- What happens to the dead in New Orleans…
- … and the investment insight that results
- Why solar power’s time has come… and Aug. 6 is a profit catalyst
- Can a 0.4% profit margin propel a stock 15% in a day?
- Postop painkillers with no addiction risk: An update
- Reader tales of sleepytime woes… the Archimedes test of silver bars… the real cost of rent-a-chickens… and more!
“You can’t bury bodies here in New Orleans,” said the tour bus driver. “The water table makes them pop back up. Then they float away, and it bothers people,” he said with a smile.
We’d never thought about it until our Byron King related the story. But it makes sense: Most of New Orleans lies below sea level.
Byron was in the “Big Easy” last spring and took a tour on an afternoon an appointment fell through. “The most surprising stop was one of the city’s famous graveyards. Not your usual tourist trap. According to our driver, this is the graveyard in which part of the 1969 counterculture movie Easy Rider was filmed.
“But it also held a secret investment insight. I may have been the only one to spot it.”
If you can’t bury the dead in New Orleans, what do you do instead?
“The solution is for families — even groups of families, in some cases — to build mausoleums in which to place deceased relatives,” says Byron. “Yet these aren’t like mausoleums up North. No fancy, airtight metal caskets, sitting entombed for all ages in mini-monuments made of granite block. Nothing like that.”
As the bus driver explained, a body is laid out on a slab inside the mausoleum. Then the mausoleum is sealed up with bricks and a thin coat of concrete.
“Then,” Byron goes on, “the body literally ‘bakes’ inside the mausoleum, under the hot sunshine that prevails in New Orleans much of the year. After ‘not less than a year and a-day’ — the legal requirement — cemetery workers break down the sealed opening on the mausoleum and remove the bricks.
The solar-powered mausoleums of New Orleans [photo by Byron King].
“Then they use long poles with something like a garden rake attached to push the now-decayed remains back into the rear of the mausoleum. They fall onto the earth and essentially recycle down into the ground of the natural world. This clears space and leaves room for another body when the need arises.
“We’re dealing with a solar-powered crematory, in a sense,” says Byron — getting us closer to the investment insight. “Sunlight does the job of speeding a body along to rejoin the dust of the universe. Those old New Orleans mausoleums were way ahead of their time.”
When Byron says solar’s time has arrived, we pay heed: He looked askance in 2008 when solar investments went through a momentary mania. The Guggenheim Solar ETF (TAN) made its debut that year, priced above $250. Months later, it was below $50. Good thing he steered his readers clear.
But the economics are completely different now. Jody Chudley, one of Byron’s colleagues on our energy team and another skeptic turned believer, affirms that with hard numbers. “The rate of growth has skyrocketed since 2010,” he tells us, “with each of the past several years seeing 30 gigawatts of capacity added.”
Usage is way up because costs are coming way down. “The reasons for this cost decrease,” Jody goes on, “have been dropping cost of installation, generous tax incentives, cheap financing and the efficiencies of scale that come with reaching a certain critical mass:
“The cost per watt of solar power has dropped from over $3.00 in 2008 to only $0.62 in 2014,” Jody goes on. “That means huge margin expansion.
“Skeptics like me thought that we would need to wait decades for solar power to be economically competitive, but we were wrong. It has happened much faster, and it is going to turn our power generation model on its head in the coming years.”
“The solar sector is continuing to warm up with big money,” adds Matt Insley, the third member of our energy triumvirate.
“Warren Buffett earmarked $15 billion for renewables (with a keen eye on solar) — and he said he’d double that investment if he had the opportunity. Elon Musk, the maverick businessman and big thinker behind Tesla and SpaceX, has over $1.1 billion invested in SolarCity.
“Truly, we’ve got a chair pulled up to the high-roller table — these aren’t small bets, to be sure. Whale investors are plunking big money down on solar.” Also on the list: George Soros, Leon Cooperman and David Einhorn.
Why the huge change since 2008? “Panels are more efficient these days,” Matt goes on. “Today’s photovoltaic, or ‘PV,’ cells have the ability to produce much more power than cells from decades past.
“From my calculation, using numbers from Deutsche Bank and the U.S. Energy Information Administration — and confirmed by the folks I’ve talked to in the industry — these solar panels can ‘break even,’ or pay for themselves, in seven-eight years. And they’ll last anywhere from 20-30 years.
“That doesn’t include the 30% tax credit you can grab by installing them — along with any local or state credits. When you add that into the equation, the panels pay for themselves in a little over five years.” And as costs continue to drop, the payoff by 2017 might be as little as four years.
The biggest catalyst for solar is due to hit in less than two weeks — Thursday, Aug. 6. “Coincidentally, there are TWO industry reports that are set to hit the market that very day,” Matt tells us.
He’s convinced both of them will detail a massive wave of new solar installations — propelling a select group of solar stocks that he and Jody and Byron have been researching thoroughly.
Let Matt walk you through the numbers behind a $3.7 billion profit bonanza and how you can grab a share. Along the way, he’ll show you how this story has been slowly taking shape since 1969. Check out his special report at this link.
The major U.S. stock indexes are slowly sinking as the week stumbles to a close. The Dow is settling below 17,700. The S&P is back below 2,100.
Gold has tumbled further, the bid at last check $1,083. Hot money is flowing into Treasuries, the yield on a 10-year Treasury note back to its levels of two weeks ago at 2.27%.
The big economic number of the day is the “flash PMI” number — a snapshot of how nationwide manufacturing has performed so far in July. At 53.8, the number was respectable — 50 is the dividing line between growth and contraction — but no great shakes.
The big mover of the day is Amazon — up 15% because it turned a profit in the second quarter instead of the loss most analysts were expecting. Never mind we’re talking about $92 million in profits on $23.2 billion in sales — which works out to a profit margin of 0.4%.
And for that, “investors” are paying 358 times earnings this morning. Buy!
On the science-and-wealth beat, Stephen Petranek reports progress in the quest for a powerful painkiller that’s not addictive.
It was seven months ago that Stephen first told us about a Phase 3 trial in the works. If successful, it would be the first genuine breakthrough in pain treatment since morphine was first extracted from the poppy flower in 1804. Sure, there are contemporary pain treatments like oxycodone. But like morphine, they’re opiates… and addictive.
The trial is about to get underway. But yesterday, the maker of the drug popped 35% on related good news — a successful Phase 2 trial involving dialysis patients who experience intense pain and itching.
The sky’s the limit if this drug comes to market, Stephen reminds us:
“There are more than 40 million surgical procedures a year in the United States alone, and more prescriptions for pain medications are written each year than for any other drug classification. For example, about 5,500,000 prescriptions were written last year for Oxycontin alone. This new drug has the potential to displace morphine derivatives as the default prescription for severe pain.”
Stephen’s readers are already up 165% on this play; it’s zoomed past his buy-up-to price for the moment. But he has several other plays still poised to make their big move.
“Finding your info on sleep interesting,”
a reader writes after yesterday’s episode, “as I work nights at a hospital and feeling like maybe I deserve a medal for sacrificing so much for the patient’s good. If you ever suggest 5 Min. medals, I will submit myself for one.
“I’ve been a longtime sufferer of The 5 Min. Forecast and love your work.”
“When I was around 20 (now I am 72),” writes another, “I was working nights and going to college two hours away days. Some days, I was getting one hour of sleep
“After about two months of this, I dropped out of school and was put on fourth shift (worked each person’s day off — worked days, evening and night). It almost killed me. I quit the job and slept 14 hours a day for two weeks. It had a bad effect on me for many years.”
The 5: Your editor was extremely fortunate that during a 20-year broadcasting career, I worked the overnight shift for all of five weeks. Who knows what kind of basket case I’d be otherwise…
Of course, even people with “normal” schedules have trouble sleeping. The good news is that science has discovered how your brain wave state determines whether you’ll sleep tight or toss and turn. And as Laissez Faire’s chief health researcher Brad Lemley tells us, you can activate the brain wave state that helps you fall asleep on command. He explains it all in the FREE guide, The Missing Link to Getting a Good Night’s Sleep. We’d be happy to email you a copy. Just drop us your email address and we’ll pop it in your inbox moments later.
“Quick check on whether that silver bar is real,” a reader suggests on an ongoing topic — “copy what Archimedes did.
“Using an accurate balance or scales, weigh it in air and weigh it while submerged in water. Calculate the specific gravity of it. If your number doesn’t agree with the published specific gravity of pure silver, it’s a fake.
“A false OK is possible, but that would take a very careful counterfeiter. If you’re a proper right-wing wing nut, you already have a powder scale on your reloading bench that is accurate to 0.1 grain. (7,000 grains = 1 pound). More than enough precision for the job.
“Same trick works for gold items.”
“Do those chickens lay golden eggs?” a reader muses after our rent-a-chicken item yesterday — two laying hens for a season for $400.
“In six months, they’d lay maybe 24 dozen eggs worth maybe $50,” says our reader doing some napkin math. “And I figure you have to feed ’em too! And then you’re ‘allowed’ to buy them.
“Day-old chicks might cost $3 each, if that. I have six that cost less than $50 to buy and set up house for initially, and I have full ownership. They’ll lay year-round for at least three years.”
The 5: There’s a difference between eating sustainably/buying locally — we’re all for it — and whizzing away your disposable income on schemes that make you feel good about eating sustainably/buying locally…
Have a good weekend,
Dave Gonigam
The 5 Min. Forecast
P.S. Congratulations to Lifetime Income Report readers: Editor Zach Scheidt recommended unloading the Big Pharma player AbbVie yesterday. Including dividends, that’s a 114% gain over 2½ years.
And props to Zach for his timing: He didn’t want to be around for the company’s earnings report this morning. A good thing too — ABBV shares are down nearly 3%.
For access to all of Zach’s income-paying plays, including his strategy to piggyback on Canada’s version of Social Security for up to $4,700 a month, go here.
