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U is for Utilities – The Elite Investor Club’s A – Z Guide of Investing


To join the Elite Investor Club, head on over to – As we come to the last handful of episodes in the A-Z of investing, there are still some important areas to cover. Today I want to talk about a sector that’s key to our very survival and which I think will come into even sharper focus in the next couple of decades. Because U is for Utilities. What do I mean by utilities? I mean the services we all take for granted in British suburbia like electricity, gas and, arguably most important of all, water. There are some massive trends going on in the world today, all of which have utilities at their core. Global warming based on excess greenhouse gases. Yes, it looks like a major, life threatening issue. But it’s also the reason for the birth of alternative energy. Technology in this sector is moving fast and I think some of the best opportunities to make a fortune in the next decade will be found here. The controversy around fracking doesn’t take away from the fact that new methods of extraction have made previously uneconomic mines viable again. And it’s turned America into a major oil exporter, much to the chagrin of the Saudis who are trying to price them out of business by flooding the world with more oil than it needs. I read a fascinating recent analysis of the migrant crisis threatening to overrun Europe’s capacity to absorb so many new residents. Forget Syria or Isis. The report suggested the migration is based on long term water shortages in the Middle East and Africa that make survival marginal. It’s a South to North migration in pursuit of the most basic of human needs – drinking water. Then there’s the whole nuclear question. As a child of the Cold War and the Iron Curtain I look on with incredulity as George Osborne announces that China will be funding Britain’s next nuclear power station at Hinckley Point. Fast forward twenty years and we’ve become dependent on it for twenty per cent of our electricity. Then we have a falling out with Beijing who decide to switch off the energy. It’ll be candles out and back to nineteen seventy four’s three day week. We’re not the only country to lack an integrated energy policy. Short term political thinking and one hundred year strategic planning are not easy bedfellows. But, like every enormous issue, it throws up unlimited opportunity for the entrepreneur. And those are the people we should be looking to put money on. Tesla has made enormous progress in moving electric cars from the muesli and sandals market into mainstream desirability. But to make the next jump there needs to be another generation of battery with some rare minerals involved in its manufacture. One great strategy is to get in ahead of a major demand boost using ETFs and futures on specific commodities and riding the wave of explosive growth. Two companies involved in supplying minerals to Tesla, Rare Earth Minerals and Bacanora, recently saw their share prices surge after announcing new deals with the car maker. There’s so much going on in the utilities sector that you’ll need to invest some time in educating yourself before making any decisions. But its an area where I think there’s so much potential for breakthroughs in new forms of energy and in better ways of harvesting existing energy sources that it’s worthy of your careful attention going forward. Watch out for our sector specific reports and events in Elite Investor Club and decide for yourself if this is a sector you’d like to focus on. Utilities used to be regarded as a boringly safe sector that paid predictable dividends from mature businesses. That cosy world view will be blown out of the water in the years ahead – and those on the right side of the big moves will make a fortune. Will you be one of them?