New Energy Markets are Getting Hot

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Following the previous hydrogen forecasts from Morgan Stanley and by Goldman Sachs(Goldstein, 2020, September 23), the BofA team (Alpert, 2020, September 30), McKinsey counted five major industries will replace their fossile energy with new type of renewable energy (McKinsey, 2020, October 5). They are transportation, power generation, industrial fuel, fuel for residential and commercial buildings. The competition among wind power, solar power, hydropower, and nuclear power has gotten high. By 2050, according to Bank of America research team, clean-hydrogen industries could see $2.5 trillion in annual revenues (Alpert, 2020, September 30).

Knowingly, Bill Gross bets on the two companies: Energy Vault store solar and wind power for use on cloudy or windless days; Heliogen, uses mirrors to generate the intense heat needed to make hydrogen, as well as steel and cement (Hodari, 2020, October 6). They are not in public stock markets yet backed by SoftBank. McKinsey highlighted transport industry where fuel cell electric vehicles (FCEVs) might be better for American trucks running long distance Plug Power (PLUG) and ITM Power (ITMPF) (McKinsey, 2020, October 5). These two companies are publicly traded, so you can invest them.

The BofA survey listed the industrial gas giants: Linde (LIN), Air Liquide (AIQUY) and Air Products and Chemicals (APD); hydrogen fuel cell specialists: Plug Power (PLUG) and ITM Power (ITMPF); the motor vehicle suppliers:Cummins (CMI), Daimler (DDAIF), Volvo (VLVLY), Toyota Motor (TM) and Hyundai Motor (HYMTF) (Alpert, 2020, September 30). They are all good options for long-term investment.

When markets show no clear direction, it is time for value investors to identify future trends that will come soon and dominate markets in the long run. When you are on the right strong wave, you can ride long.

Cite as:

Rachel Kim (2020, October 7). New Energy Markets are Getting Hot, The Blue Ocean Management.com, retrieved from: https://theblueoceanmanagement.com/2020/10/07/new-energy-markets-are-getting-hot/

References are as follows:

Alpert, 2020, September 30, Barron’s.com

Goldstein, 2020, September 23, Barron’s.com

Hodari, 2020, October 6, Wall Street Journal

McKinsey, 2020, October 5, Wall Street Journal and GLOBE NEWSWIRE

Too Fast and Electric? Tesla

Tesla and its CEO, Elon Musk, have been featured in many newspapers in early September 2020. In early 2020, Tesla reached $270 billion in market value, faster than anticipated and higher than even Toyota currently valued at $200 billion (Randewich, 2020, January 8).

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Furthermore, there was hopeful anticipation that S&P 500 Index may include Tesla or not. Elon Musk may get paid $800 million due to his stock option included in his pay package in 2018 (Grant, 2020, September 10).

Higher valuation than normally would have been a norm for Tesla. Even in its IPO 2020, market value of Tesla was higher than its operation capability. There was a concern that $15 per share might be too high for Tesla (Cowan & Jarzemsky, 2010, June 30). After the Split, Tesla stocks are around $450 per share in 2020 September, makes the company valued at $ 419 billion.

In the long run, electric vehicles are what we have to own and drive for the Planet, particularly looking at bloody smoky sky in San Francisco due to the Wild Fire. However, too fast and too much investing based on our hope may have a bumpy ride ahead unless some extra cash in hands or option at play as SoftBank showed off.

Another way to invest in EV sector would be looking at other competitors with low prices: Ford, GM, Lucid, Nikola.

Cite as:

Rachel Kim ( 2020, September 15). Too Fast and Electric? Tesla, The Blue Ocean Management, Retrieved from: https://theblueoceanmanagement.com/2020/09/15/too-fast-and-electric-tesla/

 

References:

Grant, 2020, September 10, Wall Street Journal

Cowan & Jarzemsky, 2010, June 30, Wall Street Journal

Randewich, 2020, January 8, Reuters.com

Statista, 2020, August 7, Statista.com

Rachel Kim, 2020, The Blue Ocean Management, Retrieved from: https://theblueoceanmanagement.com/2020/09/06/us-stock-market-down/