AGL has been the worst stock I’ve ever bought. Even as a value investor I’m struggling to tell myself to buy more. I think at some point this stock will emerge from the darkness, but I’m thinking it will be a few years until I see a return in my investment. this period is very nostalgic, reminds me when oil miners got rocked by fears oil demand would disappear when electric cars hit the markets 5 years ago. They came roaring back not long after when investors realised there’s still a few decades before they had to worry about that. I still believe utilities have 20+ years of profit and solid returns ahead. I don’t think Australia has a choice. $30k of solar and batteries will last 1-2 days (in overcast weather) before you are asking the grid for electricity. You have another bushfire season, you will be asking everyday. Without solid utilities industrials will vanish, our defence systems will become unreliable, people in apartments will eat dinner under candle light, our cold storage industry will be thawed, business would come to a grinding halt, and that’s just touching the surface. The government knows there’s problems with green energy, that is why they are winding up rebates to that sector. I believe feed in tariffs will disappear once the rebates stop. Energy prices will start to rise and then after 10 years the government will role out some new green energy plan, and repeat the process. The utility sector is probably unlikely to see new competitors enter, possible some will exit, but those that stay in it are likely to thrive, and do so for a long time. It might be another 12 months before the market realises this but I’m still confident in long term projections even if my opinion is contrary to everyone else’s. I see energy businesses diversifying, cutting costs and implementing cleaner energy alternatives themselves. once this cycle has done it’s thing, this should be good. So stuff it I’ll keep holding. May buy some more if she gets really chopped up. locking this away and I’ll reassess in 5 years
AGL Price at posting:
$8.39 Sentiment: Hold Disclosure: Held
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