“The Smart Grid: Bigger than Bill Gates”

By Travis Johnson, Stock Gumshoe, October 28, 2009

Those of you who’ve been around the block with the Gumshoe a few times know that I’m always a little bit skeptical of most of the newsletter promotions I read, but I tend to give a wee bit of extra scrutiny to the stuff from Untapped Wealth — partly because they are responsible for the “forever battery” teaser (that one is so over-the-top and has had such a huge impact on the share price over the last couple years that I’ve used it in examples when I give lectures or presentations), and partly because their publisher pushes the envelope more than most in taking endorsements from companies to profile them in advertising that, while separate from their “real” investment ideas in their newsletters, comes across as distressingly similar.

They’re not the only ones, of course, but as far as I can tell they’re among the most aggressive marketers who do both the “real” newsletter and the company-sponsored ads, and I get their emails forwarded from my readers as often as I do any other firm. So I thought we might take another look at one of their tempting teases today, especially because it’s apparently about a “smart grid” company, and after the government’s first round of stimulus-funded smart grid payments were announced yesterday lots of investors are thinking about these companies. The ad comes in over the signature of Tim Fields, editor of Untapped Wealth, and it’s roughly (or maybe exactly, I didn’t parse every word) the same ad they’ve been running for most of this year, but I’ve never written about it before — and just to be clear, this is apparently one of their “real” newsletter recommendations, not a paid promotion.

That stimulus funding, by the way, was $34 billion as announced yesterday [correction: $3.4 billion, this article got it wrong], so although that’s a drop in the bucket compared to what it would cost to actually switch everyone over to a smarter grid, it is a big push to accelerate that modernization — most of the funding will be going to utilities, which makes sense, but a lot of that money going to the utilities will also flow through to the smaller suppliers and innovators who are developing products to manage and monitor electricity usage.

The ad is as filled with hyperbole as any I’ve read in a while, though it’s hard to split hairs in a world where the oceans of overstatement lap over the floodwalls every day — here’s how they pitch the idea of the “smart grid”…

“Opportunities like this only come around once every 10 years or so…whenever technology is ready to take that next leap forward.

“Take Google for example… or Microsoft… or Facebook… Youtube… each of these companies have created scores of millionaires.

“These weren’t just Wall Street big wigs…we’re talking regular folks, like us, who bought in early and experienced a wealth juggernaut…

“But the Smart Grid is different.

“Not only is it going to pioneer the next wave of the electricity industry… more importantly…it’s going to be bigger than the above mentioned companies…combined!

“Can that be possible… Bigger than Bill Gates?

“Yes…because unlike Google, Microsoft, and Youtube…this amazing innovation affects every single aspect of our lives.

“You’ll be using it while you sleep…while you’re awake… virtually every minute of your day will be changed by what this tiny company has cornered the market with.

“Take a penny from one person and you’ve got nothing… but take a penny from 305 million people every day… now you’re filthy rich.”

And they even pull in a couple of the founding fathers of our electric world …

“Thomas Edison couldn’t have imagined what’s secretly happening to his invention right now…”

and “not since Tesla invented AC current has energy become so efficient.”

So there you have it, our gazillions are all but guaranteed, right? Or at least jillions?

So which “smart grid” company are we dealing with today? We start with a wee clue about the place where some say the smart grid is being “born.”

“… recent events(some are calling them covert) in Colorado are so important…

“Because what’s about to happen there is the reason they’re receiving up to $154 Billion of Stimulus funds.

“Wall Street Journal says, ‘A groundbreaking “smart grid’ test in XXXXXXX, Colo., is delivering some surprises for both consumers and utilities’

“And as nice as Colorado is… it’s not just the beautiful scenery that’s getting Uncle Sam’s attention…

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“It’s the fact that the single greatest transformation of American power in history is about to happen in one of its quiet little towns.

“And on XXXXX XX, 2009 at exactly XX:XX a.m., this little burg will go LIVE with the nation’s first ‘Smart Grid’… and forever change the way American’s receive their electricity.”

Just to let you catch up with the crowd as we move along here, I can at least tell you that this first “smart grid” is in Boulder, Colorado, the small college town outside of Denver (and a beautiful place, with lots of money and a liberal and environmentally conscious population, in general, which probably makes it a nice, hospitable place for this kind of initiative). The first stage of the test of what they call “Smart Grid City” went fully online last month, though the Wall Street Journal article that Fields cites is from February (you can read it here if you like).

So that is, at the least, a step forward for the “smart grid” concept, and I’m sure it will be a valuable test case as they try to figure out which technologies and strategies will be most accepted and workable — the idea of letting a utility step into your home and turn down your thermostat for you, after all, is a good, efficient concept on paper but might be hard to accept for the first people to experience it directly.

You can go read the whole teaser ad if you like, and get your fill of exclamation points as they tell us about the glories of the