Am I the only person who is totally in despair at the government bailout of Bulb Energy?
Various news reports suggest that the government will have to spend £1.7 billion to supply Bulb customers this winter.
Sorry but let’s just stop there.
As in 17% of the total Justice department spend and 14% of the Housing and Communities budget 9to level up).
Surely this cannot be right?
And if it is it begs an obvious question. How the hell can we say that the government’s retail energy policy is working?
This £1.7 billion is now being sued as a backstop to a private business that has been hit hard by an entirely stupid energy price cap.
On principle, I think price caps make the UK look a bit like a banana republic or the worse kind of radical left-wing populist hellholes.
Energy price caps also make it infinitely harder for those of us fighting against equally daft rent caps being proposed in Scotland.
If there is an energy affordability crisis – and there clearly is for many less advantaged – then we need the welfare system to kick into action. Maybe we need a benefits system top up and for those outside the benefits system maybe we should consider a one-off tax rebate for the lower paid. The point though is that by introducing a price cap we have introduced into a competitive system a huge distortion which is now having a very real and huge cost to all of us. And what makes it even more painful is that I think we can safely assume that all taxpayers are now subsidising lots of middle class, affluent Bulb customers.
It’s the worst kind of populism and is terrible government policy. Those of us on the centre-left should never ever support this kind of nonsense even if it seems appealing in a populist way. We have a welfare state for precisely this situation. We also end up favoring companies with poor management practices who should never be on the receiving end of government largesse.
Investment crystal ball gazing
With that rant out of the way back to business. Or should I say investment futures?
As something of a nerd I’m always interested in future predictions if only to see how completely crazy they are. But these exercises in crystal ball gazing do provide some useful ideas for long term investing.
To wit I thoroughly recommend a fantastic crystal ball exercise by Erik Hoel called Futurists have their heads in the clouds : On making good predictions for 2050. You can see the full piece HERE. Honestly, drop everything and read now.
Erik rightly lashes into bonkers crystal ball gazing and anchors his own analysis in pre-existing trends that will play out over the next 30 years (to 20250). There’s some fun stuff like “There will be a Martian colony” which I think is spot on as well as slightly less likely stuff like “Soft totalitarianism will make the West more like China” which I have my doubts about.
Anyway, I thought I would highlight the key passages for investors :
The marketization of everything – ” Nearly every imaginable thing, from your attention to your time, will be available to be monetized and tokenized by 2050. And nearly everything tokenizable will have truly wild dynamics, almost unimaginably disruptive in terms of wealth creation”. My investment take is that maybe NFTs really are big
AI will be the most futuristic impactful change in day-to-day life – “These will be tightly controlled by a small number of Big Tech companies, almost all of which will have pivoted to AI, which will be the most profitable part of their business”. My investment take is that the FAANGS stand a good chance of being those tech companies in AI
A mostly storeless society – “The majority of all current brick and mortar stores that are not located in scenic or tightly-packed downtowns will have closed. From stores that sell physical objects to chain restaurants, most of the physical locations you can go and shop will be gone”. My investment take is that retail REITs and property is going to have a tough time
Anti-aging technology will extend the health-spans of the rich – “there will be a suite of techniques that celebrities and the super-rich will have access to that will extend their health-span (the period of time in which they are active and healthy), possibly by decades”. My investment take is to start boning up on life extension biotech companies. Damn, Jim Mellon is already there.
The future really is female – “By 2050 there will be near-domination of society and the economy by women”. My investment take is that many traditional asset managers jam packed full of old male stale blokes like me are in trouble. Watch out for the next Cathy Woods.
Sticking with the futurist vibe, another week, another metaverse ETF emerges. Its from Solactive and its called the Solactive Global Metaverse. You can see it HERE. It’s powering a new Horizons ETF. The final index has 50 stocks : the current top holdings list is below: interesting the big Tencent holding.
TENCENT HOLDINGS LTD 0.774865
S4 CAPITAL PLC 0.580355
QURATE RETAIL INC 0.579411
SKILLZ INC 0.42811
ORACLE CORP 0.3898
APPLE INC 0.331147
ALIBABA GROUP HOLDING-SP ADR 0.296878
WALT DISNEY CO/THE 0.288745
VISA INC-CLASS A SHARES 0.232378
SNAP INC 0.194338
Still in the futurist vibe, interesting to see this chart and comment from Azeem Azhar of Exponential View on fusion energy. “Progress in fusion looks like it’ll see the private sector speed past publicly funded efforts. My hunch is that startups will beat the international collaboration reactor, ITER, to useful fusion power and at a fraction of the cost. ITER is rumoured to need around tens of billions of dollars”.