Are Fossil Fuels Getting Old?

“We will get there, humanity is more aware of the harmful impact of fossil fuel usage than at any other point in history, it is unfortunately a rich people problem that impacts us all.”


 

To market to market to buy a fat pig Stocks in Johannesburg as a collective gave up ground through the session, ending the day down nearly four-tenths of a percent by the close. Industrial stocks were mostly to “blame”, only financials amongst the major sectors ended the day in the green. Glencore, Mondi and Richemont all gave up ground as the Rand firmed a little off the very worst levels of the day.

Still, things are looking a little worse for wear. The biggest concerns always with the weaker currency to the majors of course are the inflationary issues. There seems to have been some steam coming out of the commodities complex as a whole, gold prices are trading near a two month low. I was having a look, gold prices are in fact trading down 7 percent in Dollar terms over the last three years. Gold prices have been at this level first in August of 2010. Spare a thought for some of the precious metal producers, it is not so easy out there. Are we getting too excited about the weak Rand and mixing it with politics?

An oil price that has bounced back a little and a weaker Rand = a higher petrol price, and we all know that you have to move goods and people with a combustion engine. For now of course. Many transport companies around the world are working out how to make more of what their customers want, and their customers definitely WANT to have electric vehicles.

We will get there, humanity is more aware of the harmful impact of fossil fuel usage than at any other point in history, it is unfortunately a rich people problem that impacts us all. i.e. it is only once you have the resources to own an electric vehicle and to change to battery technologies to power your home that cost is not as much a factor. Various studies have shown a long dated saving on energy by doing this, remember that you have to outlay the funds. We can deal with that later ….. Tesla.

There were 12 month highs for the likes of Bidcorp and Clicks, new 12 month lows for Spur and Sygnia (again for both). It is looking a little slim on the corporate news front, not much going on here locally or anywhere for that matter. With the Northern Hemisphere summer pending, we could be in for lower volumes. Although, I am not too sure that is a “thing” anymore in the age of the computer and internet.


 

Stocks across the oceans on Wall Street were sold off, led by technology stocks again. The nerds of NASDAQ sold down 1 percent exactly by the close of trade, the Dow Jones Industrial average lost three-quarters of a percent, with the broader market S&P 500 down 0.94 percent by the close. GE slumped after the European Commission was said to be probing the business after accusing them of misleading on the detail of the acquisition of LM Wind Power.

There was also the small matter of a very heavy broker downgrade from JP Morgan – ‘We Don’t See The Future Growth Potential’. For what it is worth, that share price is seen going to 22 Dollars a share, more than 20 percent downside from here.

Hey, talking 20 percent downside from here, Tesla stock fell into a “bear market”. It is a technical measure of when a stock goes down 20 percent from their last highest point. And in this case, post the Tesla production numbers, this was a mere 2 weeks ago. It has been a horrible no good week for Tesla stock, over the last three months the stock is still up around 3 percent. Year to date? Up 44 percent. Since listing? Up 1508 percent.

Whilst the earnings, production and outlook are very hard to call, I do believe that this company not only “talks”, it does also deliver. Elon Musk is busy getting excited about the following – Tesla Powerpack to Enable Large Scale Sustainable Energy to South Australia.

The release points out the impact and gives a little detail to the background, when Musk promised to have something completed by a certain time: “Upon completion by December 2017, this system will be the largest lithium-ion battery storage project in the world and will provide enough power for more than 30,000 homes, approximately equal to the amount of homes that lost power during the blackout period.”

It seems that the go ahead has been given. This contract steams from a Twitter conversation when Musk promised to have the batteries installed within 100 days or they were free. I have no doubt that Tesla will deliver this, hopefully on time! Talking alternative energy and gasoline cars, France has joined some other countries in announcing that they wish to phase out all motor vehicles powered by fossil fuels – France Plans to End Sales of Gas and Diesel Cars by 2040. Joining some others! What does this mean for the future of fossil fuels and all those companies that have a load of reserves, and countries for that matter.


 

Linkfest, lap it up!

Bright sent this link on the WhatsApp group, the title pretty much says it all – 50 Smartest Companies 2017. The tricky part in trying to identify these investments is that of the 50, only two have been on the list for 8 years.

Here is a look at the activities of the rich and the poor, no surprise to see golf at the top and relatively cheap entertainment like TV and radio at the bottom. I was surprised to see Running come in 4th spot, it is a relatively cheap sport and you can run almost anywhere – Here’s How Americans Spend Their Time, Sorted by Income.

Here is one of the main, if not the main reason Amazon is so valuable – Amazon, not Google, is the most popular starting point for Americans looking to buy products online. With the consumer associating Amazon with online shopping it means that they are the first place people look when they want something and they don’t go to the competition even if the competition is similarly priced or cheaper.


 

Home again, home again, jiggety-jog. It is non-farm payrolls today, an important point for global markets. Earlier in the week, there was a slightly weaker ADP number, all and sundry are looking for “direction”.


 

Sent to you by Sasha, Byron and Michael on behalf of team Vestact.

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