We’ve talked before about how the Jack and Jill retail investor types gravitate towards easy-to-understand stories. Jack watching Saturday morning cartoons in his underwear sees a Tesla commercial, followed by an iRobot commercial, and tells Jill they ought to invest some of their self-directed 401K into battery stocks. Jack logs into his brokerage account, plugs in the bog-standard Google search “biggest battery stocks to invest in,” and he’s cooking with gas.
There are a few problems Jack will encounter in his quest for wealth. Firstly, not all batteries are created equal. The type of battery that’s being adopted in today’s electric vehicles and fancy consumer gadgetry is the lithium-ion battery, and the cost to produce such batteries is plummeting.
Credit: Bloomberg
Just because you own a company that manufactures lithium batteries doesn’t mean you have a Sanlorenzo sitting in the harbor. As we saw in the solar industry, the plummeting cost of solar panels pushed a lot of manufacturers out of business. Investing in raw materials such as lithium hydroxide isn’t the way forward either, something we covered in our recent piece on how Investing in Lithium Hasn’t Panned Out. Yet. Perhaps we can figure out which publicly-traded companies are the biggest manufacturers of lithium batteries and sort Jack out with some
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