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If you’re counting out traditional energy, you’re making a massive mistake

Speaker 1 (00:00):

Hi guys, I’m Tim Melvin, and welcome back to a better way to wealth. Now I know a lot of the attention these days when it comes to

Speaker 2 (00:06):

Energy, energy is being focused on the renewable energy companies, wind solar and all that.

Speaker 1 (00:13):

And, and that’s, that’s fine there. You know, the future is renewable, but if you’re counting out traditional energy, you’re making a massive mistake today. I want to outline for you why, and then I’ve got to pick for you that should double your money over the next

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Year in a traditional energy company that I happen to like a whole

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Lot now unless you were buried it under a rock or

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Something, you know that this Monday, the United nations released their climate change report. And it basically,

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We said that because we haven’t done what everybody’s said, we should have done over the last 30 years. We’re basically basically doomed

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To a mad max type of future

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Without drastic immediate changes

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About what you’d expect from United nations. Really. And there’s talk again about the United States and other developed countries going to

Speaker 1 (01:00):

100% renewable by 2030 or 2035 at the latest guys, that might be a nice political slogan, but I’m here to tell you it’s simply not going to happen. The costs of doing that here in the United States alone would be $35 trillion. Now think about that. That’s another $3 trillion

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Dollars. We’d have to find as a nation. When we’re already running a massive budget deficit,

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We don’t have the money that money doesn’t exist. It’s going to be a much longer slower transition. And that 35 trillion by the way, does not include the cost

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Of destroying the oil gas industry that employs tens of thousands of people. It also doesn’t talk about the fact

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That that’s basically today’s material costs. Guys, remember that study, we talked about when we

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Did electric vehicles, where the Netherlands looked at, what it would take as far as rare metal usage for electric vehicles, it’s worse for renewable energy.

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The Netherlands would use use two to 12 times the global production of certain rare earth elements that are used in, in when you know windmills

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And in solar energy panels two to 12 times just the Netherlands. Guess what? 20 times the size of the network,

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This can’t happen. Now. I grew up in

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Annapolis area, very close to Washington DC, and I got to be good friends with a guy who is one of the leading energy experts in the world. He advised the department of energy. He consults with a lot of the larger utilities and provides information to some hedge funds that invest in energy.

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And he was blunt about this. He said, look, we may get to renewable energy someday, 100%. He says, but we’re not getting there. We got a drastic increase in nuclear power. As of today, the United States still hates

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Nuclear power. We’ve not done anywhere near, right? What European nations have done with nuclear power to achieve zero carbon. So

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It’s not going to happen. Don’t take this guys that I hate renewable energy, cause that’s

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Not the case. I

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Love renewable energy. We invest in it. We of

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Investments in companies that, you know, they have wind turbines, they have hydroelectric plants. There are massive owner of solar solar fields. So I love a renewable energy. I think it’s going to make sense a lot of money over time,

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But I also love traditional energy companies. So we have a lot of money

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In this family invested in traditional energy companies, particularly by the way, in the infrastructure of the energy industry. We liked the pipelines and storage assets and the assets that are used to move or oil and gas from point a to point B. That’s actually where our stock pick is this week. We’re going to get to that in just a second year. So not opposed by a long shot to renewable energy. I just don’t think that you should give up on traditional energy. Lots of investors have created a massiveness pricing that has going to give us a tremendous opportunity to make a ton of money over the next year and even beyond. So let’s get to that pick. I promise Dorian LPG. The symbol is L P G.

Speaker 1 (04:14):

They own 23, very large

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Gaps. Yes, tankers gas carriers, VL GC vessels, and they move up PR petroleum gas fraud, probably liquid products all over the world. Now that stuff like propane butane, it’s used for a chemical feedstock, industrial and residential heating aerosol propellants it’s used for cooking. It’s used for motor fuel in some parts of the world. And some types of vehicles, lots of use for this stuff. Lots of demand

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Pricing has really been improving in spite of the fact that nobody in the market

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Paying a lot of attention to it. Now because of that, guys, this stock is ridiculously cheap. Okay. you’re trading at 55% of book value and less than seven times earnings. Now this is in spite of the fact that they’re paying down, that they just paid their fees. First dividend in company history, they’re buying back stock, management’s doing all the things they need to do to get the stock price a lot higher. Now it’s $12 stock. They have a stated book value. That’s just about $23 a share. I think that’s it a little bit understated because they’re fully depreciating all of their vessels. And I think they’ve depreciated faster than they’ve actually declined in value because of demand in the marketplace. Nobody’s really building any new vessels since COVID. So that’s gonna take a while to work out. In the meantime, their ships are much more valuable.

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So 55% of book value set less than seven

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Times earnings. The analyst price targets are all at, you know, 80, 90 and a hundred percent of the current stock price. I think this thing can double plus a little bit more over the next 12 months, there’s an enormous margin of safety because I could literally sell off the ships, pay off the debt and send all the money out to the shareholders. And you guys were profit from that happen. So the stock sitting there to symbols, LPG, it’s a, should be a double over the next 12 months, even more than that beyond just because everybody giving up on traditional energy has created this, this bargain opportunity

Speaker 1 (06:18):

Because don’t take my word for it. The U S energy

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Information agency and the international energy

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Agency all say that oil and gas

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Will still be the predominant fuel in 2040. And perhaps even as late as 2050, renewables coming, oil and gas is here to stay. And here’s an opportunity to make a ton of money from energy infrastructure. You know, I’m Tim Melvin, and that’s a better way to wealth.