Exodus Prediction

Hi Smurfers;

Recently I have made a prediction about how Flakers are going to realize how under-priced Vein is and seek out Veiners to leverage their capital and reduce risk. Vein is the best kept secret and MRF with its current Peer Imbalance is the best of the bunch in my opinion. This does not diminish others its just MRF is working its way into the light.

Graphite is highly sought after and Flakers will always be the top draw. That being said Veiners compete with China and are only going to become more and more lucrative.

Global and Chinese Isostatic Graphite Industry Report, 2013-2016

http://www.researchandmarkets.com/research/qxxtpn/global_and


How will this effect MRF?

I think it means more and more Long-termers are going to seek out Veiners to accumulate and they wont stop accumulating because they obviously get a better deal for their dollar. Price has uncoupled from value and formed these bubbles and they are only going to get more extreme and exaggerated. It is a new marketplace in my opinion.

This also means a deceleration for many of the smaller weaker Flakers while the strong will continue to bubble creating Flaker imbalances that could also lead to gains. Like perhaps SYR and TON.

Flakers are over-bought and Veiners are sitting very comfortably right now. What I like about MRF is the management is doing a great job so far. I think once the market realizes about the imbalance between Flake and Vein of course they will seek out the better deal for their capital.

The drag effect is not a bad thing, all bubbles burst, Fundamentals 101

Veiners know the differences between Flake and Vein but most Flakers don't in my opinion. Speaking with them recently not many know much about it and for good reason, Vein Graphite is re-emerging after a long hibernation and Graphene is relatively quite new.


So what should the price of Vein be right now?

What should Vein Companies be priced at?

What evidence is there for Flakers and Flake imbalance?


A great catch I think helping us start to see the differences is:


Chinese manufacturing expanded the most this year during June, with the closely watched monthly PMI coming in at 51 points. The May result was 50.8 points

ANZ says it is the first time that both the official China PMI and the HSBC reading of Chinese output have come in above 50 points (the expansionary level) since December.

"The rise of both PMIs suggests that the growth momentum has been picking up due to the recent pro-growth policies, including increasing the infrastructure investment and accelerating the budgeted fiscal spending. The rising G3 demand and intra-Asia trade flows have provided positive impetus as well.

In the meantime, the high-frequency data showed that the crude steel output continued to increase in the past two months, consistent with improving sentiment indicators.

"Combining these factors, we believe that China’s GDP growth in Q2 will likely come in above 7.5%, compared with 7.4% in Q1."

http://www.smh.com.au/business/mark...ancial-year-20140701-3b4yu.html#ixzz36B8uQt94


I think Flakers are going to merge, joint venture, bubble and evaporate if they are not careful.

Anyway maybe I am wrong!

Kind Regards

PS - DYOR !