In today’s Money Morning… but there’s a second story here… we are at the dawn of the most important energy disruption in 100 years …the flurry of second-order effects…and more…
Ryan and I have been researching an intriguing story in the background for some time now.
It is a story of intrigue, twists and turns, political chicanery, media spin, groupthink, and colossal money migration.
It is also a story of potentially lucrative stock gains in the speculative realm.
We can officially share the story with you today.
And the little-known Australian companies which we believe are going to become key players in the narrative in 2021.
The story, as you probably know, lies in the world of clean, green, renewable energy.
There are two narratives on this right now.
First the mainstream one…
The incredible run-up of many stocks related to solar, wind, and electric vehicles (EVs).
‘Investors pull green levers to reshape energy sector’, reports the Financial Times.
And, yes…in almost every stock index — here included — clean energy stocks cleaned up the gains in 2020.
But there’s a second story here…
One the mainstream is yet to wake up to.
It centres on where this fervour is actually leading from here.
And Australia’s role in what’s about to happen.
As with our mining boom — which centred on bulk commodities like iron ore and coking coal — our role will be a starring one. And lucrative.
Only it’s not what you might think…
Let’s start with an irrefutable fact:
We are at the dawn of the most important energy disruption in 100 years
You’re seeing it in real time in Australia right now.
News drops each week on the redesigning of our national energy markets…towards renewables and away from oil and gas.
This is happening just as quickly around the globe.
And it was well underway before Trump lost the election. But now the Biden administration is the final green light.
So far, much has been made in the mainstream of a possible Green New Deal and an ‘EV metals super-cycle’. Almost mandatory policies are being put in place around the world to meet emissions targets.
Biden is going absolutely hell for leather on this.
He’s laid all his cards on the table.
There are serious and well-founded doubts he can eliminate carbon from the US energy sector within 15 years (his stated aim).
Critics say the fossil fuel lobby won’t let him. And that voters will turn on him too as it would make electricity prohibitively expensive.
But all that misses the point.
The global groundswell is now in full motion.
And the smart money is moving to take advantage.
And where should investors be shifting capital in order to capitalise on this megatrend in 2021?
And so, we get to a story that’s getting hardly any media attention right now…
What is not being covered are the ‘second-order effects’ of this great disruption
Everywhere you look in Australia right now, corporations seem to be falling over each other to make their energy green.
Energy company AGL is the country’s biggest greenhouse gas producer. It just announced it’s building a giant battery next to its Loy Yang coal plant in Gippsland.
A Sun Metals Zinc refinery just became the first business of its kind to pledge to go 100% renewable by 2040.
The breweries, the supermarkets, and even Bunnings have all just put their clean energy pledges on the table.
There’s more than a whiff of groupthink about all this.
But make no mistake: it’s happening.
You and I are powerless to stop it.
And all this is just what’s taking place right on our doorstep.
This great system change is unfolding all around the world.
Which leads to an important question…
What will the second-order effects of all this be?
To answer that, you first need to know what second-order effects are (I’ve spoken about them in the past).
And why they could lead to stock price rises matching or even surpassing the mining bonanza of the mid-2000s.
Starting today you can get everything you need to know — including six investment plays on this phenomenon — in a new research report we’re finally able to publish.
This second-order phenomenon goes much deeper than solar power, wind power, and lithium-ion battery energy storage.
It will finally lay bare the full disruptive power of clean energy.
And, if Ryan and I are even half right, it will put certain companies…and the second-order projects they’re focusing on…into the spotlight.
(One of our recommendations, by the way, blew out 170% in a single Tuesday trading session this October as a direct result of what we’re about to show you…)
Now, at the risk of stating the obvious, that is not a normal occurrence. Not all our picks perform like this.
And there are several listed renewable stocks on the ASX that have not only failed to take flight this year but have gone down.
This is not a puff piece saying you should blindly go in on any old green stock.
But we firmly believe we’re at the beginning of something monumental here.
What happens next could well lead to even greater stock spikes in the micro- and small-cap end of the ASX in 2021.
But NOT from the obvious renewable companies…
…the ones whose names repeatedly appear in the likes of The Motley Fool, The Australian Financial Review, and the various renewable energy forums.
This is the story inside the story — and a strategy for placing yourself well ahead of the pack in 2021
Second-order effects are pretty simple to understand.
Every action has a consequence. And every consequence has another consequence.
Those latter consequences are called second-order effects.
Every change you make to a system has second-order effects.
The internet, for instance, was designed as a back-up network for the US military in the event of an attack.
Its second-order effect was to open up a free information superhighway that changed the world.
Cars, too, were a great system change. The first-order effect was getting people from A to B faster.
One second-order effect was the emergence of suburbs and city sprawl. Another was a proliferation in carbon. (One of the main drivers of the green boom we’re seeing all around us right now.)
As a result, you are witnessing another monumental system change — away from fossil fuels.
An $11 trillion tsunami is about to pour into clean energy.
Pick the second-order effects of this — and the stocks poised to exploit them — and the potential profits could be huge.
Giant green stocks conquered the market in 2020, easily outperforming the tech leaders like Amazon, Apple, and Facebook.
But that could be nothing compared to what’s around the flow-on effects that are coming…
It doesn’t matter if you’re sceptical or ideologically opposed.
It doesn’t matter if the terms ‘sustainable investing’ or ‘Green New Deal’ raise your hackles.
It doesn’t even matter if you suspect the likes of Biden, Bezos, Gates, and Buffett — and even Big Oil — are hitching themselves to the green wagon with ulterior motives.
A great system change to a lower-emissions future is on.
And it’s going to have a multitude of second-order effects few can contemplate.
Keep an eye out in your inbox for more on what Ryan Dinse and I have to say about Australia’s ‘Clean Energy Second Order’ later today.
For Money Morning
PS: How to Find Promising Energy Stocks — Discover why the energy market is ripe for massive disruption and how to identify innovative energy stocks. Click here to learn more.