Technical analysis, page-48

Averaging down is a fools game. You never know where the bottom is. It was created during the great depression to entice people back into Market. It is still used widely to day by bad brokers to mask bad buy advice. To be Specific to Lynas this whole run down was started by Lynas announcing very poor earnings. 80% lower than H1 2019. (I will fully agree that several different things Caused it. Other markets conditions added to it) The key is what will AR show. My guess is will be bad for year. which will again cause headlines about earnings. being 80% or more lower very possible they could be negative. So I would wait for bottom and still not buy wait for at least one or two of the things that caused lower earnings to turn. Will you buy at bottom? absolutely not. Far better to jump on a rising star than try to catch a falling knife. Number one thing to watch is NdPr price. Currently 272 RMB with vat = USD 34 no vat. AL has told us that Production break even is around USD 35. Lets call it $34. There are now two new expenses C& L depreciation about AUD 8.8 M for H2 2020. and PDF payments. USD 34 M = AUD 52M combined = AUD 61M for H2 2020. In a half at full production they will make 3.6 M KG NdPr so 61/ 3.6 is AUD 17 / KG more is needed just to break even. = 10USD / KG So a price of about 45 USD no vat / KG is needed to show a profit. If you believe AL then there is a lag of 90 days so price for April and May is already set. What happens if Lynas has first losing half and maybe whole year since 2017 to stock price? What happens if loss is AUD 20 M, 40M ?

I expect Q3 to set records for total REO volume. Possible maybe even revenue but it will be close with lower prices. Cash will be up. All very good news. but keep in mind the deduction for C&L and PDF which will come out of NPAT profits in the AR. EBITDA will look very good but Interest, Taxes, Depreciation, and Amortization are real expenses that have a direct impact on stock holders value and that is why Most investors look at NPAT. EBITDA was created for evaluating companies in a M&A situation. Has little bearing on an on going concern. Google it. There is a reason EDIT and EBITDA is not excepted by GAAP or IFRS. This is why they are mentioned in summaries outside of the audited section of SAR or AR but never in the audited section. US law is stricter on where they can even be mentioned. Look at recent SAR all the EBIT &DA info is on page 1. The formal report starts on Page 2 and EBIT &DA are never mentioned after that. Why does Lynas put an Appendix in the beginning? Look up AU Listing Rule 4.2A.3 and decide if you are using it correctly.

https://www.forbes.com/sites/taxnotes/2020/02/13/new-tax-laws-make-ebitda-even-more-opaque/#278cf7736e03