Why a news story from last month that you might have missed is huge for investors of this under-the-radar trend
Last month, a news story broke that you might have missed.
While the headlines went to tariffs, growing tension with Iran, and the Democratic debate, this story didn’t even register for the average American.
But for trend investors like you and me, it was major.
That’s because what happened was a sign that we’re a step closer to a major turning point in one of the top trends we track here in the Digest … and it’s happening faster than previously anticipated.
If you’re a newer Digest reader, one of our principle jobs here is to track a handful of societal trends that are reshaping our world … and in the process, creating massive wealth in the investment markets. For example, trends like legalized marijuana, self-driving cars, 5G internet connectivity, China …
Getting in early on the right side of these trends is a near-certain way to create life-changing investment wealth over time.
Now, while some of these trends are more obvious and attention-grabbing — for instance, legalized marijuana and 5G — there’s one that’s still being overlooked by the average investor. But that’s our advantage — we can continue establishing positions in key companies before the masses realize what’s going on.
That said, the news from last month suggests we’re much closer to the masses finding out about what’s happening. While that’s good news in terms of putting us a step closer to big money pouring in, it’s bad news from the perspective of being able to buy certain stocks at low prices.
In this Digest, let’s dig into last month’s news, then make sure everyone is aware of why this under-the-radar trend has every bit the wealth-creation-potential as the more obvious trends.
***To begin, we need to start with one of the more obvious trends — self-driving cars
Self-driving cars — also called “autonomous vehicles” (AVs) — represent one of the biggest investment opportunities of the next 25 years. This innovation will transform huge portions of our economy and create trillion-dollar ripple effects over the coming decades.
The advances in self-driving technology are coming fast … and picking up steam. For instance, last Thursday came news that Waymo has now officially launched its autonomous vehicle service through its partner, Lyft, in the Phoenix area.
Lyft riders are now being offered a Waymo autonomous-driving minivan or a traditional Lyft vehicle with a human driver. The Waymo minivans all have a safety driver behind the wheel.
But as exciting as this is, there’s a subtler trend embedded within AV trend that the average American is still missing …
Next-generation battery technology — specifically, solid state batteries.
***Solid state is considered the holy grail of batteries
The shift to electric, and eventually, autonomous vehicles, wouldn’t be possible without next-generation batteries. These batteries will change the way we travel (not to mention the way we interact with our cellphones and laptops, and so much more).
Right now, EVs are powered by a larger version of what’s in your cellphone and laptop: the lithium-ion battery. But by upgrading to next-generation battery technology, tomorrow’s EVs will run on batteries that are more compact — but way more powerful … and safer, too.
The problem is that, so far, automakers haven’t been able to mass-produce these batteries profitably.
Take the electric vehicle — battery packs make up between 30% and 50% of the cost of an electric vehicle. For context, a 500 km-range battery costs around $20,000. Plus, you have to add another $2,000 for the electric motor and inverter. Compare that with a gasoline engine that costs around $5,000.
But last month’s news suggests that solid state mass production is nearing a tipping point.
So, what was the news?
Toyota’s Vice President and R&D Chief, Shigeki Terashi, said …
… by the time we have the Olympic games next year, we would like to make sure that a solid-state battery can be unveiled to the public … Progress has surpassed the target. We have entered a new age.
Next summer is two years earlier than was originally forecast by Toyota. It’s part of Toyota’s aggressive initiative to sell 5.5 million electric vehicles — which has now been accelerated a full five years — from the original 2030 to 2025.
***While most investors haven’t fully realized just how big this is going to be, it’s long been on Matt McCall’s radar
Matt is our resident thematic investor, tracking our world’s major trends in his newsletter, Investment Opportunities. For months, he’s been helping his subscribers take positions in key battery companies. The reason boils down to one simple thing — massive opportunity.
From Matt’s January issue of Investment Opportunities:
After all the research and analysis, any potential investment opportunity must still have the numbers to back up big future growth. I would like to share predictions from a few research firms about the future of solid state batteries:
Inkwood Research expects the global solid state battery market to grow with a CAGR of 67% between 2018 and 2026.
Research firm Arthur D. Little sees the entire battery market growing to $90 billion by 2025 from $60 billion in 2015. This is an important number because it shows how the overall demand for batteries is set to explode. (Not the batteries themselves … just the demand!)
If solid state is the standard for future batteries, it will capture a large portion of that $90 billion market. Even a mere 10% is $9 billion. This would represent enormous growth in the next seven years. And even more importantly, it represents massive profit potential if you are invested in the right stocks.
***So, what’s the right way to play this massive market potential?
First, you could look at the major auto manufacturers — and obviously, the spotlight needs to shine on Toyota given the latest news on its progress toward cost-effective solid state technology.
In fact, Matt gave me permission to reveal that Toyota is one of his picks for how to play the coming next-generation battery revolution.
From Matt:
Toyota is already considered the leader in solid state battery technology simply because of its advancements and history. The company has been working toward perfecting battery technology for over a decade.
Toyota is up 10% since the original recommendation, but that’s nothing compared to what’s going to come over the next decade. Matt believes Toyota will be a 5-bagger in the coming years. He likes Toyota up to $120, which means it’s still a buy at the time of this writing.
Now, even though the auto manufacturers will likely treat your money well as solid state technology is adopted on a wide scale, it’s not Matt’s favorite way to play this trend.
From Matt:
General Motors (GM), Ford, Toyota Motor (TM), Honda Motor (HMC), Mitsubishi Motors (MMTOF), Nissan Motor (NSANY), and Hyundai Motor (HYMTF) all want these next-generation batteries in their fleets as soon as possible.
Audi, Porsche, Mercedes, and BMW (BMWYY), too. In fact, Germany is so eager to help its automakers outdo the Chinese, Japanese, and Americans that it’s spending $1 billion on these batteries.
I could go on …
But as an investor, I’d rather own a pure play on the battery revolution …
So, I found a company that holds key patents.
Automakers like Toyota are relying on this tiny company for its electric cars. Yet the company is totally off the radar.
That makes now the right time to get in before everyone else.
I asked Matt if I could reveal this company as well. Unfortunately, it’s too small. In fact, it’s one of the smallest stocks he’s ever discussed before a broad audience, so it’s daily volume couldn’t handle the influx of dollars that would potentially come if revealed to the Digest’s wide circulation.
To learn more about it as an Investment Opportunities subscriber, click here. Otherwise, give Toyota a good look as a great way to play solid state batteries.
As we wrap up, I’m going to turn back to Matt to help drive home just why this trend has every bit the wealth-generating potential as the more obvious trends.
From Matt:
Over the past year, I’ve spent an enormous amount of time studying the battery industry. I can tell you this mega innovation isn’t a matter of “if,” it’s a matter of “when.” I believe the next big battery breakthrough will go down as one of the greatest inventions of the 21st century.
There are huge investment implications here. Those on the right side of this innovation stand to build incredible wealth … just like those who were on the right side of the internet and the smartphone in the beginning.
If you want more access to Matt and his investment research on batteries, he’s created a free video presentation to help investors better understand how to position themselves. Click here to watch.
We’ll continue to keep you updated as we learn more from Toyota and get closer to next year’s Olympics.
Have a good evening,
Jeff Remsburg
