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"Goldman
Sachs recently based there rare earth recommendations on a limited universe
consisting of only two stocks, Molycorp (MCP) and Lynas. ..
Gold Stock Trades has a broader view."
Those of us who delve into the markets are referred to
politely as investors. That is a Madison Avenue spin on what should in
essence be a more accurate description. We are speculators, which is a more
precise appellation. We assume business risks in hopes of gain. We buy and
sell in the expectation of profiting from market fluctuations.
We lean heavily on our technical indicators, which are
effected by news driven and exogenous developments. They can often skew the
calculations of the most adept of chart readers.
A gray swan is looking over our analytical shoulder.
Not quite black, far from white, the coloration as of this writing is gray.
The news recently of which my intelligent
subscribers are well aware, is that the Lynas'(LYSCF.PK)
Malaysian project has encountered a roadblock requiring ten corrective
measures that have to be addressed on the bumpy road to production.
Today Lynas reiterated,
"We believe the plant will be commissioned by the end of 2011 and we
expect to deliver some product to customers in the first half of 2012."
It is important to note that the independent review panel concluded that the
project met all international radiation safety standards. In reality, it is
unknown how long the process to completion will take. Management claims they
are still on schedule. Skeptics question the timeline.
We expect more of these "Merkel Moments" on
the often rocky path to fruition. In reality, the problem is two fold as the German government discovered. Not only do
the "Greenies" have to be assuaged, but there are political
considerations that are added to the brew. Politicians inevitably must run
for office as Merkel realized. The Prime Minister of Malaysia is up for
reelection. As we deduce, politicians are a fickle breed turning concrete
decisions into sand. Similarly, the Prime Minister of Malaysia, a firm
proponent of the Lynas project, is confronted by
the vocal opposition. They sense the opportunity to score political points in
the upcoming vote.
Now all of the valid considerations for the importance
of rare earths for our industrial survival recede for the time being. Taking
a backseat are the all important needs for rare
earths in the technology, military, consumer and alternative energy sector.
Where does this leave subscribers to Gold Stock Trades?
The history of watershed developments are replete
with difficulties. Fulton's steam engines blew up at the beginning. The first
space missions exploded. The birthing process is described as labor.
The West which had the lead in rare earth development, has to play catch up to China, which co-opted
which was originally an American enterprise. This is a rebirth of an
industry. One can sense the Chinese laughing at the plight of The West
scurrying helter-skelter to gain independence from the Chinese hegemony over
a vital industry.
We notice as we write that Lynas
which had fallen below the 200 day moving average with a low of 1.81 has
penetrated above the 200 day and is breaking above the 50 day moving average.
This is a very bullish sign.
Goldman Sachs (GS) recently based there rare earth
recommendations on a limited universe consisting of only two stocks, Molycorp (MCP) and Lynas. Gold
Stock Trades has a broader view. We notice that other candidates may have
been overlooked by the major analysts. We have presented our subscribers with
additional viable candidates that are undervalued, undiscovered and
strategic.
Valuable lessons are being presented to us by the Lynas and Molycorp (MCP)
experiences. We feel that these are not the only partners on the dance floor.
Feel free to consider additional rare earth miners
(REMX) who are located in friendly areas of North America and Europe with
critical heavy rare earth ores as well as light rare earths.
Many are undervalued and certainly not in the limited
Goldman Sachs universe. These rare earth miners are becoming very attractive
and appear to be just beginning to reverse their recent consolidations.
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