Rare earth price update, page-16

Gaps are important stocks can bounce off them as they fill or just slow down in the direction they are going then continue. In some cases they can actually accelerate when they hit them. To have any clue what will happen with the stock you need to have some idea of fair market value. You can use anything you want. I do not care. To say something will happen at a Gap means nothing without a declaration of fair value.

Now I use EPS and cash flow. Both of these will decline substantially from FY 2019 to 2020. I have explained why many times before. Basically lower REO prices, the biggest impact, lower less efficient production levels, and higher admin cost for all the things they are doing. Construction will be cap EX no impact on EPS but big impact on CASH. Now many say this is trash and they are welcome to their opinion.

The only consistent argument is the future value of Lynas. I agree totally with this and accept sometime in the next 3~ 5 years the stock will be worth AUD 5 or even $20. I strongly disagree with how fast this will happen. I also think the price has to go lower before speculators will jump in and buy on long term possibilities verses sort term gains. I could be wrong on both but Experience says I have a good chance of being correct. I will continue to float ideas on this board to check my opinions.

No one is correct all the time. It is about figuring out the odds following those odds and looking all the time to see if you could be wrong and taking decisive action to correct your mistake. If you are right no worry, it will take care of itself. It is being wrong you always have to look out for.