Charlie used to say that the most expensive four words in investing are "this time it's different." Charlie was usually right. He was, I believe, wrong about one thing, and the report from RethinkX called Understanding Stellar Energy is the clearest statement I have read of why.

The thesis, in plain English, is this: solar generation, wind generation, and battery storage are not, as conventional utility analysts treat them, slightly cheaper substitutes for coal and gas. They are something different in kind. Their marginal cost of producing a kilowatt-hour, once the capital is in the ground, is essentially zero. And the capital cost of putting them in the ground has fallen, and continues to fall, at roughly the pace that semiconductors have fallen since the 1970s. That pace produces, at some point in the late 2020s or early 2030s, an electricity system in which energy is super-abundant rather than scarce.

I have spent sixty-five years valuing businesses on the assumption that energy is a cost line — sometimes a big one, sometimes a small one, but always a line. The RethinkX team, led by Tony Seba, makes the case that this assumption is on the way to becoming obsolete. Not because energy will become free. Money still has to be raised, plants still have to be built, transmission still has to be paid for. But the variable cost component, the part that flows through to every product and service in the economy, is heading toward zero.

If they are right — and I am not endorsing the timeline, I am taking the argument seriously — then a great many businesses we currently think of as well-moated will discover that their moats were really energy-cost moats. Heavy industry. Aluminium smelting. Desalination. Hydrogen. Vertical agriculture. Long-haul shipping. Each of these is currently priced on the assumption that energy is dear. Each of them looks rather different when energy is cheap.

There is a corollary that should interest any investor. The companies that win in a super-abundant energy regime are not necessarily the ones generating the energy. Power generation, in a world of zero marginal cost, becomes a low-return commodity business. The companies that win are the ones with the scale to use enormous quantities of cheap power profitably. That is a different list. It includes some names that look very expensive today on conventional metrics, and excludes some that look very cheap.

I am not telling anyone what to buy. I am telling you to read the RethinkX paper and ask yourself, slowly and carefully, which of the businesses in your portfolio assume that energy will stay where it is, and which ones become more valuable if it does not. That is a useful exercise. It is the same exercise we asked ourselves about transportation when the railroads gave way to trucks, and about communications when the telegraph gave way to the telephone. The companies that did the exercise honestly tended to do better than those that did not.

Whether Seba's timeline is right is a separate question. Whether the direction is right strikes me, after reading the report twice, as not in serious doubt. We are heading toward an economy in which energy is not the constraint it has been since James Watt's first engine. Some companies will benefit enormously. Others will quietly disappear from the indices.

Read it carefully. Look at your holdings. Be honest with yourself. Charlie would approve of the exercise, even if he might quibble with the conclusion.