I stood 726 feet above ground, as the mighty Colorado River roared below me.
Red mountain peaks towered in front of me, as far as I could see… And for a moment, I was speechless.
Nomi visits the iconic Hoover Dam
If you’ve ever been to the Hoover Dam, you might know the feeling.
I’ve traveled all over the world, from Brazil to Thailand. I’ve seen hundreds of historic landmarks – from the Great Wall of China to the Sydney Harbor Bridge in Australia.
And the Hoover Dam still blew me away.
But as I’ll show you below, there’s more to this American icon than meets the eye. And it holds moneymaking clues today.
Where Public Money Goes, Private Money Follows
The Hoover Dam was a feat of bipartisan support and private companies’ efforts. It stemmed from President Herbert Hoover’s decades-long push to rein in the power of the Colorado River.
A government agency called the Reconstruction Finance Corporation (RFC) financed the project. Funding was just shy of $49 million (about $903 million in today’s dollars).
Yet, the government didn’t set up the RFC with the dam in mind. It was a finance vehicle designed to help Wall Street weather the Great Depression.
But because of one of five key RFC provisions, funding for the Hoover Dam became a reality.
Under Provision Four, private companies could help the government with public infrastructure projects. That included “bridges, tunnels, docks, waterworks, canals, and markets devoted to public use.”
The Hoover Dam ticked that box.
Now, the government provided the initial funding for the project. But that doesn’t mean the government built the dam.
First off, companies had to put their own skin in the game.
If a company wanted to even bid on the mega-project, it had to cough up $2 million. Then it had to shell out another $5 million to back a performance-related bond. This was to guarantee it would keep to the job, no matter how difficult it became.
At the time, the nation was stuck in the Great Depression. So the idea of paying up for a juicy government contract was enticing.
That was especially true in the construction industry. There, the Great Depression was eating into jobs and forward-looking business strategies.
But the dam was too expensive and complex of a project. No single company could pony up that much money for the contract… or to guarantee the project’s completion.
So, in the end, the contract didn’t go to just one firm. Instead, on February 19, 1931, a group of companies formed a coalition.
The Six Companies That Built the Dam
The Six Companies, as they were called, won the $49 million contract.
At the time, it was the largest contract of its kind. And the largest public-private partnership in the history of the United States up to that point.
The winners were all relatively small or family-owned companies. But one name in particular stands out: the Bechtel Corporation.
You might recognize the Bechtel name as a multinational mega-company. But it wasn’t anywhere near that back then.
Until the Hoover Dam project came along, Bechtel was a tiny family road construction company founded in 1898.
But it seized the challenge of the Hoover Dam project. And – together with Henry J. Kaiser Co. of California – Bechtel put $1.5 million into the dam.
The Bechtel family grew into a global construction, energy, and technology company on the wings of that project.
Today, Bechtel is the second-biggest construction company in the United States. And it’s one of America’s largest private companies, with a $40 billion market cap.
It was in the right place at the right time.
What This Means for Your Money Today
Now, I’m not suggesting that you buy Bechtel. After all, it’s a private company. So even if we wanted to, it’d be nearly impossible.
Instead, I’m telling you this because we’re at another crossroads for our nation’s infrastructure.
In the 1930s, the Hoover Dam gave small companies the chance to grow bigger.
And right now, legislation coming out of Washington is creating a similar opportunity in the energy markets.
The nuclear energy revival I’ve been writing about is about to go into overdrive…
I got a recent glimpse of that on Capitol Hill, where I had dozens of meetings with Congressional leaders and staff in the energy space.
When I was there, 17 energy bills sailed through markup in a single meeting. Ten of them were nuclear energy-related bills.
That kind of volume and speed is not normal in Washington!
A staffer contact of mine from Delaware later confirmed this was the most bills with the quickest process he’d ever seen.
But these bills aren’t fully baked into the cake yet. They’re due to start getting funding early this year.
That means we’re about to see a lot more policies directed at supporting nuclear energy and technology and domestic uranium and nuclear fuel supplies.
And if you’re a regular reader, you know that it pays to follow Washington’s money trail.
A simple way you can position yourself to take advantage is through the Global X Uranium ETF (URA). It’s a fund that provides access to companies involved in uranium mining and nuclear technologies.
It holds 46 companies, including Cameco, the Sprott Physical Uranium Trust Fund, and NexGen Energy. And it’s a great place to start your search.
Regards,
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Nomi Prins
Editor, Inside Wall Street with Nomi Prins