Nov 172011
 
     A government decision has created an indirect benefit to investors. Canada has started to roll out the new plastic banknotes starting with the $100 bill.  I think these are much better than our old paper money because they’re more durable,  harder to counterfeit, waterproof, recyclable, and they look amazing. I guess this gives a new meaning to the term “paying with plastic.” ( ゚∀゚)

The Australians invented these polymer banknotes and many countries around the world  have been using this technology for years. Now it’s our turn. These notes will be printed on a polymer substrate manufactured by Securency International in Australia. Yes, unfortunately we have to import our own currency material. The actual printing of the banknotes, however, will still be in Canada of course.

 

But I think there’s an opportunity here for investors looking to cash in on this transition. The base material for these notes, biaxial-oriented polypropylene, is just a fancy term for durable plastic, and we all know plastic comes from hydro carbons made from oil and gas. So going long in energy companies will most certainly prove fruitful as more of these notes are printed in Canada, and are being adopted by other nations around the world. Large integrated names like Suncor Energy, and Exxon Mobil, produce both oil and natural gas. Pipelines like TransCanada Corp, and Enbridge Inc, are also great ways to ride the energy wave.

10 year Investment Returns
Average Stock Market (S&P; 500) = 13%
Suncor:                                          =206%
Exxon:                                           = 99%
TransCanada:                                =102%
Enbridge:                                       =220%

This isn’t a coincidence. Smart investors have been invested in energy/pipeline companies for decades. Natural resources are a necessity in modern society and the demand will only go up in the decades to come. Invest early and get time on your side.

Disclaimer: I own shares of Suncor and Enbridge, and plan to buy TransCanada soon.