A neighbor who manages investments, and knows I have an interest in economics, asked what investment opportunities I had divined from the tea leaves. Not a single one, was my reply. My impaired vision no longer lets me read FRED charts and graphs; even reading plain text is painfully slow, so I’ve fallen way out of whatever marginal loop I was ever in. Still, the question haunted me.
What have we got to work with? Global climate change is a real and present danger, but aside from vague promises, it looks like few governments will actually do much about it. The fossil fuel industry says hopeful things on one hand, and defends the old ways on the other. They have no incentive to change unless forced, and they are pretty sure carbon fuel interests have been secured through campaign contributions and high priced lobbyists. We’re emerging from COVID, but not leaving it behind. COVID has moved from pandemic to endemic. Moreover, it’s messed up the the world’s commercial processes sufficiently to take years to untangle. Inflation, which is not all that bad, has everyone afraid that rising prices will erode standards of living. A sizable minority of Americans favors autocracy over democracy, ironically in the name of small government, low taxes, and minimal regulation. That the impending loss of white supremacy is a factor is vehemently denied in the same breath as white supremacist propaganda is swallowed whole. Any old crackpot opinion has been given equal status with learned thought based on disciplined study. None of it adds up to hopeful opportunities for investment in the near future.
However, Congress passed the infrastructure act that will pump several trillion dollars into infrastructure related investment opportunities, generating ripple effects with an unknown multiplier effect on the nation’s economy. It bodes well for savvy investors.
In what should they invest? Maybe not the obvious: cement, steel, copper, etc. Maybe not even contractors or heavy equipment manufacturers. It seems to me that savvy investors will aim at industries behind the obvious, especially innovative companies creating new forms of the elements used to weave infrastructure. Laser printing manufacturing might be one example. New ways of managing logistics might be another. Lithium extraction research around the Salton Sea has produced little of practical value, but the potential is enormous. What new, environmentally acceptable extraction processes might be in the offing? Recycling is another possibility, not of cans and paper, but of essential elements wired into obsolete electronic equipment. It’s a boutique industry now. Could it be more? For that matter, what about glass? Crushed glass has possibilities for infrastructure, but no one has made it cost effective yet.
Making investment decisions is not my thing, but I’m happy to offer flippantly improbable advice to anyone willing to listen. Look in the corners and closets for opportunity. Maybe you will find the next billionaire nugget, or maybe just dust bunnies. It’s your money. Go for it.