In today’s Exponential Investor:
- Oil: demand to hit a plateau?
- Food: farming to go vertical?
- Finance: what will soar?
The latest Netflix series 14 Peaks is incredible, and I highly recommend it.
In it, a Nepalese ex-special forces soldier and mountaineer tries to ascend all fourteen 8,000-metre peaks in the world, in the space of just seven months. The record he’s trying to break is… seven years.
Well, we investors are also witnessing a record-breaking run of peaks.
Every twist in the markets – like the Omicron dip a week or two ago – is met by another high point being reached. It shows just how powerful the buy the dip mentality is among investors, as well as the powerful market dynamics (like algorithms and corporate share repurchases) that buy every dip automatically.
However, the peaks that appear between the troughs on the charts of major stock market indices are not really the ones that matter the most…
… and that is the central topic of this edition of Exponential Investor.
Oil and peak oil
Meanwhile, there is also plenty of discussion around peak oil. This used to mean the point at which we’d run out of oil. That was back when there were no alternatives, and people assumed that as the global population and economy grew, we would keep using more and more oil each year until it ran out.
Now, after plenty more was discovered and shale oil became technologically accessible, people aren’t so worried about running out. Now peak oil means something else entirely – the moment at which oil demand stops rising.
Oil demand will probably form a long plateau. Think of the profile of Cape Town’s Table Mountain rather than of Mount Everest or the Matterhorn, as moves by governments to promote electric vehicles (EVs) and to cut carbon emissions slowly crimp growth in demand for oil.
But there’s another industry that could be facing a similar path…
Food and peak food
At the moment, we are collecting food in a way that looks unsustainable. In many places, our soil is getting worse, the seas are being almost emptied of fish, and land-based wildlife is being massively reduced.
Currently the discussion around peak food is about running out (especially regarding ocean fisheries), just as it was for oil 20 years ago.
The oil industry then experienced an incredible wave of innovation and research. A host of alternatives emerged as a result.
The threat triggered a response. Traditional energy sources have been replaced by green – or alternative – energy sources. There has been huge disruption.
The same thing appears to be happening in food. New innovations that are emerging include alternative meats, cultivated meats, bio-fermentation, precision agriculture, vertical farming, land-based fish farming…
These things are currently seen as emergency measures. However, as we make the food system more efficient and less damaging, the conversation will shift from peak food meaning running out of food, to meaning the replacement of current foods with new foods – e.g. cultivated meats replacing meat from real livestock.
Finance and peak… what?
A casual glance at the various publications of Southbank Investment Research shows that something similar is happening in finance.
Technological disruption is underway, and on a large scale.
Much of the innovation and disruption is related in some way to cryptocurrencies. New companies like Bakkt are making it easier for people to acquire and to trade bitcoin and other cryptos. Established companies – like Mastercard – are joining forces with new companies in order to reduce the boundaries between traditional finance (TradFi) and decentralised finance (DeFi). Crypto is playing an increasing role in areas as diverse as online gaming and – through non-fungible tokens (NFTs) – art.
It’s these deeper applications that I find most interesting, and also the hardest to understand! That’s why I rarely dive in and invest myself – and I guess you might be the same.
But sometimes, you get the opportunity to see what the pros are doing – and today is one of those days.
Do you want to know which are the three cryptos that one legendary investor is buying today?
Well click here to find out…
His predictions are all to do with a systems upgrade to a key technology, which is coming in early 2022… so there’s no time to wait.
To see what this is all about, click here now.
All the best,
Co-editor, Exponential Investor