I recently received an email from Stansberry Research regarding a new investing opportunity, which led me to a video featuring Bill Shaw, who was talking about a little-known $4 “battery royalties” stock he’s bullish on.
According to the presentation, Elon Musk has a “big problem” because Teslas require one rare resource, and supply is running out. And Bill says he can show you how to potentially profit anywhere from 100% to 1,000% in the coming years as its demand ramps up.
What stock is he teasing? How does his newsletter work? Is Bill Shaw the real deal?
In this article, I intend to help answer these questions and more. So let’s get started by taking a look at what Bill’s presentation is all about, then we’ll look at what stock I think he’s teasing.
Overview of Bill Shaw’s “Battery Royalties” Prediction
The headline for Bill Shaw’s latest presentation is titled “Elon Musk’s BIG Problem” and it begins with Bill saying that this problem could “derail Tesla’s future…”
And according to Bill, it’s not lithium.
He says there’s another resource that’s critical to the batteries found in electric vehicles. And points out that the largest EV manufacturer, Tesla, requires approximately 121 pounds of this resource for every new Model 3 they produce.
Which, according to Bill, could become a huge problem. Because he says that, unlike lithium, “supply for this critical element is drying up.”
And to make matters worse, he says that demand for this resource goes well beyond just Tesla, virtually all electric vehicles need it and more and more auto companies are getting into EVs.
According to Bill, “there’s a massive raw material shortage about to take place” and until it’s solved, Elon’s plan to produce 20 million EVs by 2027 is “doomed.”
Sounds kinda scary, and potentially exciting from an investing standpoint.
But what resource is he talking about, and are his claims legitimate?
The resource Bill is talking about is nickel.
And, while I haven’t checked all of Bill Shaw’s claims in the presentation, the main points he makes do seem to be grounded in reality.
- Deloitte is forecasting global EV sales to more than 10X between 2020 to 2030, and says they could contribute to approximately 32% of all new car sales.
- Some of the most common types of electric vehicle batteries, like the NCA and NCM 811 mentioned in the presentation, use about 80% nickel.
- I was unable to verify how much nickel is used in Tesla’s Model 3. However, I did find a 2021 article on mining.com that states that, on average, Tesla’s EV batteries use an average of around 45 kilograms of nickel, which works out to just over 99 pounds.
- From what I can tell, the general consensus is that there may be a shortage of nickel this decade, especially given the increasing demand from electric vehicles. However, some experts caution of a bearish near to mid-term outlook on price due to a short-term oversupply.
Another point Bill emphasizes in the presentation, is how Tesla is apparently concerned about nickel shortages, and that it’s holding them back from producing more EVs.
Which, as it turns out, is also true.
In fact, not only are the quotes Bill shared in his presentation about Elon Musk’s nickel shortage concerns real, but it turns out Elon even partnered with a nickel mine in New Caledonia to help ensure Tesla has access to a reliable supply of nickel going forward.
So, Tesla, and probably many other auto companies, will need a lot more nickel going forward. Which could be extremely bullish for nickel investors going forward.
Does that make nickel investing a slam dunk?
Because, for one thing, nickel isn’t the only option for EV batteries.
Even though nickel EV batteries have many benefits (such as higher energy density), Tesla does use other types of batteries. Like LFP for example, which they’ve been shifting some of their lower-end vehicles into as a result of the nickel shortages.
Second, even if nickel itself does do well in the coming years, that doesn’t automatically mean that Bill’s investment idea is going to make you money. It might, but there are no guarantees.
What stock is he teasing?
Let’s take a look…
What “Little-Known $4 Stock” Is Bill Teasing?
One of the points Bill emphasizes in the presentation is how, during a conference call, Elon says he wants to give a “giant contract” to a nickel mining company. And Bill (more or less) says this could be super bullish for nickel.
Here’s a snippet of what Elon said in the call (linked to earlier):
“Well, I’d just like to re-emphasize, any mining companies out there, please mine more nickel.”
“… Tesla will give you a giant contract for a long period of time, if you mine nickel efficiently and in an environmentally sensitive way.”– Elon Musk (source: resourceworld.com/giga-metals-responds-to-elon-musks-call-to-action-for-nickel-miners)
According to Bill, however, “it’d be foolish to try to pinpoint the exact company that’s going to win this contract.”
As mentioned, Elon already has partnered with a mining company. Which according to the BBC article I linked to earlier, is a Brazilian multinational corporation called Vale.
From what I can see, this was announced in March 2021, and Bill’s presentation went live in June 2021. So that’s not the “$4 stock” he’s talking about.
Which is further evidenced by what he says next:
So far, Tesla has one vague agreement with a small nickel mine, in a politically unstable region.
But it’s a private company, so there’s no way to invest in it.
I strongly suspect over the next few months, they’ll be announcing more partnerships and agreements.
Thing is, unless I’m missing something, Vale is a public company (VALE3).
Nevertheless, he does say that he strongly suspects new partnerships will be announced going forward. And either way, Vale is not the company he’s teasing.
So what is it?
Here are the clues he provides in the presentation:
And for just $4 you can invest in a little-known company that is exclusively focused on “dominating the nickel market” in a unique way…
By using a little-known, but incredibly powerful, wealth building tool called “royalties.”
In this case, my favorite $4 stock is currently purchasing existing royalties from prospectors who hold the rights to the top nickel mines in the world…
They recently purchased the rights to one nickel mine that is fully permitted and “shovel ready” right now… Over the next 30 years, it’s expected to produce 50,000 metric tons of nickel every single year.
This company with first mover advantage owns the rights to 18 nickel and copper mines around the world, resources which will explode in demand in the coming years, thanks to the worldwide shift to electric vehicles and renewable energy.
Years ago, they started a gold royalty business, where they made one-time investments purchasing the rights to several gold mines, and were able to make huge profits on whatever gold was discovered there…
Just in the past year, they’ve acquired six of the world’s largest Tier-1 nickel mines giving them a dominant market share in the future of the global energy supply chain.
This firm has a portfolio of royalties on some of the most strategic nickel mines in the world, and right now they’re generating $8 of value for every $1 invested…
Based on these clues, my guess is Nova Royalty Corp (NOVR).
This was actually a pretty easy one to figure out, because Bill provided lots of clues and this company fits pretty much all the clues he provided.
Here’s a breakdown of why I think it’s Nova Royalty:
- It’s a nickel and copper royalties company.
- The stock is currently trading for $3.50 (CAD).
- According to this July 2021 investor presentation, they have 19 nickel and copper mines in their royalty portfolio.
- Some of those on the management team and board of directors were involved in a gold royalty business called Metalla Royalty.
- They’ve made lots of acquisitions over the past year.
- In the April 2021 investor presentation, the company said it’s generating about $8 of revenue for every $1 invested.
Based on the clues Bill provided in the presentation, and my research, I’m fairly confident it’s Nova Royalty. But it is just a guess. And to find out for sure, you need to join his service, Commodity Supercycles, through the presentation.
If/when you do, you get access to the following report:
- Super-Charged Battery Royalties: How to 10x Your Money Investing in the Critical Resources Tesla Needs for Electric Vehicle Batteries
This report details Bill’s stock pick and the details behind why he’s recommending it. So it could still be worth a read, even if it is Nova Royalty.
What is a royalty company? And how does Nova Royalty work?
I’m not an expert on these types of companies, but my understanding of a royalty company is that they purchase the rights to operate a mine and collect a percentage of the profits from that mine for the agreed upon time and amount.
Almost like a tax…
They don’t do any mining, they just get a cut from all the mining companies that use their mines. Or, more specifically, the mines they own royalty rights on.
It’s actually pretty cool. Because their costs can be super low compared to a mining company and their only major risk is often just their upfront capital to establish (or acquire) the royalty. From there, they just collect a percentage of whatever the miners produce.
And as Bill points out, some of these companies can trade at huge multiples to the underlying resource that’s being mined.
The reason I think this is interesting is because this company is literally making money from some of the biggest copper and nickel mines in the world – without doing any mining (lol).
It’s kind of brilliant.
But again, I’m not an expert on this type of thing, this is literally just my first impression.
This article from McKinsey & Company does a great job of explaining what royalties are and how they work, so it may be worth checking out if you want to learn more.
Anyway, tying this back in to Bill Shaw’s pitch…
If Tesla did partner with another nickel mining company, and that mining company happened to be one that Nova Royalty owns the royalties for, that could be a big deal for investors.
On the flip side, the natural resources sector is known for being volatile, and there are always pros and cons with any type of investment. So even though I do think it looks interesting, it’s always important to consider the potential drawbacks.
Recommended: Go here to see my #1 rated stock advisory of 2022
What Is Commodity Supercycles?
Commodity Supercycles is a monthly newsletter headed up by Bill Shaw of Stansberry Research, and this is the service he’s promoting as part of the “battery royalties” presentation.
Basically, the way these things work is they talk about a stock they’re interested in within the presentation, and reveal all the details about it in a special report.
In this case, that report is called “Super-Charged Battery Royalties: How to 10x Your Money Investing in the Critical Resources Tesla Needs for Electric Vehicle Batteries.”
And in order to get access to this report, you need to join the underlying service. Which in this case is Commodity Supercycles, a service dedicated to investing in natural resources.
As a member, you get new recommendations and insights in the monthly issues, access to the model portfolio, updates and reports.
All of which is aimed at helping you become a successful natural resources investor.
The types of opportunities they recommend include things like drilling and oilfield-services providers, energy companies, gold miners, mineral explorers and other types of metal mining and royalty companies. Basically anything Bill Shaw and his team think is worthwhile in this space.
According to Stansberry Research, one of the things that sets this service apart from the competition, is their “boots on the ground” approach:
We focus on “boots on the ground” investigation… Visiting companies, meeting management, and kicking the rocks at projects to get the real story behind these opportunities.Source: stansberryresearch.com/products/commodity-supercycles
Also worth mentioning is that if you join through the presentation we’ve been discussing, you get access to some bonus reports that are exclusive to that presentation:
- Super-Charged Battery Royalties: How to 10x Your Money Investing in the Critical Resources Tesla Needs for Electric Vehicle Batteries
- The #1 Gold Stock to Buy in 2021
- The Secret Currency: A Secret Gold Strategy Used by the World’s Wealthiest Families to Make 500% Gains With Very Little Risk
How much does it cost to join?
The cost to join is $49 if you join through the presentation. But there is a $79 option which gives you some additional reports and a 12 month subscription to Stansberry’s Investment Advisory, which is Stansberry Research’s flagship investment advisory service.
There’s also a 30 day money back guarantee in place with this offer, so you can give it a try and if you’re not happy, request a refund before your first 30 days is up.
Who Is Bill Shaw?
Bill Shaw is the man behind the “battery royalty” presentation, and the Commodity Supercycles service. He also runs another service for Stansberry Research called Stansberry’s Gold & Silver Investor which, as the name suggests, is all about investing in precious metals.
Prior to joining Stansberry Research, Bill was a land development manager for residential homebuilders, where he was in charge of designing and constructing entire communities.
According to Stansberry Research, he also holds a Bachelor of Science from Penn State University in Environmental Resource Management and once managed a $100 million land portfolio.
In 2015, Bill joined Stansberry and says that ever since, he’s been “traveling thousands of miles to places like Chile, Kazakhstan, and British Columbia to hunt down the world’s best mining stocks and resource investments.”
He also describes himself as having a preference for “hard, physical assets like gold and silver.”
According to Bill, “Elon Musk’s big problem” is a shortage of nickel. And based on what Bill talks about in the presentation, it may not just be Elon’s problem.
Turns out that electric vehicles aren’t just putting an increased demand on lithium, nickel is a big part of many EV batteries and copper plays a large role in EV charging stations.
And Bill says he’s bullish on one “little-known company” with a $4 stock that could allow everyday investors to take advantage of this emerging trend.
Based on my research, that stock is Nova Royalty. But that’s just a guess, to find out for sure you’d need to join his Commodity Supercycles service, and read his special report.
Personally, I think it looks like an interesting company and could be a great opportunity. Assuming the company continues growing, it seems well-positioned.
And the service could be worth checking out either way, if you’re interested in learning how to invest in the natural resources sector.
In any case, I think it’s important to do your own research before jumping into something like this, because there are lots of variables to consider when it comes to investing. And you may come to a totally different conclusion based on your own research.
I also think it’s important to understand that there are no guarantees you’ll make money with this. Seeing a 10X return might be possible, as Bill suggests, but it’s not guaranteed.
Either way, thanks for stopping by, I hope you enjoyed the article.