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Thanks Joe! Excellent overview video on Rare Earth’s, and there accompanying Stocks. So glad I became a premium subscriber, and can’t wait for an in-depth analysis of MP materials!
Joe, last night I was thinking about this topic after watching a documentary on how Australia is trying to challenge China in this sector. I will heavily buy MP Materials under $20 ,and I already have a decent position in LYSCF. I do own some Canadian stocks in this industry, but nothing significant. Great video as usual!
Really glad you enjoyed this video. I like how we're able to put out content across a wide variety of themes on this channel, while our written research can stay focus on our core offering - disruptive technology research. I decided to cover this, not just because a Premium subscriber requested it, but because it's an interesting story. I would expect a closer look at MP Materials would also be interesting, so I'll add this to the queue. Joe P.
@@Nanalyze This sector is a as important than the disruptive companies, and LYSCF is well-positioned with its partnership with MP Materials. US and the NATO allies will rely on these companies to reduce their dependency toward China, but it will be a long journey. You should look at some Canadian stocks as well for this industry.
Great video! I think in an economic sense we refer to commodities as a raw material that share some characteristics with a perfectly competitive market. One of the characteristics being the inability to differentiate an individual product. For example, wine wouldn't be the commodity, but the grape would be. Wine can be differentiated through branding, ingredients, aging etc, and this allows for some pricing power for individual firms. While commodities sell for a global price. The rare earth example, would be any mineral as long as it is the same grade is indistinguishable from another. It's impossible to tell where it came from, there is no branding. Just like in a perfectly competitive market the producer then doesn't control the price as long as there is a sufficient amount of competitors, and mining there usually is since the minerals are geographically spread out, a past exception being diamonds with DeBeers as they could control the price of rough diamonds through manipulating supply. So I think some of these finished products aren't really traded as commodities as they can be differentiated, and the producer has pricing power. I think the reason why almost all junior miners are garbage is the significant barriers to entry due to the high start up/fixed costs associated with mining. The timeline for opening a mine, can be as long as 5-7 years. That is 5-7 years without any meaningful revenues usually results in high levels of debt. The new junior miner doesn't benefit from scale so they are usually less efficient in both production, shipping etc which results in lower profitability than their bigger peers. It's the reason you. don't see many junior miners grow up into one of the big boys. I personally like investing in big miners that have access to minerals with a limited supply where demand is expected to increase. The volatility that you mention can often provide attractive entry points into the underlying business, and some mining companies are fantastic businesses.
This was an excellent description of what makes up a commodity. Thank you for taking the time to make that clear. Also appreciate the color on junior miners. You're absolutely right.
How about companies like Albemarle (looking for pick and shovel style lithium exposure)? Government backing, exposure to international markets, growing demand and now expanded mining operations to two countries!
Yep, we've covered lithium before and may consider a video on this since it's been a while since we checked in with the thesis. www.nanalyze.com/2020/10/investing-in-lithium/
We really appreciate hearing Premium subscribers recommend our service to others. Many people gift Nanalyze subscriptions to their kids or other family members they want to help become better investors. (We have gifting functionality, but are working on improving it right now for the new site.) The best form of marketing is always word of mouth. Thank you so much for the support!
It would be nice to do a deep dive on MP Materials who is about to open a major processing plant in addition to its mining operation and will likely benefit from US incentives to build this infrastructure
Early metrics and feedback point to this video being a popular topic which may merit a follow up. If just a few more people like this video and share it with their friends, we'll look at doing a deep dive on MP Materials ;)
Our favorite people :) You probably saw our last piece on LCID (ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-nu2ZdwKYjvg.html) and we may do another early next year. That usually gives enough time for things to unfold so we're not checking in too often (too much noise). EQNR is a tricky one - not quite growth, not quite value. It's a tough one to analyze because large and complex. Not sure if it would fall into our tech strat or DGI strat. Interest is noted though. Thank you very much for your financial support and for reaching out! :)
We don't like it when people use the phrase "lots of speculative gains" because that's not what we do here. We're investors, not speculator. We teach people how to accumulate wealth and the process isn't easy or quick. ;)
What do you think about lithium America corporation or LAC? They are pretty deep into lawsuits to get into the thacker pass mine in Nevada but some big developments have been made the last few years and it will be interesting to see how that all plays out in my opinion as unfortunate as it may be for the native Americans who can call that area home.
Lynas is tradeable under LYSCF and LYSDY. Didn't know if BHP met your thesis for this sector too. I've dipped my toe in Freeport but not much else so far.
Hello Thank you for the great videos What are your thoughts about General metal miners like Rio tinto Australia ?. Do you think that metal miners are a good investment ?. I read a news saying that they bought several lithium mines. I am scared of buying lithium dependent companies like Albemarle because of new tech. Battery companies in China and Japan and Germany are searching for a new material to build EV car batteries and even Toyota said that their EV cars in 2030 will not use lithium batteries and that they will have 900 mile range ( Tesla has 400 mile range ). The biggest battery maker in china announced that they made the first non-lithium EV battery with the same storage and half the price of lithium batteries. EVs are a new technology, and lithium might get replaced as soon as they find a better replacement, lithium miners depend so much on EV battery revenues, and i conceder that as too much risk for any investment. Thank you so much.
You're asking a lot of complicated questions. Mining stocks aren't on our investing radar because none are dividend champions in our universe. We focus on disruptive tech and dividend champions. We believe mining has lots of external risks that can't be controlled and that the risk often outweighs the reward. But it's a theme that attracts lots of retail investors, perhaps because it's intuitive, or we all have a primal attraction to "mining resources." Lithium could very well be displaced or built around. The same holds true for rare earths (the Tesla example). You are quite welcome, and thank you for the comment and support!
We've touched on this before - both from a DGI and tech perspective. Here's a piece on one water firm: www.nanalyze.com/2019/10/smart-water-technology-xylem/ We may do a video on this in the future.
DSM deep sea mining will start soon all going well. Won’t tick you investment tick list but Canadian company TMC could be a gem of an investment if you check out the DD
On the tin, DSM doesn't sound economically viable. Do we not have enough available resources to mine on the earth's surface? Sounds very interesting, but we don't invest in any firm with a market cap less than $1 billion USD. We also won't be walking down the mining path much on this channel, just the occasional piece on resources in demand because of technological advancements. Note that there is no "gem of an investment," no matter what some pundit might be trying to cram down people's throats. They all have company-specific risk.
Loads of interest though which is why we covered it in the first place. Doesn't fit our overall investment strategy but each investor needs to act on their own convictions.
