market loves to slam lithium... Its was the flavor of 2017 and then magically without any manipulation become the short sellers dream for 2018 and continues... The fairness of how the market can be sold on borrowed stock but not bought on borrowed stock is beyond me... But id be an hypocrite if i blamed shorters as I my self am shorting a number of stocks based on momentum.
Reality is, A40 highlighting distress was the a golden opportunity, after all who is buy lithium? see PLS, GXY for examples of how to get slammed. as for a40 = 3m in volume shaves 60m in market cap, its a sellers market and the fact its dropping means someone is selling out and it isnt the big players (only 3m in volume)
As for the A40 going bankrupt view. Contrary to the seller views above, we could just stop all operations now ship our the inventory at hand and be sitting on enough sustaining cash to meet debt covenants... remember the quarter was in profit! This is not a company worried about its future, this is a company making things happen with the cards delt and i think those are all the right moves. only bad thing is the share price but if you sell when share prices go down and buy when they go up, then your buying high , selling low, not a smart trading strategy haha
The question i ask my self is - Is lithium over supplied? Is it in shortage or will it be? if you believe in lithium then regardless of the loss of confidence etc, a40 is a good risk play... rewards at 120m market cap is alot higher than the risk at 120m market cap with multiple players buying in at 50% premiums today
as for when to sell ill sell a little when i see Bald Hill exploration updates (Note: Calderwood wrote the book on WA lithium, he knows the potential as does the various lithium experts who bought in). I will sell a little more when i see converter demand come on in H2 FY19 and ill sell a little more when i see all manufactures have EV models. Only reason to sell now is if A40 is not hitting its targets.. On the contrary, they are. its the market that letting them down...
To which, i am a firm believer in lithium.
Some graphics:
EV activity
Uses of Oil
Size of oil:
So if 70% of oil is used for transport and Oil is $1,720 Billion. How big will lithium be if its currently a $3b industry??
anyways dyor, thats my 2c, im tired of these irrational markets so suggest everyone consider their reasons for buying and holding through the craziness unless those reasons fail..
tempted to just focus on technical trading moving forward. This fundamental stuff is irrelevant these days... Markets are just ridiculous and certainly a GFC like event is within a few years now
