The world's total wind resources are 100TWy/y. Harvesting 100% of it would require we stop all wind blowing on earth (converting it to rotating wind blades) - not remotely possible. Global energy use is currently 19TWy/y, and will likely double in the next 30-50yrs.
You can therefore forget powering the world's economy purely with wind. Hydro resources are limited to 3.5 TWy/y, and are mostly already exploited. Anyone that suggests tidal as a possible solution - at just 0.3 TWy/y - knows laughably little about energy economics.
Energy resources across fossil fuels & uranium above are understated as they are only currently known/proved reserves & resources. We will find a lot more if and when there is a need and financial incentive to do so. But they will eventually run out/EROI will fall below 1x.
Musk is right that in the very long term, solar power is the only way forward for the human race. I think he is right on that, but 50-100yrs early (the same argument could have been made to leave coal in the ground in the 18th Century at the dawn of the Industrial Revolution).
However, it will need to be done. The bull case for fossil fuels is that having enough energy is going to be a much greater challenge than there being too much. The only metric to watch is how fossil fuel costs compare to mass storage-enabled solar. Everything else is noise.
Inclusive of the cost of mass storage, including dealing with seasonal variations, fossil fuels currently have a cost advantage of approximately 10 to 1 in my rough estimation. Coal and natural gas can produce electricity for a wholesale cost of about 2.5c/KWh.
So long as there is such a stark cost advantage, and no other viable scalable alternatives, all the politiking and sustainability activism in the world will make no difference, assuming people don't want to go back to Middle Ages' lifestyle, which is a pretty safe assumption.
The visual is courtesy of Brilliant brilliant.org

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More from @LT3000Lyall

2 May
How many people have given any thought to fact that credentialed climate scientists need climate change to be a thing to make a living.

For them to believe otherwise would be like a psychologist arguing there are no psychological disorders and hence no need for psychologists.
They have already self-selected into a profession - presumably because they are already environmentally conscious - and already have huge sunk costs in terms of their selected career path. They are pre-committed to a designated conclusion irrespective of the facts & evidence.
Stop being cowed by degrees. Anyone can get a degree. It really isn't very difficult. It doesn't mean you are right. It doesn't mean you're not emotional, political, or biased. Quality varies. Scientists argue with each other. Learn some science and it will demystify it for you.
Read 4 tweets
1 May
The effect of the covid-19 pandemic is detectable in GNW's long term care & life insurance mortality data.

For politicized topics where there is rampant misinformation, I always look for hard to fake real world data/evidence. Cuts through the bullshit.
Want to know whether the narrative around climate change is actually leading to an increase in extreme weather, for eg? Look at the cost of catastrophic insurance. Hard to fake. Lots of statistics can be manipulated. Some of them can't.
Don't focus on "studies" done by government bodies, academics, and NGOs. They are highly susceptible to bias, politicization & misinterpretation. Instead focus on data/evidence that emanates from real world experience that is hard to fake.
Read 4 tweets
29 Apr
This is a masterclass in how to bullshit about your performance numbers.

Translation: We ill-advisedly went into cash 12mths ago, underperformed a lot, and 6mths ago decided to jump back into market. We've recovered a tiny bit of what that ill-fated decision to cash up cost us. Image
I sniffed bullshit as soon as I read it. Dug up their numbers and sure enough: Image
I'm not going to give someone a hard time for making mistakes or underperforming. Investing is not easy and to err is human. But if you make mistakes and print bad numbers you really need to be upfront & transparent about it. Trying to bullshit & mislead people is not ok.
Read 4 tweets
23 Apr
US citizenship is arguably more of a liability than asset these days. 43% cap gains tax and that's on nominal gains. With the Fed determined to raise inflation to 2%, the real effective capital gains tax rate on a portfolio that generates 6% would be 76%.
The US is one of the only countries in the world that taxes by citizenship rather than residence & source. If you live & work overseas you still pay US taxes. And if you want to renounce your citizenship there are exit taxes and they ping you for another circa 10yrs I believe.
I would not accept US citizenship if you paid me US$5m to accept it.
Read 6 tweets
23 Apr
There are typically four phases to thematic growth stock cycles (thread):

1. Demand (D) > Supply (S). Top line growth strong; margins expand; stocks soar & multiples go to moon.

2. D=S. Competition rises but demand growth remains strong. Top line robust but margins plateau.
During 2, stocks will either plateau or drift slowly up, or during bubbles keep spiraling higher on flows/narrative.

3. S>D. Supply overtakes demand. Top line growth slows and margins suddenly weaken. Profits unexpectedly drop 50% or more, even with top line still growing.
Phase 3 can go on for many years. You'll start to see stocks drop 10-20% on profit warnings. They tentatively recover on buy the dip, but then give it back, and then derate another 20% on the next warning. They'll often end up down about 25-50% about 12 months into downturn.
Read 10 tweets
23 Apr
Redbubble's share price reaction yesterday shows investors may be starting to understand that "investing more through the P&L to drive growth" is in most instances the same thing as "margin compression due to growing competitive intensity forcing more investment/spending". (cont)
There is a time early in a company's life where more investment & temporary sacrificing margin to accelerate growth is justified. But there is also a time in a company's life where the returns & economies of scale should be starting to sustainably come through.
At this stage of the tech/software cycle, where software & platforms are already exiting the high growth phase and starting to mature, w growth set to slow down fairly dramatically from 2021, if you're still needing to cut margins, that's a profit downgrade, not "investment".
Read 5 tweets

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