Your letters

You might have noticed over the last couple of weeks I’ve been asking you to write in more than usual.

I’ve been interested to get your take on renewable energy, driverless cars and the future of the oil nations.

Your insight has been great, and so I thought I should share it with my other readers. Below you’ll find a selection of reader responses to my articles over the last few weeks – with names anonymised, as usual.

Remember, if you have an opinion on anything I write, you can always email me at: harry@southbankresearch.com.

Your thoughts on: What a piece of virtue signalling nonsense

Hi Harry,

I think this is the beginning of the end for fossil fuels. The growing investment in renewables is certainly not due to virtue signalling.

The misguided comment in the article states that “the ideological climate demands it (virtue signalling) in the west now”. Well we haven’t seen anything yet! With growing evidence of dire consequences if the world does not transition to a carbon free future and the growing momentum of climate protests, the ideological climate is only going to head further in the same direction.  

Yes I think public perception is taking longer to shift because people have been brain washed into thinking that renewables are a bit of fun but are not a reliable source of energy and that we will always need big oil to drive the economy. The majority of people are just not as clued up as Exponential Investor readers!

With the world’s largest sovereign wealth fund (created from oil wealth) divesting from oil and gas exploration, I believe this marks the beginning of a massive surge of investment into renewables.

The rewards for savvy investors are EXPONENTIAL!

Regards,

NL

 

Probably a bit of both. Investing in Coal in the UK would not have been a good Idea for a long time. But Tobacco shares have done very well despite the crack down on cigarettes. Oil may be under attack as excess use of natural resources, However there is some reason to believe that gas is formed far more quickly and perhaps as fast as humanity is using it.

Change does not equate to decay, like the hymn says. Climate change is not all for the worse as they would have you believe. Every action has an equal and opposite reaction, and not just in Physics.

RS

 

Hi Harry,

I have and am an investor in renewables, and a great believer of the necessity, but have mostly but not always seen negative returns and high volatility as US and UK Governments have been swayed by fossil fuel lobbying and backed off renewables policies. Overall, I’ve made a loss.

For example Solar Window was on a big high prior to the Trump election, and PV Crystalox Solar got hit by UK Government solar policy uncertainty and claimed solar panel dumping from China.

In recent months things may have got a bit easier, so am down 32% on 1414 Degrees, down 16% on Kontrol Energy Corp, breakeven on Solar Window, did well out of a lithium miner before they caught a cold, and up 41% on NRG Energy Inc.

There is an inevitability about fossil fuel replacement and I am at a complete loss to understand how anyone dare risk investing in them. It is only their easy ability to lobby governments that is helping string them along despite deep rooted public objections to them. 

I’ll be patient with the above as they and their equivalents will be much better opportunities going forward, and no it’s not virtue signalling!

With kind regards

CC

A survey of 39 fund managers with $10.2 trillion under management found that 24 per cent wanted the oil industry “to wind down their businesses and return cash to shareholders”. All but two of the funds said that oil stocks would not be attractive investments within ten years if they failed to respond to climate risks.

1.24% equals about $2.5 trillion, a trifling sum in the scheme of things.

2.…not attractive in ten years. Ten years ago, how many of these fund managers had any idea what would be attractive investments now.

3.…if they failed. A statement of the bleedin’ obvious! A brief scan of the Renewables’ investments by the top ten Oil companies, including the NOCs, reveals the billions of $ they have, and continue to, invest in Renewables – both the technologies and actual energy generation and storage plant. These businesses are not managed by blind and deaf fools!

As for virtue signalling being self-promotion and seeking adulation. Yes, I agree with you completely. A cause can be found in Erik Erikson’s Eight Developmental Stages. Typically around 10 years, children seek accolades and to show their achievements, they are awarded badges. For example, Boy Scouts or Cubs.

There’s a discussion to be had about the effects of the Nanny State, post-1960s Education and Social Media causing a lack of emotional development by removing the requirement for accountability. Stunted development often leads to a reversion to the incomplete developmental stage.

Kind regards

CS

Your thoughts on: The next car you buy could make you £23,251 a year while you sleep

I was interested in your piece about renting out driverless Teslas.

Most of us admire the entrepreneurial spirit that Mr Musk represents (although he does seem to fly dangerously close to the wind). There is certainly the kernel of an idea here.

However mainstream driverless cars on public roads are still at least 15 years away.

More practically, the idea that one’s car can travel 90,000 miles a year while you sleep is somewhat fanciful. The average mileage of a full time London Uber driver is less than 35,000.

It also takes no account of the maintenance costs and regular MOTs that mini cabs and taxis require. Whilst electric motors are cheaper to maintain and have less moving parts, all other wearing parts remain (tyres, brakes, shock absorbers etc). Insurance premiums for taxis are very high.

So if you reduce the predicted mileage by 2/3rds, add in the additional running costs and allow for the market to depress prices due to the rising supply of vehicles, it looks like pretty thin gruel.

TA

 

This is not the only way to make money out of electric cars.  A full battery could, in principle, be rigged up to supply back to the grid when demand is high and the supplier is willing to pay over the odds to keep consumers’ lights on.  And if one has solar panels too then that supply would be quite a good little earner.  Furthermore this approach means that we do not have to wait until driverless cars become accepted on our roads…..

BE

 

Couple of points Harry.

When making these ‘vast’ sums of money who would maintain the car, the owner or Tesla and what about the thorny issue of insurance, who would be responsible if an accident happened whilst your car was out working for Musk, you or Musk?

Oh and who puts it on charge and pays for the electricity?

And cleans it after the drunks have thrown up in it?

An interesting idea but I fear a series of ‘practicalities’ will encroach on the idea that will shift the opportunity away from the little man and move it into the arms of big corporations.

This could easily shift the car market from you buying a car from Tesla, or whoever, and move ownership of all vehicles to the manufacturer, and the little guy -you and I – just rent cars from the big manufacturers when we need them. Mind you isn’t that what we are moving towards with PCP’s the first step on that path?

Keep up the good work and I’ll be keeping an eye on this to see how it develops.

Regards

BB

 

As a taxi driver with over 30 years’ experience I don’t think many people will send their cars out on their own to earn money. The damage done to vehicles with a driver is bad enough, despite all efforts to avoid accidents. I mean in car. I won’t go into activities!

Electric cars are definitely a must for the future. Taxi sized vehicles are needed now. Driverless is something else completely.

We use family size saloons as taxis, and they work well, especially for elder people. Accessibility being a big point, also in my experience most people like a conversation.

Electric cars, 5 seaters plus, at a realistic price are needed now; but most importantly a long distance required per charge.

Tesla’s ideas are good but in the real world it’s going to take a long time to happen.

AJ

 

Dear Harry. 

I’ll do it! I’ve got 3 petrol cars. 15 year old BMW 3L z4 that’s in mint condition, a new Hyundai i10 and a Smart. Bye bye last 2, hello 2 Tesla’s. Got 2.3kw solar panel array and drive space. Wish my garden was big enough for a wind generator under permitted development rights!

I prefer my motorbikes these days. But roads are very crowded and getting worse everywhere especially in the south east. Go out into remote sticks for fun. Even z4 can be trial with traffic, speed bumps and have-a-go dick heads in chavvy mini hatchbacks with ridiculously noisy exhaust pipes.

Despite my enthusiasm, I’m still reticent in some respects. I rented out a house once 29 years ago. Never again thank you. So much damage done and worry. Now, imagine having to clean up the sick and rubbish from an abused Tesla ride! Will they internally self clean? Integral jet washing perhaps (including the cretins inside)? Better still, could you Taser the miscreants remotely and lock the doors for the coppers to come and arrest? 

Regards

MT

 

Dear Harry,

Sadly, I don’t think it will only be increasing capacity that will eat into the owners’ profits.

With income that size (and decreasing income from petrol, diesel and, with each car getting more hours of use, fewer vehicle tax returns) the temptation, to tax, tax and tax till returns for a private owner are derisory and unviable, would be one no current government would be able to resist.

I hate to wake us all from a dream but….

Best regards,

FB

 

Hi Harry,

I know what would happen if I entered this business.

Within a couple of years I would have not one, but two cars.

One would be my personal transport and would spend most of its time parked outside my home as at present, the other would be for hire and would have every characteristic chosen to be cheap, tough, bare and hard wearing. It would have cameras inside to record passenger vandalism.

The hire car would not be as big a money making proposition as you suggest because it would need servicing probably every two or three months and new tyres every year. The insurance on it too would be horrendous as it would need to cover vandalism both inside and outside the car. (Just look how busses and trains get vandalised, and they have crew onboard).

I should be more likely to become a customer of the self-driving taxi service. I am 78 years of age and have to contemplate the possibility that one day I shall become permanently unfit to drive. When that happens, the autonomous taxi will be a god-send.

Regards,

AS

Your thoughts on: Will the oil wealth last?

Harry

The question of oil nation wealth depends largely on how that wealth is managed. We can look to the likes of Venezuela and certain African states, to see the effect of squandered wealth despite an abundance of oil and other resource. I would also suggest that the UK didn’t make the most of its resource.

As for renewables, the switchover largely depends on storage technology. Generating large amounts of solar energy is all well and good, but if you can’t store it effectively goes to waste. We have seen in Europe that wind power can at times be so abundant that its price drops to negligible levels. Managing the flow of renewable energy on a large scale is the next hurdle in renewable energy growth.

Regards

MF

 

Seems to me the Saudis, at least, have been aware of the eventual demise of oil as king for a long, long time.

Casting back to the 70s, we had the Club of Rome and ‘Blueprint for Survival’ advocating a sort of back to the land anarcho-syndicalism as a survival strategy for when the oil ran out, which was going to be around 2030.

Interviewed on TV at about this time, Sheikh Yamani, the then Saudi oil Minister and big man in OPEC responded to a question about dwindling oil supplies by saying that “the stone age came to an end, but not for want of stones and the oil age will come to an end, but not for want of oil.”

Whether or not the Saudis have acted on this knowledge remains to be seen. The house of Saud of course has vast wealth invested in America, but whether or not this will benefit ordinary citizens of the kingdom in a post oil future is questionable.

Some of the most worrying consequences of the end of oil are geopolitical. What, for example will happen to Israel when the USA no longer needs a strongman in the Middle East?

Perhaps I should be investing in GEC Marconi?

Best wishes

PM

 

If you want to read a bit more in-depth piece about the history of oil wealth and its upcoming political problems, you can read my article here: Invisible resources.

Okay, that’s all for today.

Until next time,

Harry Hamburg
Editor, Exponential Investor

Category: Technology

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