Rebuilding America’s Backbone – The Next Capital Wave is in the Capitol’s Hands
An old adage tells us that “Cs get degrees.”
But middling marks like that will never put you on the honor roll.
And that’s America’s problem right now – as well as its challenge.
Every four years, starting in 1988, the United States has been graded on the state of its backbone – the roads, bridges, electrical grid, schools, railroads, airports and seaports, and drinking water and wastewater infrastructure systems that make it possible for the country to function.
America got a “C” on that first report card – and then watched as its grades plunged into the bordering-on-failure “D” territory in the years that followed.
In its latest report card, the American Society of Civil Engineers (ASCE) gave the country a grudging “C minus” – a slight improvement from the “D-plus” of 2017, but nothing that puts America on a path to an infrastructure Rhodes scholarship.
Even worse than the grades themselves is the cost-to-fix deficit, which has nearly quadrupled, from $1.3 trillion back in 2001 to $4.59 trillion today – an amount roughly equal to the economic output of Germany.
According to the ACSE, which looked at the 17 different infrastructural categories it grades, our fair nation scored that recent “C-minus” because our infrastructure hasn’t seen a significant upgrade since much of it was built during the presidency of Dwight D. Eisenhower.
Under President Eisenhower’s guidance, the interstate highway system blossomed from a mere 1,000 miles to 41,000 miles. Approximately 8,938 of those miles are roadways in poor condition. Then there are the bridges – 220,000 of which (6,000 miles) now need fixing.
All told, more than a third (36.4%) of what Eisenhower pushed to build has crumbled in the last 60 years.
America needs to do better.
But as you might know, every challenge is accompanied by an opportunity. And, for investors, the infrastructure opportunity is an especially big one.
In this two-part special report on the Biden administration’s $2.5 trillion infrastructure plan, we’re going to outline that opportunity.
And then we’re going to give you the one stock that will let you cash in on the “Rebuilding of America.”
The country’s highways/bridges/water/energy backbone may only be getting “C” grades. But we’ll deliver a “Grade A” wealth play …
There have been multiple attempts to do the work needed to raise up the infrastructure grade stemming from both sides of the political coin, but every policy in the last 20 years has either died on Capitol Hill or fell down the hill so full of pork projects that they became completely useless.
Like I said before, the U.S. is no star student. Every ASCE report since the late 1980s gives an average grade of a C- or less with minimal improvements over the years.
Now it’s Biden’s turn to take a swing at it. His plan is extensive and expensive, totaling around $2.5 trillion. Inevitably, this plan will wind up almost as useless as its forefathers, but, as heavily as that will weigh on your wallet as a taxpayer, there is more that you can do than just grin and bear it.
Week in and week out, what I look for are profit catalysts – triggers of major market shifts that could catapult certain stocks to the moon. And nothing reeks of a profit catalyst quite like $2.5 trillion on the table.
This latest presidential spending spree is going to make big waves in every industry any forthcoming bill touches. Breaking down the currently proposed bill, we see a whopping $621 billion is about to be funneled into transportation infrastructure. Investors are already responding to the profit potential this holds.
This infrastructure plan became more than a campaign promise at the end of March 2021, which triggered an upswing in almost all infrastructure ETFs. iShares U.S. Infrastructure ETF (IFRA), for example, has been on the up-and-up since March 23, rising over 10% since the announcement and it continues to be bullish.
But money isn’t just going to flow into construction, or ETFs for that matter. We’re going to see a domino effect, one profit catalyst bleeding into another as infrastructure across the country gets attention. $174 billion in the proposed infrastructure bill will flow into the electric vehicle (EV) industry, breathing life into the “EVolution,” as I call it, of an all-electric era by building charging stations as well as new vehicles.
EV-related stocks are already popping, I’ve had my eye trained on a few, including some good ones that have fallen back because investors got too ahead of themselves, but this push will now send them higher over the next several years.
But before that can happen, the basics need addressing. Step one is roads and highways. Cash will start flowing and we’ll be there every step of the way to snatch up the profit opportunities in front of us.
We’re at step one and I’ve got a stock for you tomorrow that will get us started down the highway to profits.