UK politics and the economy feel like corpses waiting for an autopsy.

Hello Everyone,

UK politics and the economy feel like corpses waiting for an autopsy.

I am getting very tired of not hearing the truth, not being able to read the truth, and therefore not knowing the truth. This situation now seems to apply to any important subject of the day. Bias and influence seem to be everywhere.

Also, why do the government and the opposition say that “they” are going to give money to this and to that demand, when it is in fact our money, the taxpayers, and not theirs that will foot the bill. If only it was theirs, then maybe we would get better results from its use. Sometimes I feel that instead of giving politicians and their civil servants the keys to our economy, it might be better to just change the locks!

Any of you that have been with Saltydog long enough, will know that I have had a soft spot for all investments into old and new (green) energy funds, and into hydrogen generation businesses in particular. This has not always turned out to be a good move. Initially some flared into light and then subsequently descended back into darkness. Will they be resurrected is the ponderable question?

Two that still have their heads above water, are the fund TB Guinness Global Energy and the firm ITM Power plc. Those that have followed TB Guinness will have enjoyed the ride over the last couple of years, but ITM has been a let-down, that is unless like me you went into it when it was first discussed in “Thoughts” nearly three years ago. You then enjoyed a 400% plus rise if you were fortunate to exit. This however is not so if you invested two years ago, because today you will be hatching a small loss.

My question is what to do next, sit tight or invest more into ITM? This is a company that uses electrolysis to turn water into hydrogen. The stored liquid hydrogen can then be used instead of today's carbon fuels to drive engines developed for the use of this fuel. This is a green process as long as the fuel used for the conversion is also green (solar/wind). Recently there have been a number of businesses saying they are going to adopt the ITM process. JCB invested into ITM and are already underway with their own converted engines to drive their great yellow machines. The Netherlands has recently announced that they are going to put a huge complex up on the polders using their wind farms for energy, and this will drive their ITM electrolysis conversion plants. Last week I read that Scottish Power is also going to put a similar complex into Felixstowe using their own North Sea wind farms for the drive energy, thereby making liquid hydrogen available for the vast number of lorries that use the port (if their engines have been converted).

This all sounds like good news to me, and you would think the price would jump up. A month ago it did just that, and by over 40%, but has now fallen back to its original price. All is confusion. Surely (not Shirley) this is an opportunity for gain in the future. Perhaps for the moment it is worth small incremental investments on a wait and see approach.

In a similar vein, nuclear power plants are back in the news in a positive way. “Putin's war” has demonstrated the need for countries to be self-sufficient in their power requirements. Germany, France, Japan and the UK, who had in recent times announced that they would pull out or at least reduce their reliance on nuclear energy generation, have now understandably done an about turn.

Rolls Royce with its new unique modular nuclear power stations is one company that should benefit hugely from this change of direction. Unfortunately for them they are saddled with large continuing losses from their aircraft engines division, so for me this is a wait and see situation.

Another company, called Yellow Cake, should also benefit greatly from this change of heart. They buy from the miners, store, and then resell the uranium to the nuclear power stations. It is an extremely profitable business already, and should now become even more so. But it is a little like ITM, the stock market price does not seem to always reflect this potential. This year it has had a high of 486p but today is down at around 410p. I have held this share for over fifteen months, and when I can see it getting recognised for what I believe is its true worth, then I intend to increase this investment. So there!

I have been asked by a few of the Saltydog subscribers whether or not I follow the Saltydog Tugboat and Ocean Liner investment portfolios. Well, the answer is that I do, but not always exactly. I certainly stick very closely to the sectors that are being followed by the portfolios, but not always the exact same funds. I also stick reasonably closely to the cash percentages. My SIPP is an almost exact replica of the portfolios. My ISAs, as I said above are a modification of the same, but I do allow my investment accounts to spread their wings. Hence the ramblings in my “Thoughts” articles.

Obviously I sometimes get it wrong, but as the saying goes. “If you want a rainbow, sometimes you have to put up with the rain”.

Best wishes and good luck with your investments.

Douglas
Founder & Chairman