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adam a

14,516 Posts.

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28/04/24

20:35

Post #: 73546956
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Originally posted by 1ronnie ↑

Earlier this year, this thread opined that risk reward probably would favour Gold over lithium stocks, and I wasn't wrong.

YTD, this is how they have performed

GOLD
Gold +13.33%
XGD +6.45%

Lithium
PLS -3.80%
MIN +0.29%
LTR -32.12%
LTM -23.14%
IGO -21.44%
CXO -42.0%

I suggested that the tables have been turned - that Gold was coming out of winter hibernation and Lithium was going into one (winter hibernation).

It took Gold stocks almost a year to get out of it, and lithium stocks would have to endure a similar period or likely longer. The reason for that is that lithium being beholden to EV would be susceptible to a recession while Gold benefits from it.

And while the market narrative holds out for a soft landing, we can only deduce that the market is in denial that a recession can be avoided in the very short term but not likely with a timeframe of a year from now. Lithium stocks would run out of time to recover before the onset of the coming recession/stagflation.

So believe what you want but I reckon lithium stocks won't recover and will likely have to endure a more painful bear market ahead.

If my thesis is correct, exiting the lithium space to enter Gold (physical/digital/ETF) would avert a protracted lithium winter to embrace a golden summer (punt intended).

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RMS 18.7% YTD
PRU 24. 73% YTD
SLR. 19.10% YTD
Ect ect ect

Neverwrongski
Gltah
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0 Great analysis

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