Trader Note

Before an ECB speech, with no data, any move bonds made will revert before the speech (mostly).

Investing in Dreams

Technology is a difficult place to invest. For years, venture capitalists have been throwing their money into tech startups. In the booming 1990s, just having a ".com" in the name meant cash inflows. Companies with proven software, even where it cannot be shown to make money, have also had large capital infusions. But if you pumped money into Snap or Twitter and are tired of watching your share price drop, perhaps you should look to emerging technologies for investment.

Here are some places to invest, or watch closely, so that you can profit from the next boom industries. You can also feel good that investing in such projects will help society and potentially save civilization for at least a little while longer.

Thorium Reactors

I have written before on LFTR (liquid fluoride thorium reactor) reactors, and still think that this will be a massive game changer in the future. These reactors can basically burn nuclear waste, especially the vast mountains of cracked uranium fuel rods left over from breeder reactors. These reactors also use thorium, which is currently a waste product from rare earth mining. Many rare earth companies try to mine in places without thorium because of environmental regulations about dumping nuclear materials. It will be a simple process for these rare earth miners to tweak their processing to separate out the thorium. Thus, the fuel for these reactors is cheap, widely available and beneficial to the environment.

This should make such reactors a no brainer. Unfortunately, the US government has put so much capital and resources into breeder reactors that they failed to realize the potential of such reactors. The initial design was built in the 1960s, but now much of that information and experimentation has been lost. The US government is not funding such research, and will be standing on the sidelines when China produces a good design.

China has been spending huge amounts of money on such reactors. Their researchers are years ahead of others in development, and will likely have a marketable design in the next few years. As China is the manufacturers of the world, expect them to be able to quickly put such a design into production. Very soon, wider generator availability will boost rare earth mining which will also boost the Chinese economy since they control 98% of rare earth minerals and mining.

Wider availability of the reactors (which will likely be portable) means that remote locations will be more accessible to mining and processing. Industries like aluminum and copper will be able to work in remote spots, and do processing cheaply, to allow for cost effective shipping. Savings on projects will come from not having to run power lines to such locations, as well as lower fuel costs.

Large vessels will likely be able to convert to LFTR reactors, creating a massive savings on diesel costs. This will mean bigger profits for early adopters, especially if they are able to sell carbon credits back into markets. So the shipping industry will win, but wait to invest in shipping technologies until there is an indication of adopting such technology.

Power Storage

Once power is easily generated, then it needs to be stored. There are three competing technologies that are viable for massive storage. For wind and solar power production, having affordable energy storage means that these technologies do not need to be supplemented by nuclear reactors or fossil fuels like coal. Having available energy storage also means that the grid only needs to extend between production, storage and point of use. This combination can then supply remote locations that otherwise would not be cost effective to settle and utilize. This will open up areas of the world to powered systems that otherwise would be unavailable.

Tesla has addressed the problem of energy storage with lithium based storage. These are rechargeable batteries that use a solid state storage. Lithium is a limited resource, and longer term it will become rare as storage becomes an issue. However, for now, lithium battery storage is a proven and available technology provided that the input materials are available. Tesla has built a mega factory in to address this need:

A competing technology is liquid batteries (Red Flow, Sonnen). These batteries store the energy as a liquid using a unique pump and membrane system. Because these systems are cost competitive with lithium technology, it is highly likely to be a strong competitor for the stationary battery market. This market is important for such applications as solar powered home or large scale remote production. To learn more about this technology, have a look here:

Another competing technology is liquid metal batteries developed by MIT (Ambri). The principle is similar to the process of producing aluminum only in reverse. Competing metals are used, at high temperatures, to store and release electricity. It is a novel approach to power storage, which is suitable for very large scale energy storage at low cost.


Solar Farming

Food security is important to everyone. Power requirements are difficult to meet, but in some cases can be cost effective. Indoor hydroponics farms, based in cities, are providing produce with a short distance to market. Wider power availability will make this methodology cost effective for a range of products.

On a larger scale, my favorite innovative farm is Sundrop Farms. They use solar collectors to distill ocean water and then run a hydroponic tomato farm. This is all done on arid desert land in Australia. For more information on their business:

As population grows, projects that produce more food with fewer resources will be in demand. Project that can produce vast quantities of food in an environmentally friendly manner should be promoted and funded, too.

Space Mining

The materials on the planet are finite. The mines of the earth are all going deeper underground because the easy resources have already been extracted. As we burrow deeper into the planet, costs increase while yield does not. Space will soon provide the same materials in much easier to acquire forms, assuming the technologies are available. In the future, planetary resources will be so expensive to extract that space may be the only place to find them. Thus, we need to expand our species into space while we still have the resources to do so.

Asteroid mining will be the next big mining boom. This will be companies that capture near earth objects with robots. They will either mine in orbit or return them to earth for processing. Because the composition of space rocks is not like the composition of earth geology, some asteroids can be packed with gold and platinum. Others may contain exotic heavy elements that we have yet to discover on earth. As this industry is still young, I would suggest investing in a basket of companies that are in the early stages to ensure risk coverage of the industry. Soon, there will likely be a fund or ETF available.


Colonizing Space

Space research provides us with scientific breakthroughs that make life better. Equipment like microwaves and inventions like Velcro have benefitted everyone. These things were designed by dreamers attempting to conquer a difficult environment.

Once, space could only be affordable to governments. However, now much of the push to space is moving into the private sector. Companies like Space X and Virgin Galactic are using private funding to get humans and materials into space in a cost effective manner. Mars One is trying to use crowd funding and advertising to put people on Mars to create an off world foothold. Once we have a foothold in space, everywhere in the universe become more cost effective. This is because it is expensive to move materials out of Earth's gravity well.

To get a glimpse of what the future of a space society might look like, watch The Expanse. It may also give you an idea of what kind of technologies will be important in the future. It is an awesome show:

Better propulsion technology will help humans conquer space. Current technologies, chemical rockets, are heavy to get out of Earth's gravity. They cannot push a space ship fast enough with their reactive masses to make wide space colonization feasible. They make the Moon and Mars feasible, but not other solar systems. Plasma rockets, antimatter, solar sails and other exotic propulsion systems need to be developed to shorten the distances between destinations. There have been great scientific breakthroughs, but more research and funding is needed for the next leap forward in technologies.

Nearby space destinations are many lifetimes away, even at speeds we can currently only dream of reaching. So, another way to get humans to a new world is to suspend them. Even if a new planet is thousands of light years away, cryogenic storage would allow us to send colonists to new worlds. A species that has settled on multiple planets would be safe from extinction level events.

To truly move into space, we would like to travel to a new world. To do so, we have to first see a destination. Satellites that allow us to glimpse other earths around other suns are important for this reason. New world discoveries may one day be claimed by the discoverer which means that one company might own the rights to the next earth like planet (so get in early). Once we can see a viable destination, then resources and energy will flow into getting us there. That is how humans conquer challenges and achieve great things.

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