I read an interesting report in the media about a new technology breakthrough. Obviously you shouldn't believe the report, for two good reasons.

a. The story is about technology.

b. It's in the media.

According to the story, a Salt Lake City company, Ceramatec, has developed a super battery that will soon make it practical and economical for homes to be off the power grid, or mostly off, as long as you also have solar power or your own wind mill.


I'm sure this is one of many research projects going on right now to improve battery technology. MIT is spewing breakthroughs:


The battery industry has excellent financial bubble potential. By the time you put batteries in your house, your electric car, and all of your portable electronics, we're talking serious money.

If you want to invest in the future battery bubble now, figure out what raw materials or related products are generally necessary to add battery storage to a home with solar power, or electric cars. For example . . . pause while I Google. . . maybe a product like this chip, or future versions of it, will be part of the next boom:


Just to make this prediction interesting, moments ago I bought a few shares of Linear Technology (LLTC), the company that makes that chip. I ignored the company's fundamentals, because I'm making a bubble play. It's probably a year before the battery bubble forms, if it ever does. And obviously you can ignore all of the analyst recommendations for the stock. I believe you're all smart enough to know those are complete bullshit.

What other stocks would benefit from huge improvements in battery storage technology? Let me see your ideas. Ignore the obvious companies, such as the solar cell companies. They already had their bubble run. Let's dig one level below the obvious.

[Warning: Don't take financial, medical, safety, romance, or career advice from cartoonists. Any one of those could get you killed.]

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Aug 26, 2009
Oh, johnnybravo411, don't be so mean! I'm *serious*! Anyway, they didn't beat me to the punch, they just beat me to the joke. I've been thinking about this for *years*.
Aug 26, 2009

Someone already beat you to the punch:

Aug 25, 2009
A home storage battery is the most ridiculous idea I've ever heard of. This assumes that in the near future more than 50% of homes and businesses will be producing more power than they consume during the daylight hours. Just to clarify, homes AND BUSINESSES. The last two businesses I worked for used over 3 MEGAWATTS of electricity during the day, more than a small city, and they aren't uncommon. And this discounts the power consumption of electric vehicles. You want to invest somewhere? Invest in unregulated electric !$%*!$%*!$% they're the ones that will be rolling in the money when EV's come on line in large numbers and electricity demand outstrips supply. Only an idiot would believe we'll need to store all our 'extra' solar power to use during the night.
Aug 25, 2009
I want a battery I can charge by peddling a stationary bike or rowing machine, or by treading furiously on my spinning wheel.

This way, when the infrastructure collapses, I won't have to pack up all my fashion dolls on my back and live in the streets 20 stories down; I can stay in my apartment and live like any other cliff dweller.
Aug 25, 2009
In response to dwbrant:

Actually, North Carolina's renewable portfolio standard must be met with a portion of electricity generation from both swine and poultry waste. (0.2% solar electricity and thermal energy by 2018; 0.2% swine waste by 2018; 900,000 MWh of poultry waste by 2014)

-1 Rank Up Rank Down
Aug 25, 2009
"Don't take financial, medical, safety, romance, or career advice from cartoonists."

I have to wonder, then, about the value of the advice from a cartoonist advising against taking such advice. So much for getting anything done today.
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Aug 24, 2009
What stocks would benefit? That's simple: WASTE DISPOSAL COMPANIES.

Someone, or some company, is going to have to dispose of all of these batteries. Scott mentions the
'financial bubble." I would like to think that there is an "evironmental bubble" as well. All of the Yuppies in their Priuses and Escape Hybrids who think they are saving world will actually be the cause of the "great battery debate" when it comes time to junk these worn-out batteries.

I think Congress should consider a "battery disposal tax." Heh...Heh...Heh. We'll see how long the Green Yuppies stay green then...Hah! Hah! Hah! (Sometimes I feel like Dogbert....)

Where are all of these dead batteries going to go? Can they be recycled? Well, I'd guess no, since no one is currently recycling used Energizers or Duracells at the present time. Or, maybe, since the media is so "Green" and "Socialist" right now, they will keep the pending ecological disaster hushed under the title of "Necessary Pollution."

Like that? "Necessary Pollution"? I thought it up on my way to work the other day. I work near some oil fields in the Middle East. Every morning I'm greeted by filthy black clouds of burned-off gas rolling across the horizon. It reminds me of a Mid-western thunderstorms sometimes. And yet...No one complains about this type of pollution. And why? Because it's NECESSARY POLLUTION. Without it, there will be no gas for cars. Hence, it is ignored. Hmmmmm.

Anyway, that's my rant. Think WASTE DISPOSAL COMPANIES.
Aug 24, 2009

"Agreed that ultracapacitors are the future. However, they've been talked about for years now. If they are so great, then why aren't they in production? Clearly there are still technical/economic hurdles yet to overcome."

The problems are mostly financial, not technical. The financial sector has been generating high returns for the last few decades which are very attractive for investors. We've seen a steady drop in venture capital willing to invest in technology. In years past, investors would have a choice of investing their money in creating debt and getting a "guaranteed" return of double digits versus investing in R&D and taking a risk that their investment would go sour and they would lose everything. That basically meant that only large companies had access to venture capital for "risky technology" projects. You probably know that most large companies don't do anything innovative---they find a small company with the technology and buy the entire company (and let most of their employees go). So, the inventors don't have the capital to carry their ideas to reality while the big companies and investors are too braindead to invest.

The equipment to produce these capacitors can be obtained for around a million dollars. We've been looking for venture capital for quite some time to get the project off the ground. We can make a crude form of the capacitor in the lab, but real production requires real equipment and a clean room environment. Now that the stock market has soared more than 50% this year, it looks like we might actually get the money to buy the equipment and get the product into production some time next year.
Aug 24, 2009
I have more of a "can't do attitude" so what I see are the sectors which would take a big hit from widespread decentralized independant electrical production. Anyone who makes elelectric generators (Generac), anyone who produces electricity, the entire coal food chain, mom-and-pop alternative energy companies (they will never survive on Wal-Mart margins of profit), much of the natural gas foodchain, and many other that I can't think of.
The winners would be those companies who already have a foot in the door making alternative energy power handling systems (i.e. power inverters, PV panels, wind turbines, etc.) and industries whose electric power costs are a major fraction of their cost of production (founderies, steel mills, etc.).
If electric bills weren't an issue I would use a heat pump to keep my house warm/cold year-round, I'd never turn off my TVs or lights, and I'd probably use lasers to get rid of my garbage.
+1 Rank Up Rank Down
Aug 24, 2009
Scott, on an almost completely unrelated note: http://greeninc.blogs.nytimes.com/2009/06/17/the-energy-potential-of-chicken-droppings/

Just FYI. I couldn't find a "Contact Scott" link anywhere.
Aug 24, 2009
Nobody will profit from this invention. Chevron is going to buy it up and mothball it, or make it so expensive nobody can afford to use it, just like they did with large-format lithium-ion batteries.
Aug 24, 2009

Agreed that ultracapacitors are the future. However, they've been talked about for years now. If they are so great, then why aren't they in production? Clearly there are still technical/economic hurdles yet to overcome.

Those buggy-whip manufacturers probably made a lot of money before they were replaced.
Aug 24, 2009
Aug 24, 2009
By this time next year, batteries will be obsolete. Ultracapacitors will obsolete them. I know because my brother and I are going to produce them. He has patented a capacitor with at least three times the capacity of the battery technology being touted here. Here is a comparison of storage capacities for various devices in watt-hours/kg:

Li Ion battery: 160
Ceramatec battery: 200
CapZen(TM) capacitor: 688 (this is the one my brother has patented)

Our estimate of 688 Wh/kg energy storage density is based upon our best estimate that we believe has an excellent chance of being achieved, but higher densities are possible. An energy storage density that is approximately three times as high may be possible for this technology.

So, go ahead and bubble the battery stocks up, but don't be surprised when your shares eventually sell for the same price buggy whip manufacturers sold for after the automobile went into mass production.
Aug 24, 2009
As far as lithium goes, Chile is one of the world's biggest producers.

Take a look at Sociedad Quimica y Minera de Chile (ADR) (NYSE:SQM). I wouldn't buy anything right now, though, as I am not expecting this recession relief rally to last.

I currently have no position in SQM.
Aug 24, 2009
Hydrogen Electrolysis is a simple, green, immediately viable method of energy production that would work anywhere in the world and seems to be getting underexplored/developed. My personal theory is because there's little incentive because there is little money to be made after the initial sale. I think improved battery technology will be like current computer technology; outdated by the time you get it home. Also, like hybrid cars, the batteries will have a short life span requiring additional sales on upgrade and replacement. Weigh that against the number of new jobs created by this technology versus the number of jobs lost in the current utilities industry, and I just don’t see this dream being realized.

I want to be an optimist, but I don’t think it will ever happen.
-1 Rank Up Rank Down
Aug 24, 2009
I know that there's lots of military technologies that would become practical if we had better battery technologies. Make you could find some military contractor developing those sorts of technologies.
Aug 24, 2009
I think there'll be a trend for unobtrusive power/technology in the future- if energy issues are solved then the next step is for people to reclaim their environment, so landscape gardeners, domestic architects, sunken power lines, decommissioning of older technology- these are the things I'd go for.
Aug 24, 2009
Scott, I love your financial posts. Especially the full disclosure and disclaimer parts.
+2 Rank Up Rank Down
Aug 24, 2009
As a financial professional, your advice is typically much more sound than my competition - so stay out of the fee-based wealth management business and I'll stay out of the cartoon business and we'll both be happy!!!
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