Kris’ note: It’s great when the thoughts and ideas of someone in our business sparks the thoughts and ideas of another.
That’s how innovation, entrepreneurialism, and investing works.
That’s really the subject of today’s essay from 10-year Casey Research veteran Andrey Dashkov. Andrey explains how just spending a few minutes reading analysis from investing expert Dave Forest allowed him to see knowledge he’s had for years in a new light… and apply it elsewhere in the markets.
It’s an interesting observation – and something you can potentially apply to your own investing.
Check out Andrey’s essay below…
By Andrey Dashkov, analyst, Casey Research
This week, Dave Forest pulled back the curtain on a secret of Casey Research’s success…
He revealed the “Nine Ps,” Doug Casey’s method for evaluating resource stocks.
The “Nine Ps” is responsible for some huge winners, like 119%, 163%, 361%, 519%, 716%, and more.
But I couldn’t stop thinking about how today, it applies beyond the resource industry – especially the “promotion” part.
And the more I thought about it, the more it made sense. It could be applied to any industry. If you can cut through the noise, understand what ideas get traction, and figure out what factors might contribute to a company’s success… then you can understand what’s going on within some of the biggest trends.
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At the Dispatch we have two goals:
To introduce you to the most important investing themes of the day, and
To show you how to profit from them.
We do this by showcasing our best investing ideas, and how you can take advantage of them.
Today, I’ll talk about EVs (electric vehicles) and what a recent piece of news means for the sector.
Investing $11.4 Billion Into EV Factories
You know something major is happening when an established company makes a dramatic decision.
That’s not what they usually do. Multibillion-dollar companies are giant bureaucracies with layers and layers of management pushing paper and PowerPoint presentations with little real impact.
They prefer things to go as they always have. In a perfect world, big legacy companies wouldn’t need to change anything…
…Let alone reinvent themselves entirely. Transformation is a great recipe for some uncomfortable soul-searching and chaos.
But sometimes, they absolutely have to do it… otherwise, they’ll become irrelevant.
Like General Electric.
It was one of the American powerhouses… until it wasn’t. It lost focus, its structure became too bloated, and in 2018 it got kicked out of the Dow Jones Industrial Average.
An American icon was no more.
On the other hand, there’s Ford. It produces America’s best-selling trucks… and it’s reinventing itself right now.
This sends a clear message to the market: the auto industry isn’t what it used to be.
The company has long-term emissions goals. By the end of the decade, up to one-half of Ford’s cars could be electric.
And it has a $30 billion budget to spend on electrifying its fleet by 2025.
It spent more than one-quarter of that just recently. Ford put $7 billion into building an assembly plant for the fully electric F-150 model and three battery factories, all located in the U.S.
And Ford’s partner, South Korea-based battery maker SK Innovation, will cover the remaining $4.4 billion of the $11.4 billion project.
This investment into its electric vehicle factories and battery manufacturing was the largest in the company’s 118-year history, according to the Financial Times.
This investment will promote electric vehicles like nothing else… because it’s one thing when California-based start-ups plunge venture capital money into new technologies…
But it’s a completely different thing when an incumbent like Ford decides to make the largest investment in its history into EVs.
Ford Doesn’t Have a Choice…
There’s only one way to understand it. Ford has no other choice.
This is the real message. The real “promotion” of the electric vehicle trend.
The “legacy” car industry is cornered. It either must reinvent itself or risk becoming non-existent.
Earlier this year, Ford made another move that’s relevant to the Nine Ps. It snatched up Apple’s Doug Field, who was rumored to have overseen the company’s secret car project.
This one falls into the “People” category, and it tells me that the EV trend is attracting some of the most well-known professionals.
Including those big names working for tech giants like Apple.
So there you have it. The same method Doug Casey and Dave Forest use to find some of their best-performing stocks can also work for tracking where the EV trend is going. (It can also be applied to many other trends.)
And what I see for EVs makes me optimistic… and there’s still plenty of time to get in before the big “Push”… (another of the Nine Ps!) comes into play.
To get exposure to the EV trend, I’d recommend that you take a look at Global X Autonomous & Electric Vehicles ETF (DRIV). It’s an exchange-traded fund that holds companies producing electric vehicles and their components.
Ford is one of the holdings with a 1.5% weight of the total.
Analyst, Casey Research
P.S. These electric vehicles are a long-term trend… but they might be facing a problem.
You see, there’s a resource that’s becoming more and more scarce in many tech industries. But Dave Forest has found the (surprising) company – a stalwart in its industry – that’s reinvented itself… secured a must-have patent… and could be the only solution to this problem.
Investors who see where the wind is blowing could see big profits by getting in early…