oeko report - smsl's latest claim, page-39

Agreed FF, do take a lot of solace from my weighting in Fins. & TEL.
FWIW, I was very concerned re Lynas second half last year, mainly conflicting data on RE as a whole and prices being the biggest drag on the SP, so decided to do the Roskill's RE conference in HK last Nov to try and get a deeper understanding. Got a little tired catching knives.
Best decision I've made for a while although NC's keynote was absolutely gut wrenching. Hard realities of ROW demand destruction, thru both the price bubble and the effectiveness of China sucking in OEM's, knocked the stuffing out of the room. Dudley Kingsnorth took several minutes to compose himself, particularly as the data in his next up presentation was palpably out of date.
NC's presentation is on the website and if you read the first half carefully you can get the tone, particularly against earlier presentations. It's a sharp turning point and a wakeup call.
Lots of other good data presented and much helped focus on Lynas's strengths and business plan, I sat there ticking them off one x one. Arrived a bit confused and down, got smacked by NC's keynote but left the conference totally calm and confident, but with an horizon pushed back 12 months. Managed to get Gareth Hatch (TMR & v nice guy) out to dinner the last night for 4 hrs on his very objective view of the RE industry (he's neither an investor, promoter, miner or end user) and where Lynas fits in. Pleased to say I taught him quite a bit re Lynas business plan & Duncan prospects.
Go read, or reread, his and particularly Jack Lifton's commentary for the past 3/4 years and if you digest it in conjunction with Lynas's Roskill preseantation I think you'll understand where the RE industry is right now.
Investment expectations have not deleveraged from the hype based on bubble prices created by the Chinese fallacy of "rare" earths. Best estimates, DoE CM report, is only projecting a real shortage of several hundred tons of Dy, Eu & Tb by 2015 and Duncan alone could make up nearly all but the Tb. And the report was written prior demand destruction & recent GDP slowdown, investors are trapped in la la land.
To Lynas's enormous credit, maybe some Rhodia "been there done that" counsel, they have stuck to their pre bubble business plan and resisted the Molymess "chase the rainbow" strategy - with the majority of foundation capital exiting at $50.
Lynas have leveraged the richest RE deposit, not just grade but suite (read JL), over low cost production into an attractive proposition as a reliable & direct alternate supply chain to China. You could write a book on the implications, no doubt someone will, but suffice to say it's exquisitely timed at a major inflection point.
Reality confronting investors is that it will take another 6/12 months for the RE bubble to fully deflate thru the market, not even half way there, and at the same time Lynas to prove up the basics and "emerge" with positive cash flow Feb 14, most likely as we start to see some price/demand appreciation thru CREO.
My original plan was to realise roughly half my investment after the FY14 report to partially fund a lifestyle plan but I've put that back 12 months and selling our Melb house instead. Meantime I've parked half a large for another "top up" on a breakdown under 55c (which I consider likely on macro sentiment, not necessarily Lynas performance) or a sustained break over 75c.

Point is I'm destressed re Lynas and ambivalent re ST price movements. Traded 60c to 258c for 6 figure return, bought back way too early, missed my stop loss @ 165c floating in a pool in Bali, then loaded 7 figures between 70c & 130c, hedged a little along the way but overall got pretty stressed. Totally understand where I went wrong and totally respect those that played the down trend, probably better than I played the up trend, but with some confidence in my understanding of the basic market I believe Lynas is brilliantly positioned to deliver some great returns over a 1/3+ time frame. Maybe even catch total returns on Fin. & TEL.
Write these occasionally for clarity of thought but most often delete, stick this one up for whatever it's worth.