• Hydrogen’s hidden problems…
  • How 5G and self-driving cars work together…
  • The right time to invest in a SPAC…


What a landing…

Here is the first photo from NASA’s Perseverance rover after it landed on Mars.

The Surface of Mars From NASA’s Perseverance Rover

Source: Space.com

Looking at photos from other worlds never gets old.

And don’t worry about the image quality. The pictures will get better after the rover has been through all of its system checks and begins its mission. The first picture was just a quick one to confirm that the landing was successful and there was nothing unexpected.

Perseverance is a huge accomplishment. And it is unique in its size. It’s like landing an SUV on the surface of another planet.

As a reminder, the rover landed inside of the massive Jezero Crater, which is 28 miles wide. And the goal is to look for signs of life – past or present. Better yet, it will collect samples that will eventually be returned to Earth.

What an incredible few days the world has experienced! We’ve witnessed three successful missions to Mars within the span of about a week.

I can’t wait to see what we discover with Perseverance.

Before we turn to our mailbag, I’d like to let readers know about a special event taking place next week. Our friend and colleague Teeka Tiwari is hosting his Tech Royalty Summit next Wednesday night at 8 p.m. ET.

Right now, investors seeking income have few real options that are worth the investment… with paltry S&P 500 dividends and Treasury yields hovering around a meager 1%.

But Teeka’s “Tech Royalties” have not only helped deliver outstanding capital gains… they also allow investors to collect some of the biggest income yields he’s ever seen. (One “Tech Royalty” is currently up 1,850% with a current effective yield over 324%.)

That’s why Teeka is so excited to tell you about an exciting move getting ready to happen in this space… and he wants to make sure investors are positioning themselves now.

If that all sounds interesting to you, then you can go right here to sign up and reserve a spot to attend.

And if you have a question you’d like answered next week, be sure you submit it right here.

Now let’s turn to our mailbag questions…

The dirty truth about hydrogen fuel…

Let’s begin with some of the feedback on our Presidents’ Day essay discussing the downsides of hydrogen fuel:

Wow, Jeff, that is considerable research and math. Thanks for your efforts and putting all that together and giving it to the public. Totally blows my mind. I do remember I had an ’84 Mustang that had a Vera injection system. It split water from a tank into hydrogen and oxygen and injected into the carb, giving a little boost and a little better miles per gallon (mpg). Quite possibly the only system to make any type of hydrogen fuel worth it, and it’s 37-year-old tech.

 – Jon B.

You did a nice job of summarizing the issues with hydrogen fuel. But you should have included the safety concerns. Hydrogen is the most flammable and explosive fuel possible, far higher in this regard than natural gas.

A few decades ago, we started using propane as a fuel for vehicles, and now we are using a bit of natural gas. Europe has been way ahead of us on this forever. In a car accident, a propane or natural gas tank can explode, and they do sometimes. The amount of energy released in a hydrogen fuel tank explosion is much higher yet, and more likely since it’s more explosive.

Recall that the Hindenburg exploded after it was filled with hydrogen… It’s certainly worth adding to your list of drawbacks of hydrogen as a vehicle fuel.

 – Donald L.

Good morning, much enjoyed your article about hydrogen. Everything you say is true, except you forgot one major point. The wind blows and the tides flow 24 hours a day, but during the night, electricity demand is significantly less, so this is the energy source to fuel the electrolysis.

 – Alan H.

Enjoyed your Bleeding Edge article on the truth about hydrogen.

One [comparison] you did not make was the cost of producing hydrogen using electricity generated from solar cells or wind turbines. The carbon cost is obviously in the cost of making each generator, but the computation is above my pay grade.

 – Craig C.

Thank you all for the excellent feedback on this topic. As I said on Monday, many traits make hydrogen an attractive fuel option – its energy density compared to gasoline, its abundance, and its “clean” output to name a few.

But the tradeoffs – such as the fossil fuel-based energy currently used to create hydrogen fuel, the inefficiencies in storing and transporting it, and the cost – make it clear that we have a lot more work to do before it becomes a viable and truly clean alternative to our current system.

And yes, hydrogen is flammable, but I don’t see that as a major risk for hydrogen-fueled cars. It can be managed safely, much more safely than Lithium-ion batteries. These batteries are also flammable and known to combust, resulting in a car fire.

While it wasn’t part of my research on hydrogen fuel, our current electric vehicles powered by lithium-ion batteries have many of the same problems. The electricity mostly comes from fossil fuels, and the materials used in the batteries are toxic and hard to recycle.

And as for your comment, Donald – thankfully, we don’t need to worry about the hydrogen fuel in a vehicle exploding like the Hindenburg. While hydrogen can be a hazard, carmakers are taking precautions to avoid such an outcome.

For example, these fuel-cell tanks – which are constructed to be extremely durable to begin with – can be pressurized up to 10,000 psi.

If a pressurized tank were compromised, the hydrogen would instantaneously dissipate because it is lighter than the surrounding air. This is actually safer than propane and gasoline, whose vapors are heavier than air.

So while there are inherent dangers in any combustible fuel, we won’t need to be more worried about this particular issue than we would be for our traditional gasoline-based cars.

Finally, Alan and Craig… You’re absolutely correct that producing hydrogen using clean energy sources like solar, wind or waves and tides would be ideal. There are some places where this might be possible to do.

For example, California and Nevada might be great locations to co-locate massive solar farms with a hydrogen plant. Using the tides or waves is interesting, but it’s obviously limited to a coastline. And it would have to be done in a way that doesn’t disturb or damage the tidal ecosystem.

Of course, these approaches aren’t perfect. And they all have some environmental drawbacks. Solar panels are also made with toxic chemicals. And they’re difficult to recycle after they have passed their useful life.

And wind farms negatively impact migratory patterns of wildlife, birds in particular. Wind turbine blades are also a real problem. They can’t be recycled or repurposed and are now being dumped into landfills.

Like I mentioned in my essay, transporting this fuel is tricky since the molecules can leak out of most containers. So even if we built a field of solar panels in Nevada to produce hydrogen fuel, for example, we would still need to solve other efficiencies in this system.

Sadly, it’s rare to see journalists, or even environmentalists, present a complete picture on any individual form of clean energy. It is important for us to understand all second-order environmental impacts.

And we must look at how this energy is manufactured, the dangers involved, and how and if it can be recycled when it has reached the end of its useful life.

I don’t have any angle or vested interest at all other than simply wanting clean energy with no negative environmental impacts. And simply changing the location where fossil fuels are burned is not having any net positive impact on the environment.

Let’s figure out a way to solve the base load power requirements with clean energy.

I’m very glad to see so many people engaged in this area. As we all become more knowledgeable and develop a complete picture about energy sources, we’ll be able to have informed discussions and find solutions to this grand challenge. We’ll continue to follow the latest developments in clean energy in The Bleeding Edge.

Thank you all again for sending in your feedback.

Watch me get into a self-driving car…

Next, a reader wants to know more about the connection between self-driving cars and 5G:

Hi Jeff,

I am a Brownstone Unlimited member and am extremely happy with our results. Your research is top notch. If anything, right now we almost have too many opportunities.

Hope this question makes sense. The S.A.V. demonstration was very impressive. To what extent did it depend on 5G communication? Or did the visual sensor negate the need for 5G? Thanks.

 – Jay K.

Hi, Jay, and thanks for being a lifetime subscriber. I’m glad to hear you enjoyed seeing my recent test drive.

For unfamiliar readers, I recently “drove” a self-driving Tesla to check in and see how the technology has progressed. There’s nothing like boots on the ground research, and what I experienced was impressive. In fact, it helped me identify what Elon Musk’s next big project in this space will be…

If anyone would like to watch the demonstration, please go right here.

As for your question, autonomous driving does not require 5G wireless technology at all. We can think of these cars kind of like having their own “brain.” They are capable of driving themselves based entirely on their own software. And if they get stuck, they tell us – the human driver – to grab the wheel and take over.

Current production cars with self-driving technology, like the Tesla that drove me, are all equipped with 4G wireless technology for connectivity. Historically, the wireless connection has been used for emergency phone calls in the case of an accident, or to enable the ability to send an alert to the car.

But when Tesla came along, things changed. Tesla is really an artificial intelligence company that just so happens to build cars. It flipped the model and adopted a computer architecture, rather than an automotive architecture.

Its cars are upgradeable at a moment’s notice. Tesla can push out new software upgrades over the 4G wireless network when the software needs some changes or improvements. This can also be done over a Wi-Fi network.

Now that 5G wireless technology is becoming mainstream, we can expect the next generation of cars and trucks to begin using 5G technology rather than 4G technology.

This is typically what happens in the automotive industry every time the wireless industry upgrades to its next generation of technology. It will take a few years, but eventually all new cars will be manufactured with 5G tech.

The intersection between 5G wireless and autonomous driving will happen when fleets of self-driving cars are deployed. This will be especially true in the case of logistics, where large semitrailers and trucks are fully autonomous.

When a car or truck gets into a difficult situation, it will call back to a command center that is staffed with professional drivers who will take over the vehicle in real time. This is where the near zero latency of 5G comes into play. A human driver from 2,000 miles away will be able to safely drive a vehicle that is empowered with 5G wireless technology.

A perfect example is the one that I shared yesterday. A driver in Guam successfully maneuvered a car in Japan – over 1,600 miles away – using 5G wireless technology.

The driver could operate the vehicle safely because there wasn’t any delay in the 5G connection. The driver could see exactly what the car’s sensors “saw” in real time. This wouldn’t have been possible with 4G.

And there will also be some applications for vehicle-to-vehicle communications. It is possible to do that using 5G wireless technology, or other forms of near-field radio frequency technology.

Like I’ve written about before, our cars will be able to transmit and receive smart contracts in real time to enable one car – someone in a hurry, for example – to pay a small fee to the surrounding drivers to go to the front of the line.

Thanks for your question. I hope it’s not bad news for you, but I have a lot more great investment opportunities to share in the year ahead.

When should we invest in a SPAC to get warrants?

Let’s conclude with a question about special purpose acquisition corporations (SPACs):

Hello, Mr. Brown, I have this all down except for one item. I understand that each SPAC offering has a closing date. Do the warrants get issued after the IPO [initial public offering] closes? Once the IPO closes, if we buy the SPAC, will we still be issued the warrants?

Just want to clear this up so I can learn up to what date I can buy the SPAC you recommend so that I will still be issued the warrants. Or will you be letting subscribers know the last day to buy the SPAC so that you do get the warrants? Sorry for the confusion.

 – Paul A.

Hi, Paul. And thanks for writing in. No apologies needed – SPACs are a very new area of investing for most people, and they are their own asset class. I’m happy to help bring clarity to this space for my subscribers.

For unfamiliar readers, SPACs are one of the most exciting opportunities for investors right now.

Known as “blank check” companies, SPACs exist for one purpose: to combine with a private company in order to take it public. That allows regular investors the rare opportunity to essentially invest in a company before it goes public, which is when the greatest gains are possible.

And this is a big trend we’re watching. Last year, nearly half of all IPOs were SPACs. And this year looks like it will be another record-setter. So far, 160 of the more than 207 IPOs that have taken place in 2021 have been SPACs.

Of course, many of these SPACs hitting the market aren’t worth our money. My new research service, Blank Check Speculator, helps subscribers find the best SPAC deals on the market. (If you’d like to join us, go right here to learn more.)

Returning to your question, Paul… There are a few nuances to the answer, so let me break down our process.

In Blank Check Speculator, we invest in units of SPACs, which then will split into shares and some amount of warrant coverage. These warrants are like a bonus for amplifying our profit potential.

  1. We are buying our units after the SPAC IPO but before the units split into shares and warrants. Prior to the split, units are the only security available to purchase. You will know you received your units if the ticker symbol has five letters in it or ends in “.U” or “/U” (this may vary slightly by broker).

    The SPAC will eventually file an 8-K with the SEC announcing the separate trading of the stock and the warrants. This is when the units can officially be split into their two respective securities (stock and warrants). The split is always announced within 52 days or less from the original SPAC IPO.

  2. We will not know precisely when in the 52-day window the units will split, which is why we encourage subscribers to purchase their units as soon as possible, preferably within the first few weeks that follow the IPO. We will alert readers after a split has occurred to let them know they can now split their units into shares and warrants if they choose.

  3. After the split occurs, it is usually possible to buy units, shares, or warrants. However, we will not recommend buying units after the split because volume usually declines considerably. We will also not recommend buying shares after the split because they will not come with our “bonus” warrants.

If any subscribers can’t manage to purchase units prior to a split, that’s no reason to be concerned. I expect we will have frequent enough buy alerts in this service for all subscribers to get in on a number of new recommendations before their splits.

As I shared above, the pool of SPACs is growing rapidly, giving us many great opportunities to invest.

And if any current Blank Check Speculator subscribers have more questions about our strategy, I strongly encourage you to read our manifesto and check out the FAQ page on our website. We answer many common questions there.

And of course, if you have a question for a future mailbag, you can send it to me right here.

Have a good weekend.


Jeff Brown
Editor, The Bleeding Edge

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