Brad’s Note: Today, I’m passing the reins over to one of my analysts, Justin Law.
Justin has a Ph.D. in Chemistry and has worked in nanomaterials, metal organic compounds, and cancer research. He is also an avid dividend investor and manages a database of all the companies with the longest dividend growth streaks.
Justin has been with Wide Moat Research from the beginning and has been working behind the scenes to help produce the articles you read here every week at Intelligent Income Daily.
So, though you may not recognize his name, you’ve been reading a lot of his research.
Today, Justin shares his take on an exciting piece of news from the world of science, including one stock he thinks has the potential to help you get in on the ground floor of bleeding-edge technology…
By Justin Law, Analyst, Intelligent Income Daily
“LK-99” could change the world. If it’s real…
A couple weeks ago, scientists in South Korea stunned the world. They claimed to have created a material – “LK-99” – that is a room-temperature superconductor.
Regular conductors like copper are good at moving electricity around. But they always have a bit of resistance that causes some of the electricity to be lost. Up to 10% of the electricity coming to your home is wasted as it travels through transmission lines.
A superconductor can move electricity with zero resistance. That means if we replace the copper wiring in our power grid with a superconductor material, we’d save a lot of energy.
Superconductors also have powerful magnetic properties. They’re used in MRI scanners and magnetic levitation trains. And they’re essential parts of future technology like quantum computers and nuclear fusion.
But the superconductor materials we have today come with big drawbacks. They only work at very low temperatures (below -450°F) or extremely high pressures (more than 100,000x atmospheric pressure).
That’s why a superconductor that works at room temperature is one of the holy grails that material scientists have been chasing for decades.
And now, it might be real.
The news of this miracle material caused speculators to pile into stocks related to superconductors such as American Superconductor Corporation (AMSC). Its shares more than doubled in a week.
But don’t jump on the bandwagon just yet.
Today I want to explain what we know about LK-99 so far and why it will be a long time before anybody makes money off this discovery.
What We Know About LK-99
The scientists that created LK-99 claimed that they made it by baking common chemicals containing copper, lead, and phosphates in an oven.
It seems to be a simple procedure that just about anybody can do at home with the right tools and ingredients.
So a lot of people tried it. Many failed to produce the same results.
Some videos on social media claim to show a piece of the material floating over a magnet. But so far, nobody has been able to definitively prove that it has superconducting properties.
One scientist at Lawrence Berkeley National Lab used computer simulations to analyze a potential crystal structure of the material. They concluded that it had interesting electronic properties that are similar to other known superconductors.
But most scientists are still skeptical. After all, claims of room temperature superconductors have come up before. But they never panned out.
Even if LK-99 is everything it’s claimed to be, it will be a long time before anybody profits from it.
It will take a lot of money and years of research to develop this material into a profitable business.
History shows that it can take more than a decade for a new material to become a commercial success.
For example, PVC is a plastic that is now commonly used for plumbing. It was first produced in 1952. But it took 15 years for it to become widely used.
That’s why a tiny company like American Superconductor Corporation is unlikely to be a long-term winner due to the discovery of LK-99. It doesn’t have the money or expertise to develop a new superconductor material by itself.
The only reason its stock gained in price is because speculators saw that it had “superconductor” in its name. The same cycle of greed and speculation created the “.com” boom and bust as well as the “blockchain” frenzy.
Instead, a true superconductor breakthrough is more likely to come from a company like IBM.
If It’s Real, Here’s How You Can Profit
Most people think IBM is a tech dinosaur.
But in fact, IBM is one of the most prolific research companies on the planet. It is consistently one of the top producers of patents every year.
IBM has an artificial intelligence program that can predict the outcomes of reactions and plan how to create a specific chemical. That’s a huge advantage that could help it figure out LK-99 and similar – possibly better – materials.
Plus, IBM is one of the leading companies developing quantum computers. These computers rely on superconducting “qubits” to perform complex calculations. Materials like LK-99 could produce qubits that are cheaper and more stable.
That could lead to an exponential increase in quantum computing power.
Even if LK-99 turns out to be a dud, IBM is a profitable business with a long history of rewarding shareholders. It has increased its dividend 28 years in a row and currently yields 4.6%.
So investors are being paid well while they wait to see if this cutting-edge research can change the world.
Exciting advances in technology and science are being made every day.
But don’t gamble your money on rumors. If LK-99 is real, IBM is the way to profit from it over the long term.
Always invest in high quality, tried and true companies that give you a growing income.
Happy investing,
Justin Law
Analyst, Intelligent Income Daily
P.S. Just like IBM is the best way to profit from the LK-99 breakthrough, there is another company that in real time – not 10 to 15 years down the road – will allow you to profit from the success of Amazon and the recent dynamite breakthroughs in the AI space.
This play owns the necessary components that both Amazon and AI desperately need to function. Brad Thomas calls it “Amazon’s Secret Royalty Program.” Click here to check it out.