What SWaB (“Gold 2.0”) Stock Is Whitney Tilson Pitching?

Whitney Tilson of Empire Financial Research has released a new stock teaser pitch that centers around what he’s calling “SWaB.”

According to Tilson, SWaB stands for Solar, Wind, and Batteries. And he says that SWaB is driving demand “through the roof” for a mineral he calls “Gold 2.0,” which could create “massive gains” for those who are “positioned correctly.”

“SWaB stands for Solar, Wind and Battery.”

[…]

“And SWaB is driving the demand through the roof.

“That’s why many in the media – including Forbes and the Financial Post – are referring to this mineral as the ‘new gold.’

“But because this is going to be one of the most important minerals in the world of technology and energy… I prefer to call it ‘Gold 2.0.’

“Just like gold did back in the 1840s Gold Rush… this ‘Gold 2.0’ is on the verge of creating massive gains for people who are positioned correctly.”

Source: https://secure.empirefinancialresearch.com/?cid=MKT655401&eid=MKT686805&s202=1297294&assetId=AST257582&page=2

What is Gold 2.0?

The whole pitch was pretty mysterious; Tilson never revealed exactly what mineral he was talking about or what company he was bullish on.

Unfortunately, that information is locked behind a $49 paywall for his newsletter service, Empire Stock Investor.

But my research suggests that “Gold 2.0” is copper and that the “little-known Canadian company” he’s teasing mines it.

Ahead, I’ll show you everything I learned about Tilson’s prediction, including the name and ticker of the company I think he’s teasing.

SWaB, Elon Musk’s “Master Plan Part III,” and Gold 2.0… Breaking Down Tilson’s Pitch

The first main part of Whitney Tilson’s latest presentation centered around SWaB, or Solar, Wind, and Battery technology.

In short, Tilson believes that this tech will continue to get cheaper with time to the point it could make energy “almost free.”

“In the same way that the internet made communication almost free…

“SWaB will make energy almost free..”

Why? I can’t speak for Tilson, but based on what he said in the presentation, he’s basically predicting that solar, wind, and battery tech will get more affordable as this tech becomes more efficient and adoption increases.

And he argues that “for purely economic reasons,” virtually everyone will “shift” to using SWaB energy in the future.

“Everybody from individual families to large corporations will switch to SWaB for purely economic reasons. Not for green reasons, not for political reasons…but just for pure economic reasons.

“I want to stress upon this. The shift will be mainly because energy from SWaB will be cheaper. Period.

“In a few years or even months, it may soon make zero sense to invest in any other form of energy.”

Whether or not the trend toward wind and solar continues remains to be seen, but the cost of this tech has decreased over the years, which is often the case with new technologies, as innovative technologies are typically deflationary.

In any case, another aspect of Tilson’s presentation centered around Elon Musk and a “master plan” he’s supposedly “about to unleash.”

According to Whitney Tilson, “part I” of Elon Musk’s “master plan” involved the electric car, “part II” involved solar roofs and basically expanding his EV business, and Tilson claims Musk is “about to unleash Part III.”

What’s he talking about?

According to Tilson, “part III” of Musk’s plan involves SWaB (solar, wind, and battery tech), and it’s “all about scaling.”

“So far, he’s delivered almost everything he promised in part I and II of his Master Plan.

“And now he’s about to unleash Part III.

“In an interview with the Financial Times in April, Musk revealed it would involve three technologies.

“Together, these three technologies form a unique system that I call S.W.a.B or ‘SWaB’ for short.

“In August this year, Musk said Masterplan 3 is all about scaling. By the time SWaB rolls out across the country, thousands if not millions of everyday Americans will likely use SWaB in ways nobody is even thinking about right now.”

What is Musk supposedly “scaling?”

In short, Tilson talked about how Elon Musk has been working on different “SWaB complexes” around the world, and he cited numerous large-scale lithium-ion batteries (Tesla Megapacks) Tesla has set up around the world as examples.

And after highlighting a subsidiary Musk recently created called Tesla Energy Ventures, Tilson put forth the idea that Musk’s goal (aka “part III” of his “master plan”) is to “become an official electricity retailer.”

“In August 2021, Musk quietly filed an application with Texas’ Public Utility Commission for a new subsidiary called Tesla Energy Ventures.

“Tesla has an energy storage facility 30 miles south of Houston operating under the name ‘Gambit’…”

[…]

“Until now, Tesla built SWaB complexes to help other companies generate, store, and consume energy.”

[…]

“But what Musk plans to do in Texas is different.

“The goal of Texas Energy Ventures is to become an official electricity retailer, and deal directly with customers.”

You may have noticed (above) that Tilson said, “Texas Energy Ventures.”

I’m not sure what that’s about, but this appears to have been a mistake, as he was clearly talking about Tesla Energy Ventures.

In any case, the gist of this part of Tilson’s prediction is that he believes that Musk’s big plan is to enter the electricity retailing business.

What company is he recommending?

Well, first and foremost, he’s not recommending Tesla stock…

“By now, you probably expect me to tell you to go out and buy shares of Tesla.

“But that’s not the case.

“Now, don’t get me wrong.

“I have nothing against Tesla or Musk.

“But here’s the thing.

“Tesla is already a $950 billion company. Even if SWaB adds hundreds of billions of dollars to Tesla’s bottom line, the upside potential just isn’t big enough to change your life.

“On the other hand, history has shown that if you’re looking to maximize opportunities like this…

“The real money is in finding smaller companies that will take advantage of these massive disruptions.”

Instead of Tesla, Tilson is recommending a “little-known Canadian company” that mines “Gold 2.0,” which he describes as “one of the most important minerals in the world of technology and energy.”

What “Gold 2.0” Stock Is Tilson Teasing?

Based on the hints Whitney Tilson shared in the presentation, the mysterious “Gold 2.0” he’s referring to is, in reality, copper.

Here are some of the hints he dropped that led me to that conclusion:

“Just as computer need chips and chips need silicon…

“SWaB relies on one key mineral.

“The average wind turbine in the U.S., which generates around 3 megawatts of energy, requires 4.7 tons of this mineral.

“To generate the same 3 megawatts of energy, solar panels require 15.5 tons of the mineral.

“Together, electricity generated with SWaB requires 6 times more of this key mineral than your current electricity.”

[…]

“Goldman Sachs urges, ‘Don’t stop buying now.'”

[…]

“That’s why many in the media – including Forbes and the Financial Post – are referring to this mineral as the ‘new gold.’

“But because this is going to be one of the most important minerals in the world of technology and energy… I prefer to call it ‘Gold 2.0.'”

When you look into each of the above clues, and others he shared about “Gold 2.0,” I think it’s very clear that he is referring to copper.

For example:

• According to copper.org, a “three-megawatt wind turbine can contain up to 4.7 tons of copper.”
• Wikipedia states that a “photovoltaic solar power plant contains approximately 5.5 tons of copper per megawatt of power generation.” This is a little more than Tilson said, but it’s close enough to know it’s a match.
• And based on a May 2021 Sydney Morning Herald article, the Goldman Sachs quote above about “don’t stop buying now” was referring to copper.

I could go on, but you get the point…

When Tilson says “Gold 2.0,” he’s (actually) referring to copper.

Mystery solved.

And as for why he’s bullish on copper, the gist of it (from what I can tell) is that he believes demand for copper will outpace the supply in the future.

“When demand slightly exceeded supply back in 2005, you’ve seen how you could’ve made 30 times your money…

“Imagine what kinds of gains you’ll see with the massive supply-demand imbalance that’s coming.

“The world will need 10 million more tons of ‘Gold 2.0’ to meet demand.”

It’s not just Tilson predicting this type of scenario, either.

I recently watched a presentation, which was very similar to this one on YouTube, from Associate Professor Simon Michaux. And his research suggests (skip to 41:15 in the above video) that the global push toward renewable energy could lead to a (potentially massive) shortage of copper in the future.

Not to mention, there are numerous articles online, like this one from Bloomberg, that suggest there could be a shortage of copper on the horizon.

To be clear, I am NOT suggesting that Whitney Tilson’s prediction is going to happen. I have no idea if it will or won’t. Nor am I suggesting that the company Tilson’s recommending (whatever it is) will help you make money.

Not at all.

I just thought you might find the above resources interesting (as I did) if you want to further your research, which I always recommend doing. And in this case, what I’ve learned seems to (very generally) support part of what Tilson’s predicting.

Anyway, what clues did Tilson share about the company he’s teasing?

Not much, really.

But it was enough to narrow it down to one potential company.

In short, Tilson said that he’s tracking a Canadian company that mines “Gold 2.0” (copper), that its revenue is growing, and that it’s a “market leader.”

He also said that it’s “committed to mining in an efficient and environmentally sustainable manner,” which the presentation suggests could be (at least partly) why Elon Musk and other companies “turn to” it in the future.

Here are some of the main clues from the presentation:

“And while I know Bill Gates and Jeff Bezos are investing heavily to find better alternatives to mine more of this mineral…

“One little-known Canadian company has been quietly buying out strategic land in different continents. It’s perfectly positioned RIGHT NOW to take advantage.

“The company’s revenue is soaring,

“They are on track to increase output by 102% by 2023,

“They have an elite management team,

“They have one of the industry’s lowest costs to produce ‘Gold 2.0,’ and

“They are a market leader.

“Most importantly…

“This Little Company Has What Tesla Needs

“This company is committed to mining in an efficient and environmentally sustainable manner.

“Last year, when there was a short supply of a critical mineral required for batteries, Musk promised a ‘giant contract for a long period of time’ to any company able to mine in an efficient and environmentally sustainable manner.

“So, guess where Musk and all the other companies that rely on SWaB will turn to when the demand exceeds supply?”

What could it be?

I think Tilson’s pick might be Teck Resources Limited (TECK).

I want to stress that (while I can never be 100% certain about these things) this is not one of my highest conviction guesses, as the clues were pretty vague.

But it’s a possible match.

Why?

Well, for starters, Teck Resources describes itself as “one of Canada’s leading mining companies,” which lines up with what Tilson said. And copper is one of the company’s core areas of focus.

Second, another thing that stood out to me as I was browsing the company website and its October 2022 investor presentation is that it appears to be very focused on sustainability, which would seem to match another Tilson clue.

Third, Tilson said that the company he’s teasing “has been quietly buying out strategic land in different continents.” And while it’s unclear exactly what acquisitions he’s referring to, Teck Resources has operations all over the world.

Fourth, the presentation is dated September 2022, and Yahoo Finance currently shows that the company’s Q4 2021, Q1 2022, and Q2 2022 revenue have increased.

I don’t know what Tilson’s definition of “soaring” revenue is, and the company’s most recent quarter (Q3 2022) shows that its revenue decreased from the previous quarter, but at the time the presentation was made, this clue seems to match.

Lastly, I wasn’t able to verify Tilson’s clue about the company increasing output “by 102% by 2023,” but this Seeking Alpha article states that Teck Resources plans to “double copper production by 2023,” which is very close.

Again, I am not 100% sure about this one. But my research suggests that Tilson’s “Gold 2.0” (aka SWaB) stock pick could be Teck Resources.

The only way to know for sure would be to join his Empire Stock Investor service for $49 and see the report called “Gold 2.0: Tap Into the Most Lucrative Vein of the SWaB Revolution.” Because that’s where Tilson reveals all the details.

Should you join?

I’m not a member of that service, but I may join and review it in the future, and I have looked into numerous Whitney Tilson presentations.

Most recently, I looked into his LNG stock pick, and he shared more specific hints about that one, such that I’m pretty confident I was able to figure it out.

And before that, I looked into his “$4 inflation stock,” which he also teased toward the end of the presentation we discussed in this post.

So you might find those useful if you want to know what other companies he’s teased.

Either way, my suggestion would be not to join any service or invest in any company expecting to get rich overnight.

Nobody, no matter how good their track record, can predict the future. So it’s always possible you could lose money following their recommendations.

Bottom Line

Whitney Tilson’s “SWaB” presentation is all about the rise of solar, wind, and battery technology as a means to power the world.

And Tilson is predicting that we could see demand for “Gold 2.0,” which is copper, outpace supply as SWaB technology adoption increases, as a lot of copper is used to develop solar and wind projects.

I have no idea if his prediction will play out or not, and if so, when. Nor do I know what companies would be best to speculate on.

But it goes without saying that copper is vital to the global economy. And based on everything I’ve seen, a supply crunch is not out of the question, especially if the world continues moving toward using renewables.

So at the very least, it will be interesting to see how it all unfolds.

Anyway, that’s my take.

Let me know what you think about all of this in the comments below.

Thanks for stopping by.