Image Source: Tripadvisor
 

On March 15, 1667, Louis XIV made Gabriel Nicolas de la Reynie the Lieutenant General of Police, entrusting him with the task of making Paris more safe. In addition to quadrupling the number of policemen in the city, one of the measures was to install more lighting. Lanterns were placed on almost every main street and residents were asked to light their windows with candles and oil lamps. The idea was to prevent lawbreakers from dodging the police or hiding in dark alleys, therefore reducing the crime rate. From here on, the city gained the nickname La Ville-Lumière (‘The City of Light’). 

At the time, Paris was one of the first European cities to adopt street lighting, but the nickname really gained the most traction during the Age of Enlightenment that followed. 

Whilst some historians date the Age of Enlightenment between 1715 (the year that Louis XIV died) and 1789 (the beginning of the French Revolution), others say the movement was already present in Paris from the 1620s with the start of the scientific revolution. 

From the late 18th century to the 19th century, the city of Paris became increasingly known as a center of education and ideas throughout the whole of Europe, inspiring poets, philosophers, engineers, and scientists galore. As well as the gradual increase in wattage, this context of innovation and enlightenment is what helped reinforce the symbolic significance of Paris as ‘The City of Light’.  I found that piece of history on Culture Trip and have seen much myself on trips there but it did not become - until now - the capital of Europe that Napoleon Bonaparte envisaged:  After he crowned himself Emperor on December 2, 1804, Napoleon began a series of projects to make Paris into an imperial capital to rival ancient Rome. He failed. 

Successors such as Charles de Gaulle - President of France from 1959 to 1969 - tried to but failed.  German reunification in 1990 suggested that Berlin would become Europe's capital but Germany is now in a state of decline. Britain dreamed of London becoming the capital of a new world empire after leaving the EU.  I wrote about that 5 years ago in Britain - Lost en route to Empire 2 and today it has sunk beneath the global waves it once ruled. 

So, in many ways, Paris is achieving a centuries-old ambition almost by default. I am no historian so have my own idea of the turning point catalyst and I call that point The MINI Revolution. Until around 20 years ago virtually the only cars on the streets of Paris were French cars. Thereafter the smart people of Paris took to the streets in German owned British made MINI cars!  No one had their head chopped off as in the 1789 revolution - unless the CEO's of French car manufacturers got the chop -  but during the time since then French politicians started to take a back seat in important French companies they had constantly interfered in. That led to large corporate restructurings including the break up of some huge conglomerates into more effective, specialized companies. I would not invest in French companies due to that political involvement but now am deeply involved with some who have become outstanding world leaders,  one of which I shall say more of later.  

More success in France will come from huge investments being made around the country today including R&D in new energy concepts. In Paris, there is micro nuclear reactor company NAAREA 

In southern France, 35 nations are collaborating to build the world's largest tokamak, a magnetic fusion device that has been designed to prove the feasibility of fusion as a large-scale and carbon-free source of energy based on the same principle that powers our Sun and stars.  ITER ("The Way" in Latin) is one of the most ambitious energy projects in the world today.  Fusion will make most of today's electricity generating technologies obsolete by 2050, perhaps earlier. 

Hydrogen is another fast-growing source of clean energy and in southeastern France, Europe gets its largest hydrogen fuel cells gigafactory to date. 

I featured French company, Air Liquide (symbol AI:PAR on the Paris exchange) - a world leader in hydrogen technology - in my recent article titled Where to invest in the EU/Eurozone mess. 

Since all roads in France lead to Paris let's take a trip back there on board a clean hydrogen powered truck...

Photo: hydrogenfuelnews
 

Paris, the city of the future 

I borrowed that heading from a recent article in the FT Weekend Magazine. In that article are the many positive happenings in Paris today many of which are the result of huge investments being made in preparation for the Olympics that will be held there in 2024. Some other things were caused unintentionally by that traditional rival to France, Britain, that has lost its way in the world. 

That article mentions one example, quote: Parisian investment banks are swelling with post-Brexit refugees from London. Valérie Pécresse, the Paris region’s president, boasts: “For the first time, the region is number one in Europe, ahead of London, in new foreign investment . . . The Paris region is number one in the world for R&D investments.” End quote. 

France already has one of the most extensive high speed rail networks in the world and Europe's largest transport project - 68 new metro stations being built in the suburbs - is well underway with several of those expected to be finished in time for the Olympics. That is part of an urban renaissance that is helping even the poorest part of France; the Seine-Saint-Denis part of Paris.  Good transportation systems also aid productivity growth, something that is in decline in many Western countries due to lack of such investment.  

Many cities in the world also face a housing crisis due to a lack of buildings to meet needs but Paris is building many homes, including thousands above and around each new metro station. Then there’s the Olympic Village, several blocks of airy apartment buildings by the river in Seine-Saint-Denis - thus helping that poor district post-Olympics. They will be enhanced with many trees and plants that are lovely visually and are good for the environment. Post-Olympics, the buildings will become social and market-priced housing, offices, shops, and cafés. 

All that means the Paris economy is booming even if the overall country is in - or nearly in - recession. Paris regional unemployment is at its lowest level since the financial crisis of 2008. That success will spread outwards to other parts of the country- 

It also means plenty of work for one of the investments on the Paris stock exchange...
 

Schneider Electric 

Schneider Electric (SBGSF) or SU:PAR on the Paris exchange, where I own it, was founded during another revolution - the first Industrial Revolution - by two brothers of that name, in 1838. I shall use SU in the rest of this article for brevities sake. 

Now over 180 years later it is number one in the world in what it does spanning virtually all electrical control needs from the power transmission source to the end use and that span is also global. SU has 135,000 employees and is active on all continents in multiple sectors leading the digitisation of the electrical world covering all from smart grids and smart cities to individual homes and on to a cleaner environment for all.

Today what SU does is needed more than ever due both to growth in demand for electricity and neglect of existing systems.

It is not only Paris - the City of Light that needs to keep the lights on -  as Fatih Birol, the executive director of the International Energy Agency (IEA), has warned that the equivalent of the entire global electricity grid (80m km of grid) needs to be added or refurbished by 2040 to hit climate targets and ensure reliable power supplies. Global investment in energy grids needs to double to more than $600bn a year by 2030 to hit national climate targets after “over a decade of stagnation at the global level”, the IEA said.

In the US over $500 billion is needed to upgrade electricity networks of which $400 billion is already funded meaning immediate and ongoing business for SU. In addition to government-funded items, huge investments are being made by companies in the US that provide big opportunities for SU...

America is enjoying an economic transformation - a new Industrial Revolution. 

An excellent article in the Financial Times tells more; the US economy is on the brink of a new growth cycle It mentions the nearly $3 trillion in federal funding devoted to productive investment that has yet to be spent.  In addition, private sector investment is soaring with Intel being quoted as one example - it will invest up to $100 billion in building its new semiconductor manufacturing hub in Ohio, in part due to federal tax credits aimed at incentivizing such projects.

Many more have been announced over the past four years encouraged in part by those things plus the political push to bring back production to the US, dubbed re-shoring. They include...

- Micron (MU) will invest up to $100B in a massive New York chipmaking plant

- Samsung (OTCPK: SSNLF) is currently building an advanced chip-making plant in Taylor, Texas that will be open in 2024. The company has reportedly been considering sites for as many as 11 different factories in Texas in an investment that could be worth as much as $200B.

- John Deere (DE) is investing $29.8m to shift production from China to Louisiana.

Every major car maker is spending billions in the US to build EV factories.

- Samsung is building a $2.5 billion EV battery factory in Indiana.

- General Motors (GM) is spending $7bn to convert an existing factory to make EVs.

- Ford (F) has begun construction of a $5.6B EV-focused facility in Haywood County, Tennessee. Another similar-sized one is being built in Kentucky.

- Hyundai (OTCPK: HYMLF) will break ground in Georgia later this month on its first EV dedicated US plant worth $5.5bn.

- BMW (OTCPK: BMWYY) is making a $1.7B investment for electric vehicle production in South Carolina. BMW Group Chairman Oliver Zipse called the South Caroline EV commitment the biggest single investment the German car maker has made.

- Volkswagen (OTCPK: VWAGY) is spending $7.1B to boost EV production in the US.

- Stellantis (STLA) and Samsung (OTCPK: SSNLF) have a JV to build a $2.5 billion battery factory in Indiana.

- Quanta Services (PWR) and Hitachi will build the largest U.S. clean energy infrastructure project according to this report.  

- Businesswire reported that First Solar is to Invest up to $1.1 Billion in a fifth US Manufacturing Facility

- Air Products (APD) will boost manufacturing capacity by nearly 20% with an investment in Florida 

- Putin’s barbarous invasion of Ukraine has added enormous impetus to US LNG export facility building: Sempra Energy’s Port Arthur project has reached a “final investment decision”. That project alone is expected to cost $13 billion. Cheniere (LNG) went forward with its Corpus Christi expansion recently and Venture Global is going ahead with its Louisiana Plaquemines facility.  Others are in the pipeline. 

- Cummins Inc. has announced plans to invest over $1 billion in its US engine manufacturing network for a transition into hydrogen-fueled engines. 

There are many more and probably add up to trillions in total. 

I put much emphasis on the US because it is once again leading the world and much of the rest of the West needs to invest hugely also after years of failing to do so. 

Those and other happenings have been feeding nicely into SU’s results for several years already.  

Source: Financial Times 

The lost COVID year of 2020 shows how resilient SU is. 

H1 results to June 30, 2023, show more of the same sound, profitable growth including good cash flow and safe levels of debt...

Total debt/total equity: 0.6343

Total debt/total capital: 0.3821

The dividend of 1.75% is safe and grows annually. 

In short...
 

Schneider Electric can light up your portfolio 

It has for mine and other investors. According to Morningstar SU was number ten in its list of European top performers this year. Up 37%. 

 

That chart shows the past five years' performance. I see no reason why that should not be repeated in the next five years and see no risks apart from unthinkable new wars that would do harm to all. 

I wish all a very good Christmas and a peaceful, prosperous 2024.

Ideas from readers made in the Comments boxes below will be most welcome. We all learn by sharing knowledge.

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