Assumption is the lowest level of knowledge, but it’s also the foundation upon which opinions are formed, and eventual conclusions are reached. It’s an inherently flawed system, but it works. Think hypothesis, followed by experimentation, leading to a proven theory.
How does this apply to today’s topic? Americans are assuming that the Biden administration, with strong partisan support, will advance a clean energy agenda. The President’s infrastructure bill is the first step in that process. Will it pass in some form? Let’s assume that it will.
The bill has an estimated price tag of over $3 trillion, which is a lot for Congress to stomach after just spending $2 trillion on a new stimulus package. It may be split into two bills, with one part dedicated to Biden’s Build Back Better agenda. That program includes:
Regardless of the final terms of the bill, these items will be on it. Plans to cut carbon emissions and increase corporate tax rates are political footballs. Charging stations, energy-efficient homes, and new power lines are universally accepted as “essential.”
The Impact on America’s Fossil Fuel Industry
The death of the American gas station is at hand. Sell ExxonMobil (XOM). Buy ChargePoint (CHPT). They’re down 40% this year, so they are perfectly priced. If that’s too much risk for you, try Blink Charging (BLNK). They are down 23% this year, and I expect them to go up also.
Is that too much to gamble on an assumption? If I told you to buy Tesla (TSLA) you wouldn’t hesitate. Everyone believes EVs are the cars of the future. Here’s a tip for you: Those vehicles are useless if there’s no place to charge them. Blink and ChargePoint provide that.
Don’t get me wrong. Oil and gas will still be around for many years to come, but the perfect storm created by a democratic president working with a democrat-controlled house and senate is going to accelerate the transition to electric vehicles. It’s time to cash in on that.
Energy Efficient Homes and Green Energy Credits
Joe Biden was Barack Obama’s VP, so we can expect to see an increase in green energy tax credits at some point during his administration. Building new energy-efficient homes may be an overly ambitious venture. Offering tax credits to put up solar panels is simpler.
Either way, the solar industry is going to benefit from the renewable energy push of this administration. Canadian Solar (CSIQ) seems to be a fan favorite among stock promoters, but I’m going with First Solar (FSLR) because they have a stronger balance sheet.
Another company I’m watching closely is SunHydrogen (HYSR:OTC). They’ve developed a new technology that uses sunlight to make renewable hydrogen out of any type of water. It’s on the pink sheets now for 11 cents a share, so I’ll buy in. It could be this year’s NIO.
The Pros and Cons of “Universal” High-Speed Internet
This might be the most under-the-radar piece of the infrastructure proposal. President Biden has proposed spending $100 billion to expand the nation’s broadband network, promising to bring “affordable” high-speed internet into every American home.
The plan looks great on paper, but affordability comes with a price tag. The bill will be funded by increased corporate taxes. There’s also a promise attached to this plan that prices for internet service will be “driven down.” It’s not clear how that will be accomplished.
Unlike charging stations and solar panels, broadband infrastructure is the realm of the few, not the many. Look for Verizon (VZ), AT&T (T), and possibly T-Mobile (TMUS) to benefit the most from the expanded network. Ironically, they will also pay a good chunk of the bill for it.
Lithium Stocks Should be on the Rise Again Soon
Despite recent market losses, it’s still a good bet that lithium stocks will start to go up again soon. The demand for electric vehicles will increase when charging stations start to go up around the country. EV batteries require lithium. The main question is, “Where will we get it?”
I wrote about this a few months ago and recommended a number of lithium stocks to put on your watch list. Of these, my strongest performer appears to be the one I was most skeptical of. Piedmont Lithium (PLL), which I thought was overbought at $60, hit $80 in March.
Piedmont has a deal with Tesla to start supplying them lithium in 2022. I’m doubling down on each of them. I’m also looking at Lithium Americas (LAC) and American Lithium (LIACF:OTC), both of which popped in February and are expected to jump again later this year.
See our disclaimer: https://