One of the easiest ways to make big money … the “secret” behind wealth creation … three investment opportunities positioned for huge returns this decade
Let’s begin today’s Digest with an excerpt from an essay by our CEO, Brian Hunt:
Have you ever known someone who got rich even though they didn’t seem very smart, didn’t try very hard, or both?
Almost everyone I know has someone they’d place in this category…
The mortgage brokers and real estate agents that made millions during the 2002 -2007 real estate boom… despite not working or thinking very hard… the guy that made millions in gold mining during the historic gold bull market from 2002 – 2011 … despite not working or thinking very hard… the website designer that practically fell into millions of dollars during the 1990s Internet boom…
There’s a powerful secret – a set of knowledge – behind most of the “easy” or “accidental” fortunes in the world. This knowledge is one of the key differences between people who make lots of money and people who don’t.
So, what is this secret?
We’ll answer that in a moment.
***First, Monday brought eyebrow-raising news from BMW
The German automaker announced it had ordered up to $24 billion of batteries.
This is to support the growing demand for electric vehicles.
From Yahoo! finance:
BMW AG has boosted orders for battery cells to keep pace with accelerating demand for electric cars that made up more than 11% of deliveries during the half of the year.
The German carmaker now has contracts for more than 20 billion euros ($23.8 billion) of batteries, up from 12 billion euros previously…
Earlier this spring, BMW reported it expects deliveries of full-electric models to grow by more than 50% annually on average by 2025. That’s more than 10X last year’s number.
And by 2030, BMW expects at least half of all its sales will come from zero emission vehicles.
With this in mind, let’s return to Brian’s essay and the “secret.”
From Brian:
In the business world, the “super boom” times I described above are often said to be times of “tailwinds.” They are extremely favorable periods where an industry’s sales and profits soar.
If you’ve ever met someone who got rich without trying or thinking very hard, chances are they got into an industry with a strong tailwind blowing at its back… a tailwind of robust industry growth that lasted for years…
Achieving success in these situations can be like hopping on a boat headed down a huge, fast-flowing river. You can practically float your way to success.
BMW and other electric-vehicle manufacturers are standing on the cusp of a period of incredible, organic growth. Investors who see this, and position themselves accordingly, stand to make extraordinary wealth this decade.
Or, as Brian calls it, “gale force tailwinds of wealth creation.”
***But these tailwinds aren’t limited to electric vehicle manufacturers
What’s the topic of the BMW article above?
Well, besides BMW, it’s batteries.
You think a $24 billion order is going to move the needle for certain battery manufacturers?
From our hypergrowth specialist, Luke Lango, who helms Innovation Investor (bold added):
A report a few years ago from Intel – and backed by other reputable firms – states that the AV market will be worth $7 trillion. And I think that is a conservative number. When you think about how it will change life for nearly every person on Earth, it could be closer to $10 trillion.
To put $10 trillion into perspective, only two counties in the world have economies bigger than $5 trillion (the U.S. and China). The total GDP of the entire world is about $90 trillion. That means the AV market could be bigger than 10% of the GDP of every economy on Earth.
Even if I am wrong and Intel is too optimistic, there is no doubt that trillions of dollars will change changes in the future of transportation. It is not very often than an opportunity this big and with degree of certainty is in front of investors.
This is truly an investment opportunity for the ages – the Roaring 2020s.
This industry isn’t just the ultimate prize for long-term investors. It is the ultimate prize for all battery companies as well. With Bloomberg New Energy Finance predicting sales of over 50 million EVs by 2040, there is a whole lot of upside to capture here.
This is the definition of a tailwind.
But it doesn’t stop there.
***Batteries don’t appear from nowhere, they’re created from other materials
So, if the 2020s are going to witness an epic bull market in electric vehicles…which means an epic bull market in batteries…won’t that also mean an epic bull market in battery metals?
Absolutely.
From our macro specialist, Eric Fry, editor of Investment Report:
The average plug-in EV requires about 200 pounds of copper, which is nearly four times what a midsized internal combustion vehicle requires.
Depending on the exact battery chemistry, these vehicles also contain about 50 pounds of nickel, along with meaningful quantities of manganese, aluminum, and/or lithium.
You could say, in effect, that the road to carbon neutrality is paved with battery metals.
Below is a chart from Eric that shows how much the demand for various battery metals will increase in the next 10 years.
If you have trouble seeing it, nickel and aluminum demand are set to explode around 14X… phosphorus and iron roughly 13X… and copper and graphite about 10X.
Again, classic tailwind.
Let’s do one more…
***How will electric vehicles…and batteries…and battery metals…recharge without a massively built-out electric infrastructure network?
Well, they can’t…at least not at any great scale.
So, get ready for a tailwind behind electric charging station growth all over the country.
From Barron’s:
President Biden wants half of all new car sales in America to be electric by the end of the decade. It’s a bold goal – and it won’t be easy.
It will require a lot of lithium, batteries, EV charging, and EV manufacturing capacity. Most important, it will require billions and billions of dollars.
Let’s zero in on the “EV charging” part of this by returning to analysis from Luke:
There’s only about 75,000 charging stations in America.
By comparison, there are 1.2 MILLION gas station pumps in America –& sixteen-fold& the number of charging stations.
Clearly, if EVs really are the future of automobile transportation (spoiler alert: they are),& then the number of charging stations in the U.S. is going to explode higher over the next decade.
Again, a massive tailwind behind a handful of companies building out our nation’s EV infrastructure.
These aren’t the only huge tailwinds, obviously.
There’s solar energy, cybersecurity, the blockchain/crypto ecosystem, and gene editing/precision medicine to name a handful of others.
They’re all long-term portfolio makers.
***Hitching your portfolio to a monster tailwind is one of the simplest ways to compound your wealth and change your life
Let’s return to Brian:
Most books on wealth don’t emphasize it, but I believe knowing how to spot and harness tailwinds is one of the great secrets of getting what you want in life.
Whether you want money, respect, freedom, or good press, few forces in this world can help you more than a strong tailwind.
Want to retire rich at 40? Get a tailwind blowing in your favor.
Want to build a multi-billion-dollar business? Get a tailwind blowing in your favor.
Want to massively grow your nest egg with smart investments? Get a tailwind blowing in your favor.
To be clear, this doesn’t ensure a smooth, easy ride to riches.
You’ll still encounter volatility, bears predicting doom and gloom, and probably some nervous moments. But the payoff can be extraordinary.
On that note, I’ll give Brian the last word:
People can and do make lots of money in declining industries, but making big money is a heck of a lot easier and your chances of doing so are a heck of a lot higher if you focus on industries with powerful, long-term tailwinds at their backs.
When you do this, you can get rich without trying or thinking very hard.
And if you’re willing to think and try hard?
Well, it’s scary what you could accomplish with a gale-force tailwind at your back.
Have a good evening,
Jeff Remsburg
