Bullish signs..., page-60

CJ Is the share too high or too low for LYC? It certainly has great potential BUT will it translate into a higher SP in the near future? I don't know. There are ASX companies with astronomical valuations that don't make a profit. There are ASX companies that make a substantial profit and have miniscule valuations. So ultimately Mr Market determines the share price and increasingly so these days there is often a disconnect between the economic fundamentals and Mr Market's valuation. I've tried to fight this cognitive dissonance by applying commercial & economic logic but all this strategy does is make me less money. You don't loose money because you are investing in companies with strong fundamentals but you don't make money because for some inexplicable reason the SP refuses to rise. So I'm afraid Mr Market will always have his way and rather than fight this chap and his fickle ways I find it a better strategy to walk in his shadow. So what is Mr Market saying about LYC:
1. I know about MK and their desire to dispose of their remaining 2.3b shares (after conversion) in LYC
2. I know that the MK will optimise their disposal profits in a trading range, 11cps to 16cps
3. I know the FY2017 Annual Reports will probably show a relatively small loss
4. I know LYC has developed a very sound business and if there is a sustained NdPr price increase, LYC will start to generate a profit and improved cashflow.

So looking at 1 to 4 above do you think it likely that Mr Market will give LYC's share price a boost above 16cps? My answer is no because if I was Mr Market I would want to see the following:
1. MK gone
2. Sight of the FY2017 AR to make sure the business foundations were indeed solid.
3. Sustainability of the NdPr price rise
4. Sight of the FY2018 Q1 QR to see the green roots of profitability
5. Sight of the FY2018 Q2 QR to see the profitable result of a sustained NdPr price rise.

Now the above is imbuing Mr Market with a degree of logic he does not always display and he may decide to crank up the SP anyway, just because he can!. However I think Mr Market will lead LYC into a period of consolidation and the share price will range trade between 11cps and 16cps. Quite normal after a strong price rise. Mr Market will require at least the conclusion of 1 to 4 above before encouraging the SP to move out of its consolidation range. This suggests the SP will consolidate until to at least mid October 2017 before upside breakout occurs.

So that's my theory and if Mr Market finds out about it, he will probably prove me wrong. However in the meanwhile I will keep my powder dry and deploy my resources elsewhere into the many profitable opportunities currently available in the ASX.