Wow, we now talking recessions as well.
I'm sure many of you know that Oz hasn't had a recession in over 25 years, so we a probably well overdue. But the technical definition of a recession is - 2 consecutive quarters of negative growth (6 months), and that negative growth could be say 0.1% per quarter, but still considered a recession. While I prefer no recession, its not the end of the world and they are temporary, where things are re-set before they start to grow again.
If overseas interest rates rise quickly that would likely stall global growth and could lead to negative growth (a recession). However, this would be temporary, and central banks would move to lowering interest rates in order to stimulate growth. If you single out the US, their long term rates are about 2.8% (10 year bonds), whereas short term (cash) rates are around 2%, and I think the US fed would be hoping to get short term rates to arround 3% before they cease tightening, but that will depend on continued strength of the US economy. The missing piece of the puzzel globally atm is wages growth and without meaningful wages growth you wont see price growth (inflation), therefore less need to substantually raise interest rates.
Commodities prices are purely based on supply and demand fundamentals, and more specfically, the demand pull for lithium is strong, short, medium and long term. The dissconnect between li miner sp's and future demand fundamentals is baffling, so you have to acknowledge missinforamtion, shorting and manipulation is the main culprit atm, helped by those who capitulated and sold their shares, confused by said missinforamtion, downrampers (drop bears), etc.
Below is Joe Lowry and Simon Moores's take on Lithium land atm;
________________________________________________________________________
Thus far it seems the supply “tsunami” from new projects in Oz is more like a very gentle wave peacefully lapping against the China beach causing no disruption. On the other hand, low quality brine based carbonate from Qinghai operations that have recently increased production has pushed “spot” price in China down substantially stoking the fires of the “oversupply” camp and short sellers.
The contradiction is amazing – the long term market growth prospects have never looked better, yet “short interest” in lithium stocks is probably never been higher.
"Don't think that bank research and lithium stock prices are 'the story' of the lithium industry. Usually it is just the opposite of what is really happening".
________________________________________________________________________
My take on Joe and Simmon's comments is its a screaming buy opportunity, but remember this is a growth sector, thus there will be a few bumps along the way as the whole supply chain matures and the thematic takes hold. The long term trajectory and trend is our friend IMO.
Also, said missinformation has been a blessing for current and near term producers. Until the sentiment turns, finance for less adavanced miners has dried up, thus 10 to 12 producers globally will reap the rewards and dominate the sector for years to come.
I would encourage those who are holding multiple Li stocks at varying development phases to consider which stocks are positioned to take advantage of the wall of demand that is coming over the next 5 years, and place your bets there. As I have posted before, there are 2 types of Li stocks atm, the funded or the dead.
And would also encourage those who a responding / buying in to the downrampers BS posts on here to take a deep breath and activate your ignore button. I view these downrampers as being somewhat special types, possible diagnosis, uneven levels of cromosomes, but in the end, they either want your shares or want to see the company fail.
Expand
(20min delay)