re: news - my take on what was said, page-12

re: news - my take on what was said milesy,

NC's "macroeconomic revival" refers to the rebuilding of ROW RE demand growth. Two factors have dramatically reduced that demand, particularly in the past 24 months. Chinese taxes, tariffs & quotas have sucked in 80% of 4 of the 5 main RE demand sectors and, together with a dysfunctional supply chain, the resulting bubble prices have caused considerable demand destruction thru substitution & efficiencies.

Lower prices and new reliable, quality ROW supply, such as Lynas RED, will stimulate that demand but the biggest impact could well be the emerging rebirth of US domestic manufacture. The US is already forecast to more than double it's RE demand over the next four years but if Obama's speech overnight is any indication this may happen a lot faster:

"... if you’re an American manufacturer, you should get a bigger tax cut. If you’re a high-tech manufacturer, we should double the tax deduction you get for making your products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers. (Applause.)

So my message is simple. It is time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I will sign them right away."

http://www.businessspectator.com.au/bs.nsf/Article/Barack-Obama-inauguration-Australia-gas-manufactur-pd20130122-46RSV?OpenDocument&src=sph

The US is starting to unwind some of China's dominance of OEM's and the new Japanese PM is aggressively devaluing to the same effect.

It's not going to happen overnight so I agree sitting out may not be a bad idea as Lynas derisks and demand begins to recover. Also NC's "chat" was clearly a motherhood statement as I commented yesterday but to suggest Lynas has no financial modelling on dozens of different cash flow predictions is totally naive. With the number of variables at play, in a tiny industry that has just been thru considerable dislocation, in a start up operation with no history, no responsible CEO is going to release internal modelling on cash flows.

Have already commented that "cash flow does not equal profit" but I watched NC, Moly, GW and others present in HK last Nov and I can assure you Lynas has far more understanding of "understanding of world demand and product prices, getting production right" than any of its peers.

Lynas remains a spec stock for very good reasons, but IMO it is a very good spec stock.