Chief Investment Strategist, The Freeport Society
Hello, Fellow Navigator.
If you’re reading this, you likely saw colleague Louis Navellier’s “Californication of America” presentation.
In it, he predicted that President Joe Biden would drop out of the race and be replaced by a California Democrat with radical socialist policies.
And now, he’s out with an even bigger call on artificial intelligence – a shift Louis believes could be your last chance to take a small grubstake and make potentially life changing returns.
And when he makes a call like this, it’s worth paying attention.
Louis became a Wall Street icon for applying quantitative analysis to small- and mid-cap stocks.
And he’s been writing to subscribers about his top ideas for the past 44 years. (He launched his Breakthrough Stocks advisory in 1980.)
Here’s what’s so special about his models. They highlight stocks before they become market leaders.
And Louis’s recommendations have outpaced these larger stocks over and again.
This year, for instance, he closed the following trades at his Breakthrough Stocks advisory…
- Rambus (RMBS) – 133% in 17 months
- Super Micro Computer (SMCI) – 593% gain in a 1/3 sale
- Gatos Silver (GATO) – 45% in 1 month
- e.l.f. Beauty (ELF) – 68% in 16 months
- Atkore (ATKR) – 81% in 28 months
- Axcelis (ACLS) – 81% in 25 months
- Black Stone Minerals (BSM) – 55% in 24 months
- PBF Energy (PBF) – 67% in 19 months
Now, Louis is now targeting the biggest gains of his career in AI stocks.
And not just any AI stocks – breakthrough AI stocks.
These are supercharged companies that have stellar fundamentals.
They’re selling more products… running more efficiently… and making higher profits than their competitors. And they’re seeing outsized gains in their share prices as a result.
As longtime readers will know, we’re hugely bullish on AI and automation at The Freeport Society.
And I can’t think of a better guide than Louis.
So, if you haven’t already, make sure to check out his presentation on what he calls the Real AI Boom.
Most folks are focused on Nvidia (NVDA), Microsoft (MSFT), and other “first generation” AI stocks. But as Louis shows, the biggest winners will be “second generation” AI plays.
Then watch the video below of the conversation I recorded with Louis in our studio in Baltimore earlier this week.
We covered what makes his models so effective… what we can expect next in AI… and why only 5% of the stocks Louis looks at will deliver extraordinary returns.
Don’t forget to check out Louis’s presentation on the Real AI Boom.
To life, liberty, and the pursuit of wealth,
Charles Sizemore
Chief Investment Analyst, The Freeport Society
Transcript
Charles Sizemore: Charles Sizemore here, Chief Investment Strategist of The Freeport Society. And today, in The Freeport Navigator, we’re sitting down with a friend and colleague who really needs no introduction. I’m sure he’s a man you all know well, Wall Street legend and Freeport Society friend, Louis Navellier Louis, welcome.
Louis Navellier: Thanks, Charles. Good to talk with you as always.
Charles: I jump at the chance to talk to Louis any time. But today we happen to be in town together to do some other filming, so I pretty much demanded that we take advantage of that. The only thing better than talking to Louis is sitting down with Louis in the same room.
Now, Louis has a special broadcast out and I wanted to talk to him about that, among other things. We’ll get to that in a minute.
Louis, but first, let me sing your praises for a minute. What you’ll be sharing with us today is built on your 47-year career of using your proprietary Stock Grader quant system to help you identify growth stocks and market trends well before they become mainstream. You spotted early investments in companies that dominated their industries, like Microsoft (MSFT) at $0.38, Apple (AAPL) at $0.37, and of course, Nvidia (NVDA) at less than a quarter, all before they experienced explosive growth.
That’s all ancient history, though. There are so many more recent successes. Just last year in Breakthrough Stocks, you’ve been on a roll. Breakthrough Stocks is your oldest service, and its primary focus is on small- to mid-cap stocks with strong sales and earnings growth. It’s where you’ll find companies before they become market leaders in industries ranging from AI to energy to consumer products and more.
Among your biggest trades this year are Rambus (RMBS), 133% in 17 months. Super Micro Computer (SMCI), a 593% gain in a one third sale. A 45.6% gain on Gatos Silver (GATO) in one month. e.l.f. Beauty (ELF), 68.5% in 16 months. An 80.5% gain on Atkore (ATKR) in 28 months. Axcelis (ACLS), 80.8% in 25 months. Black Stone Minerals (BSM), 54.8% in 24 months. PBF Energy (PBF), 66.5% 19 months.
And you’re sitting on some big AI winners as well. You’re waiting for the right moment to hit that “Sell” button. Super Micro is up 704% in your Breakthrough Stocks portfolio. MakeMyTrip (MMYT), which collaborates with Microsoft to use AI for travel, is up 70%. You bought that on February 9th, 2024. Powell Industries (POWL), electrical systems’ growing presence in the data center market. It’s up 213%, bought that October 6th of 2023. Skyward Specialty Insurance Group (SKWD) uses AI for better insurance underwriting, you’re up 24% there, you bought that on July 12th of this year.
That’s a great track record! Big winners in the hopper there. But Louis, what I want to know now is, what’s next? In your latest broadcast, you know folks watching now can have a link to it below.
AI stocks could see a massive shift beginning really soon here, before the end of this month even, but not in the way we might expect. In short, the next phase of the AI boom represents one of the biggest investing opportunities we’ll see in our lifetime, with lots of potential for smart investors. It sounds like we’d be crazy not to get on board, right?
Louis: Where we are at this time is our research has shown that you have to be in the 55% of the stocks with the best fundamentals. If you’re not in that group, you have no performance. But then once we find that top 55%, then we have to run them through our alpha screenings and find the top 5%, because the top 5% of stocks are just extraordinary.
So, there is a silver lining critical path that we can follow. The market has been trying to broaden out, we’ve seen the small-cap start to join this party. But you know, I can’t explain just how narrow this market is. And we got to keep all our investors in the crème de la crème.
Charles: Yeah, that’s interesting. You hear a lot of technicians talk about how this has been a narrow market, and they talk about that as if it’s a problem. The market’s only going higher because a very small number of stocks are pulling it higher. But that never fully made sense to me because okay the market’s narrow. Great. Then just focus on the stocks that are doing well.
Louis: Yeah. And clearly The Magnificent Seven are still good, but they have broken down a bit this year. A lot of people think it’s Nvidia and 499 other stocks. But you know, we bought Super Micro before it was added to the S&P 500. And there are a lot of very good stocks in the small-cap arena. And we count on them to not only be added to the S&P 500, but the Russell indices that happens every June.
It’s very exciting to pick up and coming stocks and watch them get add the indices where all this force institutional buying pressure just drives them higher.
Charles: Yeah, that’s interesting. Small-caps have been on my list as well. That’s something we’ve been touching on in Freeport lately. But what I thought was interesting was, you know, going back, some of those massive returns that you’ve generated in the past – when you’re buying Microsoft and Apple and whatnot, when they’re still trading for under a dollar – you don’t get the kind of returns going forward if you’re buying them today. In order to get those kind of returns, you have to buy them when they’re up and coming.
Louis: Well, obviously, our biggest gains come from discovering monopolies, high margin companies that dominate their business. And we’re fortunate, for example, with Super Micro that they’re dominating the AI water cooled data centers. I just read that Dell‘s (DELL) finally getting in that business. Finally. It’s taking them forever, because Super Micro was getting more chips than Dell and, you know, there’s a shortage of the Nvidia chips. So, whoever can get the chips wins.
But we do like funny anomalies. Right now my top ranked stock, believe it or not, is, an organic chicken company, mostly laying eggs. And as long as the chickens don’t get sick, we’ll be okay.
Charles: Yeah, there you go. It’s funny, you mentioned companies that have sort of natural monopolies. The “M” word is kind of thrown around as if it’s a negative thing. But if you’re an investor, there’s nothing you would want more than for a stock to have a natural – well, it’s what Buffett would call a moat.
Louis: Sure, I can go back in time and my first big monopoly was Conair (CNGA), which made hair dryers in the 80s when big hair was in fashion.
Charles: I don’t even know another brand like that. That’s the only brand.
Louis: Exactly. But, you know, you spend time in Dallas and that was the big hair place in the 80s. And they had that monopoly till everybody else figured out how to build hair dryers. And then my next monopoly after that was, believe it or not, Tyson Foods (TSN) because kids don’t realize there was no such thing as chicken tenders 30 years ago. Tyson invented it with McDonald’s (MCD) and they made nuggets. And that was a monopoly that lasted for over four years. Then everybody else started to make chicken.
Probably the most fun monopoly we had was Hansen Natural and that later became Monster Energy (MNST). And I still remember I had the Red Bull guys visit me in Reno –
Charles: I assume they were really amped up and intense.
Louis: Well, first of all, I had a friend who had an IndyCar team and the meeting just had to be in my office in Reno, and he was trying to get an endorsement from Red Bull. So, these Austrian guys come and they all got long hair, they wear leather, and then they have these aluminum suitcases where they open up the Red Bull drinks and we start drinking them. And I just saw they tasted horrific and I didn’t realize I was supposed to be in college putting booze in them.
Charles: That’s the part you missed.
Louis: Yeah, that’s what I missed. But obviously that became an incredible niche. And Monster was more dominant in North and South America. And of course, Red Bull was more dominant in Europe and internationally. So, but that was an incredible run. And obviously Nvidia is a monopoly, you know, and so we like these companies that just dominate their business.
One of the tricks of our trade is, profit margin expansion creates a lot of the earnings surprises out there that we count on to drive our stocks higher, but it’s fun when you can find them early, and it’s fun when you can hit those 1,000% or more gains.
Charles: I guess that their margins expand when they hit economies of scale. That same company, when they’re smaller, they’re going to be able to generate higher margins when they hit that scale that they’re looking for.
Louis: Yeah. Our average stock in Breakthrough has over 40% sales growth. But we count on their earnings to grow faster than sales from margin expansion.
Charles: Sure, sure. Makes sense. So, with all this talk about AI destroying jobs, you know, I personally use AI quite regularly. I use it to write things like business letters, if I need to deal with something at the bank and I need a formal legal looking letter, I’ll just have ChatGPT do it. I get it works. You know? Why mess with the good thing? I can do it in two seconds when it would take me probably a couple of hours to write it by hand.
But there’s this fear that AI is coming for your job. You know, it’s “we’re all going to be in the breadline” because of that. How do you see this playing out?
Louis: Oh it’s true. Well, let me be very clear. So post-Covid, a lot of the company hires were the diversity hires, more woke people. And they pretty much all been laid off, especially in Silicon Valley. I spent a lot of time there, I spent three weeks in Silicon Valley, San Francisco.
Charles: Well, that’s an interesting point. Like there’s been a huge backlash to the DEI initiatives in corporate boardrooms because at the end of the day, why does a corporation exist? They exist to make profit for their owners. That that’s why we’re here.
Louis: It’s sad to see a third of the buildings empty. And a lot of the restaurants and things that support them closed. It’s just sad, and so clearly there’s an issue.
The other thing that’s interesting is my son is getting a second master’s at Stanford, but Stanford creates a lot of the computer programmers. CS (computer science) is a big major there. But a lot of companies would rather hire them from Texas or Georgia Tech, because the Stanford kids want their six weeks off. “What do you mean I have to go to the office?” And, you know, they…
Charles: “I have to wear pants? What?”
Louis: Yeah. That’s interesting just to watch. And my son, a second year MBA student, has told me that the job market is pretty soft right now. I think some of that could be the election uncertainty.
But you’ve already seen Intel (INTC) layoff 10% of their workforce. Boeing‘s (BA) laying off 10% of their workforce. The techs have been cutting jobs this year. So, yeah, it looks like AI is destroying job. And if AI makes this more productive, it’s okay. Hopefully all those people get better jobs, you know? But at least in California, Silicon Valley, they’re cutting jobs. And now we see Boeing losing jobs, Intel’s laying off people.
Charles: It kind of feeds into that theme we’ve talked about, this Age of Chaos where AI is just disrupting the world we’re in. The industrial revolution was the same. In the end, the jobs created by it tend to be more productive, higher paying. But in that interim phase, it gets pretty dicey. A lot of a lot of people may find themselves without work while things sort out.
Louis: And there’s some really interesting things going on. There’s all this stuff coming out that if you’re an Uber or Lyft driver, they may not send you the pick-ups because that they’ve got all these minimum wage laws and some of these states, you know what I mean? And so you may not get the call because of the state restricting what’s happening.
Charles: Well, it’s funny too – not directly related, but sort of tangential – there was the big strike in the East Coast ports. What do people always strike over? Money, of course. Fine. That’s normal. Striking over wanting more pay, that’s every strike in human history, right? But what was different about this one was they were also striking to prevent automation, which I thought was interesting because by that rationale, you know, we would still have kids running to set up bowling pins in a bowling alley. We wouldn’t have an automatic system. We’d still have some guy in the elevator hitting the button for you because clearly you can’t run an elevator by yourself. So, it does seem like they’re kind of tilting at a windmill on this. To fight technology and resist automation would seem to be ultimately futile.
Louis: Yeah, but that’s what the longshoremen are worried about. And although it looks like they’ve agreed on a pay increase, they have not worked out that job security issue.
Charles: Yeah, yeah.
Louis: And of course, the UAW was very worried about that because a lot of the automotive jobs go to Monterrey, Mexico. And Ford (F) has more employees than GM (GM) in America even though GM sells more cars, because GM’s already outsourced so much. Now Dodge is outsourcing. Their most popular pickup is going to be made in Mexico.
It’s interesting, you know, all our air conditioners in America are now made in Monterrey, Mexico. All of them. Doesn’t matter which they are.
Charles: It’s hot in Monterrey, so they know a thing or two about making it cold.
Louis: Yeah, but whether you get a Lennox or a carrier, everything’s made in Monterrey, all the bets. And unless you get a South Korean air conditioner, which looks a little different – sits on its side and more narrow.
John Deere is in trouble because they can’t sell tractors in Europe because of all the farm regulations to comply with the Paris climate accord, it kind of screwed up the farming industry. And they have all those protests.
So they’re now outsourcing everything to Monterrey, Mexico and there’s three major Deere facilities all having layoffs. And, you know, this is a big election topic already this year. But under NAFTA, whatever’s made there they can bring back. And of course, the Chinese are trying to build EVs down there. Obviously, Trump doesn’t want them to bring them in, but under NAFTA, they can probably bring them.
It’s going to be interesting to watch all our trade wars happen. And it’s going to be interesting to see the tariffs. The Biden administration, they put more tariffs on than Trump did. Do you know what I mean?
Charles: I know, it’s funny. A lot changed when Biden took office. But one thing that remained absolutely the same was a general hostility to trade in general, and particularly with China. That was that was one policy that absolutely held over. And where this gets interesting to me – because this is where two themes kind of overlap – is this backlash to globalization, this backlash to trade, this kind of political imperative to bring production closer to home. Which also, as we saw in the pandemic, there’s an insurance component as well. You don’t want to be potentially locked out of a market or to potentially have your production grind to a halt because you can’t get critical components, because it’s on a boat in the wrong port, and somewhere… Bringing it all closer to home is that deglobalization trend, it’s strong. It’s strong in both parties. But how do you do that when we don’t have the workforce. I mean the inflation that we would have if we brought all production home, you couldn’t do it right.
Louis: That’s why the Taiwan Semiconductor (TSMC) plan in Arizona keeps getting delayed, because we haven’t moved enough Taiwanese to Arizona to run the plant.
Charles: Just the body count isn’t there, the headcount’s not there. But that’s where we come back to AI because that’s where we actually need these labor-saving technologies to make this kind of globalization trend happen. It doesn’t work unless we replace human labor with machines.
Louis: Correct. But all these plants are sold as big job creations. You know, it’s interesting,
Charles: Big job creations for the robots.
Louis: Correct. It’s interesting, I have an office in Reno and we know people who work at the Tesla (TSLA) plant, and half the Tesla plant is Panasonic (PCRFF) because it’s Panasonic batteries going in the U.S. Tesla’s except for the cheapest one, which is CATL batteries. We have Japanese in Reno because they need Japanese to run that plant. So they’re the boss, you know what I mean? We’ve noticed their kids are pretty good at baseball, too, by the way.
Charles: It is a baseball country.
Louis: And we apologize, we don’t have the sushi that they want and stuff.
Charles: Which that’s really to our detriment as well. Yeah.
Louis: That’s true. So, what’s happening is we tried to onshore and it didn’t work because we couldn’t compete.
Charles: The headcount wasn’t there. It wasn’t there at a reasonable rate.
Louis: China has a battery glut. So even though batteries are heavy to transport, it’s just cheaper to buy them from China than to make them here because they built too many. So between CATL and BYD – and even that Tesla model Y in Germany is a BYD blade battery. That’s an LFP battery that works better in the cold weather. And Germany’s kind of cold, it’s kind of up there like Canada.
It’s just interesting to watch what’s going on. And you thought they could all build it all on site and then in the end, they just ended up importing the bits from China.
It’s funny, BYD has a small EV they call a seagull. But in Mexico, it’s called a dolphin. But it’s basically $10,000 car. And so we’re going to put a 100% tariff on it. So now it’s a $20,000 car, and maybe we’ll add five grand to dealer markup. In the end it’s a $25,000 car, and they’re still going to sell them with a 100% tariff.
A 100% tariff is not enough. Because that’s still the cheapest car you can get. So it’ll be interesting if the dolphins or seagulls eventually invade America. Okay. It’s going to be interesting.
Charles: Dolphins are smart.
Louis: Well, I’m not sure, I’m not on the marketing team. And look at Germany, they just gave up saying “we can’t build the cheap EVs.” So, Volkswagen (VWAGY) signed a deal with XPeng (XPEV). So basically, the XPeng is going to have a VW badge in Europe. And so, when they put the tariffs on the Chinese EVs in Europe, Germany was fighting them, so was Hungary, Slovakia, because they are all part of the automotive empire. And they didn’t want to have the tariffs because they were going to benefit from all the importing. So, the world’s a very complicated place.
Charles: Particularly in the Age of Chaos.
Louis: Yeah. In theory, free trade is great, but you throw in overproduction, you throw in the Uyghur slave labor. They have to put tariffs on the level, the playing field, and it’s a mess. But it’s going to be interesting where they send all the tariffs and hopefully it generates a lot of money for the government.
The other thing I would add is, you know, we have so many economies in America that are cash oriented. You know, 20% of Californians don’t even have bank accounts. So there’s clearly a big cash economy in California – but you know, you have cash economies everywhere – so if you have all these people that are, for lack of a better word, underground, you know what I mean?
Louis: You can get them through sales taxes and other things, or you can get them through the tariffs.
Charles: Harder tax to escape.
Louis: Yeah. So, if we’re going to have this lawless society, or whatever society we have now that we’re encouraging, this is going to become a bigger and bigger tax generator. And, eventually, you know, just have it all tariffs and get rid of income tax. I’d be fine with that.
Charles: You know what’s funny? This is a tangent, but, you talked about cash economies. I live part time in Peru and you would think, “Yeah, it’s a developing country. It’s going to be a cash economy for the most part.” Right? No, everybody uses – there’s a Peruvian local, one of the banks there has a product called the Yape that’s, it’s essentially like a PayPal or Venmo. Everybody uses it. The beggars in the street use it, you could literally like PayPal them begging money. You can pay the guy to shine your shoes. It’s the taxi driver. Everybody uses that. I thought that was interesting.
Louis: Well, Venmo in America is, and I’m sure it’s the same down there, but you can pay in dollars or crypto, okay?
Charles: Yeah.
Louis: And a lot of this underground economy has started to gravitate towards crypto. The other comment I’d have is that you probably notice our kids use credit cards for everything – and it’s probably because it’s tied to their parents’ accounts.
Charles: I don’t know what you’re talking about.
Louis: Yeah, but they don’t know what cash is, you know, they don’t know what checkbooks are.
Charles: Well, if I if I told my children to balance a checkbook, their heads might explode. I haven’t even balanced one in 20 something years. It’s been a while.
Louis: You know, they tested the central bank digital currency. I think it was in Estonia that tested it at first. So, it’s going to be interesting if they’re going to do away with physical currency eventually. But it looks like it’ll first evolve in the EU and we’ll use them as a guinea pig, but eventually it might spread to our central bank.
Charles: Well, I wouldn’t be surprised if it actually happened in the developing world before or before Europe. It’s when you have kind of a gap of regulation. It’s funny. It’s not that the developing world, South America, whatnot, is some libertarian paradise. It’s more like anarchy.
Louis: Organized anarchy, though, right?
Charles: Oh, there’s nothing about this I would call organized, but it’s because the state is weak. It’s not that the state doesn’t have the desire to regulate. Of course, like all governments are the same, they all have the desire to get their fingers in everything. It’s just they don’t really have the power or the energy to do it, right?
And so because of that, the private sector has a little bit more leeway in certain ways. So I would not be surprised if some of these real revolutions and how we do business actually start in the developing world and then make their way here once it’s been, sort of proved out.
But kind of pivoting back to AI, because that’s probably the single most interesting investment angle of really the next… probably the rest of our lives. I heard you mentioned earlier that, we’re sort of at the end of phase one, right? That this initial phase where, you know, you start in the Nvidia phase, if you will, where we’re establishing the chips and the basic infrastructure.
What happens next? What’s the next phase?
Louis: Well, one of our biggest successes has been the companies expanding the power grid. And we all know that Microsoft gave a 20-year deal to Constellation Energy (CEG) to restart one of the reactors on Three Mile Island. It was interesting, constellation said it was still cheaper to still use natural gas because natural gas cheap in America. Microsoft wanted green energy.
So the push is on to get more nuclear. And the data centers are always around the hydroelectric dams like the Columbia River Gorge or Hoover Dam and things like that. And Chattanooga is huge for that because they get a lot of hydro clean energy down there. But what’s interesting is that, I want to see just how successful this machine learning is. Because our CIA and NSA do something like that, but they missed 9/11. They missed October 7th. So, I worry that they’re putting garbage and garbage out and not getting a clear picture. Because I build models and model building 101 or forecasting 101 is only putting correlated bits. So if I put garbage and garbage out, if I put garbage in, I’m going to get garbage out.
Look, I worry that the machine learning, their general models, might be looking at too much. And I think – I have friends who build AI chips for Samsung, they’re in Boise. They’re my ex Micron people. And what they do is they find these precursors. So, let’s just say you drive a truck, or you bird hunt, or you golf, or you like sushi… and that they find these things called precursors. And let’s say there’s 400 of them. I think it makes more sense to optimize those than to look at everything, and that’s how we build our stock selection models. Because if somebody comes to you and says, “Well, my model looks at 8000 things.” Well, they’re full of crap.
Charles: But 7,990 of them aren’t actually velvet.
Louis: Yeah. I’m amazed I found eight fundamental factors at work. But I can tell you when I factor six, seven, and eight, the incremental improvement drops off.
Charles: It may even go in reverse.
Louis: Yeah. Sometimes I don’t need four to five factors, but I have an eight-factor fundamental model. But I can tell you those last few factors do add less. And eventually if I had 11 or 12, it would add nothing. So, there is a silver lining critical path yet that AI needs to find.
I do think doing AI on what we call precursors might end up being more successful. But right now, everybody’s just trying the region of AI for Nvidia. Now we got to double the power grid and that’s just another mess.
In America, let’s just say we decide we’re going to be super green and put all the solar in the desert. By the time we ship the solar to where it’s got to go, via the current transmission lines, we lose it. That’s the crackling noise you hear. The only way to ship electricity a long ways is to have a direct current grid. And we don’t have the grids, and no one talks about putting good grids in.
We on the West Coast, we have a direct current grid from the Pacific Northwest for hydro to California. New York has a direct current grid for hydro from Canada, but we don’t have direct current grids going sideways in the country. So, whether we’re doing wind in Texas or, solar in the desert, I mean, I think solar works for Vegas, okay, because it’s close enough.
Charles: You got to power all that neon somehow.
Louis: Exactly. But if we want to replace all the coal that Salt Lake City burns for their server farms there, and with solar, we’d have to put in a direct current grid because there’s no way to get it there. We’re just going to lose it in the air and everybody is going to wonder why their hair’s up and the birds have fluffy feathers, you know, that’s what’s going on.
It’s interesting. But, one of our candidates wants to double the power grid, so let’s hurry up and do it and see what AI can do.
Charles: So we’ve talked about all of the massive power generation needs to make AI happen. You don’t just snap your fingers and make it happen. It uses a lot of juice. So, one obvious solution to that, something that America has an abundance of is of course, natural gas. Do you see any opportunities there? How do you see that plan?
Louis: That’s probably going to determine who is going to be president. Because if you remember, in January, the Biden administration essentially put the kibosh on all LNG expansion, subject to environmental reviews. And so western Pennsylvania got really ticked off because that’s where a lot of natural gas comes from. And, although we still export LNG, Russia since May has been shipping more LNG to Europe than we do. And I don’t think that was the plan. So anyway, the good news is in the Fifth Circuit, in Louisiana a few months ago, they overturned it because 16 states sued. But the Biden administration is still appealing at the Supreme Court right now. So, we’re getting mixed messages. Kamala said, “Yeah, I’m for fracking.” Even though before she said she’s not. But in the meantime, her boss, the administration is trying to stop LNG expansion.
Charles: One might think that if she wanted to win the election, she might not antagonize the most important electoral state in the election.
Louis: Exactly. And, so what happens is – and I’m originally from Berkeley, California – they’ve lost in all their natural gas challenges, but, you know, they just signed a bill in California that if a town gives up its gas, the state will actually pay to put electric appliances in homes. They’re still pushing the natural gas ban in California. And I for one, you know, the fog comes in and it’s nice to have a nice fire pit, and I’m all pro natural gas. I just don’t understand what they’re doing. So, you know, we still have a bunch of big natural gas turbines coming in to boost our electric grid, but it’s not in the blue states on the coast. That’s going to get very interesting. And this gives us an incredible competitive advantage compared to Germany and other countries that don’t have access to this cheap electricity. So, we’re the Saudi Arabia of natural gas, we’re huge.
And you know what happens when they don’t use it? They just flare. I mean that’s why we don’t have a pipeline from the Dakotas. So, when you fly over the Dakotas, it’s brighter than Minneapolis because they’re flaring it. They’re going to burn it anyway.
Charles: Might as well get some value out of it.
Louis: Exactly. Let’s have it spin a big turbine. You know that these turbines for electricity are the size of trains. That’s how they get them, they’re so big. And they’re very efficient. If you’re obsessed with being green, this is how you make the transition, you know.
Charles: It’s a transitional fuel. If you’re reasonable about it and you’re just wanting to get away from the worst greenhouse gas emission fuel, which would be coal, natural gas is a major step forward.
Louis: Correct. So, let’s go there. I just don’t get what the hell is going on. I realize there’s money that wants us to do certain things but I think if Kamala doesn’t win the election, because she can’t carry Pennsylvania, I think she can just look at the Biden administration for what they did to her. You know what I mean? They pissed off the state.
Charles: If you piss off Iowa, it probably doesn’t matter, right? No one lives there. Pennsylvania matters. You might not want to piss them off.
Louis: Well, we need Iowa for the pork. I don’t know if you’ve been to Iowa, but they eat pork all day long.
Charles: My kind of people.
Louis: It’s a pork state. Breakfast, lunch and dinner.
Charles: Give me my bacon.
Well, on that note, Louis, thanks for joining me today. I enjoyed this. Thanks for being a big supporter of The Freeport Society. I’m not sure we’d ever been able to get off the ground were it not for you.
Louis: Oh, well, I love what you’re doing, Charles. And I love how you’re giving everybody guidance in these volatile times. There’s always an opportunity when it gets volatile out there. And you just got to find that silver lining critical path. You’ve been doing great job with that.
Charles: Thank you.
About those opportunities, everything we talked about today, I think this talk about a reset for AI stocks and the next phase of the boom, that’s really what grabbed my attention the most. And for more details on this and how to learn more about how you can be part of this reset, make sure to check out Louis’s latest broadcast.
Just click on this link. And with that, we’re going to sign off.
To life, liberty, and the pursuit of wealth,
This is Charles Sizemore.