In 2022 i was looking at all the Rare Earth players and Hastings was def on my list. And i went back to my notes. So in 2022 I was concerned about the CEO that had just been sacked, Twiggy and the China off takes. They were my three big issues.
1 - CEO - At the time i was not sure whey the CEO was sacked/let go. But there has def been lots of staff turn over. I have been burnt many times when CEOs leave. So i just tend to wait a year or two to see how the next CEO goes....(A great example where I have been burnt by CEO departure is BAP....and that is still playing out).
2 - Twiggy - Twiggy is very supportive of China. To his credit, he spotted the Iron Ore business opportunity when China's property market was growing. And he went all in. But I think that has clouded his judgement in the Rare Earth space. And also the geopolitics have very much changed. I also don't like his push into hydrogen. My friend heads up a part of the CSIRO that looks at this stuff. And hydrogen is def not the way to go. He is doing it because of some tech he owns..and just wants to push that for his own benefit. Anything Twiggy is involved with, I would tend to test it out more. I think he is a guy who got lucky...and time will tell if he is making good decisions. My view he is not making good decisions.
3 - China - for all the reasons i have mentioned in many other posts...Ex-China is one of my investment themes. I can't see this changing for 5-10 years. I have done deep dives (through alot of the work Ray Dalio has done - see more below*) on what China wants and why. And how they tend to operate. China totally believes Tawain is theirs. They also know, due to population decline, they will only have an economy that could launch a war, from about 2026-2029. That also coinsides with their expected military peak (ie their military assets and their people trained and hardened). China has also learnt from Putin...and preparing their economy for the expected sanctions etc. They are stockpiling everything. The China property disaster has made life hard for the regime as well. They are facing lots of pressure from the Chinese people. History has shown, that when a regime is under pressure from its people, starting a war is a great distraction, and unifies the people with that regime. (Sorry - this is something i have researched alot.....but it is important to understand...and is now flowing into Govt polcies all around the world. And it plays into my investment themes of 1 - invest in monopoly type business (this has been around for ages)....2 - Invest in govt backed/alinged businesses. ARU is effectively Govt backed....and will have monoply type revenues for at least 5-10 years).
BTW - Back in 2022 I looked at 24 different companies to invest in to have exposure to Rare Earths....I have 90% of my REE money in ARU and the rest in MP in usa. I'm still waiting to invest in Lynas as well. The rest I think are a long way off, or go against my investment themes.
*(Btw - i don't fully agree with Ray Dalio...he says that empires come and go every 70-150 years....and USA is on the way out..and China is next in line. I believe strongely that USA will be the first empire to make a comeback and do a double stint at the top. My resoning comes down to innovation. History has shown that when a country can master innovation, the new tech propels them into the global leadership position. And right now....where do all the smartest people want to live....not China...USA. The new inovation tech could be AI...or something else...who knows? But i'm 75% sure that this innovation in USA will keep them as the global no.1 super power. Ray Dalio believes China is where that will happen. All I see from china is copying/stealing.....I think Ray is a little blinded by his fondness for China (he made alot of money from them...like Twiggy).)
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