Ann: Mt Cattlin Shipping Update, page-75

Why buy or hold?

Galaxy resources is in the market for Lithium, which still has a huge potential to grow due to it's usefulness in making batteries. This is especially true as the world is increasingly becoming swamped with different types of technology (the most obvious for lithium is the demand for electric cars):

- China has a strong desire to have cleaner air and is therefore a major buyer of lithium. It has a goal of increasing the amount of battery powered cars relative to petrol and will therefore continue to require more lithium (unless a company is able to replace lithium as a key ingredient in batteries). Electric cars will become even more important as a result of the removal of the one-child policy in child which will require more power (not only for cars but also for devices) and, of course, more electric cars to counter the increase in pollution as a result to the population increase.

- As energy prices continue to solar in Australia, many households will likely consider and eventually switch to solar power. In order to use the sun to provide them with consistent power, batteries are required and most attractive one on the market atm is the Telsa Powerwall, another product that depends highly on lithium. Yes making the switch is extremely costly at the start, but I'm expecting to see the government step in and provide more incentives to Australian families to make the switch and remove this agenda off their plate.

- The recent consolidation of 5 shares into 1 has a likely effect of increasing the possible demand for GXY (an increase in demand, relative to supply, means an increase in price). Many funds are limited to buying stocks that have a price over $1, and therefore was unable to buy GXY. Now that the price is over $1, the demand for this stock may increase after analysts do their thorough research and consideration for this stock.

- Finally, those short-sellers will have to rebuy those stocks that they sold and as long as the current holders have sense and faith, the price will only increase if the current investors decline to sell at the current price.

The verdict: Do not get scared by those shortsellers who are driving down the Galaxy price. Understand the actual value that is behind those shares and look long-term, and don't give them anything to buy when they need to reconcile their positions.

Goodluck!