Happy New Year!
It’s been a long time since I looked at a teaser ad from Global Resource Hunter over at Weiss Research, and it appears they’ve changed editors over the years — now heading it up is JR Crooks, who I don’t know much about (apparently his father is Jack Crooks, who I’ve seen mentioned a few times as a currency trader).
And, more to the point, a bunch of Gumshoe readers have asked me about the latest ad from JR Crooks, which is all about turning every dollar into $60 by riding a “soon to be legendary” wave as an innovation alters “every layer of society.”
So what’s he pitching? Well, we may not get a full answer for you today — the ad, which is selling Global Resource Hunter ($49) by pitching a “special report” called “The Pyramus Compound: Profiting From This $256.5 Billion Cash Grab,” is not all that detailed in hinting at the exact investments he’s recommending… but we can at least get you started, talk briefly about the “big picture” of the spiel, and name a few stocks that are likely in his report.
The ad starts this way, accompanied by a photo of a beaker 2/3 full of a black substance:
“Why the Pentagon, the Department of Energy, DARPA, and Boeing Are Racing to Harness This Fake Oil….
“The beaker of black goo you see on your screen right now is not petroleum.
“Yet it can produce fuel for the equivalent of $1 per gallon.
“Only it has no cartel controlling the price. It doesn’t require risky wildcatters and millions of wasted dollars to produce.
“And that’s just in liquid form …
“By processing it, this strange compound can be turned into a substance 14-times stronger than steel …
“A material firm enough to build airplanes and cars with …
“Along with becoming a carbon fiber nearly twice as strong as and more flexible than Kevlar.
“And that’s just the beginning of what it can do.”
And then he implies that there’s one company that will be at the center of this revolution (naturally, one presumes that this company will make you rich):
“It’s like going back in time to the beginning of the Industrial Revolution and getting in on the game-changing resources that would come to shape the modern age …
“Except this is a one-stop shop.
“Believe me when I say that with one fell swoop, you’re going to get access to an innovation that will quietly alter every layer of society.”
Really? So what is this substance? Some more hinting:
“The Pentagon is on schedule to invest over $7 billion in the technology behind it …
“Why the Department of Energy recently commissioned a $17 million study to examine it …
“Why Boeing has started adjusting their aircrafts to use it …
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just click here...“Even how Ford has made plans to start building cars out of it.”
The projects hinted at here are, if my inferences are correct, all over the map — these are general “alternative fuels” and “alternative energy” and “biofuels” kind of things. The Pentagon does have a multi-decade $7 billion alternative energy program, the Department of Energy has granted a total of $17 million to biofuel projects (mostly at Universities) over two funding rounds over the last few years, Boeing is trying to work with biofuels developers to create a more jet-friendly alternative fuel (partly because oil sands and fracking are hurting the quality of kerosene, apparently because some of the additives survive the refining process), and Ford has used cellulose fibers as additives to its plastics in at least one car model.
Those are important trends, and materials science and chemistry are pushing the boundaries and unlocking a lot of potential in new materials and new energy sources from biomass, but the advancements and developments have not been (and will not be) all created by or dominated by one company. Not even close. Much of it is still at the level of basic science, funded as research projects by chemical companies, timber companies, governments and universities, among others. There are a few publicly traded companies that are more focused on this than others, more than likely, and I suspect those are among the stocks being hinted at by Crooks… but let’s keep sifting and see what we get in the way of clues….
Crooks implies that this potential is like the early days of the oil business after Spindletop, before Standard Oil was broken up… and the days of the Carnegie revolution in steel…. or the huge potential in General Electric in its early days….
“I won’t tell you the firm I have my sights on will zoom 6,700% … or 15,000%, or even 96,000%.
“But it could be on the very same path, as my research is already showing.
“It’s about to magnetize profits to itself from a slew of industries in one of the most ambitious potential cash grabs I’ve ever seen.
“They’ve already received explicit endorsement from both the United States Department of Energy and the Canadian government …
“All because they’re pioneering this special super-substance I call …
“The Pyramus Compound”
That’s a reference to Augustin Pyramus de Candolle, a Swiss botanist who was the first to name and identify Lignin, which is a binder for cellulose and helps to stiffen and protect cell walls in woody plants and algae (that may not be a scientifically accurate definition). It’s often considered a waste product and is an alcohol (timber processors will often call it “black liquor”), so it’s also sometimes burned to help supply energy for pulp mills.
Here’s some more on this “Pyramus Compound” …
“… the name comes from the scientist who first described his discovery of this black goo 200 years ago.
“I doubt he knew that his discovery would lead to potentially the biggest game-changer across numerous industries …
“And ultimately afford a single company the chance to ride a cash tsunami worth $256.5 BILLION….
“Unlike oil, The Pyramus Compound is abundant. It’s one of the most abundant resources on the planet….
“With The Pyramus Compound, we can produce fuel here, in the USA, for as little as $1 per gallon.
“Today, the international oil market is worth an unparalleled $550 billion.
“Just imagine this compound taking over even a portion of that market share … as I expect it to.
“Because not only is it cheaper than oil … able to produce the equivalent of a gallon of fuel for as little as a single dollar …
“Easier to acquire and produce in abundance …
“Not controlled by a hostile international cartel …
“But it can do much more than a barrel of crude.”
Since it’s really a stretch to tie all this stuff back to a single company, I guess the best way for us to look through it is by checking a couple of the sources Crooks cites to build our excitement level (and make it seem more real):
He says that Dr. Caidong Qin of Oxford University says it could “replace 15% of the world total consumption of diesel, gasoline, and jet fuels….”
I haven’t seen the original source of that quote, but it’s also cited here with the modifiers “on average, it could be assumed.” No indication of what the original source of that quote is, but it’s from 2009… Qin also has at least a couple patent applications for Lignin-derived fuels, though I haven’t seen much else attached to that name.
And then there’s another quote:
“I’m not alone in seeing the gravity of this substance. A leading body of architects put forth their findings after investigating how it could change the construction industry.
“As they wrote in The Journal of American Institute of Architects:
‘[the Pyramus Compound could] replace Petroleum-based chemicals.'”
That’s a quote from this article, about a University of Wisconsin research project.
And then Crooks follows that up directly with…
“The firm behind it … the firm I’ve been studying for months now …
“Is set to grab a piece of this massive pie. It has already received the green light from both the Department of Energy and the Canadian government in building applications.”
Huh? There is no one “firm behind it” … these are research projects and assessments from different academic researchers. None of this is from a company. But apparently there is a company pushing this Lignin fuel-and-feedstock agenda… Crooks says…
“They’re already pioneering the Pyramus Compound …
“Already leading the charge in production …
“And already have enough money in the bank to scale it like nobody else.”
Who?
There’s another quote from “aerospace insider Darrin Morgan” who is a director at Boeing and who, according to Crooks, says…
“It is a huge discovery. A game-changer.”
That’s a quote from this article about a biofuel/aquaculture installation in Abu Dhabi, Darrin Morgan is indeed spearheading alternative fuel work for Boeing. That’s not so much about Lignin as a fuel source as it is about finding salt-tolerant plants that are low in Lignin, which makes it easier to release their sugars for creating alcohol as a fuel (and grow them in the desert, using salt water). Sounds pretty cool, but not particularly closely related to this tease in any other way that I can identify — the project has two companies involved, Boeing and Honeywell, but certainly neither of them is being teased as a play on biofuels or lignin as an alternative energy source.
We’re also told about the potential for this “Pyramus Compound” as a replacement for kevlar and carbon fiber, stronger than everything except carbon nanotubes (which he says cost 100X more)… that’s a reference, it seems to me, to nanocrystalline cellulose, which is basically a nanomaterial created from cellulose/biomass (or if you prefer, “trees”). There’s a decent article about that here if you’re curious.
And Crooks goes on to tell us…
“And while there are no exact numbers for annual carbon fiber and Kevlar production … you can imagine the devastating effect The Pyramus Compound will have on them once it hits the mainstream.
“For a company with just a $2 billion market cap … the catapulting effect this could have on the stock is hard to estimate.”
Ah, so there’s a clue… a $2 billion market cap. Helps narrow it down, if we’re talking about just a single company.
So what is it we’re looking for? In Crooks’ words…
“The firm I think will lock down the biggest profits as The Pyramus Compound transforms the entire geo-political and economic landscape, much like oil and steel and the Internet did …”
Then Crooks sums it up this way:
“… the essential details are this: years ago, wood mills discovered a strange, black byproduct from processing wood pulp.
“They actually used this byproduct to power their mills cheaply!
“It was only later that scientists began to realize it was much more than just a substitute fuel …
“That inside this black ooze these mills were producing, there were elements stronger than steel …
“More flexible than plastic …
“Able to replace oil as a fuel …
“And dominate the aromatics market …
“And again, it comes from trees.
“We can literally grow it to meet demand.
“And there are scientists, right now, using developments in DNA sequencing to engineer even more potent trees for processing …
“For stronger material …
“More fuel …
“Maybe you can grasp the implications here. We’re talking about a complete and thorough reshuffling of the commodity markets with this Compound sitting at the dead center.”
Then we get to the final pitch for his report, which he implies will focus on the one leading company but also cover six others:
“In this report, I’m including more than just the pioneer behind this ‘tree’ fluid that could replace oil, steel, Kevlar, and most aromatics …
“I’m also including six companies that are set to blaze across the market with similarly revolutionary technologies.”
So who are we dealing with today?
Final clues…
“So I want you to get instant access to your Pyramus Compound report right away
“You can flip to page 13 and see the exact ticker symbols.
“You can go to page 14 and see a deep financial breakdown of the company.
“On page 20 you’ll see a list of other companies I recommend and the special circumstances around them (including a $2 stock that could easily shoot up 1,000% or more in the next 12 months).”
So I’m going to go out on a bit of a limb and guess that “ticker symbols” means the key stock is traded on more than one major exchange… so we get a company involved with Lignin production/extraction, traded on more than one exchange, with a $2 billion market cap. The Thinkolator’s best guess on that — and given the level of clueyness we’re dealing with here, it has to be a guess — is that we’re being teased about a Canadian forest products company called Domtar (UFS in both Toronto and NY).
Domtar is a pulp and paper company, mostly selling stuff like the absorbent material for adult diapers and reams of paper for your copy machine, but they are also working on lignin separation and operate the first commercial plant that uses the Lignoboost technology owned by Metso (which is also publicly traded on their home exchange in Finland and at MXCYY OTC in the US, though much of their customer base is in the mining business so their current situation isn’t entirely rosy — only 8% of their business is in pulp and paper processing, most is in mining and aggregates).
Domtar’s stock has been pretty flat over the past five years, and pays a decent yield (4%+), with low growth expected over the next few years (which is actually an improvement over the past five years, when earnings have dropped slowly). The stock is close to the low end of its range over the last few years, it hasn’t often drifted much below $35 and is at about $36 today — presumably it’s the dividend keeping that “floor” under the stock, but I don’t know much about their history.
There are lots of pulp, cellulose and paper companies in the world. Most of them produce and use “Black liquor” to some extent, and many are involved in producing more advanced cellulose products. I have no idea where Domtar stands on the continuum of innovation — whether they’re at the bleeding edge or are an old fuddy duddy — but they do at least say all the right things about cash management and investment in new technologies and more efficiency and advanced materials. The income statement does not inspire lust, but not all your investments have to be lust-worthy — sometimes a fairly steady 4% dividend payer with some relatively minor potential for growth is not a bad thing. Domtar is not going to dominate the Lignin business or be the next Carnegie Steel or Standard Oil or General Electric, I suspect, and I’ll be shocked if the stock rises 1,000% in my lifetime, let alone 96,000%, but well, that doesn’t mean it’s a bad investment.
So that’s our best guess about this Lignin stock — I hate to start off a new year with a non-definitive answer so I’ll toss out a second guess… are two guesses better than one 100% certain answer?
For the other somewhat hinted-at stock, I’d guess that he might be talking up Solazyme (SZYM) as the “$2 stock that could shoot up 1,000%,” since SZYM is a beaten-down biofuel company that currently focuses on specialty algae oils. I doubt that will shoot up 1,000%, of course, such things don’t happen very often, but you never know what enthusiasm or stories might do to a stock — SZYM has been teased and touted a few times over the years, and it would take almost a 1,000% gain to get it back to where it was in 2011 shortly after it went public.
And, in case you haven’t followed the logic, cratering oil prices will likely continue to be terrible for most “alternative” companies — low oil prices make the production of specialty polymers and chemicals from Lignin or cellulose less exciting, since the competing (and dominant) feedstock, petroleum, is getting cheaper and low petroleum prices deter investment in alternative plants or processes… and that’s to say nothing of the big potential biofuels market that’s teased — with oil and gas both super-cheap now, biofuels will likely be even more dependent on subsidies to achieve any kind of meaningful scale. That’s what has troubled Solazyme, and turned them from a potential biofuel company into a food additive and cosmetics ingredient company over the last few years, but I guess you never know when the tide might turn or the story might change.
If you have other lignin or biomass ideas to discuss, or have some opinion about Domtar, Metso or Solazyme, by all means, throw ’em on the pile with a comment below…
well done! pretty spot on.
one dollar per gallon is far above present crude price of 30 $ per barrel
He mentions a study by two Swedish companies (one is more of a think tank connected to research) and they are about 5 minutes walk from my client on the outskirts of Stockholm. My guess it that it is more of a case where they find more products from the same huge paper-cellulose industry here in Sweden. They have already produced laminated wood beams that are 7 times the strength of steel. Now the big focus is towards making the whole process more “circular” so that the sum of all products and by products give zero effect on the environment (or positive to it).
I will be checking it out from here in Europe…
CH
It seems to me that common sense would tell us that there being a problem with deforestation now that this would compound the matter and have a great deal of push back if it was to ever get to the point of commercialization. I think this would be an investment dream that would not come true.
Not to hype or “de-hype” any of these related stocks…but deforestation is an old-wives-tale in much of the world. Yes there are 3rd world countries that have completely destroyed their timber potential thru rampant mismanagement/poverty/survival, but for much of the industrialized world, the forest products industries are as robust as ever. The problem in the USA is that federal and state governments seem motivated to run people out of the business much as they have with coal…all in the name of the “sky is falling”. The vast majority of “big timber” these days have a very good handle on sustainable management of their lands…much like food agriculture. FWIW.
FYI — Domtar’s symbol is UFS not DFS on the NYSE. DFS is Discover Financial Services (Discover Card!).
Have to have at least one ticker typo every year… got it out of the way early for 2016!
Atypo? Really? i’m shocked! Better to have you REAL than one of these Burger King Plastic people lol. we love you anyway! Good story
For the car go to bioforeconceptcar.upm.com
or just upm.com
It’s the european part of Domtar
Interesting reading
Thanks Francois. I looked at the yearend 2015 UPM financial report just now, and it is interesting to note that 41% ($5,809M EU)of their total assets ($14,193M EU) is in UPM Biorefining and UPM Energy. Seems a little dis-proportionate for a “paper” company.
See;
http://assets.upm.com/Investors/Documents/2015/UPM_Results_2015_en.pdf
This is on the top chart on page 21 of the document and pdf.
Thought he might be pushing graphene instead. Seems to fit a lot of his hints too
He did specifically say it’s timber-derived at some point, though the intro was more ambiguous.
Hello Travis. This is the first time I have written to you.
Have you seen the pitch from Kent Moore about fuel fro SAND? I can’t believe what I read. Tried to google it and several SCAM comments came up.
Wilfred
Just do a site search – Kent is mostly referring to solar energy
SUNE is pushed, it is a real stock, and has made people money this fall
Didn’t the stock Guru Cramer tout Sune? Recently?
Black liquor is produced during papermaking and is already recovered as a fuel…no value-add there for lignin. Perhaps there is a breakthrough development using lignin as the raw material for a highly engineered carbon product…but, this seems a distant possibility…and the tease seems to focus on the energy value.
Never let reality get in the way of a good story!
Thanks, Travis—excellent sleuthing as always!
The apocalypse is near, as the market will be collapsing 70%, housing 50%, 40% of your
savings— so who gives a flying whatdoyoucallit. Don’t say I didn’t warned you.
That could happen, but extended economic stagnation, a la Japan, is an alternate possibility for the U.S. and other western countries. The basic cause, which is too much government intervention and control (by both those who run and those who buy influence in governments) will continue to prevent decent rates of sustainable economic growth all over the world. Only when, and where, people demand free markets with only as much regulation as is necessary, will we see any meaningful growth again.
” decent rates of sustainable economic growth”
I doubt that the rate of economic growth that is truly sustainable (without incurring ecologic catastrophe) over the long haul is going to be considered “decent”.
Economic growth doesn’t have to mean increased pollution Dave: clean energy technologies are undermined and black-PRd by the entrenched fossil fuel industries with all the political and academic influence they can buy – which is a lot. I do believe in strict environmental regulations, absolutely. Human rights do not include the right to pollute the atmosphere, water, and land we all share. If some great power suddenly forced us to convert away from fossil fuels “or else” then it’d be amazing how fast solar, wind, enhanced geothermal, safe nuclear, and other technologies would fill the need.
I agree until governments realise that there is a finite amount of fosill fuel, they will not have the courage to force us to consider alternatives. A simple set of 2kW each of solar and wind means I do not pay a elecricity bill.
Patricia, you forgot to mention the gross continuation of environmental disasters and unnecessary deaths — both the result of to little public (govt) intervention. We are on the brink of unparalleled environmental, energy and medical breakthroughs with the assistance of Federal intervention and funding.
If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand. – Milton Friedman
Speaking about SAND… There is another “stock” site touting the sand as the unexaustable resource for the making fuel of all types from it. So and so fourth just as with the tree thing. I’ve seen it twice this week but have as yet got ANY info from the those sites even after signing up for it. I figure the tree thing is aout the same. All hype.
I’m new to all this, but if you can’t be straight up, why should I or anyone believe you.
I have seen that ‘sand’ thing too… Do info me, if you got anything back for you, after signing for that investment lead, my email: tehcsiang@gmail.com…. Thank in advance..
why not SEC stop such bogus writers who come every now and then to screw up folks by introducing such fake inventions which take the whole world by storm?
Well CARBON, many of us will be wide awake when Asian markets open tonight.. tomorrow may be key. So far the Chinese gov’t has done whatever necessary to keep the SSE over 3000, but now that they’ve announced the suspension of “circuit breakers” will they be able to maintain that artificial floor with their previous methods of intervention – or will they even try. Their currency move looks a bit desperate too, I don’t like George Soros but he knows currencies, and now here he is saying this looks a little like 2008. I’m just saying that your gloomy post may turn out to be well-timed; investors should always be prepared for a crisis, but this week especially. Look to your safe havens whatever they may be, and be glad if you live in a country where markets are less controlled so more trusted, because global capital will continue to move our way. I know someone, for example, who has a relative in Brazil who used much of her savings to buy a house in the U.S. last year but doesn’t live here – it was only for wealth preservation. The most corrupt governments always collapse their economies – I hope the U.S. is still far from that point. In comparison, it’s still a place people want to come to, not leave.
Trying to guess how governments will intervene in markets, then guess how markets will react to those actions or expected actions… can be close to impossible. A senior editor on Bloomberg said something to that effect yesterday, and I thought “bravo” – we don’t often get that level of honesty from financial media (from a few of their guests sometimes, but not usually from the anchors/editors/producers).
Government is basically a good thing – quite an improvement over the tribalism and brute force which prevailed in prehistoric times – unfortunately though too many people without good intentions are attracted to government positions. It’s no accident that the countries which are rated the most free are also rated the least corrupt, and are also the most prosperous per capita.
We have too much government because people crave for a leader, for somebody who will show the way and solve the problems. I always remember this scene in Forrest Gump when he stops running and you’ve this throng of followers; what are we going to do? Generally speaking and in the long term, people will never vote for less government.
Wow – that is a great point. Thinking of that scene you mention does help me understand the current presidential race much better too – I admit it has had me a little puzzled, along with scads of political commentators.
That scene basically show that people in general are just followers with herd mentality…
Most people survive on auto pilot mode without any enlightening direction in life…
This chart is pretty interesting as a crisis indicator, though we have to take into account unprecedented overproduction in the oil sector:
http://www.zerohedge.com/news/2016-01-17/what-crisis-goldoil-ratio-predicting-time
GLD, WTI-Hi Patricia, so what is your take away/thoughts on these two? Does gold tank for a short period, prior to moving higher? Thanks. in advance for your thoughts. I posted similar to this from the site on the thread that you no long subscribe to 🙂 Best2You-Ben
Gosh Ben, who knows. The gold mkt is too manipulated for anyone not connected to those machinations to be able to do any real analysis and make reasonable forecasts. I’ve looked to Jim Rickards for trend readings, because he’s well connected, but look how wrong he was recently about the price of oil – expecting it to stay in the 40-60 range where the Saudis probably do want it, but that didn’t mean they could keep it there during this glut + global slowdown. I’m in the “PMs = savings or insurance, not investment” camp anyway. (Rickards is sticking to his prediction about Biden becoming the nominee though: apparently the people he talks to seriously intend to bring in Biden in the end if/when Hillary slides off the mountain due to scandal(s) catching up with her.) Best2You also.
I wish tipranks.com had investment new letters (Spam) ratings 🙂 Patricia, why do you not consider writing threads for us….you pick the topic and let us have at it. We require more Gummies writing on subjects of interest to them imho
Richest 62 billionaires as wealthy as half the world population combined: http://www.theguardian.com/business/2016/jan/18/richest-62-billionaires-wealthy-half-world-population-combined?CMP=share_btn_tw Best2You-Ben
Kind of you to suggest it, I did write that one way back and was happy with and grateful for the input I got, but as a rule I think articles should be written by subscribers like you who have real expertise to share. I’ve only been posting more on this old thread because of all the “impending crisis” talk in finance news ever since CARBON posted his warning above. I like your “Water – Our Most Precious Resource” article and think you’re right about the opportunities there. Cheers Ben.
Patricia In re your post to Ben,,,,, Lack of expertise has certainly not kept me from posting,
I claim expertise in nothing,,, just opinion. I enjoy your posts. frank
Then cash out and buy Gold and silver only, stock your home with 25 year safety buckets of dried food . Grab your kids and find a mountain retreat powered by solar generators.IS Gumshoe Mountain for rent?
Ha Deborah, most “preppers” would consider Gumshoe Mountain much to close to civilization! Though I once teased Travis about whether he as a moat around it, so maybe he has that covered. I understand where CARBON is coming from though: so many are blind to the rotten foundations upon which most of the world’s financial systems rest. They are too fragile and “shockable.” Here’s Reuter’s ridiculous online headline tonight regarding why Asian stocks are up tonight: “Asia stocks rise after US snowstorm rescues oil price.” Oh – my – G–. The markets were already way up on Friday, all on the hope of more easing from the BOJ and ECB because of their recent statements to that effect. Headlines about what’s causing market movements are often conflicting and silly, but this one reaches a new level of crazy.
Patricia have you considered that Asian markets could be responding to Government shutdown caused by storm? Under the Arch theory of incoherent connectivity that is plausible if not possible. See St neve Modnar ala randoM eventS . I notice that may have even affected you subconsciously in describing the effort to peddle black goo [ Pitch ] as being pitched. If seen thru looking glass,,,, random is certain.
The “Arch Theory of Incoherent Connectivity” has now been duly added to my collection of market theories, joining others under the subheading “The Markets as Seen Through Smoke and Mirrors from the Mouth of a Rabbit Hole After Tea and Funny Little Cakes with the Mad Hatter.” You are right of course – anything is possible, we are all guessing, I just think some guesses are much more based upon facts than others. Gov’t & central bank overreach is destroying the economic stability that you and I enjoyed and took for granted most of our lives; people may soon believe that a global economic crisis every ten years or less is normal. Especially now that history is so poorly taught and so much of the public has the attention span of a gnat. Have an excellent week Frank.
Those that hype these products are either unable to distinguish between “technically possible” and “economically feasible” – or hope you are unable to distinguish. In particularly they don’t understand and or purposefully confuse the limitations imposed by both physical and fiscal economics on biologic products.
Unfortunately, you can’t get something from nothing – at least in the long term. Nature sourced biomass and biofuels etc. are all limited by the natural phosphorus cycle which is a multi-century process in which mineral phosphates are turned into biologically active phosphates. Absolutely nothing lives without adequate sources of biologically active phosphorus.
Of course there are agricultural wastes, but the logistics of moving these to at scale conversion systems is usually economically infeasible. Additionally, all those agricultural and food wastes – are NPK dependent which is petroleum dependent. Getting rid of petroleum as the most critical human feedstock – is far harder to do economically – fiscally and physically than is generally discussed in polite conversation.
To produce quantities of any kind of biomass that will have a significant impact on the petroleum consumption – you must use NPK fertilizer to produce the respective biologics’ biomass. Just as we do 95% of the worlds food crops. The problem with NPK fertilizer is that it is petroleum dependent and the biologically active phosphate portion uses huge amounts of organic acids to make it biologically active very quickly – unlike the as in natural phosphorus cycle. These acids are produced by the petrochemical industry which is 5% of the overall petroleum industry by volume. What most people don’t get is that petrochemical dependent products like NPK fertilizers, pharmaceuticals, plastics, etc. are cost sensitive to current economy-of-scales of the overall petroleum industry. Consequently, while petrochemicals are only 5% of the petrochemical industry the economics of the petroleum industry has tremendous impacts on petrochemical feedstock.
While there will be some companies that will make money by converting wastes into biomass at relatively small scales, they will never be able to make a dent in our need for petroleum and particularly our need for an economically stable petrochemical industry. In reality it isn’t automobiles that keep the petrochemical industry going, its the human populations demand for food and the fact that the current population currently exceeds the natural phosphorus cycle by 3-4 times. We haven’t lived within the natural phosphorus cycle limits since petroleum generated the industrial revolution and the green revolution.
What this means for those for those investors who think that biomass is going to do away with the petroleum industry is simply – that that they are dead wrong. Every mass balance physics/economic feasibility analysis study done for biofuels says the same thing. You can’t produce a product that is physically and economically dependent on product that it is trying first compete with and then replace. Essentially, this kind of hype regarding biomass is just playing on the scientific and economic ignorance of the general public.
Don’t believe just my comment. I suggest you take a look at one of if not the worlds foremost authority on the scarcity of economically available phosphates Dr. Dana Cordell’s slide show regarding global phosphate reserves. (http://www.slideshare.net/DevFutures/dana-cordell-phosphorus-scarcity).
Absolutely spot on in all regards.
Here is one of Dr. Cordell’s presentations… I am taking a closer looking into investing in Phosphates https://www.youtube.com/watch?v=zieJqsmy43o
FYI — For what its worth, Hilary Kramer, who runs a number of advisory newsletters, lists Domtar as her “best stock for 2016” with a buy price of up to $36.95 …. she claims that it “will reach new heights” — she also lists it on the Investor Place “10 Best Stock Picks for 2016” contest in which 10 advisors (Navilier, Sizemore.etc) are competing with each other, each picking one stock which is being watched for the entire year.
Lignin Is worth more as a chemical feedstock than as fuel. It is not new and there are no new startling discoveries likely to change the price, unless extremists succeed in shutting down petroleum industry,which is a competitor. It is a by product of the, paper from tree industry, and would not survive otherwise as the primary product. I do not see a large increase in paper manufacture but rather more likely a decline because of Electronic Publishing
Exactly. Lignin does have unique hydrocarbon structures and is different than petroleum based HC. Maybe this will lead to new building blocks for engineered carbon products in the distant future. Maybe not.
In “the old west” or “Olden Times” there were “Snake Oil”
salesmen driving covered wagons.
Human Nature hasn’t changed.
Be safe out there!
Travis, don’t feel bad what stocks you can’t decipher for certain we don’t need to know about.
As an economist I can point out an immediate investment defect for this no doubt wonderful invention. It is this. There is a very restricted source of raw material, lignin, to make this stuff. I know people think there is a lot of trees in the world, but there is a restricted supply of trees in one place that can be economically processed.
So what will happen if this technology takes off? The price of lignin will double and double again, increasing the price of the final product, making it a very restricted market.
No, this product is not a substitute for steel or oil – which have virtually unrestricted supply. Maybe the stuff can be used for Kevlar body suits or airospace components. But the restricted supply of the input will raise its price, raise the price of the output, and restrict the market.
Aw, trust an economist to take all the fun out of the hype 🙂
Good point, particularly when it comes to the predictions of market dominance and gajillion percent returns — thanks!
There are millions of tons of lignin produced every year (as a papermaking recoverable by-product). The lignin (black liquor) is consumed as a fuel at the paper mill. So, if new demand for lignin appeared my guess is that it’s market value would not be effected much as papermakers can replace it with other fuels. Papermakers will not pay a ‘premium’ for lignin so it’s market value will be linked to traditional fuels for a long time.
Papermakers that produce black liquor would be logical potential developers of alternate lignin products since transporting this goo from where it is produced to where it can be further processed would be problematic. I don’t see papermakers as innovative game changers, but they could probably be convinced to allow a third party to consume and process their black liquor near their mills.
IMHO…too many ‘ifs’ and ‘maybes’ for this turd to float!
Black (and brown, etc.) liquors resulting from wood pulping used to be disposed of by the firms in nearby water bodies. Primarily due to environmental concerns, the companies began to concentrate and burn it with the help of plenty natural gas. The concentration process alone consumes a lot of energy.
One (minor) constituent of the liquor is vanillin (yes, the stuff used to flavor your ice cream) but that is no longer extracted. While higher-value uses for the other organic components in the liquor may be found, separating those out is not a simple or cheap process. The same is true for making any clean fuel out of it. At 50%, it’s already a viscous syrup.
Wiki has a fair writeup on black liquor.
JR Crooks? I hope you don’t mean JR Ewing ROTFLMAO. GO VIKINGS!
Off Topic, But….
With the recent downturn in many stocks, the newsletter writers should be fearing MASS CANCELLATIONS.
It is too bad that there is no ETF that represents this “sector” so that we could SHORT THE HELL OUT OF IT.
Has your favorite newsletter ever told you to sell before its favorite stock started its decline? No, only after it was in decline.
Markets are cyclical, they go from bull to bear and then back to bull. The bull markets are usually longer and let newsletters make money. The bear markets are painful, but shorter on average, however it takes a long time to convince those who suffered the pain to step back in. Once they step back in, another bull is born.
It is a CYCLE!
Many writers seem to be serial newsletter editors, “rebooting” with a new angle when the stench of their current pub’s track record kills renewals. It’s a tough gig I suppose.
For schemes such as this or garbage burners etc to be investible with any hope of success
certain problems must first be solved,,,such as small scale refineries and the inherent corrosion, cost and energy input solutions and/or the catalysts to make such feasible.
A lot of money is being put into research such as following link
http://iic.pnnl.gov/news/Transformations/waste_energy.stm?
An idea may be good but if you cannot engineer plant design to carry it out it has no value.
IMHO
I was trying to sleuth this myself during the past month….was any consideration given to Sappi Ltd OTC: SPPJY ?
http://www.bdlive.co.za/business/industrials/2014/12/09/sappi-edinburgh-napier-discover-low-cost-way-to-make-nanocellulose
Dear Jr. Crook,
Read your comments with interest. I am a subscriber to the RWR (Real Wealth Reports) of Larry Edelson. I sure wish you would suggest some companies listed on the NYSE in which to invest to get 10-baggers. Forget the 956% sudden gain.
Victor