Many financial analysts see a recession looming in 2023. However, I don't see a financial recession in our near future. It is more than likely that the market continues to decline and that our GDP holds around roughly one percent. The Fed will try to hold our one percent growth mark through fiscal tightening. I expect the FOMC to continue the pace of rate hikes with a 50bp hike in December ad 25bp hike coming January I think we see the same rate throughout the year. I see this year as slow up and down decline, nothing fun nor exciting for the year of 2023. Yet boring years can become very interesting for the future. As of right now I am focusing on investing into 5 main categories: Automotive industry, Waste Management, Cyber Security, Nuclear Energy, and High-Yield Dividend stocks. Now this is my equity investment plan, I have considered rotating back into cryptocurrencies and other alternative assets but as the market slow declines I am not ready to burn money into the fire. I believe that Bitcoin will end its decline at $13,000 and at that point I will consider alternative assets as a potential opportunity for investment. I will say that NFTs are more than likely to make a strong comeback at the end of 2023 heading into 2024. I would strongly consider buying one or two in the middle of April for possibly huge gains at the end of the year.
The Automotive Industry
The automotive industry for investment is just as reliable as investing into a football club. If you invest into Arsenal, you will do well, or if you take a shot with a club like Monza (a small Italian club) who knows where you might end up. For all of you non-football, the automotive is rarely predictable and even when it is the gains become minimal. Take for example, Nikola Motors, supposedly Tesla's greatest rival who has now fallen from grace and end up in the pit of terrible investment hang on by thread with Enron yelling up at them. The automotive industry is very confusing and tough industry to navigate, especially with the new addition of electric cars. Tesla still remains the industry leader when it comes to electric power vehicles, however, I do see it slipping behind auto manufacturer giants like Ford and General Motors. I have a downgraded my price Tesla to $75 a share. This downgrade might come to shock to many, however, Tesla has too many competitors in the field and the only thing keeping them in front is the range of their vehicles which is slowly diminishing. The new Tesla model S has a max range of 405 miles on a single charge which has only been beaten by Lucid Motors' Lucid Air which has a range of 520 miles on a single charge. Scary news for Tesla investors. I would like to mention that I do not think Tesla is the next Duesenberg. I think Tesla is underutilizing their best asset: their large network of supercharging stations. Tesla has supercharging stations across the globe and repair centers in almost every major city in which a Tesla can be found. That is what makes Tesla so interesting, Tesla will still be a competitive manufacture but it's true value lies within what it can do for others. As for the other 25 young auto manufactures competing for the title of second best I think we might have a victor: Lucid Motors. Lucid Motors is a copy of Tesla, but copies have done well in the past in other industries. I think Lucid will do well in the future and can claim the title of second best for now but the true victor in five years will be the sleeping giant that is Fisker Motors. Henrik Fisker the original designer of the Tesla Model S will become the Porsche of electric cars. Not an everyday car for many but for the few that can afford his luxurious designs, Fisker will be highly praised. I look forward to seeing what they have instore for us in 2023. Hyllion, Rivian, Polestar, and Li Auto are other companies I would look into in 2023.
Waste Management
The waste management industry has been growing rapidly in recent years, and I expect this trend to continue in 2023. With the increasing focus on environmental sustainability, governments and companies are looking for ways to reduce their carbon footprint and minimize waste. This has led to an increase in demand for waste management solutions such as recycling, composting, and waste-to-energy technologies. I believe companies in the waste management space such as Waste Management, Inc, and Republic Services, Inc, will see significant growth in 2023. Additionally, I would also keep an eye on the growth of the Circular Economy, which is an economy that is restorative and regenerative by design and aims to keep products, components, and materials at their highest utility and value at all times. Companies that are focusing on this concept such as TerraCycle, Loop Industries, and Ecolife Recycling will be interesting to watch in 2023. Also, the industry will be heavily influenced by the government regulations and policies, and companies that are able to comply with the regulations and adopt sustainable practices will be the ones that are going to be successful in the long run.
As for the recycling side of the industry, with the increased focus on sustainability, recycling will be a crucial part of the waste management industry in 2023. With China, the world's largest importer of waste, closing its doors to foreign garbage, developed countries are having to find new ways to manage their own waste. This has led to the development of new recycling technologies and an increased demand for companies that specialize in recycling. Companies such as Waste Connections, Republic Services, and Veolia Environnement are worth watching in this space.
In conclusion, the waste management industry is expected to be a growth sector in 2023, as the focus on sustainability and reducing carbon footprint continues to gain momentum. Companies that are able to provide sustainable waste management solutions and comply with government regulations are expected to be the most successful in the long run. Additionally, the recycling side of the industry will also be an important area to watch in 2023, as new technologies and increased demand for recycling services will drive growth in this sector.
Cyber Security
The cyber security industry was quiet in 2022 leading me to believe that this might be a loud 2023 for the industry. The last time the United States fought a war, we fought with troops on the ground, the next time we fight a war we will be doing so with people sitting in chairs. Wars will most likely not be fought on the field but on the computer. Cyber warfare will become the future of warfare. Identifiable federal spending on artificial intelligence rose to nearly $1 billion in FY 2020, up 50 percent from FY 2018, making it one of the fastest growing emerging technology investment areas. If countries want to do harm to the US, which sadly there are many, then best way to do so is through the Internet. A guy with a laptop can cripple our entire banking system which just the push of his keyboard. Why send thousands of men to their death, when you give one man a computer and some earbuds to cripple an economy. Cyber security has been the talk of the town since the early 2010s yet with the rise of artificial intelligence it is crucial that the United States stays ahead of the curve and ahead of enemies to make sure the US is well protected against cyber warfare. Furthermore, companies and consumer need to protect themselves against the dangers of cyber-attacks. One key stroke and your entire bank account is transferred to offshore bank account in Belize. I have upgraded my price for Akamai at $100 a share along with Cloudfare at $55 and Okta at $85 by years end. For more diversified portfolio I would look into Palo Alto Networks, CyberArk, and CrowdStrike Holdings. I would also suggest Shopify and Trade Desk as additional investment suggestion to go along with your well diversified Cyber Security portfolio.
Nuclear Energy
We’re seeing demand grow for new nuclear both to supply electricity as well as power applications beyond the grid. Globally, countries are focused on decarbonization and energy security and seeing nuclear as a critical tool to accomplish these goals. From South Korea to the UK, and from India to Poland, countries across the world are committing to new builds. In the state of Georgia, Vogtle Power Plant Unit 3 come online in early 2023, which will deliver clean, safe, reliable, and affordable energy to Georgia Power’s 2.7 million customers. Once operating, all four units will power 1 million homes and businesses. Earlier in the year, NuScale Power completed their merger with Spring Valley Acquisition Corp. to become the world’s first publicly traded SMR technology company. U.S. nuclear power company, Westinghouse Electric, was sold to Brookfield Renewable Partners and Cameco in a $7.9 billion deal. TerraPower recently announced a $750 million fundraise, rounding out the top 10 venture capital deals made in the third quarter of this year, and in December, SMR developer X-energy went public in a $2 billion deal.
All of these actions signal to investors how ripe the investment opportunity is within the nuclear energy space, and this comes at a time when companies are increasingly committing to the UN’s 24/7 Carbon-Free Energy Impact.
As mentioned previously, NuScale Power will become one of the biggest names in nuclear energy, I have upgraded my price point to $26 a share by the end of 2023. BHP Billiton is my favorite company in the nuclear energy industry and is ripe for investment. Yielding high dividends and long-term growth potential I see BHP as no doubter for investors. Furthermore, I have become increasingly aware of the growth potential of Uranium Energy and its ever-expanding business in Wyoming. Centrus Energy also receives an upgrade from me to $50 a share by the end of the year from my original $40. A big leap, with little news but I believe they will make a strong push in 2023.
Closing Statements
Lastly, I would like to highlight the importance of considering global investments. As the world becomes more interconnected and economies continue to globalize, it is increasingly important for investors to consider opportunities in other parts of the world. China's "One Belt One Road" initiative, which involves significant investment in Africa and the Middle East, is one example of this. With the second largest population in 2050, only to India, the BRICS nations will be formidable match to the declining Europe, in terms of population. BRICS plans to add two new nations to their council, Iran and Argentina. I find the addition of both of these growing nations very interesting; Argentina population continues to grow and in terms of investment follows a similar pattern with their population growth. Brazil, the future leader of South America, has room to grow but is the 5th largest country for foreign investment and I understand why. Brazil has physical room to grow and develop and a population to labor that growth. India which will have the largest population by 2050 is trying to replicate what China did in the 1980s to benefit from its large future workforce. I would keep a close eye on BRICS and future investment plans. I would key a close eye on some key African nations such as South Africa and Nigeria.
For now, that is all, I wish everyone a wonderful 2023, and as always happy trading.
