Our job here is to cover trends. Particularly ones that we think will be profitable for investors... Heck, it's all spelled out in our name: Profit Trends. But one of our secrets is that many of the trends we cover aren't really that "new." They've existed for hundreds or even thousands of years - like cannabis and psychedelic medicine. The difference is that these trends are finally starting to disrupt multitrillion-dollar industries. The other secret is that to stake a claim in the hottest sector or the biggest trend, investors don't need to take on excess risk with super-speculative plays. We're always fans of pick-and-shovel opportunities, no matter the sector. Especially when that company has the vision to reinvent itself. Edison's Folly and Vision"The great secret of doing away with the intermediary furnaces, boilers, steam engines and dynamos [to produce electricity] will be found, probably within 10 years." The great American inventor Thomas Edison made that enthusiastically bold claim back in 1884. The man was driven by electricity's potential. In 1899, a mere four years after the introduction of the gasoline-powered car, he began working on his idea for an electric vehicle (EV). Edison believed EVs had the potential to be more economical than gas-powered vehicles. So he developed a nickel-alkaline battery for EVs that was used by electric delivery trucks. But Edison's dream of an electric future was undone by Henry Ford's Model T in 1908. No EV could compete with the inexpensive, gasoline-powered vehicle that rolled off Ford's assembly line. And the problems Edison identified more than a century ago - such as the expense and weight of batteries as well as the issue of maintaining a charge for long journeys - have plagued the EV industry ever since. Yet, it hasn't stopped companies from trying to solve these problems. And it hasn't prevented investors from turning EV makers into household names. We all love innovations and are willing to pay a premium for them. Elon Musk's Tesla (Nasdaq: TSLA) has a market cap 10 times that of Ford Motor Company (NYSE: F). And that's despite the fact that Tesla produced a few more than 500,000 cars in 2020 while Ford sold 4.2 million vehicles last year. Then there's Fisker (NYSE: FSR), Li Auto (Nasdaq: LI), Lordstown Motors (Nasdaq: RIDE), Nikola (Nasdaq: NKLA), Nio (NYSE: NIO) and Workhorse Group (Nasdaq: WKHS). These names - and shares - have been tossed around like hot potatoes each week by Wall Street talking heads and armchair analysts. As Edison discovered more than a century ago, EVs are a volatile business. But he also identified the safest and surest way to play the sector... |
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