As I write this LYC is at 1.82. Things are looking dire and...

As I write this LYC is at 1.82. Things are looking dire and unfortunately, I didn't get out early. But there are positive ways to look at this.

Looking back at the depression and previous recessions, PE ratios for the market fell to 5. Then we must take out the Lynas Basket excel sheet posted here a while back.

If we assume this PE ratio, RE prices would have to drop to $107 this financial year, $62 the next and $38 in 2013-14 for the share price to remain at ~1.85.

Some people may look back at RE prices of $10 a few years ago but the situation is vastly different now due to China seriously restricting exports, and moving to restrict it further almost every week recently.

So unless we see a new depression (likely) and RE prices fall 80% (unlikely IMO), LYC should be a good performer over the next few years. If prices only halve, then it should be almost $6 in 2013-14.

Also keep in mind that during past depressions/recessions, the PE ratio did not stay at 5 for very long. It soon went up to ~10. If we allow for a basket price of $35 then LYC should be at $3.30 in 2013-14. All this suggests that it may be a good performer in the likely crisis to come.

HodHold on to your hats!