MoneyWeek Magazine asked their contributors to choose their favorite investment ideas from around the world for this year and beyond.
By Dominic Frisby
For link to the full article: Invest in helium, biotech, and UK small caps in 2019
One of their contributors (Dominic Frisby) considers Helium to be the most compelling story out their today!!
Every year some niche commodity seems to become a hot investment in the Canadian resource markets. This year it was marijuana. Last year it was cobalt. The year before that it was lithium. Whether it’s rare earth metals, potash, graphite or uranium, the thing about these mini-bubbles, even if they turn out to be just that, is they all have a compelling underlying story.
The most compelling story at present is helium. It has a multitude of uses beyond balloons, most of them in tech. It’s needed for high-capacity hard drives in data centres; in the production of barcode readers, computer chips, semiconductors, LCD panels and fibre-optic cable; as a refrigerant in cryogenics research; and as a coolant for nuclear reactors and MRI machines. Demand is rising while supply (Qatar and the US are the two biggest producers) is in decline. Roughly 15%-20% of global demand is met by the US selling off its national reserves, but within two years these will be fully liquidated. Cue the rush to find more.
There are four listed helium stocks in North America. Three have been disasters this year, all for internal company reasons. However, a new kid on the block, Desert Mountain Energy (TSX.V: DME) has staked out land in Arizona (now dubbed “the Saudi Arabia of helium”), raised money and is now preparing to drill in the spring. It’s a tiny-cap energy play. Anything can happen. If the drilling works, you’ll make a lot of money. If not, you’ll lose it all.