Unless you are a professional investor able to pay for access to the few real experts, my top six recommendations for parsing and staying current with the lithium market are:
1)
Read publicly available info from the “Big 4” lithium companies and next tier of juniors. You will see all you need to know to assess demand and the supply plans in the required disclosures and corporate presentations. Of course, the info is often slanted as much as corporate legal teams will allow but it is still great to form a foundation of industry knowledge and free.
2)
For now, don’t obsess over the price in China. Unless you are investing in Ganfeng or Tianqi, focus on the price outside China (aka ROW price) and utilize the price performance of SQM quarter over quarter to get a rough sense of the ROW trend. SQM is the largest single seller of LCEs (mostly carbonate) to the ROW market and doesn’t have an organics business like ALB and FMC which make it difficult to assess their upstream pricing. Also use publicly available info to track spodumene exports from Oz and the price especially if you are investing in a junior producing only concentrate.
3)
Understand the industry cost curve: Easier said than done because there are so many inaccurate cost curves in reports. The fact of the matter is, over the long term, price will ultimately settle slightly above the high end of the cost curve and you want to be invested in companies at the low end of the cost curve. Of course this is obvious – it is also often forgotten in a frenzy to capture profits from momentum driven stock.
4)
Don’t react to every stray tweet, or Linked In/Seeking Alpha/Hot Copper post. I don’t even use Seeking Alpha or Hot Copper. My past experience is that the chaff is much more voluminous than the wheat on those two sites – yes, even worse than Twitter.
5)
Trust few sources and DYOR – in addition to the previously mentioned company names I trust commentary from people like: Chris Berry, Simon Moores, Mac Whale, Jingwen Sun, Henry Sanderson, if you are a Seeking Alpha fan (Matt Bohlsen)
or any rare post or comment by Vijay Mehta or Gerrit Fuelling.
If someone isn’t mentioned it is not necessarily a negative it just means you should DYOR to vet your own trusted sources. Of course I also have a long list of employees at lithium, cathode and battery companies that I have access to – it is not appropriate to name those individuals.
6)
Finally - listen to the Global Lithium Podcast (
www.lithiumpodcast.com) Of course, you knew I would say that. Emily Hersh and I have tried to bring some of the most insightful people in the industry to you via the podcast which is on iTunes (subscribe, please), Spotify and even YouTube. We do not put it on YouTube but a friend of the podcast does. Our recent “Beers with the Lithium Podcast” event during the Lithium Conference in Las Vegas brought out a “who’s who” in the lithium world. Several of our past and future guests can be seen in the picture if you have discerning eyes.
Following me isn’t going to give you insight to the majority of juniors. People constantly message me about their favorite tiny company with a few drill holes. Sorry to disappoint but I focus on the majors and those juniors I believe have a reasonable chance to bring meaningful quantities of lithium chemicals to market within five years. I also follow major suppliers of concentrate.
The "random walk" concepts are clearly at work in the lithium world; hopefully you will be one of the few that rise above.
https://www.linkedin.com/pulse/random-walk-down-lithium-street-joe-lowry/?published=t
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Go Galaxy!
