New Energy Weekly Update – June 17, 2022

Take comfort – there is a lot of money heading our way.

Dear Friend,

I know the markets are ugly right now. I try not to look at my retirement account on weeks like this. I sold what I wanted to, and the rest is long-term holds. Now I just sit on my hands and wait.

Because sometimes the best thing you can do is nothing. Don’t buy. Don’t sell. Just wait.

That said, this market will find a bottom. And when it does, there will be awesome bargains waiting for us.

And there will be a lot of money chasing good critical mineral projects. According to a Reuters essay (HERE), a European fund is raising money right now. The fund will invest in “critical minerals needed for a transition to zero carbon emissions”.

The fund plans to raise and invest around 2 billion euros, initially.

And it isn’t just in the European Union. The United Nations laid out its Principles for Responsible Investment. So far, 4,375 institutions signed on, including Harvard Universities $42 billion endowment fund. In total, those institutions manage about $121 trillion.

Those are direct investments by institutions. But there are some strong market forces pulling money in that direction as well. For example, the Indian government is using policies to promote clean fuel and electric vehicles as its auto market grows.

Those goals support India’s growth. Currently the country operates 70% of its transportation on imported fuels. A fleet of electric vehicles (EVs) would reduce India’s dependence on foreign oil for its growth. And demand for EVs will support the demand for batteries.

This may seem like a small market force. But according to a study by the Ministry of Health and Family Welfare, only 8% of Indian families own cars (HERE). About 20% had no transportation.

To put that into a market perspective, Indians bought 18.5 million vehicles in 2021. Because if its massive population, even 8% makes a massive market for car sales.

That is the sort of information that lets me face the current bear market with patience. I know that the demand for good companies serving the energy transition is there. And as the market churns through this period, we will have some excellent opportunities to buy.

I’m just reading, studying, taking notes and preparing. And when it comes to stocks, I’m doing the hard thing right now – nothing.

Good Investing,

Matt B.