Friday Feedback: The “We Will Rock You” Edition
Buddy, you’re an investor, make a big noise playing on the Street, gonna make some big gains someday!
You got mud on your face…
Actually, that’s not as bad as it sounds — the mud on your face, that is. ‘Cause today, we’re talking about investing in geothermal power!
But first things first. It’s Friday Feedback!
Yes, the day you’ve all been waiting for is here! Today, we dive into the Great Stuff inbox to answer your questions, Great Ones. You see, Great Stuff is all about you. Today, doubly so.
So, if you have a burning market question, are looking for some specific investing research, or you just want to rant about why a raven is like a writing desk … drop us a line at GreatStuffToday@BanyanHill.com.
For instance, alternative energy has been an unbelievably big topic this year, and Great One Randy B. hit upon an investing topic that doesn’t see the light of day all that often:
Good to hear from you, Randy B.! (No relation to Cardi B., I hope…)
So, geothermal energy. I was wondering when one of you Great Ones would dig up this topic. It’s certainly an interesting one.
The thing with geothermal energy is that it’s kinda like the genie of the lamp in Disney’s Aladdin: Phenomenal green power … in an itty-bitty living space.
First and foremost, geothermal power is one of the lowest-cost green energy sources on the planet … mostly because geothermal power is the planet.
This energy source works by tapping into natural reservoirs of hot water under the Earth’s surface.
Where those reservoirs aren’t available, water is pumped down an injection well into underground hot spots.
This hot water returns from underground via a “recovery well” in the form of steam. That steam is then used to drive electric generators or provide heating.
If you want a deeper dive into this topic, click here. (It’s where I found that nifty geothermal power image.)
The absolute best thing about geothermal is its cost. After initial startup costs, geothermal plants are the cheapest to run on the planet. It’s literally just maintenance and monitoring costs as you rake in revenue.
So, why aren’t Wall Street investors lining up to invest in geothermal power companies?
Because geothermal power is all about location, location, location!
Remember, in order to set up a geothermal plant, you need a hot spot in the earth or an underground lake of hot water. And while the Earth is really, really big, there are very few of these hotspots that are actually viable for power generation or in convenient locales.
As with all things, the steady advance of technology will eventually let us expand where and how we use geothermal energy. Basically, this green energy source is just waiting for the right breakthrough to make it more widely viable.
In that regard, Randy, here are three companies actively working to make that happen:
- Ormat Technologies (NYSE: ORA): Ormat is a global geothermal-power business with solid financials. ORA stock is a bit undervalued, but given how overvalued many green energy stocks are, this is actually a good thing.
- Polaris Infrastructure (OTC: RAMPF): Polaris is a Toronto, Canada-based geothermal-power company that’s relatively new on the scene. Despite being Canadian, Polaris’ main operations are in Latin America, where there are lots of potential geothermal sites.
- BP PLC (NYSE: BP): Formerly one of the biggest oil producers on the planet, BP shifted gears and is now heavily focused on alternative energy sources — mostly because the EU said it had to. Not only is BP involved in hydrogen, solar and wind power, the company recently dropped $40 million on Eavor Technologies — a privately owned geothermal-power company.
You’ll note, Randy, that only one of these is a “Big Oil” company. And that company is basically “outsourcing” geothermal power development.
The problem with looking to Big Oil for geothermal power because they have drilling technology is that most of those Big Oil companies don’t actually have drilling technology. They count on companies like Transocean (NYSE: RIG), Nabors (NYSE: NBR) and Schlumberger (NYSE: SLB) to do their dirty work.
If geothermal ever actually takes off, the Transoceans of the world will suddenly have a new and profitable market to turn to. Until then, if you’re looking for an oil major to invest in for alternative energy, BP is probably your guy.
But for pure geothermal power investing? Ormat and Polaris are likely your best bets.
Thanks again for writing in!
Now, I get it — geothermal energy has left you all hot and bothered. Scandalous! Now you’re out on the prowl looking for more alternative energy plays. First, relax, contain yourself … if you’re not ready for the geothermal big-time, we’ve still got you covered.
Ted Bauman tracked down what he believes will be the single best investment you could make in this opportunity today — the company he’s calling “Solar-on-Demand’s Standard Oil.”
This company is on track to make solar power not only cheaper than traditional energy, but also just as reliable. And it’s already paying off.
In 2020, it made more money than any other solar company — and all the oil supermajors combined. It has smart money piling in from Goldman Sachs, BlackRock, JPMorgan Chase and Citadel.
Yet, right now, its stock is worth less than 1% of the traditional energy majors. But it won’t be for long.
Geothermal aside, if only we could tap into the absolute fire comin’ out of the Great Stuff inbox this week — y’all were packing heat!
Thanks to everyone who wrote in, and to all of you who didn’t write in … c’mon, what gives? Don’t be a stranger — stop by our inbox sometime to share your thoughts with us.
Ben, they say the only thing that’s certain in life is death and taxes … and cryptocurrency is no exception when it comes to paying the taxman.
Let’s break your question down a bit more for all the crypto noobs out there. First, you’re absolutely correct that cryptocurrency isn’t considered legal tender here in the United States — although that’s no longer the case in other parts of the world.
Here on the homestead, cryptos might not be accepted as an official form of debt repayment along with the trusty greenback, but they are considered “property” for federal income tax purposes, meaning the IRS treats cryptos like any other capital asset.
That means if you’re a crypto trader, you’re required to report capital gains and losses from each of your transactions.
But here’s the thing. If you buy a cryptocurrency — any crypto, pick your poison — and just keep it in a digital wallet for safekeeping, you’re not going to owe taxes on that money come the end of the year.
It’s only when you start using cryptos as a method of exchange — like buying and selling bitcoin, for example — that those purchases become taxable. Note: This also includes swapping your crypto back for U.S. dollars.
So, whether you’re buying and selling crypto on the reg … or just mistakenly purchase some Dogecoin (DOGE) trying out Robinhood’s new crypto wallet … make sure to pay your taxes lest Uncle Sam comes knocking.
I hope that clears things up for you, Ben. Thanks for writing in!
Oh Mon Dieu, Mon Chéri!
Cheri, Cheri, Cheri … I don’t know what you’ve been smokin’ lately, but it must be the good stuff!
Really, though, all electrical sources from powerlines to refrigerators emit extremely low electric and magnetic fields (EMFs) — including the computer or cellphone you used to reply to the Great Stuff inbox. (Unless you’ve somehow figured out telepathy, in which case, please tell me your secret.)
However, no scientific evidence suggests that trace exposure to EMF poses a significant medical risk to humans … at least, not yet anyway.
So, when I hear the argument that electric vehicles (EVs) must be more dangerous to drive because of the bigger batteries they use, I’m reminded of the classic microwave test: Are you going to toss your microwave because it releases small amounts of radiation?
If you answered “No” to that question, then you can probably shove that human shield technology into the glovebox of your EV, right next to all those plastic straws and Ketchup packets you’ve been saving for a rainy day.
And as for that scarcity factor you mentioned, EV charging availability is actually a crucial part of our current administration’s infrastructure plan … and is being worked on as we speak. As more EVs hit the roadways, expect to see more charging stations in kind.
Finally, “not the province of government?” Where do you think our existing powerlines came from? Or gas stations? Sure, most of these are privately operated now, but the government helped significantly with the initial buildouts. And it has every right to help build out charging stations as well. Just saying…
As always, thanks for writing in, Cheri!
There’s A Car … That Runs On Water, Man!
Howard, congrats! You’ve made it into our “hydrogen hoopla” free space for the week. I swear, not a Friday Feedback goes by without some forlorn nod to Hindenburg-like chaos.
If you’re hearing concern about hydrogen and the ozone layer, it’s nothing new … just a paper out of Caltech spouting your run-of-the-mill dialogue that “since we can’t get 100% clean energy yet, let’s not even try to wean off of oil!”
As with any environmental fearmongering (no matter the stance), there’s no gray area. No in-between. The Caltech paper assumes that there will be massive hydrogen leaks — bigger than the Exxon Valdez disaster, oh noes! It’s Oil Spill 2: The Ozone Boogaloo!
Except … it’s not. While no energy resource will be perfectly 100% containable, this is no reason to not shift away from oil now.
Plus, everyone freaks out about the electricity needed to make hydrogen. But we already have multiple green technologies to generate electricity — you mentioned solar yourself. And dismissing those in favor of gas, oil or coal is ridiculous.
As to ethanol … I have no comment. That nastiness was dreamed up by Big Corn, and if you don’t believe Big Corn is a thing, boy howdy from the Midwest. Let me tell you … Big Corn is real. And they’re poppin’ off like Orville Redenbacher.
Pier None Imports
Thanks for the kind words, John. I appreciate you writing in again.
I have looked at Big Lots (NYSE: BIG). It’s why I don’t like Big Lots.
The pandemic made me realize I’m a “moat” kinda guy. Now more than ever, I want to invest in businesses that can’t be replicable (easily) or have some brilliant irreplaceable technology. You get the gist.
Big Lots has no moat. Like, none. (And drainage canals don’t count. Sorry, Florida peeps.) Like I said on Tuesday, anything that Big Lots does, literally anyone else can do better … or failed trying to. Its entire business model is a race-to-the-bottom on price and quality.
Big Lot’s style of mediocre-build furniture is everywhere, like a cheap wicker wave lifting all discount retail boats. There’s a reason why furniture has been Big Lot’s biggest sales driver the past few quarters, and it’s the same reason why BIG was originally downgraded due to higher freight costs.
So that’s Big Lots settled … on my end, at least. BIG shares, however, are another story.
If I only look at Big Lots from a trader’s perspective, I’m looking at BIG’s steady downtrend since mid-May. I’m also looking at BIG consistently trading under both its 50-day and 200-day moving averages. In other words … it’s going down, yo.
If you’re not invested in BIG already and wanted to get in, maybe watch to see if BIG holds above early 2021 support levels in the $42 to $45 range. But that “maybe” is a shaky “maybe.”
ALL CAPS MEANS MY EMAIL GETS READ
GETTING LATE… TALK AT YOU LATER.
FYI: OIL IS DEAD… IN ROUGHLY 6 MONTHS OR SO…
IT IS GOING TO CRATER BECAUSE OF A RADICAL NEW TECH COMING.
JUST A HEADS UP. THE WORLD IS ABOUT TO TURN ON ITS HEAD. BUT NOT FOR THE REASON YOU THINK — Arlen M.
What a way to end the week!
A cliffhanger? Really, Arlen?
I’m glad we agree that oil’s dead, but please, rid me of this painful anticipation — what’s about to turn the world on its head?!
Amelia Earhart was found in a cryo-fridge next to Walt Disney? Are they coming out with The Bible 3: Newer Newer Testament? Is there a partway Pink Floyd reunion? (Sorry, Rick…) You got a new fudgy brownie recipe to share with the class?
Anyway, it’s getting late so I’ll talk to you later … I guess. Write me back, won’t you?
In the meantime, here’s where you can find our other junk — erm, I mean where you can check out some more Greatness:
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Until next time, stay Great!
Editor, Great Stuff