...if we have the Winter Hibernation that I alluded to for the...

...if we have the Winter Hibernation that I alluded to for the lithium sector, it would likely result in the following should US enters recession
1. some lithium juniors raising more CR until they go bust [this will happen before the sector bottoms]
2. some lithium companies switching focus to gold or copper
3. lithium majors such as MIN, PLS and [maybe] LTR muddling through with lower profit base - the new normal for an extended period of a number of years with modest growth

...then you have to be open to the possibility that PLS could emulate the RHC LT chart in which we moves sideways for an extended period of time after first having fallen by another 30% or more, and that its all time high is never again re-visited. The peak point of RHC before the side ways move marks the end of its glorious growth heydays...RHC remains a very profitable company with half year NPAT of $759m with PE multiple of just 7.19x from its heyday of 30-40x (just like PLS today).

...PE multiple contraction is to be expected when the market finally accepts that lithium is being commoditised and that its future growth outlook is not as strong as expected to warrant a high multiple [which has fallen but remains high because there is no consensus yet that lithium winter would get worse].

...my confidence on the above is strong IF we get a US recession scenario panning out in final quarter of this year or sometime in 2025. You can wait if you like but you have to have real conviction in a soft landing as you do about the company.


All time view
RHC Stock Price and Chart — ASX:RHC — TradingView
All time view
PLS Stock Price and Chart — ASXLS — TradingView