- Is the U.S. “too stupid” to optimize nuclear fission technology?
- 5G isn’t just for the big cities
- Do you know somebody interested in technology? Read this…
Dear Reader,
Welcome to our weekly mailbag edition of The Bleeding Edge. All week, you submitted your questions about the biggest trends in technology. Today, I’ll do my best to answer them.
And what a week! I know how painful and frightening a market like this can be. Five days in a row of market turmoil. I didn’t even know what to expect early this morning.
Market futures at 6 a.m. were pointing down about 1%, and by the time the market opened, we were down around 4%. As I write this around noon today, we’re down 2.3% on the Dow Jones Industrial and less than 1% on the Nasdaq Composite.
Considering that the Nasdaq is down 13.5% from its all-time highs last week, and about the same for the S&P 500, we are definitely oversold. I’ve been discussing the need for a healthy correction from somewhat overheated market conditions… and we have it.
While the media has made a big deal out of Japan closing its public school system for a full month, the real motivator is not because of the COVID-19 cases in Japan. It is all about the Olympics.
Japan has spent billions of dollars getting ready to host the Summer Olympics, and if the event is canceled, it will be a disaster for the economy… basically, no way to recoup the investment.
It would be heartbreaking if that happened. But I can’t imagine a worse thing to do than bring nearly a million spectators, staff, and athletes from around the world to one of the most densely populated cities on earth.
My point is that while there is a lot of fear in the market right now, there isn’t enough to justify an even larger correction than what we experienced this week.
What would concern me would be major outbreaks of COVID-19 in the U.S. This would result in a dramatic slowdown of the U.S. economy until the virus was brought under control.
The best thing investors can do right now is mind their stop losses and risk management strategy, stay on top of developments, preserve and/or build a cash position, and be ready to buy back into the market when things bottom out.
We can remember back in the fourth quarter of 2018 when the market seemed to fall off a cliff. The S&P 500 fell almost 20% in the space of three months. Then it went on a run, rocketing up 40% from those December lows earlier this month. These dips usually present the best investment windows in great companies.
I’ll keep readers updated on the latest developments. But for now, let’s turn to our mailbag.
If you have a question you’d like answered next week, be sure you submit it right here.
America’s forgotten “green” energy?
First up is a great piece of feedback from a reader on nuclear fission technology. It’s a bit longer than our normal mailbag questions, but the topic is so important that I wanted to publish it in full.
Jeff, I appreciate your background, but I think that you are missing a much bigger issue within the entire scope of nuclear power applications and technologies. I am a nuclear engineer (USMA ’72, MIT ’77) and did my graduate work in magnetic fusion technology before running the Army’s nuclear power school. I have migrated into aerospace for much of the past 30 years but still am involved in several nuclear technologies.
First, you know that all of the big nuclear plants are basically 1950’s designs with some improvements in technologies and materials. The Department of Defense Navy reactors, using HEU [highly enriched uranium], have operated with incredible operational and safety records and go many years before refueling. The commercial plants have used LEU [low enriched uranium] at ~4% enrichment (driven a lot by regulatory issues), and the resulting low burn up of fissile isotopes leads to an obvious desire to reprocess and reuse the existing and created fissile isotopes (Plutonium-239, etc.) for further power production.
The fact that the U.S. is too stupid to get out of its own way and reprocess commercial fuel is an indictment of our political system. If you reprocess and separate out the fission products, you then have a material that gives off energy for thousands of years.
As an engineer, would you really call that “waste”? There are several ways to consolidate the material and use it as a source of energy (think of just low-quality heat for district heating or northern climate greenhouses…), but that has become a dead-end because of political concerns.
The best news about fission technologies is that there are now multiple approaches to advanced power plants that could use different solid and liquid fuel approaches and lend themselves to such configurations as factory-built, small modular reactors (SMRs) that can have much different siting and cost profiles. If reducing CO2 production is your focus, then there is nothing that beats fission nuclear power going forward if you want a reliable source of electricity.
I applaud the fusion efforts, and there has been some significant progress made. I think they are still all based on D-T reactions [deuterium-tritium reactions]. And don’t forget that electricity production is still 14 MeV [million electron volt] neutrons interacting with material to make it hot, generate steam, etc. While the amount of radioactive irradiated material is less than fission products, it is still not zero. Not an insurmountable problem in any event.
There is no technological reason why we could not deploy a very large number of advanced fission technology SMRs much faster than we will deploy fusion plants at any time in the near future. Remember that there is no fossil power plant, wind, solar, or even hydro that has the capacity factor of our old fission plants that now routinely run at 100% power for 400+ days before a 20-day refueling and going then back online.
– Bill S.
Hi, Bill. Thanks for taking the time to share your thoughts on this. It is great to have readers like you with such fantastic backgrounds in high tech to contribute to these kinds of topics.
For readers who missed it, I have been discussing the difference between nuclear fission and nuclear fusion technology in these pages. For anybody who’d like a more detailed explanation of nuclear fusion, please download this free research report.
The points that you have made are so important. Sadly, very few understand what a missed opportunity this has been for the U.S. I absolutely share your frustration.
For additional background, third-generation fission reactor technology has been around since the ’90s. These designs are far safer and even more efficient than the reactors the U.S. currently has online. And where are they being built? Mainly in India and China.
And there are even fourth-generation fission reactor designs that are more economical and even safer than the third-generation technology. Technologies like Sodium-cooled Fast Reactors (SFR), Gas-cooled Fast Reactors (GFR), Very High Temperature Reactors (VHTR), and Molten Salt Reactors (MSR) all show great promise.
Nuclear fission technology is based on mature technology and releases no CO2 into the atmosphere. So why isn’t the U.S. and most of the Western world building third- and fourth-generation nuclear fission reactors? One word… and to your point… politics.
I have had discussions with “experts” on the issues around nuclear fusion technology, some of which were laced with so much vitriol it was impossible to have a conversation. One got so worked up, he couldn’t tell the difference between nuclear fusion and nuclear fission.
It’s not logical… it’s not rational… but the ignorance and emotion around nuclear fission technology are very real. This is why I simply don’t see a path forward in the U.S. and other developed markets with the kind of SMRs that you wrote about. This is why I really haven’t written about nuclear fission.
Fusion, on the other hand, is the “power of the Sun,” which I see as a far easier sell.
And yes, you’re correct, most fusion reactors are combining deuterium and tritium, which releases a small amount of radioactive material. As you point out, it is on a completely different scale (dramatically less) than a nuclear fission reactor, but it is not trivial.
But not all fusion reactors are the same. My favorite approach to nuclear fusion uses a proton-boron (pB-11) fuel. The advantage of using pB-11 is that the reaction produces no neutrons. The output is just three helium nuclei and a whole lot of clean energy. No radioactive waste at all.
These advanced reactors are immensely complex, but I believe with our advancements in materials science – and more specifically in artificial intelligence – we will be able to optimize the magnetic fields required to control the plasma reaction in the reactor.
This will change the political debate entirely and put the world on a path to clean energy. It will be capable of feeding the world’s electricity grids for baseload power… what we all need to keep the global economy humming.
For any readers who are interested, I had a long conversation about nuclear fusion (as well as other technologies) when I was a guest on Glenn Beck’s podcast late last year. You can catch that conversation right here.
Bringing 5G to rural America…
Next up is a common question about the 5G wireless rollout…
Jeff, you have made much of the coming 5G “boom” and how it will enhance artificial intelligence (AI) and augmented reality (AR) and other “on the horizon” innovations.
Recently, I have been involved in moving our library to a new location. We felt this was a serendipitous move in that we would be well established for the advent of 5G.
However, ours is a relatively small, semirural community. The nearest big city (Nashville) is a little over 50 miles away. We learned that the towers required to mount the 5G boxes necessary for reception could be no more than 300 meters away from each other and the target location.
Additionally, I learned that due to the tower purchase (lease) and installation costs involved, 5G is economically sensible only in bigger cities. So we’re out of luck now and quite away into the future.
To my knowledge, none of your writers promoting this innovation have touched on this. Why not?
– John T.
Thanks for writing in, John. I’ve addressed this question in the past. And I’m happy to do it again. I understand it’s something readers are very interested in.
Readers will likely need no reminding, but 5G is the next generation of wireless network technology. And it will be, on average, 100 times faster than the wireless speeds that most of us experience from the current 4G networks.
And the rollout of 5G infrastructure – what I call “Phase One” – is well underway. According to recent estimates, global spending on 5G infrastructure will come in at $4.2 billion this year. That’s an 89% increase from the $2.2 billion spent in 2019.
John, you’re correct in pointing out that early 5G deployments will take place in large, populated urban centers. In fact, the president of Qualcomm – Cristiano Amon – is on record saying that 5G will be in every metro area in the U.S. by year-end.
It makes sense that network providers would start with populated cities. They need to start generating revenue from the 5G networks as soon as possible to help fund the rest of the infrastructure build-out.
Even before a wireless operator has installed its first 5G base station, it has already spent billions of dollars on the radio frequency (RF) spectrum. Then the operator must spend billions more to launch the service.
New generations of wireless networks literally take years to build out. Once the major metropolitan areas have complete coverage and the majority of customers have switched over to 5G-enabled phones, the new cash flow is reinvested into less-population-dense areas. It takes time. But that doesn’t mean that 5G won’t be coming to more rural areas of the country.
President Trump actually made a point to address this when he spoke on 5G last April. He said, “We’re also focused on rural communities that do not have access to broadband at all.”
And the actual distance required from the base station on a tower to your library depends entirely on what radio frequency the wireless operator is using. So you might find better luck calling around to different operators.
I have a question for you, though… Why does the library need 5G? I’m assuming that the interest is in internet connectivity? Does the library have access to a local CATV provider that offers high-speed internet? Or perhaps another telecommunications provider that might have fiber to the facility?
If so, the library’s problems are solved. If there is a wired high-speed connection to the library over CATV lines or fiber, then the library will have the “feed” for its own wired and wireless network.
As for 5G, it may take a bit longer. But 5G isn’t just for big cities. Any market that has 4G today will eventually have 5G in the coming years. This is a “once in a decade” investing opportunity. And I’m preparing my readers for it right now. For anybody who’d like full access to my investment recommendations around 5G, simply go right here.
If you like The Bleeding Edge, share the wealth…
Let’s conclude with a question a reader had about sharing research with friends and family…
Jeff, I just finished reading your macro assessment of electricity moving from scarcity to plenty as costs grew more and more accessible to the common man.
Then I read your insights about the 2FA (two-factor authentication) standards, followed by the Internet of Things ratings. All terrific information and observations. So good that I wanted to forward the newsletter to some people.
Here’s my question: Am I breaking any sort of restrictions by passing on this information? I respect that you and your team have worked hard to research and write these articles, but when some of these really great thoughts and observations come my way, I want to share.
What is your preference?
Thanks in advance for any guidance you have to give.
– Janet B.
Hi, Janet. I’m happy to hear you’re enjoying the research we publish here in The Bleeding Edge. You’re right that my team and I spend hours every day publishing each issue. But I’m happy to do it if it means I can bring the best insights on the world of tech to readers like you.
As I said when I launched The Bleeding Edge, my mission is to provide insights that I would want to read if the roles were reversed. And I believe I can confidently say that we’re publishing one of the most valuable, information-rich technology publications on the market.
So if you’d like to pass along these insights to friends and family, you’re more than welcome. That goes for all readers. If you know somebody who is passionate about bleeding-edge technology, I’d be happy to have them join us as a free subscriber.
All new readers can join by going right here.
As for my other research publications, The Near Future Report, Exponential Tech Investor, and Early Stage Trader, that research should not be passed on freely. It is meant only for subscribers to those publications.
That’s all the questions we have time for this week. If you’d like me to answer your question next week, you can submit it here. I’ll do my best to tackle it next Friday.
And for readers of my large-cap investing service, The Near Future Report, be sure you keep an eye on your inbox next Monday, March 2, for our issue. I’ll introduce you to another great technology stock that has become an absolute powerhouse in its industry yet still has incredible growth potential. And this latest market volatility is giving us a chance to buy in at a great price.
Regards,
Jeff Brown
Editor, The Bleeding Edge
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