Categories: Energy Stocks
Topics: Investing in Energy

Extreme Profits from Extreme Weather

The year is already off to an interesting start.

It's an election year. We have wonky markets.

And then we have weather patterns that are increasingly volatile.

Texas, just for example, has seen 60- to 70-degree temperature swings over a few days that led to frozen infrastructure and energy use warnings.

I've long said that climate change is real.

You can see the changes in the intensity of weather patterns, whether it's temperature or rainfall or winds.

The past several weeks have been a nationwide phenomenon of extreme weather events.

On the East Coast, there was a wind and rainstorm that swept the entire Eastern Seaboard. We have a colleague in Charlottesville, Virginia whose basement flooded with hundreds of gallons of water. My parents are in the northeast corner of Maryland, and my dad said they had multiple trees down with winds near 70 miles per hour.

We have friends and colleagues in Philadelphia who were without power for two or three days, and I've read reports that some people in the greater Philadelphia were without power for five or six days. That's relatively unheard of in the 21st century for a major US east coast city. Or at least it should be.

And that wind and rain storm was followed up by two bouts of snow for the East Coast. 

So these storms are intense and they're damaging the infrastructure.

Where I live in the Pacific Northwest, I just wrapped my well up in insulation because we just saw -10 temperatures with -35 wind chills.
The extremes are so widespread that they’ve affected billions’ worth of infrastructure and millions of people. 

One is insurance. We've seen it being increasingly difficult to get insurance in some coastal cities that are at risk of flood and more intense storms. 

Because I live in a custom cabin constructed of timber logs, it's tough for me to get insurance because we're in a fire area. And as you probably know, those fires aren't getting any less intense or frequent. I tried to switch homeowners’ insurance providers a couple of months ago, and some carriers told me outright that they wouldn't insure my home. So there's that aspect of climate change going on.

But then there's the opportunity, which I'm keenly interested in and have been for over a decade now. 

And that's the solutions that emerge for decarbonization, electrification and all these trends that come from the spending for climate change. 

Obviously one of the big things recently has been the Inflation Reduction Act. It allocated billions to various forms of energy, batteries, and efficiency measures. 

Those billions are now starting to be spent by utilities and other companies to carry out all the things that were in the bill. 

So everything from batteries and electric charging stations to infrastructure build-outs and wind farms… it's starting to happen this year.
And as the entire nation just witnessed as severe storms rolled through, some of these measures are desperately needed.

We lost power a few nights ago.

We had a windstorm. This cold front came in and it came with 50-mile-per-hour winds, and we lost power. 

Fortunately, we've taken preparatory steps because some of us saw these things coming. 

I saw that the climate was changing, and I knew that there was going to be stress on the grid. 

And so my dedicated backup generator turned on and my kids had their nightlights while the power was out for hundreds of others. 
It's good to plan and it's good to have foresight. And that's not just about your house and your grid and your generator, but it's also about how this can affect your portfolio.

Buying things that benefit from the billions in infrastructure spending that are about to be unleashed is another plan I’m making and executing. 

And you can see that plan in detail here.

Call it like you see it,

Nick Hodge
Publisher, Daily Profit Cycle