I know how your feeling, especially if you bought in the high $3. I'm up, but have been buying whenever I get funds to do so. High $3, a few over $4.
Sure, there could be a retrace but I think patience is the key here and while we sink and none producers keep heading up - maybe opportunity to buy (DYOR). Like has been pointed out, all the sales figures of EV vehicles are up, as is the price of lithium, and if we keep projecting forward with that same growth, then there might be a lot of lithium in the ground but there won't be the operating mines required for there not to be a squeeze on supply.
Of course this is speculation, but it is based on current evidence. There is always the chance this will go belly up. But please consider what I think to be a couple of major points about GXY share price:
- The west is the main profiteer from oil. This is not just about EV vs ICE. It's about power and profits. If you're in Australia. You probably know about Adani and what a crazy idea it is when compared to the future proofing that is happening in SA with battery plant. The fossil fuel industry is synonymous with government in an opaque and murky way. The ICE vehicle industry is also the 'power' and they don't want EV vehicles, especially in the west. They earn a vast amount of their money (if not most in some cases - Kia Rio comes to mind) from servicing overly complex engines, supplying parts etc. I'm in Berlin and there are now fleets pure EV vehicles that you car/scooter share and Berlin is by no means has the highest uptake of EV in Europe. I'm from Australia, but it's got no vision compared to EU. I wouldn't look around there for EV vehicles at the moment.
- The share market is not the real world. And in this sense, the fact that GXY is down while others (with higher P/E and P/B or who are not in production) are up and is perhaps a sign just how much interested parties want to keep a lid on this. Keep it in your back pocket so to speak. If you can keep it as a small plaything for now, why not? GXY is in the hands of instos, who have there own agenda. Generally comes down to power and the weight of the power still rests in with an in ICE industry. There can be other reasons for this. If you want to do a deal with GXY, you want the price to stay down. If you are a US insto and are long on US lithium mining, then go short in Australia. I think that the price of ASX lithium miners that are not in production and in nowhere near the position GXY is (as a global/diversified lithium miner), are being allowed to run somewhat. They are not really a threat at the moment. Retails investors can fall over themselves, trying to play for the next big one. But once something big has been recognised...then the games truely begin.
From the research I do, it feels like the big boys are only starting to play in the ASX lithium space and more importantly in the 'wow, it looks like we may be forced to go EV after all...but not without dragging our feet' space. And I'd hazard a guess that while EU auto manufacturers say "2020, 2022, 2025" for greater EV production - they are possibly just playing cat and mouse with Chinese EV producers and seeing how long they can thread out this very lucrative ICE thing, where they have the power, before totally committing/showing their true plans. I think many of these automaker powerhouses will be ready to match the Chinese if they start seriously threatening their market share of ICE with EVvehicles. Until then - keep a lid on it anyway you can. Tesla is not a threat at the moment. These big car companies can bring on EV vehicles in a fraction of the time it has taken Musk to heave and puff and force them to play.
Also, look at the latest range numbers for new roadster from Tesla - over 1000km. That's better than the hybrid Mazda I hired recently. When the range is better than ICE vehicles can do, meaning you don't have to refuel at all on your 1000km journey. And the fuel costs nothing, even compared to "cheap" petrol then I figure we are seeing the end of ICE. When is the best time to invest in lithium mining, if you see this as the future...any time...but not without a sh*&^% load of patience and a willingness to gamble.
I think the biggest risk at the moment is another technology that is cheaper and more efficient than LI but it won't be petrol.
GXY Price at posting:
$3.54 Sentiment: Buy Disclosure: Held
