All in opinion:
Stock Market Recovery - Lithium Boom Mach 2
Many Lithium stocks have been heavily shorted even before the Coronavirus and some are the most shorted stocks on the ASX. That will change soon..... We have a market bottoming as the global virus curve flattens and the world adapts to the circumstances as humans always find a way to survive.
Being the optimist here are some of my thoughts:
1. Lithium: Looking on Asianmetal dot com it appears Lithium Carbonate and Hydroxide is rising off multiyear lows. Profit increase for PLS/GXY in the near future?
2. Oversupply? Nah thats history.. China's Tianqi postpones commissioning of Australia lithium plant. The old lithium oversupply theory is looking more unlikely as global battery demand increases, car manufactures race to keep up with Tesla, and supply is balanced and perhaps heading to be undersupplied to support prices going forward.
3. Costs Lower - Many miners such as PLS have been optimising their plant towards name plate and lowering costs.
4. AUD is now under 60c to US dollar. Great for Aussie exporters.
5. Dow Jones has had one of the most sudden drops in HISTORY near 40%. History repeats and markets do recover.
6. MASSIVE stimulus measures across the globe. Big money folks and that will slowly flow into markets, especially emerging markets! Lithium will benefit. Up up up it goes.... Great for business and market confidence.
7. Will Tesla car purchase increase as more people shop online?
8. Lithium SPs PLS @ 15c and GXY at 78c is at a level not seen since they were exploring developing towards being a producer. Unrealistically low at these levels and way oversold...
8. Some talk debt. But lets talk future profits as Lithium price rises. For example PLSs debt owed in years to come? By then, PLS would of made enough profit to pay it back as I expect a significant recovery off these lows. GXY will also profit well in the future.
9. PLS recently raised funds and in light of what just happened globally, was a genius move and I'm sure money is used wisely in the circumstances now.
10. LOWS is a KEY word here. Dow at 40% lows.. Lithium ETF at lows, Lithium prices near lows. Lithium SPs at lows. Too many lows means no room for shorters to run. The Bear is totally exhausted and due for a long sleep now after all that temporary gloomy excitement. A global mass short covering is LONG overdue here as the market recovers off global lows. Remember the sharemarket looks ahead several quarters.
11. Coronavirus cure updates - The globe is working hard on potential cures and its only a matter of time before a cure is on its way. Watch the markets rise as quick as it fell.
12. Corona cases will flatten globally. The globe is doing its bit to ensure the spread is stopped. Of course they will beat it! Again more of a reason for future upside to markets.
13. As the miners ramp up and profit well off a low AUD and increasing Lithium price post this crisis off multiyear lows, im sure there will be opportunities for those Australians who unfortunately lost jobs recently to work in the mining industry. For now, times are really tough to get through but there is light at the end of the tunnel. Some markets will thrive quicker than others on the other side of this market fall.
14. Money Moves - Money moved away from Sharemarket temporarily and that money sitting on the sidelines needs to be reinvested somewhere and no doubt a great candidate is energing industry such as Battery Tech, Lithium miners, EVs. Its the FUTURE. Look at the low Carbon Dioxide levels globally recently from Corona Virus. The world now knows what it means to be green with a low carbon footprint. Its better for the earth. Its better for our health. Plain and simple. More of a reason why energing industry stocks and lithium will boom.
15. Property - In light of a temporary downturn in employment as businesses struggle over the next couple of months, Australia's Property market may finally deflate (not crash) and turn into a multiyear down cycle. In opinion, its way overpriced. Simple. Even at record low interest rates, some who have no job recently or more limited hours now cant afford to pay their mortgage...... With higher unemployment this year, will there be higher defaults than normal and will investors who had multiple investment properties heavily geared in debt need to consolidate? That means more supply on market while demand decreases and less foreigners travel to Australia. That means Property Market deflates and properties wont sell as the market begins to fall and those who want to enter into the market will wait until its done the inevitable cyclic turn to the downside. My opinion is money will move from property into stocks to rebalance bubbles. The air has already come out of global stocks and Lithium industry is at absolute lows. Is it now Aussie property markets turn to deflate too?
In summary.
I will be looking to buy more and other quality Aussie miners off these historical sharemarket lows who have been battered. It may not be the bottom of the market but as history repeats nothing falls as quickly as it had done and not recover. It will recover. These companies will be producing MASSIVE profits in years to come as the foundations they set in place over the last few years materialise into $$$$$$$$.
Calm heads, patience, keep cash aside for emergency. Keep the family safe. Hoping 2020-2021 for all of us will be great for years to come.
(20min delay)
