KNOW THE CYCLE, PLAY THE CYCLEMuch of the negative discussion on...

KNOW THE CYCLE, PLAY THE CYCLE

Much of the negative discussion on this thread revolves around the currently cyclical downturn in the NdPr/REE complex.

Well derr, all commodities go through price cycles and especially those where "normal" market forces are being managed by the 90% global supplier. Naysayer's on this thread, should take a cold shower instead of mischievously disguising half truths to create fear.

I don't want to appear bullish or bearish, just realistic. As a holder of many commodity producers for well over 30 years, I have found it useful to seek and hold only the highest quality businesses, in the sector. Accumulate in cyclical downturns and lighten when the "mob" have bought into the narrative and prices are high. Everything in between is just noise, that makes weak hands fold and delivers profits to genuine long term holders.

Delving into the minutia of a 3, 6 or 9 month price cycle misses the point of investing in the resource sector. Bear markets last 5 years and throw up great opportunities to those with an investment strategy that they genuinely believe in, whether it be precious metals, green metals or base metals. LYC meets most criteria of being a quality business currently supplying Japan and ROW with rare earths. Many new players will not survive a downturn.

Reading long term cycles IS VERY important in determing the time horizon and pace of accumulation or extraction of capital. As I believe the world has passed peak output of just about everything, I suspect world demand to soften for all commodities. China will not be immune from a global downturn neither will the world. My base case is demand for EVs will not meet expectations and a kneee jerk reaction in most of the supply chain producers is imminent.

I am no long a buyer of anything other than junior precious metals producers that are debt free, cash flow positive and quite cheap, as well as currently distressed green energy producers that are getting US government support, in various forms, as part of the US longer term goal of decoupling from China and "friend shoring".

Having taken this investment position, I am very mindful anything in this space is fraught with investment danger. The green narrative drove prices to stupid levels and a 50% pull back does not make them cheap. Just not so stupid. There is likely to be a lot of blood in the streets over the next 9-12 months, and I am 100% certain, some of it will be mine.

To mitigate my "grief" I have tried to hold on to a lot of cash and accepted every M&A deal that has conveniently turned up over the last 12 months. I want to be the buyer during this last bear cycle of my lifetime, not a seller. I can accept a 20% decline in portfolio value as the price of enjoying a multiple of that over the last 2-3 years. It comes with the territory.

I feel very strongly that AL and her team have worked miracles over the last 8 -10 years and that LYC will retain its current status as a PROFITABLE global rare earths producer, so it is a keeper for me. If the price drops into the $5 range, I might get interested again to add, it all depends on when and why, both of which are presently unknowns. I won't be buying if the price goes up, but I will be happy if it does.

I would hope all holders have developed their own strategies to meet their own objectives with realististic expectations and investment time horizons.

No one here, including me, knows the future and younger or inexperienced investors, should be very careful not to be swept up by either the optimism or pessimism of posters. There are no prizes for posting trash or treasure, but there can be severe consequences from putting money on the table, or taking it off.

In my view we are all in for some interesting times ahead. The macro uncertainties in nearly every investment corner of the world are not conditions conducive to a sustained long term bull market. Quite the contrary.

Naturally this is not advice, just opinion. Most people are here to learn, avoid misinformation and mistakes and ultimately, to make money. So am I.

Knowing yourself, and knowing the nature of the market one invests in, are really important. Lynas is not a special stock. Its share price is just like a little ship in a big ocean and it is just as likely to sail fast with a tail wind as it is to founder in a headwind. That is the nature of investment risk.

Be careful out there.

GLTASH