Published on May 18 2018

California May Have Just Ignited the Next Great Bull Market

By Justin Spittler, editor, Casey Daily Dispatch

California just made history.

Last week, state regulators announced a new mandate that will require all new homes to have solar panels. The law applies to single-family homes and low-rise apartment buildings. It will go into effect in 2020.

As a result, California became the first state to introduce such a mandate.

And as I’ll show you in today’s Dispatch, this isn’t just big news for the people of California.

It’s big news for all Americans… and it’s a massive investing opportunity.

I’ll tell you why in a second. But let’s first take a closer look at the mandate… and how it will impact people living in California.

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• The mandate is expected to add $9,500 in costs for each new home built…

Now, some folks worry that this will make it even less affordable to buy homes in California. That’s the bad news.

The good news is that the average Californian is expected to see $19,000 in energy savings over the next 30 years.

This mandate will have serious ripple effects. In fact, I wouldn’t be surprised at all if Florida, Nevada, or even Texas eventually introduced similar legislation.

If that happens, more and more Americans will need to buy solar panels. And that will obviously be good news for the solar panel companies. But here’s the thing…

• The solar energy industry will flourish even if other states don’t follow California’s lead…

There’s a simple reason for this.

Solar energy has become very cheap. According to a recent report from asset management firm Lazard, the cost of solar power has declined 86% since 2009. That’s the biggest drop of any major energy source.

As a result, one megawatt hour of solar power now costs just $50. That’s less than half of what it costs to produce one megawatt-hour of coal power ($102).

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And get this… solar energy currently accounts for just 2% of U.S. electricity needs. So, solar energy will become even cheaper as the industry achieves economies of scale.

This will encourage even more people to adopt solar energy for their energy needs.

You can see where I’m going with this. But look, I’m not the only investor bullish on solar stocks. Just look at this chart of the Guggenheim Solar ETF (TAN), which invests in a basket of solar stocks.

You can see that TAN surged 9% following California’s big announcement. It’s now up 46% over the last year.

That’s a big move. But solar stocks should climb much higher in the coming months.

Check out this chart to see why. It compares the performance of TAN to the S&P 500.

When this line is rising, it means that solar stocks are doing better than the S&P 500. When it’s falling, it means they’re doing worse.

You can see that solar stocks have been underperforming the market for the past 10 years. This means they have a lot of catching up to do. But the trend has changed direction over the past few months… and solar stocks will continue to move higher, thanks to California’s mandate and the industry’s rapidly improving economics.

So, consider investing in solar stocks if you haven’t already. You can easily do so with TAN.

As I mentioned earlier, this ETF invests in a basket of solar stocks and allows you to bet on this big trend without taking on any company-specific risks.

Regards,

Justin Spittler
Buenos Aires, Argentina
May 18, 2018


Reader Mailbag

Today, lots of great feedback on Wednesday’s Dispatch featuring an important update on Argentina and a new essay from John Hunt…

Nice essay, Justin.

– Peter

Fantastic essay!

– Linda

Hi guys, Tell John Hunt his article was absolutely spot-on, just brilliant.

– Anthony

Beautiful. Perfect. Now I see why John Hunt and Doug Casey are writing novels together. Always nice to be reminded that I’m not completely alone in my view of government people. Thanks!

– Gordon

As always, if you have any questions or suggestions for the Dispatch, send them to us right here.


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