Compelling opportunity, page-2688

Its a good post Out6ack. Its something I have been reflecting on myself over recent months. Like you I think another major correction will happen in the coming years. By correction I mean down 40-50% for NYSE/Nasdaq. However whether that is 3 months away, 3 years away or maybe some years yet ( 2029 ? ironically 100 years after the great depression ? Not Impossible ) who knows. I think Gln is a great story and could easily get to $ 3 + , so despite the world risks at large out there I will continue to hold . I really like to play in this space ( small cap resource companies) for 10X , and for me that mark is $ 3.00 , so I would sort of feel like if I ran off now , it would be like taking my bat and ball and going home when the story is not even half over. I look at the world situation in this light ;

1. Only play with money in the share market you can afford to genuinely lose or at least be well down on for significant periods of time. Always be mentally prepared for tough periods. Longer term holders in Gln have seen a fair bit of that in recent years. In my gut I am a perennial bear always expecting bad times ( which helps holding a company through a long down period) , and sometimes my posts echo that. You need to find a mental state of mind and an "approach" to the game that works for you. You will take many knocks in this game, but its how you respond to those knocks. The mere fact that your asking the question and thinking about it, suggests you will be mentally prepared if something like that happens again and wont be one of the cattle stampeding for the exits.
2. There are a number of commentators who predict doom and gloom incessantly and while your waiting many years for their prediction to come true the market has gone up many levels. I have read some of Schiller's works and Roubini is another one. I am trained in finance and economics so I have a lot of respect for their work at an academic level but a lot of it doesn't translate to the real world. If you call a correction all the time, you are going to get it right a few times every 20-30 years. But in waiting for those 2 or 3 you could have missed out on 27 years of growth and the market has a habit of bouncing back to new highs constantly. Most of their analysis is backward looking using historical P/E analysis but the world and the market is forward looking. Both also fundamentally mis guessed how world governments would react to the crisis.
3. When the GFC hit the world governments just increased the money supply many fold through various QE measures , mainstream economists predicted inflation but what happened was the inflation went into asset prices, not goods and services. You can bet a similar response would happen again. We again saw it last year with Covid. The US is the worlds reserve currency, so they can get away with the Fed printing money to feed to their government treasury. As long as other countries are happy to keep underwriting the US bond and T bill issuances to a large degree, the music can keep playing.
4. The Australian market has not gone to the silly levels in terms of PE ratios that the US has done. So we would still have a major correction but it should not be as severe in my opinion.
5. I think its a fair bet that companies exposed to the EV megatrend will do well over the next decade and while they would be temporarily hit hard if their was a major US sell off, they should bounce back fairly quickly. Ordinarily my concern here for a non-producer would be if world capital markets got switched off for an extended period of time , which is what we sort of saw immediately post the GFC. That could accentuate a significant downward dip in the Lassonde curve for a developing company. However given a number of key world governments (EU, US and China) are now lining up to push the EV megatrend along, this should help capital markets over the coming years take comfort in continuing to fund these developing companies to get to production. So I do believe even if the worst happened and we had another major share market hit, as the EV megatrend is now getting so strong and lithium is so short supplied, it should allow companies like Gln to get through the development pipeline. That's also too why I liked Friday's announcement, in part it has short term de-risked the play. The market is just a giant voting machine as Buffett often says, so you can take it as the market has given a vote of confidence in our story and thereby given the company a big chunk of funds to crack on with it.

Hope my Sunday afternoon meanderings were helpful.

Pf