Latest article from proactive 16:22 Fri 05 Mar 2021
The best equity investment period since the 1980s
In this Insight, Samso takes a look at the state of play in the markets and ponders whether the greatest ASX show in 30 years will continue.
Over the last 12 months, the world has gone through one of the most defining moments of human existence. We were living in chaos. However, if you are an investor or trader within the Australian Stock Exchange (ASX), you would have experienced one of the greatest shows in 30 years. Will the show go on?
What commodities would be in demand?
This one is very simple. We all know that we are looking at the next industrial revolution, with the introduction of electric vehicles. I call this the "Green Evolution" i.e. to have all matters of manufacturing and mining for us resource people, to be green.
Green mining is the new catchphrase.
So, what is needed with this EV Revolution is lithium, graphite, nickel, copper, tin, tungsten, and wait for it ... uranium. I must point out that this list is just what is in the bright lights. I feel that the mining of these metals is the lowest form of EV Revolution. I believe that the main players would be the ones with processes that make whatever the EV Revolution requires.
And they are, for example, Andromeda Metals Ltd (ASX:ADN) with their halloysite, Altech Chemicals Ltd (ASX:ATC) with their HPA applications, EcoGraf Ltd (ASX:EGR) with the graphite recycling, FYI Resources Ltd (ASX:FYI) with their HPA applications, taking a lot of the bright lights.
Before I am swamped with emails and messages for not mentioning many others, let me say that these companies are what is rolling out of my brain space now. I am sure there are many more out there which I have not learned enough to know at this point in time.
Companies like EcoGraf and FYI Resources (Figure 5) have created so much attention that their share prices have taken a run and whether this trend will continue depends on how well their business plans are executed. What is obvious is that they represent another part of this EV Revolution that does not involve assays, drilling and geologists.
Conclusion
Currently, I do not see the market slowing down. A near-term correction may happen, but I feel that for the long-term visionaries, it will be a good story. As I mentioned, even though the gold sector has slowed down, there are still lots of opportunities that are being rewarded. We all know that the ASX growth is not restricted to commodities. Everything is flying and there are lots of professional information that would support the buoyancy that is being experienced in world markets.
Will the great show in commodity markets continue?
I think this run over the last 12 months has more legs to come. The EV Revolution is going to drag even more money into the sector, at least for the next 12 months. The uncertainty in the supply of nickel and the EV metals will create concerns from producers and end-users of these metals.
FYI Price at posting:
45.0¢ Sentiment: Buy Disclosure: Held
