I read about a study once that had a profound impact on me. A researcher, Curt Richter, was testing the resolve of rats and placed a few in a bucket of water with the task of swimming for as long as they could. Within 15 minutes each of the rates drowned. In the next test, a new set of rats were removed from the water prior to drowning and given an opportunity to rest in safety. After a break, these same rats were again placed in the water with the idea of measuring how long they would fight for survival. Those same rats swam for an average of 60 hours!

The conclusion was quite simple. As long as the rats thought there was a potential of being rescued, they continued to swim for their lives. These rats had learned the importance of hope or, in my opinion, remaining optimistic regardless of the situation.
During the turn of the century, New York City faced a great issue hotly debated by civic leaders and entrepreneurs alike. The problem was not only life threatening but potentially would alter the living standards of millions, sparking a potential mass exodus from this growing city. You see, the city was booming and people were moving to New York in droves and with them came the task of handling all the additional manure from the horses that accompanied the people. Henry Ford had another idea and soon, the horse was relegated to a country hobby and the Model T was ‘available in any color as long as it was black!’

The point is simple. Pessimism doesn’t pay and with every challenge not only comes a solution but, for a capitalist, an opportunity.

A strange thing happened yesterday, March 8th, as the markets grappled with the idea of cutting off a massive Russian oil supply and an administration’s lack of flexibility towards an accommodating energy policy. Wall Street investors began seeking solutions elsewhere.

You see, whether it takes time we’d rather not wait for, there are solutions available for our energy crisis and dependence on foreign oil. Yes, it may not be that widely accepted just yet, but make no mistake, entrepreneurs everywhere are working overtime to change this and change this as quickly as possible.

In my opinion, Tesla will become the most valuable company in the world and has paved the way for what is possible for the electric automobile market. While not everyone can afford a Tesla, many can, and there is no question all of those folks are now running the numbers, factoring in the tax credits and preparing to take a step into the Tesla ecosphere.
Interestingly enough, Tesla isn’t alone. GM, Ford, Toyota, Nissan and seemingly every other auto manufacturer in the world are racing to provide an electric vehicle solution. Sooner rather than later, they will be everywhere and my guess is anyone reading this who still drives will more than likely own an EV in the future.

With all these new EVs hitting the market, where will they charge? Well, Chargepoint (CHPT) has a solution and Blink (BLNK) is not too far behind. Not too mention, with $750MM being allocated to charging stations in the already passed infrastructure bill, they have the green light to expand and do so at a rapid pace.

How about mass transportation? Compressed Natural Gas (CNG) has slowly begun to be implemented by municipalities and industrial companies all throughout the country. We have no shortage of Natural Gas in our country and CNG is a viable option to use right now. If you’re in Lexington, next time you drive by a city bus, look for the blue triangle CNG sticker. It’s there. Companies like Clean Energy (CLNE), Westport Innovations (WPRT) or even major integrated oils with large natural gas exposure stand to benefit and these fleets are not impacted by the rising price of gasoline.

Consumers are getting a rude awakening when they open their electric and home gas bills. While this is definitely concerning, solar companies stand at the ready to take someone off the dependency of municipal power with healthy financing plans. Linda and Breck have solar on their house and the company pays them! It’s real and coming with companies like First Solar (FSLR) available to help large municipalities and other institutions move into this new world. If you haven’t gotten hit yet with ads for solar on your roof, you will be soon, and my suspicion is this will be as common as new windows.
With a new focus on nationalism and moving away from our dependency on anything made abroad, look for our government to become incredibly favorable to businesses setting up manufacturing and other projects at home. Intel (INTC) is now building a multibillion-dollar manufacturing facility in Arizona that not only will provide desperately needed semiconductors but thousands of well paying jobs.

I can go on and on, but the reality is that just when you begin to think all hope is lost, it is imperative to remember that opportunity is around the corner.

Yesterday, this subtle shift in investor focus sparked a rally in a few key areas. Today, that niche move has led to a far and wide market advance. While I have no idea if this is the bottom or where we go from here, what I do know is that many areas are certainly much more attractive then they were just a few months ago.

Throughout our country’s history we have often faced challenges far greater than we face now and each and every time we’ve had the fortitude to not only push forward but do so with innovative solutions which ultimately become some of the best investments.

 

At the time of this writing select clients were long TSLA, CHPT, FSLR & CLNE