There's no reason to fear Janet Yellen

Federal Reserve Chair Janet Yellen has made it clear: The central bank will raise interest rates by the end of the year. And investors are spooked.

That's bad for dividend stocks.

In fact, the usual sources of income all face a highly uncertain year.

But we've unearthed a time-tested strategy to produce reliable income regardless of economic conditions or Fed policy.

Learn more here.

The Stock That Lets You Dance With Robots

The machines are taking over.

We were impressed when a supercomputer became Jeopardy champion, but now the machine revolution is hitting close to home: a self-driving truck just delivered a shipment of beer 120 miles through Colorado; the just-in-case human driver never lifted a finger (and we are assuming he didn't crack a cold one).

Yes, there are other headlines now, as in the assault on Mosul and apparently some political contest, but the fact that people aren't more amazed by this is in itself freakin' amazing.

Self-driving cars have been road-tested for a few years, but this news demonstrates the feasibility of this technology for long-haul trucking. That's a game changer, and it's only the latest evidence that, yes, we're headed for a world in which robots take the place of more humans for many jobs that we thought were safe from our machine overlords.

It's not just science fiction.

Working with Humans

Robot use in factories is nothing new; it's a major reason for the decline in U.S. manufacturing jobs as productivity increases.  While it's unfortunate for the workers who lose their jobs, it's inevitable as machines that can perform tasks quickly and precisely, without ever tiring or making mistakes.

More than 250,000 industrial robots are in use globally. They're especially common in making cars, electronics, metals and chemicals, and they're increasingly used in the energy, military and medical technology sectors. Robots now perform about 10% of tasks in heavy industry; experts say that will rise to more than 20% by 2025.

Even as robots are used more in industry, their use is going to explode in areas where they need to interact with humans – including driving cars, but also many other areas that once raised safety concerns. Thanks to innovations in sensors and artificial intelligence, it's no longer necessary to isolate robots from people. New technologies, such as high-strength materials and longer-lasting, more efficient batteries, are also helping drive down costs.

And as human-robot interaction becomes common, more companies will invest in it. According to Boston Consulting Group, total spending on robots is growing at a 10% annualized rate, from $15 billion in 2010 to $67 billion in 2025.

If you're looking for a relatively safe way to play the fast-growing robotics trend, you can't do much better than Swiss conglomerate ABB (NYSE: ABB).

One of the major industrial controls suppliers in the world – and a global leader in robotics – ABB makes YuMi, a two-arm assembly robot that can work safely side by side with humans and costs only $40,000. As a major supplier to the power generation, energy and other industrial sectors, ABB is poised for solid growth as China, India and other huge emerging markets invest heavily in infrastructure over the next decade.

ABB and other companies feeding this growing market will have the wind in their sails for years to come. And the stock also works as an income investment; the company's balance sheet and cash flows are strong, and ABB currently yields a healthy 3.4%.

P.S. If you're still skeptical about what robots can already do, watch this. Blows my mind every time.


Your One and Only Shot at This Explosive $1 Trade

Silver is about to experience a once-in-a-lifetime mega-boom. One that could send prices soaring by as much as 587%. When it happens, the $1 trade I've put together could instantly shoot to an astounding $121. That's an 11,255% gain! And it's good enough to turn $10,000 into $1,135,514.

You have to act quickly, though. The window to get in the action is closing quickly.

Get the details here before it's too late.

The Alchemy of Energy Miracles

Robert Rapier

If I told you that I had created a process to extract pure gold from seawater, you might deem it an amazing accomplishment. If I issued a press release stating these facts, it very well could go viral.

In fact, the oceans do contain an estimated 20 million tons of gold, worth close to a quadrillion dollars at the current spot market price. But you may have noticed that I have omitted a very important fact.

How much does it cost to produce a troy ounce of gold using the process I have designed? I explain that the production cost is only $50,000 or so per ounce (which today is worth about $1,265), but I am sure that with enough investment dollars -- and maybe a few government subsidies -- I can get that cost down to something more reasonable.

Readers immediately understand the problem. You don't spend more to produce something than you can sell it for. But change the equation to energy instead of money and the lesson can be easily lost in translation.

That brings me to the point of today's article, one I'm forced to reiterate often: in the world of energy as in most others, there is no free lunch.  

Earlier this month a research paper was published called "High-Selectivity Electrochemical Conversion of CO2 to Ethanol using a Copper Nanoparticle/N-Doped Graphene Electrode.” The paper reports on a fine bit of science, and the researchers were measured and cautious in their conclusions.

But something got lost in translation as media outlets sought to portray this as a "holy grail,” "game changer,” "major breakthrough” or "solution to climate change.” The benefits, one story said, were unimaginable. Part of the problem, in my opinion, is that the press release from the Department of Energy was titled Scientists Accidentally Turned CO2 Into Ethanol.

The word "accidental” plays into the misconception people have of how science is done. Many take the romantic view that game-changing, eureka discoveries are merely awaiting the next lucky accident, so when they read this headline the translation becomes something like "New Discovery Solves Climate Change.”

That's because the public loves its energy miracles. People love the idea of a car that can run on water or the car that gets 400 miles per gallon (which of course GM and Ford suppressed) or the magic pill you can pop in your tank that greatly enhances fuel efficiency. So it isn't surprising that this kind of story goes viral (in notable contrast to the articles debunking these viral stories.)              

In order to understand what's really going on, let's consider a fundamental principle of thermodynamics.

If you burn something containing a combination of carbon, hydrogen, and oxygen -- e.g., gasoline, ethanol, wood, natural gas -- that combustion reaction is going to produce heat, carbon dioxide and water. These are the combustion products.

It is possible to reverse the combustion reaction and convert that water and carbon dioxide back into all sorts of things. But you have to add heat. A lot of heat. How much? More than you can get from burning the fuel in the first place. No new catalyst, and no discovery, accidental or otherwise, can get around that fundamental issue without overturning scientific laws observed and confirmed over 150 years.

Given that, what can we say immediately about this process? Going back to the fundamentals of thermodynamics, we can say, without a doubt, that the process consumes more energy than it produces. In other words, to produce 1 British thermal unit (BTU) of ethanol will require the initial consumption of more than 1 BTU of energy (as well as related CO2 emissions.) The process would produce 1 BTU of ethanol yet to be consumed. The net effect once the ethanol is consumed is more than 2 BTUs' worth of emissions per BTU of ethanol produced.

Now the researchers involved certainly know this. They actually acknowledged in the paper that the process is unlikely to be economically viable. To my knowledge they haven't intentionally misled anyone.

But the public has been misled in the retelling of the story. I have heard this research presented as "an efficient way of removing carbon dioxide from the atmosphere.” No, that's not at all what the researchers claimed. They claimed a Faradaic efficiency in the process of 63%. In other words, 63% of the electricity used in process was utilized in the reaction. They further said that 84% of what was produced was ethanol. That's the "high-selectivity” part of the title.

But that says nothing at all about the energy consumption required to remove carbon dioxide from the atmosphere so it can participate in this reaction. That is an enormous energy cost because carbon dioxide exists at only 400 parts per million in the atmosphere. Or in the case of passive removal (which is what plants do by means of photosynthesis), the process is very slow.

The high Faradaic efficiency and selectivity also provide little information about the overall energy requirements to turn purified carbon dioxide into purified ethanol, but we already know that it's more than the energy contained in the ethanol. And it could be a lot more.

There is a way that a process that is an energy sink could make sense, and that would be if you had cheap, surplus energy that might otherwise be wasted. For example, if a wind farm produced far more electricity than the grid could handle, you could envision dumping the excess power into such a process. But such an intermittent process brings up its own set of issues, and then there's the question of whether that would really be the best use of the surplus energy.

As a general piece of investment advice, if someone offers you a chance to invest in a scheme for turning air, water, or carbon dioxide into fuel, hold onto your wallet. It's almost certainly a money-losing proposition. If that should ever change, we will break it down for you in The Energy Strategist.

Now, I need to get back to processing ocean water...       

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)

 


Bigger Isn't Always Better

I've discovered a tiny tech stock that's poised to capture a $10 billion slice of the massive Internet market. Forget big nameslike Intel – everything they have going on is already priced into their shares. The tiny company I want to show you is virtually a secret to everyone… but not for long. When word gets out about what it's up to, I believe it could hand early investors gains of up to 2,042%. Shares are still less than $8, but you have to act now if you want them at this low price.

Get its stunning profit story here.

You are receiving this email at [email protected] as part of your subscription to Investing Daily's Stocks To Watch,
published by Investing Daily. To ensure delivery directly to your inbox, please add
[email protected] to your address book today.

Email Preferences | About Us | Premium Services | Contact Us | Privacy Policy

Copyright 2016 Investing Daily. All rights reserved.
Investing Daily, a division of Capitol Information Group, Inc.

7600A Leesburg Pike
West Building, Suite 300
Falls Church, VA 22043-2004
U.S.A.