That's about to break:
Potentially the best way to play the whole EV thing is buying the mining companies who put out all the materials for batterys. This is going to be a macro long term trend over the next 3+ years.
Eventually, I will put on this trade but I do not have it on yet.
*not investment advice given I am not particularly bright.
Australia has a key role to play in reducing China’s rare-earths dominance
https://www.aspistrategist.org.au/australia-has-a-key-role-to-play-in-reducing-chinas-rare-earths-dominance/
As someone who's not the most confident in TA, how do we feel about this divergence in the RSI?
yeah right now isnt a good entry point. Vol has been increasing as the price is moving up likely setting up for some kind of correction.
Im watching for a better entry sometime later this year. The rsi divergence is significant I think signaling to wait a little
I didn't realize there was an ETF for this. After watching a couple of the RV videos on the rare earths/lithium topic I took a small position in Lynas. It's performed well, up about 30 percent, but with Fidelity they charged $50 for the trade because it's Australian. If anybody knows a way around it, let me know because I'd like to buy more. I see some large upside potential.
Rare earths is a good play. However, notice below most of the ETF holdings are in China. This is to be expected since most rare earths are found in China, but this gives me some pause.
With political and economic tensions between U.S. and China high and unlikely to normalized (barring a change in direction in Hong Kong, genocide against Uyghurs, trade, political-military competition, etc), I see the U.S. continuing to challenge China as its chief peer competitor, continue the Asian pivot of the Obama administration which got sidetracked by Middle East (https://www.politico.com/news/2021/01/28/biden-china-foreign-policy-463674), and in general continued efforts to decouple some aspects of China-dependent supply chains.
The supply chain has gained urgency and recognition due to pandemic. Here is Biden announcing a review of policy earlier this month: https://www.cnbc.com/2021/02/18/biden-to-order-supply-chain-review-to-assess-us-reliance-on-overseas-semiconductors.html
Note, the situation might be different for Europe which recently signed a trade pact with China despite human rights issues.
All that said, I like Lynas because it's Australian, a reliable jurisdiction and a U.S. ally.
The Pentagon recently signed a second deal with Lynas to produce rare earths in Texas. It's a small deal at $30 million but a step. https://www.reuters.com/article/usa-rareearths/pentagon-awards-30-mln-in-rare-earths-funding-to-australias-lynas-idUSL1N2K71WD
I'm more inclined to buy more Lynas and take a look at these non-Chinese names on the list below, particularly anything in the Americas (excluding Bolivia because there are some local political issues there that I wrote about a few years ago that gave me pause:https://www.dw.com/en/bolivia-scraps-joint-lithium-project-with-german-company/a-51100873)
Here's link to ETF holdings: https://www.vaneck.com/etf/equity/remx/holdings/?country=us&audience=retail
Thanks for throwing this up bro.
I think MP is the best way to play this. Personally, I've held MP since 11/9 and don't plan on selling anytime soon with the runway it has. But, I suppose PICK is a way to play this with better geographic exposure if you don't mind sacrificing the pure play on Rare Earths.
@Chase Winter @Jeremiah S do either of you have any thoughts on the specific tickers held in PICK? I'm at my max position size in MP already, so like the idea of adding one of these ETFs to broaden my exposure in the sector.
I am still doing research still and cant really say anything about specific stocks. I think holding MP is really cool. I am looking for more of a broad macro instrument I can use leverage on as opposed to specific stocks.
Would love to talk more though once I finish more research.
Out of my league. I just hold a small position in Lynas based on some RV videos I watched last year and news articles. For me, right now the sector and really everything has all moved beyond what I'd say is a good buy. I'd buy more Lynas but it's $50 a trade at Fidelity and since I'm not rich and would only buy 300 shares more that eats into profits. I anticipate a major market correction or crash so I general I'm short and in cash.
Let's circle back then. I'm still looking into the trade as I'm wear of a near term pullback across commodities, but REMX/PICK are two of the next ETFs I planned to look into.
Lynas is a good bet for rare earth. It is an Australian company operating in Malaysia due to harmful wastes. Malaysia government will continue to promote this business as it is positive promotion for Malaysia to participate in next generation industry. This type of rare earth refining business is highly regulated and requires friendly government. At outset, Lynas had a lot difficulties getting approvals from government due to persistent protests from NGO's However, today, it is flourishing business and I expect its business expansion will get easily approved due to its participation in flourishing industry.
Ticker?
MP is the one that's been on fire of late (including today). The ETF is REMX I believe.
Thanks @John Crockett
on fire “of late??“ +125% since election with ADV 2x linear. whats to stop this, the ~$100 ceiling?
Oh sorry.....the ticker is in the pic lol.
Macro Trend Thesis: As we move into more of a commodity upturn due to deglobalization and fiscal/monetary spending, industrial metals will increase. On top of this, rare earth are primarily used for the whole EV deal. So the huge spending going to clean energy is going to hit these metals. Why buy the companies innovating new things that are closer to the creative destruction process when you can buy the materials all of those companies need to purchase? On top of that, if the China/US relationship begins to fall apart more, the price of rare earth metals will go up a lot. So there are a lot of different ways it can go right. Plus the chart really says a lot.
If the chart breaks out then there is a huge amount of upside ****
You wanna like.. enter this as a trade idea?? I mean, as long as you’re doing all the work of a a trade idea 😂
haha.
Not yet. Once I have an entry then I will put it up there. I don't have a position right now.
lol just post it so it’s at least there, Other people might have Wished they were made aware sooner. Just copy/paste what you have (with the appropriate format “long xyz, holding duratjon __”
Just added it