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Gregg Early is vice-president of KCI Communications and executive editor of the company’s flagship publication, Personal Finance. Over the past decade, he has helped build the newsletter’s reputation as a trusted source for penetrating market analysis and investment advice that subscribers... More
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Portfolio2020
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  • A State of Flux

    Headlines related to a few emerging technologies caught my attention over the past week.

    The first is a new spin on nuclear energy. A couple weeks ago I wrote about the possibility of switching from uranium to thorium to power nuclear reactors. Not only is such a transition possible, but it’s also a promising opportunity on a number of fronts.

    After I wrote that piece, the Obama Administration announced that it was focusing its efforts on energy resources that had low carbon footprints and didn’t depend on foreign suppliers. Both nuclear energy and natural gas fit the bill.

    And a renaissance in nuclear energy will bring new opportunities in fuel and waste disposal. One of the most compelling ideas cropped up recently from researchers at the University of Texas at Austin.

    They've come up with a hybrid fusion-fission nuclear reactor, the Super X Divertor. This machine could eliminate almost all the transuranic waste produced by traditional reactors.

    Most people do not want nuclear power facilities in their area because they worry about a potential meltdown or nuclear waste disposal. With the Super X, the latter--in theory--becomes a non-issue.

    At present, roughly 100 nuclear reactors operate in the US. When the fuel rods are spent the waste is packaged up and carted off for disposal. Aside from France and Japan, most countries don't reprocess their waste; it needs to be stored somewhere safe--for the next 10,000 years. To put that kind of time into perspective, the land bridge to Asia that was caused by the last Ice Age was melting 10,000 years ago.

    But the new Super X Divertor promises to eliminate this problem.

    About 75 percent of original reactor waste is destroyed in standard, relatively inexpensive reactors. This step produces energy, but it doesn't destroy highly radiotoxic, long-lived waste scientists refer to as "sludge."

    In the second step, the sludge would be destroyed in the Super X, which can burn the hazardous sludge that currently goes into storage. And the Super X has a compact footprint and is relatively safe because much of the energy is generated from a fusion reaction. Nuclear fusion is the Holy Grail of nuclear energy--the sun is a good example of a fusion reactor. The only problem with fusion reactors is you have to find a vessel to contain the energy, which heats up to around 10 million degrees Centigrade.

    But when a fusion reaction becomes unstable and collapses, it doesn’t release radioactive material. It just fizzles out.

    Tthis potential disposal methodology would be a boon for politicians states in Nevada and other states where huge nuclear waste depositories remain a source of controversy. No one wants nuclear waste and that means politicians will stick plenty of money into this project to develop it--money that likely would gone to studies on why nuclear waste sites were bad choices. And once the Super X is ready for prime time, the builders and contractors stand to make some big money.

    Another interesting development in the nuclear industry is the growing list of companies building modular reactors.

    Instead of building one huge reactor and shipping power to a wide area, companies are building small reactors that can be combined to meet power needs. Say you need 5 megawatts of power in a remote location today. Drop in one module and you’re covered. If your energy demand increases, it’s easy to bring another small reactor online.

    Two US companies--neither of which is publicly traded--are already working on these designs, and it's only a matter of time before they will get approval to start building plants.

    Nanotube Fun

    Don’t adjust your eyes. Researchers at the Massachusetts Institute of Technology (MIT) have discovered a new way to make electricity.

    That’s right. Scientists have a discovered a new way to generate electricity using carbon nantubes and an accelerant. Here's an excerpt from the whole article:

    Each of the nanotubes was coated with a layer of a reactive fuel that can produce heat by decomposing. This fuel was then ignited at one end of the nanotube...and the result was a fast-moving thermal wave traveling along the length of…the nanotube like a flame speeding along the length of a lit fuse. Heat from the fuel goes into the nanotube, where it travels thousands of times faster than in the fuel itself. As the heat feeds back to the fuel coating, a thermal wave is created that is guided along the nanotube. With a temperature of 3,000 Kelvin, this ring of heat speeds along the tube 10,000 times faster than the normal spread of this chemical reaction. The heating produced by that combustion, it turns out, also pushes electrons along the tube, creating a substantial electrical current.

    Needless to say, the implications of this discover are vast, though it will take a while for practical applications to emerge.

    A Step in the Right Direction

    The Dept of Defense’s Defense Advanced Research Projects Agency (DARPA) has existed decades. It's a public-private partnership where the military imagines its futuristic needs and asks the private sector to help turn those ideas into realities.

    Now we have the civilian energy version, ARPA-E. And the organization held its first conference last week.

    Although most of the energy research community is encouraged by the government's support of the program, the $400 million earmarked to revitalize and renew the US energy markets may be far too little to get US firms to jump into the CleanTech game.

    But American ingenuity and innovation offer hope--for example, Dan Nocera’s start-up. Sun Catalytix. This is amazing stuff.

    GS Early is co-editor of 2020 Investing and associate editor of Portfolio 2020.



    Gregg Early is Executive Editor of Personal Finance.



    Disclosure: "No Positions"
    Mar 10 10:41 AM | Link | Comment!
  • Cybersecurity Now

    Last year the Dept of Defense (NYSEARCA:DOD) spent $100 million on cybersecurity personnel and equipment in six months. When the largest spending military in the world and the largest sector of the US government makes a major financial commitment like this, you can be sure other departments--and complementary industries--will follow suit.

    Why such a big push now?

    Up to this point, governments have avoided spending money to protect themselves against tech-related threats--after all, they face innumerable real world threats from terrorists to insolvent banks. And many companies slashed capital expenditures amid the credit crisis and weak economy.

    But with an increasing amount of sensitive business being conducted online, cybersecurity is becoming a necessity. Here are a few factoids to put it in perspective.

    1. The FBI ranks cybercrime as the third-biggest threat to US national security behind nuclear weapons and weapons of mass destruction. 
    2. The nonprofit US Cybersecurity Consequences Unit estimates that the destruction from a single wave of cyberattacks on critical infrastructure could exceed $700 billion, the equivalent of 50 major hurricanes hitting the US simultaneously.
    3. The Dept of Homeland Security estimates that there were 37,000 cyberattacks in the US in 2007, up 800 percent from 2005.

    And then there’s the mythical Chinese GhostNet, which is said to be capable of entering your computer, turning on your webcam and watching you while you work, not to mention downloading the data from your hard drive or recording your keystrokes.

    Although this type of access to the average Joe’s computer might not be too exciting, it’s a different story when it comes to a worker in a power station or the intelligence community. To this day, nobody knows if GhostNet was launched by rogue agents or the Chinese government. There's also talk now that Chinese corporate and governmental espionage will increase exponentially in the next five years, with India representing a key target.

    In Russia, cybercriminals have hacked debit cards that can withdraw all the cash from an ATM and collect the account information of customers who have used the machine. Hacked machines are popping up across Europe, which means the threat isn’t limited by borders.

    And don’t forget about denial-of-service attacks, which overload a company or governmental department's servers to the point where they can't function. Such maneuvers are crippling and often act as a ruse that obscures the criminals’ true objective.

    Military brass, top government officials and corporate titans admit that the US is playing catch-up to the ever-expanding cyberthreats.

    But risks beget opportunity. As the economy gets back on its feet, companies are increasing capital expenditures. And given the importance of the Internet to businesses’ margins and productivity, expect cybersecurity measures to be on the shopping list.

    But you can't just run out and buy any cybersecurity stock. Smart businessmen and bureaucrats will assess the risk-reward aspects of different approaches to online security; investors need to know which sectors have made the assessments, committed the funds and chosen their contractors.

    I just finished a piece on the stocks that are worth watching in this dynamic and growing space for our paid advisory, Portfolio 2020. Expect future issues of Investing 2020 to feature contributions from folks who are at the forefront of emerging technologies. Our goal is to keep you apprised of the trends that are reshaping the world and the companies driving these changes.

    GS Early is associate editor of Portfolio 2020.

    Race to the Summit

    A panel discussion on the state of the economy. Presentations by each of our expert editors. One-on-one time with those experts. A sunset cruise of San Diego Bay…

    April 23-24 could be your most important weekend of the year. Roger Conrad, GS Early, Yiannis Mostrous, Benjamin Shepherd and I will reveal the brightest trends and our best recommendations--and anything else you might want to know--during the 2010 Wealth Society Member Summit at the historic Hotel del Coronado.

    They say it’s 72 and sunny every day of the year in San Diego, and in late April it probably will be. Tranquility and relaxation is good; that and the best independent view of global investing make a great combination. You may find all details at www.InvestingSummit.com.

    Call 1-800-832-2330 (between 9:00 a.m. and 5:00 p.m. EST Monday through Friday) or go online now to reserve your seat at the table. Space is limited.




    Gregg Early is Executive Editor of Personal Finance.



    Disclosure: "No Positions"
    Feb 23 10:39 AM | Link | Comment!
  • The European Supergrid

    An article about the "supergrid" being built by a handful of North Sea countries in Europe recently graced my inbox--another example of one of those quixotic projects the Europeans take on, and Americans say, "Yeah, good luck with that."

    But when the Europeans work together they do a better job than most people expect—the European Union and the euro are cases in point. A foreign bond trader I've known for years constantly--and I mean up until a couple years ago--predicted that the EU would unravel and the euro would collapse as a viable currency. Needless to say, his skepticism hasn’t been borne out.

    One of the key advantages European nations have independently as well as collectively is that their population density makes innovative energy solutions necessary and advantageous. The US has much more empty land to stick big generation plants far away from large populations, which helps power utilities limit costs for locating and building plants.

    In Europe the “not in my backyard” phenomenon is larger by orders of magnitude; individual governments are more apt to seek alternatives to building new plants. The prospect that neighboring countries could seek damages for cross-border pollution is another consideration.

    Again, as with the best companies in the world, clean-tech isn't necessarily about being green; it's about making pragmatic decisions about how to implement available technologies to create more efficient production cycles with less waste. How technology is used makes for successful innovation.

    That's the philosophy behind the recommendations in Portfolio 2020; identifying innovative companies that are developing or harnessing key technologies--companies that will set the stage for outsized growth in coming decades. There's a global economic shift going on and if you can't see it, you're going to miss the biggest opportunities. Some say it's technology, but we argue that it's innovation--the actual application of technologies.

    All right, back to the supergrid.

    The article I ran across was a new spin on an earlier proposal from the EU to fill the Sahara desert with solar panels and then ship the electricity back to Europe. The interesting thing about this project is the power would be shipped back to Europe using high-voltage DC power lines.

    This was precisely why Nikola Tesla's invention of alternating current (AC) won out over Thomas Edison's direct current (DC). A hundred years ago, you couldn't send DC power any distance and transform it on the users' end to usable electricity. Time and technology has solved the transformer challenge, yet the world is essentially built on AC power transmission--though DC transmission is more efficient.

    This Sahara solar project would be big enough to scale up DC high-voltage transmission on an economy of scale right out of the gate. From there, the idea could spread anywhere cleantech is a priority--like China.

    All renewable energy sources generate DC current. Presently, especially in the US, the challenge is to collect the DC power, convert it to AC power and step it up to a usable voltage to upload to the high-voltage AC power grid.

    If you could simply ship DC power, life would be a lot cheaper and easier for consumers and utilities. But the infrastructure isn't there, and there's not a whole lot of money lying around for anyone to pioneer this effort in the US, especially notoriously thrifty utilities. This Sahara project could be a major game-changer for the global clean-tech sector.

    Alternatively, in the far north where the sun doesn't shine so much, this other piece of the supergrid project is taking shape. Articles dating going back to 2006 reported that European nations planned to build building a North Sea supergrid from the renewable energy generated in the region.

    The first countries on this supergrid will be the wind farms of Scotland, solar panels of Germany and hydroelectric dams of Norway. From there, the project will include nine countries in all: Germany, France, Belgium, the Netherlands, Luxembourg, Denmark, Sweden and Ireland and the UK.

    This project would generate about 30 GW of electricity for Europe. Just Norway's hydroelectric contribution could be equal to the electricity generated by 30 coal-fired power plants. And although that will bring joy to the hearts of global warming acolytes, the project’s real value is revolutionizing our long-term power consumption and generation abilities as both consumers and producers.

    GS Early is Executive Editor of Personal Finance, Co-Editor of 2020 Investing and Associate Editor of Portfolio 2020.

    SAVE THE DATES!

    KCI’s editors have been combing the globe for their next luxury investment cruise: Any ports of call must be ripe with investment potential, of course, but they must provide a rich slice of the world’s treasures and unique insights into human luxury. And after the brutal year we just finished, who couldn't use some luxuriant down time learning how to prepare their portfolios for what this next decade has in store.

    Save the dates: Thursday, October 21 - Monday, November 1, 2010. Explore the wonders of Turkey and the Greek Isles while learning about the newest investment strategies from KCI editors Roger Conrad, Elliott Gue, Yiannis Mostrous and Gregg Early. While you enjoy unfettered access to the finest minds in investing today, Seabourn Cruises will upgrade the way you think about luxury cruising as you are feted aboard the brand new Seabourn Odyssey. From its all-included open bar of premium liquor, wine and beer to its almost better than 1:1 staff:passenger ratio, to its maximum capacity of only 450 passengers, you will understand why it immediately jumped to the top of the luxury cruise line ratings charts when it hit the water in 2009.

    For those of you lucky enough to have sailed with this keen crew in the past, you know you are in for a meticulously planned journey into the business, investment and cultural offerings of the region. KCI in partnership with Joseph H. Conlin Travel Management is offering this journey solely to KCI subscribers and their friends. For more information and reservations, please contact Kelly DeMarco at KD@JHCBH.com or 201-889-2796.



    Disclosure: no positions
    Jan 20 3:02 PM | Link | Comment!
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