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Money and Markets: Don’t Feel the FOMO; just wait for the next big thing

Market booms are powered by technology, but don’t panic if you missed the last one as there’s another one coming soon. The next big thing to watch out for is the hydrogen economy.

When investing, it’s always better to be early to the party than late. For me this is lucky as I am always too early for everything including trains, appointments and investments.

Stepping on my heels seems much better than the torture of FOMO (fear of missing out). FOMO drives many people to lose their shirts because it prompts them to jump into a market at or near the top, only to see their money go up in flames.

FOMO is a systemic weakness and a very costly one for many investors, both private and institutional. It has been a plague in the crypto bull market which has now crashed.

While premature speculation only leaves investors waiting for the inevitable, FOMO tends to leave participants penniless. The FOMO disabled, and they know who they are, must embrace the fact that there is always the next big thing on the way.

FOMO should be avoided and the focus should be on the next market fashion just over the horizon. Market fashion and technological developments are two sides of the same cliché.

There will be a technology layer in the mix of a boom, bubble, bust in the markets. Booms and bubbles in the stock markets have been technology-driven and technologists have been responsible for the boom, bubble and bust cycles as far back as you want to look.

Some may think this is some kind of condemnation, but actually there is nothing wrong with the boom, bubble, bust cycle, and its bad reputation comes from the screams of those crushed suitors who fall under the juggernaut of the market.

That rickety market juggernaut, though often rickety and erratic propelled, has brought us where we are today.

So as crypto leaves the throne of the current market craze and bubble, what’s the next big thing? What Asimovian magic will captivate the next markets? For me, the clear and striking frontrunner is the hydrogen economy.

The hydrogen economy is an intuitive solution to the thorny problem of energy storage. Alternative energy is the future, like it or not, with hydrocarbon resources to be replaced for much of the world’s energy needs.

The problem is that “renewable” energy, whatever you want to call it, has to be stored because it doesn’t have the fancy switch-on and switch-off function of fossil fuels.

Wind blows in the afternoon, the sun shines with all sorts of unpredictability, tides flow predictably but for limited periods.

There’s plenty of energy to harvest on a windy, sunny day when the tide goes out, but to store that bounty you’ll need a simple, inexpensive storage mechanism and delayed use.

Batteries seem like a good idea, but when you look at the batteries themselves and the scale, the problems become apparent.

Companies like Tesla have done a great job solving the peak demand problems with large battery farms, but it’s easy to think that hectare after hectare of lithium batteries or, worse, lead batteries will prove problematic for a world with eight billion electricity customers.

This is where hydrogen comes in. While not exactly a great idea for air transport, hydrogen seems like a pretty great energy storage solution.

Connect your windmill to a gadget that cracks water into oxygen and hydrogen, stores the necessary gases as efficiently as possible and then converts it back into electricity via a fuel cell.

Fuel cells are becoming a big thing in the stock market. There are already players with billion dollar valuations in the technology and risk-crazed US markets.

Many fuel cells use exotic catalysts and many belong to the family of platinum group metals or PGMs. These precious metal products are starting to take off, but that still has a long way to go and will propel their miners and the PGM IP tech companies already locked in.

There are a whole host of reasons why the hydrogen economy won’t be with us right away, but that has never stopped a good market boom, because the stock market lives for the story of the future and its wealth, and the story of the hydrogen economy is tremendously strong and ripe for hosannas.

There are untold billions at stake to solve the energy storage problem, and hydrogen will be a key part of the solution, igniting a whole new generation of companies on which traders and investors can bet.

For doubters, it is important to keep an eye on the trade in metals from the platinum group, as these will be an indicator of how the hydrogen economy is developing.

Only 180 tons of platinum are mined per year, and to double the benefit of this precious metal, platinum is a clear refuge from the inflation stemming from the fantastic Covid-19 cash dump that the world’s central banks have injected into the global economy.

What the hydrogen economy will look like is a mystery, which is exactly what the stock market and its risk-hungry residents love. It’s also a ‘right on’ theme in this neo-puritan world.

That hydrogen boom, bubble, bust cycle is also going to come this way, and if you feel FOMO when you see the trend, you’re already too late. Don’t forget, there’s another one heading your way just over the horizon.