Notes Worth Considering

     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.”

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.

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Simple Rich Living
Simple Rich Living
11/17/2011 6:57 pm

Hi, thank you for leaving a message on my blog. Great site you have here! I am a huge procrastinator so I figure joining the Yakezie Challenge will help me to be committed to both learning about investing and achieving financial freedom (and build a great blog)!

Liquid Independence
11/18/2011 9:08 am

Thanks. I'm also a big procrastinator, and can only get things done under pressure >

Financial Independence
11/20/2011 10:15 pm

The notes do look fantastic. Very bright idea.

As far as the ExxonMobil and the rest of the "multinational" oil companies:
– Main resource consumers (China / India) do not increase their shares in them but rather buying oil & gas directly.
– THe multinationals have very poor production / reserves rate, i.e. most of them will not last longer than 20 years at the current pace. Replenishment is less than 100% most of the years. So it is very risky investment…

Liquid Independence
11/21/2011 3:13 am

Good point Financial Independence. Reserve wells don't last forever so there are inherent risks in large energy companies. Best to have a diversified portfolio.