive than conventional vehicles, a big revolution in charging time could be what changes the EV market for good…
“Another big roadblock to EV adoption is charging time.
“It currently takes anywhere from 30 minutes to 12 hours to recharge an EV.
“If you try to charge an EV any faster than that, it will cause the lithium batteries to overheat and then degrade over time.
“However, a team of engineers over at Purdue University has just invented a solution to this problem….
“… this new charging cable they’ve devised could go down in history as their crowning achievement.
“It harnesses an alternative cooling method to deliver a fully charged battery in less than five minutes.
“That’s roughly the same amount of time it takes to pump your gas!
“And here’s the icing on the cake…
“This research was funded by my #1 EV stock for 2022.
“That means they’ll get first dibs on this breakthrough tech when it’s ready for commercial use.”
And Abeyta goes on to lay on perhaps too many clues for us, so this ends up being a pretty easy answer…
“there’s one category of this sector that I believe will reap the lion’s share of profits…
“And it’s the one that consumers and companies are most excited to see come to fruition.
“Consumers have amassed more than 1.6 million reservations worth over $105.4 billion.
“Amazon, FedEx, UPS, Walmart, Merchants Fleet and even the U.S. Postal Service have pledged to put more than 581,000 of these vehicles on the road….
“I’m talking about electric trucks. A market projected to grow by 1,594% by 2026….
“But I believe one company will outsell them all…
“It just electrified a line of pickups that generate more than $40 billion in a good year.
“That’s more sales than McDonald’s, Nike, Coca-Cola and Starbucks.
“And it’s about to get even bigger.
“Its new electric model has received nearly 200,000 reservations – forcing the automaker behind it to quadruple its production to meet demand.”
That’s right, you probably know the answer and can shout it out even before I have the tarp all the way off the Thinkolator, no? This is, of course, good ol’ Ford Motor (F), maker of the best-selling truck in the world in the F-150, and a company that made a huge splash last year with the launch of the electric F-150 Lightning.
If you’re curious about that charging cable R&D, by the way, the press release about it is here — there are lots of companies trying to safely speed up the EV charging process, so that shouldn’t be the core reason for an investment (the tech is at the stage of “hope to have a protoype in a couple years”), but I guess it’s a good thing that Ford is investing in this kind of R&D, even if we don’t know which breakthroughs will end up being the big ones.
And, yes, Abeyta is at least partially betting on a spinoff…
“I believe this automaker’s about to announce a business move that’ll unlock a TON of shareholder value.
“According to my analysis, I’m speculating that it will spin off its EV division and turn it into its own independent company.
“Now, nothing is certain, but if you really know stocks, you know that spinoffs are like manna from heaven to investors.”
And that’s where the deadline comes in as well…
“If you own shares of the parent company, you could automatically get tax-free shares of its spinoff for FREE.
“So if you buy this automaker today, you’ll get the chance to own both a great, dividend-paying company with massive margins, tons of cash and industry-leading brand loyalty…
“And a red-hot startup that could command a sky-high valuation as a pure EV play.
“In other words, buying this stock right now is an incredibly low-risk way to invest in the auto industry’s Master Reset that’s just now hitting a tipping point.
“And if you get in before
July 27October 27February 2 – its next scheduled earnings announcement – you could get shares for a HUGE discount.”
Ford did report its quarterly earnings on July 27, and, like most of the big automakers, the results were pretty good (Ford did better than GM or Stellantis). They reported less exciting results on October 26, roughly matching estimates. And they haven’t announced their fourth quarter report date, but it’s likely to be on February 2 (it was on February 3 last year).
Is Ford really going to split into two companies? Well, they certainly didn’t say anything about such a plan last month in their earnings call, and a spinoff is definitely not a consensus idea. Personally, I think there’s very little chance of that — but I guess it’s not impossible. There have been corporate changes and spinoffs at Ford in the past, mostly revolving around Ford’s attempts to first buy up brands to keep up with GM and what is now Stellantis, and then to shed those brands and refocus (Ford bought Lincoln 100 years ago, which I guess is outside our purview, but more recently it owned brands like Jaguar, Land Rover and Volvo before essentially selling those off in their survival fire sale from 2006-2010).
Ford ended up diluting shareholders to survive the 2008 crash, too, though didn’t fall into bankruptcy or ask for a rescue from the feds like GM and Chrysler did… and that means the Ford family’s economic stake in the company is now down to something like 2%, though it’s also true that the family maintains a strong board presence and has “founder shares” of the company that give it about 40% voting control (Ford has had someone from the family in charge, as the CEO or Executive Chair, for most of its history, and recently added two of Henry Ford’s great-great-grandchildren to the Board of Directors, both of whom were already company employees).
I think it’s exceedingly unlikely that the family would want to split the core Ford brand into two companies, and I think they’re really just aggressively positioning Ford to keep up with the EV transition (and hopefully lead it, as the F-150 Lightning appears to be a huge hit so far)… but that’s just my read of the situation, I don’t really know what the Ford family is thinking.
Ford is certainly betting big on the EV transition, along with General Motors (GM) and others — they plan to invest $50 billion in EV production over the next few years, they’ve partnered up with Rivian (RIVN) to some degree, to help make sure they have access to more technology, and they have cut back in some other areas to help pay for their EV push… and the electric Mustang and F-150 have been very well received.
And this is quickly going to become a non-trivial part of the business — Ford management thinks they’ve got enough batteries and materials “on order” with suppliers to build 600,000 EVs a year by next year, which would get them pretty close to the volume leaders, Tesla and BYD (Tesla is selling a little over a million cars a year right now, with a lot of them in China)… and at this point, I would guess that the majority of those EVs sold next year will be F-150 Lightnings. I might even have to get in line to order one of those, given the long delays in getting big trucks to market from both Tesla and Rivian.
Right now, Ford shares are about where they were five years ago — even after rising by about 20% in the past month, they still trade at a PE of about 6 (earnings estimates for 2023 and 2024 have come down a little, so they’re no longer expected to grow… but analysts think earnings will be pertty flat, down a percent next year and then bouncing back a touch in 2024). They do pay a dividend as well — it was cut during the COVID slowdown and paused for a while, but was increased by 50% this quarter so the dividend payout is back to where it was pre-COVID. At the current rate, it offers about a 4.4% yield to those who buy at $13. Sales could obviously disappoint if we head into a recession, or if COVID chip shortages continue to pressure deliveries (that problem seems to be shrinking, it has recently been other parts that have slowed things down, not the chips… but things could change), but it’s a large and strong company that has been through a lot worse.
They’re not alone, though — all of the big automakers (except Tesla (TSLA)) are similarly trading at pretty steep discounts to the market, and they all have EV strategies and big commitments to electrify most of their fleet over the next decade… even though some are currently looking better than others.
So you don’t necessarily have to go with Ford, not when the whole industry is in “reset” mode. Volkswagen (VWAGY) is doing well with EVs, too, from Porsche on down… GM is even a hair cheaper than Ford… Toyota (TM) was late to the EV game but shouldn’t be counted out… and Stellantis (STLA), which has arguably lagged in EVs so far but owns Jeep and Dodge Ram and some strong brands in Europe now and is perhaps catching up, is the cheapest of them all at less than three times forward earnings estimates, probably because of the heavy exposure to Europe at a time when the continent is in a tough economic patch (I have indirect exposure to Stellantis through Exor, for full disclosure — Stellantis now includes Chrysler, Jeep, Opel, Fiat and Peugeot, along with a few smaller European brands.) Ford is cheap, but the whole sector is arguably dirt cheap now, and that might not change anytime soon — I think it’s probably a decent bet at these prices, which is the same thing I said earlier this year at similar prices, but investors might well have to be patient if the economy cycles down and auto companies trade at low multiples for an extended period of time.
Abeyta also offers some other investment suggestions in the teaser pitch, including a few “EV stocks to avoid” that are too story-driven, he calls them the “Seven EV Deathtraps” and hints at a couple of them:
“You might be surprised by a few of the names on here.
“One of them has attracted a “crowd of retail investors,” according to Bloomberg.
“Today, it’s down almost 80% from all-time highs, and I believe it’ll keep on plummeting.
“Another is a popular Chinese EV maker that faces a serious risk of getting banned from the New York Stock Exchange.
“The SEC just put it on a list of companies that could get delisted if they fail to turn over audit results.”
That first one is almost certainly Rivian (RIVN), which is having lots of trouble getting its manufacturing spooled up (not unlike Tesla in the early days) — I wouldn’t argue with avoiding RIVN, they’re going to need a lot of money before they really get going, and trouble with any of their first wave of vehicles could bring a lot of risk for shareholders… though they do have those big Amazon delivery truck orders to backstop the business for a little while. I bought RIVN shares because I was offered an IPO allocation (because I have a preorder for one of the trucks, not because I’m a Wall Street big shot — I almost never get IPO allocations), but I did take profits pretty early on when the sentiment started to fall apart.
And the second is presumably Nio (NIO), the biggest of the NY-listed Chinese EV companies, though it could also be Li Autu (LI) — again, no argument from me, it’s really hard to predict what will happen to the many Chinese stocks who are under threat of getting delisted in the US unless they decide to follow the SEC’s new guidelines on accounting, and neither NIO nor LI is particularly a bargain given the current state of the business, partly because they face strong competition in China from both Tesla and BYD as well as other homegrown brands. Frankly, I’d also avoid Lucid (LCID) and Canoo (GOEV) and Fisker (FSR) though I don’t know if those are on Abeyta’s list — its’ true that Tesla paved the way for EVs to become a big business, but now that we’re over the hump and the mainstream car companies have committed to EVs, it’s hard to see the EV-only companies who don’t have strong manufacturing or distribution capabilities being “next Tesla” opportunities. (For what it’s worth, those have all had a terrible year.)
I still agree with Abeyta to at least some degree — If I had to buy an EV maker, it would very likely be Ford or GM at this point… and Ford is a little more appealing (though, as I said, the only one I’m actually really exposed to at the moment is Stellantis). As the market grows, scale and logistics and manufacturing might are probably going to matter a lot, and it’s hard to see anyone capturing that Tesla “lightning” in a bottle a second time.
Elon Musk did something amazing in building up Tesla, with not just engineering and design brilliance and foresight but also hype and guile and a little sleight of hand along the way to building up that battery and manufacturing capacity… but I don’t think the big auto players are likely to be beat by the next generation of EV-only firms and Musk wannabe entrepreneurs. The big fellas didn’t believe, and didn’t move fast enough to catch Tesla early on, and since Henry Ford probably no industry leader has really had Musk’s gift for inspiring investors… but once Ford and GM and Volkswagen and Mercedes and BMW and Toyota and Honda and Hyundai really get moving, as they’re doing now, they’re probably going to be a lot more powerful than the dozens of startups who are trying to follow in Musk’s footsteps. And God knows they’re a lot cheaper, and their hundreds of billions of dollars in annual sales help give them a lot more access to capital for investing in the EV transition.
Abeyta also throws out another tease that we should “invest in white gold,” which is a reference to lithium –there are a bunch of different battery chemistries being tested and rolled out by different companies, but almost all of them that will produce in volume over the next several years rely heavily on lithium, and lithium prices have been pretty strong in recent years and could certainly keep rising. Here’s what Abeyta says about “the best way to own white gold”:
“Lithium is just going up from here. It’s a simple matter of supply and demand.
“According to the International Energy Agency, the number of EVs on the road will hit 145 million by 2030.
“Not only is that up 21-FOLD from today… these vehicles will require nearly 1.6 MILLION tons of lithium.
“And I’ve zeroed in on an easy-to-follow, ‘one-click’ way to play the surge in lithium demand.
“It’s a way to essentially own the entire lithium market with one trade.”
So Abeyta must be pitching a lithium ETF. There are a few of those, though the two biggest ones focus on both lithium production and battery technology so might be a bit diluted if you’re looking strictly for a play on the metal itself. Given that Abeyta’s selling into a large audience, I assume he’s going with the more liquid option, which is the Global X Lithium & Battery Tech ETF (LIT) — that’s the biggest and oldest of the ETFs for this little segment of the market. You could also look at the much smaller Amplify Lithium & Battery Tech ETF (BATT). LIT is far more exposed to lithium, BATT weights more toward battery makers and Tesla — and, frankly, BATT is so tiny that I would guess it might get shut down if the market stays weak, it has less than $200 million in assets under management (LIT is small for an ETF, too, but is at least over $4 billion).
If you want just lithium, though, there’s also a Horizons Global Lithium Producers ETF — that’s just for Canadians, though (ticker HLIT in Toronto), and it’s even smaller (AUM about $20 million), but does just own miners and producers like Albemarle (ALB), SQM (SQM) and Ganfeng (GNENY) and not-yet-producing explorers and developers like Lithium Americas (LAC). If you just want to stick with one leading stock, then I think Albemarle is probably the most solid of the lithium producers, though Allkem ((AKE.TO, OROCF), formerly known as Orocobre) is also interesting, and SQM is the cheapest… Allkem is producing in Argentina and Australia, the other two are primarily dependent on lithium brine production in the Atacama in Chile, long the cheapest and easiest source of lithium but also sometimes exposed to political and regulatory risk. An ETF could spread things around and ameliorate some of that risk — LIT would get you into BYD and battery makers like Panasonic and LG Chem, too, and maybe that’s not so bad an idea… but it would also smooth out any windfalls you’d get if Lithium prices rise dramatically.
At this point, lithium has held up pretty well — the LIT ETF is about flat since the first version of this article ran in July. Not as good as Ford’s performance to this point, but more or less keeping pace with the broad market.
So there you have it… a broad pitch for electric vehicles, and specifically a push for Ford and for lithium as the best ways to play that, at a time when the EV business is growing pretty well but most of the stocks have seen better days. Sound appealing? It’s your money, after all, so you get to decide how to invest it — think Ford is worth a bet, or one of the other legacy automakers? Prefer some of the startups in the EV space that have different designs or strategies? Let us know with a comment below. I’ve kept the comments from our original article attached below to help get you started.
i wouldn’t avoid Lucid
What do you like about it?
I’ll bite, the intense attention to design detail. The quality of materials. Engineering seems to be excellent from what I read, the downside would be of course the charging network. I bounced in and out of LCID, did OK. I think todays price of $18 something, is a safe entry point. It will probably take a couple years to double if it does. How much room is there in the high priced luxury market?
Appealing? Ha. Nothing Abeyta recommends is appealing unless one is looking for short ideas. An Empire premium pick from early last year–Voyager–is now in bankruptcy. Enrique was pounding the tables to buy this. “ITS GOING TO $100!!” Recently he advised shareholders and the other big losers, the Voyager account holders, to just forget about Voyager and move on. The only one who will benefit from everyone moving on from this financial debacle is Abeyta.
Voyager certainly did fall apart quick when cryptos collapsed. I guess they’re not alone in that, not sure exactly what happened but I was stopped out of my small Voyager speculation back in April.
Everybody makes some blunders and falls in love with a stinker sometimes, though (or at least I do)… the key is to take the ideas and think for yourself, I think. Don’t buy anything just because a pundit picked it, if it’s your money then the investment has to make sense to you.
Here are some tips on EV Pick UP s No One Has the Balls to Tell You the Truth About Electric Trucks, So I Have To
127,661 views Jul 2, 2022 Electric truck review. Watch This Before You Even Think About Buying an Electric Car, DIY and car review Scotty Kilmer.…
5.7K
Scotty Kilmer
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Did you intend to have a link here?
Here’s the link. https://www.youtube.com/watch?v=aw3es6GajGc
This video was slightly entertaining, but mostly just funny.
Seeking out selective information to confirm a bias is lazy.
It is getting harder to read your newsletter without at least two fisher ads and six ads about a big dividend on the seven dollar stock. Perhaps if we paid you a little more money per year could we go ad-free? Since I already made the mistake of giving Fisher my phone number, I certainly don’t need anything else from them.
Thanks for letting me know — the ad load fluctuates, but we may be able to offer an ad-free option soon.
I find the tendency to just dismiss Chinese stocks quite offputting. The fact is the Chinese are light years ahead of the US, & the west generally in everything to do with alternative energy. Right now, solar & wind are cheaper than fossil fuel & China’s much stronger move into this will give their manufacturing industry an insurmountable lead looking forward. Our denial of climate catastrophe will not be pretty. Long BYD & several other Chinese companies. Investing shouldn’t be parochial.
I agree with you on some of that, China is the biggest market in the world and their authoritarian structure means they can go “green” much more quickly if they want to… and there are some advantages to them being a rapidly developing economy that has leapfrogged some of the evolutionary steps in other economies, but I often think I need to take the Chinese data with a big grain of salt.
And I don’t think US investors in many Chinese companies are necessarily going to have as firm a claim on assets in Chinese companies as they do in the US if things go south. I’m periodically tempted by Chinese companies, but the political divide over the past five years makes it harder to justify an investment… which at least means that I think we need a wider margin of safety to invest in PRC companies.
To say nothing of the perils of investing in a company whose CEO gets on Premier Xi’s bad side 🙂
There are endless examples of shareholders getting shafted by US corporations when things go south. You listed 3 in this article. US investors holding Chinese stocks is a different kind of risk, but it is simply investing risk in general.
True, everything is relative. There are no nations whose corporate offerings are all good or all evil, even if we agree on what those terms mean. I’m a lot more comfortable investing with the rule of law and transparency we get in the US, but it’s also true that we’re a smaller and smaller part of the investing world and nobody should be overly “home-based” with their investing… and, of course, that doesn’t mean I believe things to be perfect.
I highly suggest not dealing anything China. They have no sense of loyalty to anyone. It is better to keep up USA investments and choke out the bad actors.
https://ourworldindata.org/electricity-mix#:~:text=In%202019%2C%20almost%20two%2Dthirds,and%20nuclear%20energy%20for%2010.4%25.
China is hardly ahead of the world in renewables…
They are ahead on EV’s because the CCP dictated that but they burn an awful lot of dirty coal to generate the electricity. The reason EV is so important is their lack of oil and therefore lack of energy independence however I imagine now they are cosying up to Russia, oil may be more secure. Chinese quality is passable but no one could call them innovative.
I’ve owned F for longer than I’d like to admit…and I’m *still* underwater!
While I’m not anti-EV, I’m not a huge fan of any EV stock at the moment…and, I still don’t see an EV-charging stock with a legit plan to make a profit.
China is a third world hellhole, and anyone who invests there deserves the losses they will endure.
Lithium investments make sense to me, ‘though I’d recommend a direct purchase of ALB vs the LIT ETF.
I bought NIO and XPEV some time ago and was fortunate to sell them before they sunk. They have somewhat bottomed out so I bought into them again since they’re quite prominent in China and they were early to get into the EV game. I recognize the SEC issues but I believe they will eventually abide by the requirements since it is to their benefit. I think NIO may be selling SUVs in Europe(?)
The Chinese as you say are monolithic and the government sets the tone for everything. But I do believe they are aware of the climate crisis and the EV market will flourish IMHO. China is a huge market so sales may dwarf the US. Here in the US we sadly are slow to accept the fact that IC vehicles have to go on the junk heap and EVs are the future. I believe my next vehicle will be electric but I’ll wait for the Japanese car companies to get it together.
I wouldn’t put money in any US car company chasing the EV market (except Tesla which I own) since my experience has been we can build the JW space telescope but we can’t build a washing machine (new M__ag needed replacement parts after 1.5 years). There is an interesting company called Lightning Motors in CO for which I bought long call options. They targeted electric trucks, especially school buses which I believe is brilliant since school buses sit for long periods (good for charging), drive short distances, and cost less to operate saving school districts and taxpayers money. Delivery trucks and small vans are perfect targets too.
Thanks for the perspective. My non-electric Ford is by far the best car I’ve owned, US automakers have come a long way — I would have felt
Similarly 15 years ago,
But would be happy to buy an electric Ford today.
$ZEV
https://twitter.com/H0U3/status/1550365185772224513?s=20&t=-swyQ2_gUvl2bIoNdbvHEA
America built very good washing machines for many decades. Americans will undercut themselves in pursuit of cheap upfront cost.
We did, and my father owned a laundromat so as a student in the ’60s I learned to repair them. They were workhorses and the Kenmore (actually Whirlpool), Whirlpool, and Maytag I owned lasted 15-20 years. But these mostly robotic machines of today filled with circuit boards have to be repaired by a technician who swaps out boards at $100-200 (+ labor) at a pop. Replacement parts according to the tech are only required to be available for a projected (gov mandate) 7 years. My new machine needed a board after 1.5 years. The tech said always buy the extended warranty with a new machine. It’s a lot less than the cost of your first repair. And BTW this new model was close to $900 (not cheap for me, but probably a healthy profit for the manufacturers).
China does not give a damn about the (alleged) climate crisis. If they did, they would not be opening 50% of the world’s new coal-burning plants. And, bear in mind they are doing this at the same time as their populatuon shrinks and their economy is on lock-down.
Again: I am not anti-EV. But, conversion to an all-EV economy requires an infrastructure and manufacturing/mining capacity that is decades away.
I’m no lover of China but facts are another thing. China has slightly more than 4X the population of the US although the number is shrinking . China consumes 1.5 X more energy (in trillion kWh) than the US and produces a little more than half the metric tonnage of carbon dioxide as the US (nsenergybusiness.com, wri.org). They have a growing middle class and so they will need more energy in the future and as the largest producer of coal guess what. The US needs to clean up our act before we point fingers.
With summer temperatures worldwide getting more elevated we’ll all be cranking up our ACs and rolling blackouts might become common. I believe the adoption of EVs will move faster as soon as all the major car companies get their EV acts together. My next vehicle will be an EV.
Whitney Tilson is just another wannabe. A real circus barker. 2 years ago both he and Porter Stansberry bet that TSLA was going BK with stock maybe to ZERO. Both could not stand that Elon Musk was so much brighter than either of them.
Hi Travis,
Have you written articles with regard to Chaikin Power Gauge? Just wondering if it works and how reliable the tools is? I recently read an article about the The Power Gauge created by Wallstreet Guru Marc Chaikin on his Power Gauge that is offering $49 a year for his system.
The Chaikin indicators or oscillators or whatever they’re called are
Pretty interesting, though they’ve been widely available for decades and all quantitative sources of “alpha” get eroded away as computers start using them. I haven’t looked at his more recent stuff.
I have been using the Chaikin Power Gauge and I find it quite useful. I like the fact that it breaks down a companies earning and financial data in an easy to understand visual way with a red to green rating system for each category. It makes it easier for me to evaluate stocks I am researching. I have the Power Pulse Premium upgrade that allows you to create watchlist and emails me an update every morning on stocks on the list that have ratings changes. As for Chaikin’s recommendations, they have not performed well so far. Luckily I haven’t invested in his picks.
#Marc Chaikin
Hi, been owning LIT etf for some time but when assessing deeper there are several information indicating ongoing investments in obtaining lithium worldwide leading to general price drop. Wonder if anyone has some strong knowledge about it?
In all commodities, high prices solve high prices — eventually, money flows into increasing production or innovating to use less of the commodity.
Don’t know what the timeline will be for lithium — car batteries use such a huge amount that it has begun to
Upset the equilibrium, and it
Could go much higher before it goes much lower. People have been predicting this spike for more than a decade, so there has been some preparation and a big increase in production, but you’d need someone more expert than me to decide when the seesaw starts to lean the other direction.
I am told that F quit paying dividends and if true what is all this hype about Ford? Usually dividends mean the company is doing good. Wondering
Did they cancel the dividend again? Hadn’t seen that, if so — they paid the last one in early June.
Retired and getting on in age, I only buy shares in individual companies when I think they will be game-changers. (The relatively few hundred Tesla shares I bought when the company went public paid for a couple of years of living expenses when I sold out after the bubble began to reach insane dimensions; Musk became more distracted, scatter-brained, and unreliable; and the company lost promise as a cohesive, pragmatic, environmentally sane overall energy solution for individual consumers.) Though it is picking at small parts of the picture with things like using vehicle batteries for emergency backup energy, Ford does not begin to give hope for integrated, sustainable energy systems. Like nuclear, lithium has huge and largely unaddressed environmental, supply, and security issues–and not nearly enough effort is going into the R & D for the next-era battery and other storage solutions that will be needed for long-term sustainability in a steady-state world economy. On a shorter time scale and more relevant to our 70% consumer economy in the U.S., no EV maker for the U.S. is paying attention to the really big missing area in the marketplace, namely small, relatively inexpensive, safe, reliable cars, SUVs, and trucks for Everywoman/Everyman/Everyother that will get a person from place to place without having to operate an iPad. No less, and probably much more will be needed than what was done to the U.S. auto scene by the Japanese in the late ’60’s and through the 70’s and 80’s.
I have the power pulse which is the cheapest portion of power Guage, the Guage report comes out with an idea each month. I’m not too impressed by his ideas I do better on my own, like to compare 52 week lows with his power pulse and use the money flow indicator to see if money is ebbing or flowing. The pulse quickly tells you at a glance if the company is trash or not. Found pbr which is highly profitable oil producer in Brazil with 3 dollar dividend and is under 12, I think Ben Ghahm would buy that! If you want to pay more for his expensive services you can but I don’t find his tools as forward looking as he touts, at least not in this market.
I think a big grenade is about to get rolled into the EV Battery room.
The science says that unstable lithium is not the answer at all. EU is already making noise about banning LI Ion batteries altogether. Have you tried to board a flight recently with a handful of Li Ion batteries ?
The metal is fundamentally structurally loose, does not hold a charge well, will wear out at 120,000 miles, is hard pressed to get 350 miles out of a charge and takes too long to charge without overheating.
Graphene battery technology is the solution and the Chinese+ Tesla+ lithium stocks are going to have a very unpleasant outcome.
Here’s a good investment. SOLIB SOLUTIONS LLC. SOLID STATE BATTERIES with 3 patents. You can invest thru NETCAPITAL
Good luck to you on that. These super-early investments in new battery chemistry ideas scare the hell out of me — sooo many hundreds of labs are working on this stuff around the world, both in universities and within large battery companies and startups, that my inclination is to wait for actual orders to be placed and manufacturing capacity to be growing or established. All the ideas sound equally revolutionary when they’re trying to raise money. R&D is sexy and fun, and pays off huge if you get extremely lucky, but I think you do need that extreme luck.
I’m not a fan of this hype service, but I think F is a decent investment. Also, note that the crazy fast battery charging technology he talks about at Purdue is an R&D project. They are talking about being able to test a prototype in TWO YEARS. It does highlight the fact that there will be a ton of investment in EV technology of all stripes.
Ford nailed it with the Lightning pickup truck. That EV will sell well in the “red states” and give them a hell of a franchise.
I did buy some $F and own it as an investment but also as the other side of a rolling “pair trade” where I short various EV/Battery/Charging names against it. This takes the market risk mostly out of the position.
As for Lithium, I just don’t know. An ETF seems like a low-effort way to have exposure, but I’m not big on commodities.
For a lithium play, look at Brazil Minerals (BMIX) Has anyone found this yet?
Such an inclusive look at all the approaches to lithium and the battery makers, too. Who owns what. Much needed.
Such an inclusive look at all the approaches to lithium!
IMHO, Ford is in front on not only the F-150 Lightening with all it’s built in buyers, but the Mustang Mach E is going to catch Model Y fast. I told folks to buy F in 2020 under $7 and we’re buying more now. Ford has three key advantages: their focus is perfect on EVs with ICE switching to hybrid. By 2030 they’ll be all EVs and hybrids. Next, understanding this is vital, their 4IR tech is the leader and among the best in the world. It allows them to get into other businesses. Which, is good, because their real estate is about to be 50% freed up just as supply chains move to America. Why? EVs take 1/2 the space as ICE and they are building their new megaplant in KY. Ford is not only going to be 1 or 2 in auto sales, but they are going to become a conglomerate in other high-end manufacturing businesses that move back to America.