The world has been waiting for this source of clean and limitless energy for over half a century.

It was invented by the Soviet Union, but there was no way to make it viable… until recently.

It’s called nuclear fusion.

A little reminder…

Fusion is a nuclear reaction. When fusion happens, two smaller atoms combine, or fuse, into a bigger one. This releases energy.

A normal nuclear reactor works in reverse. It takes a larger atom and splits it. The reaction is called fission. When it happens, a lot of energy is released, too.

The best part about fusion is that it produces no toxic waste.

The problem? You have to get some atoms pretty hot. To get to fusion, they need to get heated to over 100 million degrees Celsius.

Capitalism Saves a Soviet Invention

The Soviet Union collapsed decades ago, so any tech developed there is old.

Compare the latest iPhone to a mainframe computer. It takes way less space and is magnitudes faster.

The same goes for any tech developed decades ago.

Modern nuclear plants are safer than the one that caused the Chernobyl disaster.

Modern cars are both more powerful and more fuel-efficient…

The list goes on.

But to get there, you need funding, which often runs in the billions of dollars.

This is where the private market steps in… with venture capitalists betting on the best startups in the clean energy space.

From green hydrogen and ammonia to lithium, we are looking at many ways to get clean energy—and, potentially, trillions of dollars in market capitalization that will get the world to net zero carbon emissions or close.

Dozens of startups are emerging in the fusion area. Most of them are private, which makes it difficult for individual investors to get in.

(Here at the Financial Star, we are watching this megatrend closely. As opportunities emerge in this sector, we will keep an eye on them.)

It’s too early to say what tech exactly could revive the cold-era invention and make it efficient.

Right now, fusion uses more energy than it produces. Which means that it’s not viable as a technology. 

But a couple of breakthroughs have changed the situation.

This year, scientists in China managed to create an “artificial sun” with a temperature of over 120 million degrees Celsius and maintain that state for over 100 seconds.

It’s still not ready to become commercially viable, but think of it this way…

It took decades to launch the first satellite in space. And now we have thousands of them, with companies like SpaceX working to make sure that space launches are efficient and commercially successful.

The same thing is going on here. Fusion is a harder problem to solve, but we have more resources now, including financial ones, to make it happen.

We will not be surprised to see some early-stage companies going public in this space in the coming years.

What to Do until Then?

As investors, we should always be on the lookout for emerging trends. 

Clean energy and electrification are some of the biggest megatrends happening right now.

Whatever gets the world closer to net-zero emissions has access to both government and private funding.

Right now, we are observing some of the most exciting opportunities in the battery space, grid storage, and clean fuels.

This last one is transforming multi-trillion dollar industries already. The global transportation industry, for example, is switching from dirty diesel to hydrogen and ammonia… which are perfectly suited to power large and long-range vehicles like container ships.

Ammonia is another fuel that has massive potential, in our view, but gets overlooked by investors focused on a handful of popular stocks.

Best of all, these sectors have early-stage public companies trading on North American exchanges. Their shares are available to the general public.

Until nuclear fusion becomes a reality, companies working in the “usual” fission space might be interesting to consider as well. Nuclear power is one of the cleanest and cheapest. Not all investors and governments are willing to recognize it yet, but that’s exactly where the opportunity comes.

Any change in sentiment towards them could, in our view, provide a welcome boost to the whole clean energy sector.

The future is approaching fast. We hope you are ready to reap the benefits it will provide.

Thank you for your loyal readership,

The Financial Star team