XAO (ASX) Short Term Trading Week Starting: 26th Feb

Originally posted by bangetron ↑

"Morgan Stanley forecasts the price of lithium carbonate will fall from $13,375 a tonne to $7,332 a tonne by 2021, and then towards its marginal cost of production at $7,030 a tonne thereafter."

Here's the link for anyone that would like to have a read:
https://www.ft.com/content/66012fe2-1ae1-11e8-aaca-4574d7dabfb6

I think it's important to be aware of various coverage of the media even if it's fake news (because yes, people's decisions are also affected by fake news).

In terms of where we are at, I called that the second wave of lithium boom would come around march a few months ago and while I still somewhat maintain that position, I was expecting a much much much larger pullback.

The only company where I really saw that pullback was BGS and I bought in straight after the chart turned around and am currently up about 30%(mad at myself for not tipping it). I think AVZ is fairly over-valued (unpopular opinion, I know) but today's CR provided some good opportunity to buy (just couldn't get myself to pull the trigger given the market cap and where the company is currently at). Might give in to the temptation if the price is still good tomorrow morning. I also think TAW should also see a decent 15-30% increase in share price over the next few weeks as it moves into production (will tip it soon).

In terms of lithium, I am not old enough to have seen what happens once the commodity cycle turns around and the miners go bust (barring the top15% in terms of cost/profitability) but I really can't see how lithium prices will stay like past the 2021-24 mark. What this means is that all those borderline profitable companies or companies too early in their exploration cycle will probably go bust so I'm very aware of that when I take larger positions in companies.

For the shorter term though, lets ride the wave and (try to) make some money.

Thanks again Freehold for dedicating so much time and effort. I think I speak for us all when I say it's very much appreciated.

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Wow! Really similar thinking in terms of stocks traded. I’m hoping it’s “Great Minds think alike” and not “Fools seldom differ”.

When I rejigged the portfolio I consolidated to near-term producers (only). That meant that longer term options (ie late 2018/2019) did not make the cut, with the exception of BGS that had been hammered down significantly, has a well advanced deposit, no OT agreement at present, good management and a significant gold resource too.

I’m still looking on at AVZ. If it ‘feels right’ I might re-enter.. but.. at present... hmm.. there’s just something about it that is not... complete. Maybe an odd feeling around “...how is it possible that everybody wins”..? I’m not entirely sure.

PS on that, if any of the wiser heads could comment on a time when a HC darling really bunted with a widely regarded sentiment that it was ‘predictable’ and ‘bound to happen’ and even though there was much toot-tooting and rocketships the stock kept going up anyway. Any examples?