Move over lithium…riding 2019’s new boom

Wednesday, 6 March 2019
Adelaide, Australia
By Bernd Struben

  • What’s in those brownies?
  • ‘Hillary Finally Gets the Message and Bows Out of 2020 Presidential Race’

They’re often dismissed as boring. But I used to like Volvos.

I liked them when they were Swedish owned. And I didn’t mind them when they were bought by US-based Ford Motor Company. Or even when Ford offloaded the carmaker to Chinese-based Geely Automobile Holdings…the current owner…in 2010.

The company has been producing cars since 1927. You can see one of their early models below:



chart image

Source: Lars-Göran Lindgren/Wikipedia
Click to enlarge

My parents bought their first Volvo in 1975. The classic, boxy 240 wagon.

We were living in Virginia at the time and they had the car shipped direct from Sweden. I still remember driving to the shipyards to pick it up, riding in the front seat of our ageing Plymouth sedan between my sister and my dad…unrestrained, of course.

When the World Bank posted my dad to Japan in 1976, the Volvo came with us. It was taxed as a light truck in Tokyo, where it was too big for many of the laneways. And the left hand drive provided no end of amusement at Tokyo’s myriad highway toll booths. This was back when drivers actually handed cash to toll booth operators, who were inconveniently positioned to the right side of our car.

Returning to the US in 1979, my parents bought another Volvo 240 wagon. This one was eventually bequeathed to my sister when she went on to university. She held onto it until it turned over 300,000 miles (480,000 km) on the odometer.

She went on to by another Volvo. As did my parents…three of them, over the years.

My wife and I almost bought one ourselves in Melbourne. The XC 90 SUV model. The one we test drove had a V8, of course. Some good power. And though I had no immediate plans to do so, I figured it would do 200 kph in a pinch.

Which brings us to why I no longer like Volvos.

From Bloomberg:

Car buyers who want to drive at breakneck speeds on Germany’s autobahn highways are about to lose Volvo as an option.

The Swedish car brand, which has long taken pride in its attention to safety, will design all models by 2020 to prevent drivers from going faster than 180 kilometers (110 miles) per hour…

“There is no reason why you should be able to drive a Volvo faster than 180,” [Chief Executive Officer Hakan] Samuelsson said in a phone interview…

After addressing extreme speeds, Volvo will be looking at technology to prevent accidents caused by driving while impaired, or by distractions such as mobile-phone use.

“With new technology, we can address those,” Samuelsson said. “There will be cameras that are capable of registering facial expressions and, I’m sure, detect drug and alcohol use.”

Wow.

Volvo’s master plan sounds a lot like having your grandmother in the car with you at all times.

Not so fast! Eyes on the road! Both hands on the wheel! Is that beer I smell? That’s it…pull this car over right now! And turn down that music, it’s bad for your hearing!

Thanks Volvo…but no thanks.

Australia’s nanny state is doing a fine job of plastering cameras all across the public domain. We don’t need our cars joining in the surveillance game. And while there may not be many opportunities to do so in Australia these days, there’s something comforting about knowing your car can go really fast when you need it to.

But not if you’re driving a speed-restricted Volvo. A restriction that will also fall onto their growing fleet of electric vehicles (EVs).

We can only hope not every carmaker’s EVs will come infused with nanny state technology.

We’ve looked at the rapid growth in the EV market over the past few days. That trend hasn’t been lost on Volvo, which aims to have 50% of its sales coming from EVs by 2025.

And Volvo is far from alone.

Hence the big rush into lithium stocks over the past two years. Lithium, as you probably know, is widely used in modern battery production.

And this has proved a boon for early investors in the right lithium stocks.

Like lithium miner Argosy Minerals, for example. Argosy saw its share price rocket 1,328% within 12 months in 2017.

In Sam Volkering’s new research report, published yesterday, he estimates that the lithium-ion battery market could reach US$93.1 billion by 2025.

But here’s the thing that you won’t read in the mainstream press. Lithium battery tech isn’t the only key element in electric vehicles.

At the moment the Chinese hold a near monopoly in another key element. But a small ASX-listed company is working to break that monopoly.

Sam believes this company is on track to succeed. Of course there are no guarantees. If the company stumbles, its share price could fall. But if things go according to plan the share price could soar an incredible 2,447%.

You can get all the details in Sam’s new report, ‘Atomic X-66’ right here.

Now a look at the markets.

Markets

Overnight, the Dow Jones Industrial Average closed down 13.02 points, or 0.05%.

The S&P 500 lost 3.16 points, or 0.11%.

In Europe, the Euro Stoxx 50 index finished up 10.07 points, or 0.30%. Meanwhile, the FTSE 100 climbed 0.69%, and Germany’s DAX closed up 28.08 points, or 0.24%.

In Asian markets, Japan’s Nikkei 225 is down 133.14 points, or 0.61%. China’s CSI 300 is up 0.24%.

In Australia, the S&P/ASX 200 is up 41.21 points, or 0.66%.

On the commodities markets, West Texas Intermediate crude oil is US$56.13 per barrel. Brent crude is US$65.86 per barrel.

That’s down just a few cents a barrel since this time yesterday. But as I often write here, the mid- and longer-term price for crude will likely be 10% lower.

Forget the temporary issues with Iran and Venezuela.

Yesterday we looked at the massive untapped oil reserves sitting off the coast of Brazil. Some 20 billion barrels…just waiting.

Brazil isn’t a member of OPEC. Or even the cartel’s expanded OPEC+. But the real headache for OPEC in the years ahead will continue to be the US, where the nation’s top oil producers will soon be pumping more crude than most OPEC nations.

From Bloomberg:

Chevron and Exxon Mobil plan to sharply increase their oil production in the world’s largest shale basin over the next five years, flooding markets with new supplies as demand growth is slowing.

Within hours of each other on Tuesday, the two largest energy companies in America announced they want to pump almost 2 million barrels a day combined by the middle of next decade in Texas and New Mexico. That would turn their wells in the Permian into bigger sources of oil than most OPEC nations.’

Something to keep in mind the next time you hear about pending ‘oil shocks’ sending crude back into the US$100 per barrel range.

Turning to gold, the yellow metal is trading for US$1,288.91 (AU$1,818.95) per troy ounce. Silver is US$15.15 (AU$21.38) per troy ounce.

One bitcoin is worth US$3,849.65.

The Aussie dollar is worth 70.86 US cents.

What’s in those brownies?

What do you think of when you hear the name Martha Stewart?

For me, her name brings up two predominant themes.

The first is her wholesome lifestyle guru persona. One that revolved around the kitchen, as she authored a series of books like Martha Stewart’s Quick Cook Menus. That preceded the publication of her first magazine, Martha Stewart Living.

The second is her conviction, and subsequent jailing, for charges that originally stemmed from insider trading allegations in 2004. That the US justice system felt it prudent to place the likes of Martha behind bars is a story for another day.

Today I want to mention two things that might not come to your mind when you think of Martha Stewart.

The first is that she was a stock broker. According to biography.com:

Stewart went to work as a stockbroker for the boutique firm of Monness, Williams, and Sidel. She worked on Wall Street until 1972…’

The second is that she’s branching out into the legal cannabis industry, hand in hand with her buddy Snoop Dogg.

This headline comes from the Detroit News, ‘Martha Stewart partners with Canadian cannabis firm’. The article continues:

Martha Stewart has entered the fast-growing – but still legally murky – cannabis market.

The domestic diva who brought us hemp yarn is now partnering with Canada’s Canopy Growth Corp. to develop new products containing CBD, a compound derived from hemp and marijuana that doesn’t cause a high.

First to come, she said, will be a “sensible product for pets.” …

Snoop’s office facilitated an introduction to Stewart, who visited Canopy Growth’s headquarters last fall.

The article notes that Nasdaq-listed Sequential Brands Group, Inc., which licenses Stewart’s products, gained 40% following the news. Shares in Canopy Growth rose 4%.

CBD, by the way, is the substance within cannabis that has some of the most promising medical applications. Unlike THC it doesn’t get you ‘high’. But it has already proven effective for childhood epilepsy. And both human and animal patients are lining up to use it to treat ailments it’s not yet clinically proven effective for.

Proven or not, the CBD market is already huge. And growing fast.

According to analysis from Cowen & Co, 7% of Americans currently use CBD, presenting a potential US$16 billion market by 2025.

Remember, that’s a market that didn’t exist a few years ago. And it’s not even taking Stewart’s ‘sensible products for pets’ into account.

It’s growth opportunities like these that keep small-cap specialist, Sam Volkering awake at night. Literally. He just can’t sleep until he’s found what he believes is the best way to play them.

Fortunately, he’s confident he’s got this one sorted.

You can find Sam’s top ASX-listed recommendation to make the most of the booming global demand for legal cannabis, right here.

Now before logging off, here’s the latest in politics from The Australian Tribune:

‘Hillary Finally Gets the Message and Bows Out of 2020 Presidential Race’

For a nation with 325 million people, the US democracy is quite dynastic.

Just think of the Kennedys, the Bushes, and of course the Clintons…to name a few.

After serving as First Lady to former President Bill Clinton, Hillary made the most of her name and political fame to become a New York state senator and later garner an appointment as the US Secretary of State.

It wasn’t until she…’

If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.

And it’s absolutely free.

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You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.

Cheers,
Bernd