An interesting investment or a foolish gamble

If you like to try your luck at the casinos in Vegas and also secretly hope to see a major green revolution take place in the near term you can take a position on both today. How? Buy ZENN stock (ZNNMF). ZENN, for those of you who don’t know, has been in the business of making zero-emissions vehicles but recently decided to change tact and now is focusing exclusively on an electric drive train that they plan on selling to Ford, Toyota and other major manufacturers. The ace up their sleeve? Their intimate relationship with EEStor a company that few know well but who is making some fairly audacious claims in the ultra-capacitor marketplace.

An “ultra-capacitor” is similar to battery technology in that it stores energy but rather than using a chemical process it stores electricity on it’s surface. A capacitor (even an ultra-capacitor) is typically characterised as possessing very high power-density (aka, power can be moved into and deployed out of very quickly) but very low energy-density (aka, stored energy on a per mass or per volume basis is very low). See the chart below to see this historic relationship with other technologies. It’s true that ultra capacitors are gaining greater energy density through nano-technologies but what EEStor is claiming would be a huge jump from anything else in the market. If believed, the EEStor technology would not only revolutionise motive transport but also the whole power industry (peak shaving, reduced spinning reserve, more economic and new power switching and quality devices, etc.)

EEStor’s ownership structure is not completely clear but it appears the two biggest holders are Kleiner Perkins (20%) and ZENN (12%). Even without the ownership stake it appears ZENN’s fate is highly correlated with EEStor’s. Admittedly I’d prefer to take the gamble directly with EEStor but as that option isn’t available to the public I think I’ll take a punt on ZENN. What do you think? Smart bet? Interesting gamble? Easy way to lose money?

Here’s a few links to help you decide:

[a few over-enthusiastic investors]  [news on ZENN’s April run-up on prices]

[more news on ZENN]  [more news on EEStor]

Can the Banks stay away from an opportunity here?

Oil continued its rally rising above $67 for the first time since November 08 (Oil prices climbed 30% in May 09, the largest monthly gain since 1999) on sustained hopes for a global economic recovery with the Saudi oil minister Ali al-Naimi predicting prices will reach $75 sometime this year.

Can the Banks stay away from an opportunity here?

Source BBC, Reuters etc. Citigroup mentioned today (1st June 09) that it will boost its Asia energy and commodities business by increasing its trade and marketing staff as it aims to sustain double-digit growth to capitalize on the region's rising influence on world markets.Also, there will be expansion into soft and some of the more esoteric commodities that we are currently doing out of London. It's a case of offering more of our global products to Asian client base."

Barcap also confirmed today that they have seen increased volumes across its commodities trading business since the start of this year and Coal & agricultural commodities would be growth areas for the next 2-3 years.

RBS mentioned in a recent interview how Commodities is their focus and continues to contribute to their bottomline.

Goldman Sachs & Morgan Stanley stay the undisputed leaders in trading oil, including physical cargoes, for the past 10-20 years but are being challenged by Barclays, Citigroup, JP Morgan, RBS Sempra & Standard Chartered.

Up to 2007-08, Citigroup's trading business was divided into 60 percent for oil, 30 percent for metals and 10 percent others but this could change ! They have announced that its current trading strategy is to link the bank's extensive client network, where it is seeing new investor appetite, with expertise across the oil barrel that will include naphtha; as well as coal, LNG, emissions and freight, filling the void left by some investment banks like Merrill Lynch, Bearn Sterns, UBS and some Hedge funds. Citigroup will grow further into trading of agricultural commodities, which will become more popular among its clients as the economy recovers in China and India, and will give more focus to metals.Efforts at developing exchanges across Asia would help to boost liquidity in the energy and commodities markets, though it is difficult for now to see prices being driven from Asia.NYMEX Clearport volumes for Asia mainly for fuel oil during January to May 2009 showed a 300-600 percent jump versus the same period last year, signaling traders' shift toward clearing in a risk-averse climate.