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2011 - The Year When Rare Earths Become The New Black
Since trading desks are dead, and to classify those manning them as bored would be an overstatement, here is what one such dejected individual who is neither able to ski with his/her boss over in Chamonix, nor pick 25 bps margins on CDS bid/ask spreads has come up with. Presenting the imaginary hedge fund letter describing: 2011: Year of the Rare Earth Mineral.
FW: 2011: Year of the RARE EARTH MINERAL
Friends,
The object of a New Year is not that we should have a new year. It is that we should have a new soul.
— G.K. Chesterton
New Year’s Day is just an arbitrary starting point, but it can have a great positive psychological impact if we spend a little time reflecting on changes we want to make. First and foremost it is mental adjustment that we need to focus on. Everything else will flow from there. The way we act, the actions we take and the way we approach the market will all flow from our mind-set.
The most important mind-set for investors to cultivate as we enter 2011 is one of flexibility. We probably all have at least some vague feelings about how the year will play out. Some folks go far beyond that and have very strong beliefs one way or the other about our prospects.
I try very hard to avoid the prediction game. The only thing I know for sure about 2011 is that there are going to be some very good rallies and some very ugly disappointment. My goal is to simply navigate it the best I can, provide some helpful insights and make some money. It would be easier if we just had a slow, steady bull market that lasts for most of the year, but I’m fairly certain that is not going to happen quickly or easily.
So let’s start off the new year with the right mind-set. Let others be hopefully optimistic bulls or doom-and-gloom bears — we will just be open-minded and see how it goes.
Welcome to 2011. Good luck and go get ‘em.
As many of you are aware, at the end of every year I move completely to cash and lock myself in a bank vault for a couple days with all of my money and all of my annual trading records. I carefully review all of my trades and try to learn what mistakes were made and what worked. I physically handle my cash; it helps me appreciate that trading is not simply an intellectual exercise involving numbers, but one which involves real money with real wealth creation and destruction.
This year, I have relocated this exercise 2,300 feet underground inside an abandoned mine at a slag dump site in Monaca, Pa. I have appropriated thirty-seven Chinese nationals from a Scandium Mine in Longba Town, Zhuxi Country, China, that have secured and transported my gadolinite, promethium, cerium and yttrium and other rare earth minerals holdings. As many of you are aware, I recently acquired these minerals, as well as the laborers, on a recent site visit to a rare earth mining facility in the P.B.O.C. My rare earth mineral holdings represent precisely half of my net worth.
Periodically going completely to cash (or, in my case, rare earth mineral deposits) is a great way to refresh your thinking and to regain your objectivity. Day in and day out, we carry the baggage of existing positions, and it’s tough to really look at the market in an unbiased fashion when you have something at stake. It’s only when you are completely on the sidelines that you can gain real clarity, and it also provides a good opportunity to evaluate what you have done right and wrong in the past.
Such is the market and so goes life.
Best of luck in 2011. Yaazzzzz!
h/t Momo Trader On Tilt
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Just don't feel that molybdenum qualifies.
Unless WW3 breaks out.
As Kodachrome bites the dust.
+64!
So, what are some good miners/etf's for rare earths that trade on US markets ... ?
REE, SHZ, & XING. Don't know of any etf's and I am not sure about any fundamentals. Just jump in and out of REE and SHZ. Good days-bad days, but just made a ton yesterday in SHZ.
Thanks !
the best ones are on the pinks. 5 lettered canadians
ARAFF!!!!
LOL XING, that's a good one. Two years ago XING was a copy-cat iphone maker and now they are pretending to be a mining company.
Yeah, I know... crazy. Just as crazy as it being up over 50% yesterday.
I noticed that as well a month back when it was flying high...buyer beware on some of the Chinese companies...some may be one big pump and dump but time will tell.
Looking at that crazy mess, the only way I'd play it is with both an out of the money call and an out of the money put.
I think you can conclude with some certainty that it will move radically. The impossible thing to predict is which direction. With some math, options could be bought that would wring forth a profit.
Hey Spaulding...there was an article on here awhile back that also mention Lynas Corp. as possibly being a strong play. Symbol LYSCF.
-Grifter
Ah...found it:
http://www.zerohedge.com/article/sorting-through-chaff-lynas-best-rare-e...
I think the best one is on the ASX: LYC and Molycorp as a second choice.
AVL is presenting a buying oppty right now. Also ARAFF
You could also buy the comapny that owns the property adjacent to the Big Whopper deposit for about 22 cents/share.Has far fewer shares outstanding and actually has a business that makes money
Gossan Resources...my gift to you.
will check that one out. thanks!
Do not use market orders on that GSS,stick with limit bids.
can you please tell us more about gossan?
http://www.gossan.ca/projects/projects.html
Multiple Gold and Rare Earth Elements targets in Ontario and Manitoba.Seperation Rapids is the play on Avalon.They have an interest in a rural claims network that will be soon sold,imo.They also own the Zuliani magnesium production process.Shares outstanding is very attractive.
My top picks would be Lynas, Molycorp, Great Western Minerals, Avalon and although still in exploration stage but sitting on the mother of all mines, Greenland Minerals.
More companies listed here: http://www.rareearthmarketnews.com/
Avalon is up 56% boost for a Christmas Present in the past 6 days! I love it!
GWMGF
Never mind the GS connection to Molycorp - it's pure coincidence.
it seems all rats leaving the ship - Ben w/ Warren will be holding the proverbial bag...well, someone has to...
Mark Twain is said to have described a gold mine as "a hole in the ground with a liar on top". Looks like we can add rare earths to that description.
Ah, beautiful Monaca! Reminders of my days growing up in the Beaver Valley ;)
Rare earth ETF is REMX.
Rare earth elements? More refining, more pollution.
Try the slag heaps in Montana, there are miles of them to refine
You can that again !
Rare earth ETF is REMX.
Rare earth elements? More refining, more pollution.
Try the slag heaps in Montana, there are miles of them to refine
+1
Leadville, Colorado the old molybdenum [Mo] mine that took out a huge chunk of a mountain. i watched it for 35 years. when i couldn't pronounce the name nor certainly what it was or did. amazing huge green slim lake downhill. it is amazing to see from the air, as well.
It is the Climax Mine in Leadville. It was open for a while in 2007, but closed again recently.
http://en.wikipedia.org/wiki/Climax,_Colorado
They are owned by Freeport McMoRan.
http://www.climaxmolybdenum.com/index.htm
The Empire/Hendersen mine is still producing moly.
good name C L I M A X , mr ball.
REMX is a holder of miners for Rare Earths mineral miners.
http://www.marketvectorsetfs.com/funds/REMX.aspx
It trades at about a 4% premium currently from its NAV and has ramped up about 20% this week. Yikes...
The ramp? People eager to lose money...
AVL - Avalon Rare Metals Inc.
The corporate theme:
http://www.youtube.com/watch?v=7D6EiQs5KsY
Interesting that we have to beg the Chinese to sell us materials that we make into high-tech weapons (optics, night vision, IR). Didn't Patton say something about how logistics wins wars?
patton who?
we have no memory and live for today...welcome to the new age
Dick. Of "Eight is Enough".
Patton the Suicide Girl.
I did'nt know that the items listed on the Periodic Table were "Minerals"?!?!
you thought they were all "air"?
I guess my comment went over your head.
I was under the impression they were all "ELEMENTS"!!!!!!!!!!!!!
Elements are single atoms, while minerals are combinations of elements.
The uneducated refer to them as rare earth MINERALS.
AU is an element and is also a mineral. Duh.
NO, AU is an element, the gold ore that contains the AU, is the mineral!
+1
I am really amazed how uneducated some investors are :-) a fool and his money are soon to be parted
the definition of minerals includes (some) elements. those who refer to "the uneducated" are ?.
Yes, when you rely upon google!
I like your old avatar better...
Show me the most beautiful woman in the world and I'll show you a man that is sick of her!
Me too.
She was a playmate in the late 60s or early 70s.
Bet they are really sagging something fierce these days.
They are elements. If you have an old fashioned Zippo lighter, the "flint" is probably made of mischmetal, mostly Cerium. "Mineral" is a more generic term that covers a lot of things -- elements, compounds, mixtures, even some organic compounds and manmade materials such as "portland cement".
One thing you should do, if you've been hoarding those promethium bullion coins, is to cash 'em in pretty quick. I've heard they have a limited shelf life.
REQUEST FOR URGENT BUSINESS RELATIONSHIP
IRST, I MUST SOLICIT YOUR STRICTEST CONFIDENCE IN THIS TRANSACTION.
THIS IS BY VIRTUE OF ITS NATURE AS BEING UTTERLY CONFIDENTIAL AND 'TOP
SECRET'. I AM SURE AND HAVE CONFIDENCE OF YOUR ABILITY AND RELIABILITY
TO PROSECUTE A TRANSACTION OF THIS GREAT MAGNITUDE INVOLVING A PENDING
TRANSACTION REQUIRING MAXIIMUM CONFIDENCE.
As many of you are aware, at the end of every year I move completely to cash and lock myself in a bank vault for a couple days with all of my money and all of my annual trading records.
This year, I have relocated this exercise 2,300 feet underground inside an abandoned mine at a slag dump site in Monaca, Pa. I have appropriated thirty-seven Chinese nationals from a Scandium Mine in Longba Town, Zhuxi Country, China, that have secured and transported my gadolinite, promethium, cerium and yttrium and other rare earth minerals holdings. As many of you are aware, I recently acquired these minerals, as well as the laborers, on a recent site visit to a rare earth mining facility in the P.B.O.C. My rare earth mineral holdings represent precisely half of my net worth.
As you are well aware, it can be difficult removing such enormous wealth from the PBoC. As such, and knowing you are very good, very resourceful person, I ask you to help me in securing my export of this great wealth, and am prepared to offer very great compensation to you should you take my consideration and aid me in my efforts.
I HAVE THEREFORE,BEEN DELEGATED AS A MATTER OF TRUST BY MY COLLEAGUES OF THE PANEL TO
LOOK FOR AN OVERSEAS PARTNER INTO WHOSE ACCOUNT WE WOULD TRANSFER THE
SUM OF US$21,320,000.00(TWENTY ONE MILLION, THREE HUNDRED AND TWENTY
THOUSAND U.S DOLLARS) IN RARE EARHTS. HENCE WE ARE WRITING YOU THIS LETTER. WE HAVE
AGREED TO SHARE THE MONEY THUS; 1. 20% FOR THE ACCOUNT OWNER 2. 70% FOR
US (THE OFFICIALS) 3. 10% TO BE USED IN SETTLING TAXATION AND ALL LOCAL
AND FOREIGN EXPENSES. IT IS FROM THE 70% THAT WE WISH TO COMMENCE THE
IMPORTATION BUSINESS.
Perfect!
too funny!
USA has large in ground reserves of rare earths. It may take a couple years to ramp up production, but they are there. Why not trade paper or electronic digits to China for rare earths while they will still make the trade?
Too bad that basically the entire USSA land has already been pledged as collateral to China for years of crazy borrowing.
you talking about chinese not americans amigo - they already have closed all the short cuts; they say everything is fine, free trade and all that, meanwhile some bureacrat (by mistake - we will fix it no worries) cut license permits by more than 75%...so good luck w/ your computer keys...
Right you are....as the name 'rare' is misleading....they are fairly common...the actual mining of them may qualify as a 'rare' event...but will become less so as China's reductions will spur new mines....as is currently happening.
Right, they're not rare but they are usually dispersed in other material and not cost-effective to extract so when they find deposits with high concentrations like some of these miners have, look out!
Obama/Salazar cleared the way for the BLM to determine Wilderness protection on it's own again after Bush implemented the "No New Wilderness" policy. Look for Sierra Club and others to move aggressively to shutdown these lands containing any mining/gas/oil prospects. Previously they had to use Acts of Congress, much harder to come by.
Lot of disinformation in this thread.
If you want to learn about rare earths, there is plenty of material available on the net.
GEM, FLX, RA, MDL, UCU, GWG all canadian stocks on venture I think
I can't help but wonder if all these flashy news items out of China are nothing but pump. I wouldn't be piling into rare earths just yet anyway, not with the potential for a nasty little equity dump on deck.
The new .com, dig a hole, rename the rock by adding a "ium" and go public as rare earth mine.
RE elements--
UURAF CMRZF HUDRF GWG NEMFF OSKFF MCP REE LYSCF CO.V
QRM.V STM.V HAT.V GCU.V lots of other companies but couldn't find
market listings.
What happpens if China decides it is not using as much and relaxes export restrictions??? I'll tell you. Financial destruction of all companies gearing up or in early stages of production. Lots of mining companies have rees as a by-product.
Those are good thanks.
I did a 2-week momentum trade (I know, I know, disapproved of here but I have to get the papery stuff before I get the shiny stuff) with MCP using a "Extraordinary Popular Delusions & the Madness of Crowds" thesis and made a healthy 38% for my troubles. As rosiescenario said, these oxides aren't rare at all and the chinese can talk about limiting their exports then just flood the market with product (now priced higher) before Molycorp has even mined a single ounce.
DaBernank
I've bought a few ree companies. When I bought they were just at the beginning ofthe parabolic move. With the recent vertical surge in price I'm waiting for a big consolidation. Call me CHICKEN, AGQ is about the max risk tolerance I have.
lincoln, I missed the top of MCP (55-ish) and the price collapsed to 45 in AH sold at 50 yesterday - a real nail-biter. When you say AGQ, do you mean the ProShares Silver or AGQ:GB (Arian Silver, with a great San Jose property in Mexico)?
http://www.ariansilver.com/s/Sanjose.asp
I've traded the former but been long the latter since 19 GBp and today's close is 54.
RE: your risk tolerance, 2011 is risk on, baby, haven't you been watching CNBS?
The USA is more than capable of producing plenty of its own rare earths, it is just not willing to do so (at this time) due to the cost, much of which is environmental.
Why not buy rare earths from China while they have been most ready and willing to pollute their land and water resources to produce them? Same thing goes for Taiwan/Singapore, where Australia ships most of their RE ore for processing.
But times are changing here in the USA (i.e. recent funding approval for REE, and other goings on...). In fact one of the biggest hurdles with Molycorp is paying for the cleanup cost left over from when the mine they took over was shut down around 10 some years ago (as I recall, but don't quote me on this).
Expect wild, VERY WILD swings with all of these babies. Just look at XING today with +/- 10 to 20 % swings intraday.
Can be very rewarding or widow making depending upon how they are traded. Definiteley not for the faint of heart.
Its funny how all of these "green technologies" require resources that cause some of the most pollution intensive extraction processes known to mankind.
ssshhhh! ...you're thinking too much.
Coal is much, much worse. ~3.2 million tons of coal are needed for a single 1GW plant per year, and there exists lots of junk in there that just ashes up into the air, not to include the bit where you have huge open pit mines.
Gotta love that this spoofer has a holding of Promethium.
Last thing I want to hold is Pm - go wiki to see why...
(hint - it doesn't occur naturally in meaningful amounts.)
These are so many of exactly the type of posted comments that brings respect for the zerohedge commyoonidee back down to earth with a bump. 'I wanna buy something I don't understand, and barely know what it is *.... can you tell me what to buy, & remember -sshhhh? '
* and stock of a fly-by-night company I've never heard of.....!!
Rare earth minerals, ha-ha-ha-ha. Stick to gold & silver. You can all get your heads round that mechanism surely by now.
TD, this post really drew out the quacks.
Either: let's not do this again; or double down, and post that thing about the former Israeli President getting convicted of rape, and watch the anti-semites spin wildly out of control.
The time to buy MCP and the like was a year ago. Unless you think GDPs are going to double next year, jumping in now is kind of dumb.
MCP wasn't trading until the end of July 2010, but your point is sound, my 'psychology of speculation' trade (gamble, really) worked out well for me (as in, I can buy a nice roll of philharmonics with the proceeds) but I am very happy to be out of the stock. Basically, unless you like doubling down in Vegas, avoid the rare earth space now until these companies bring product to market (12-18 months).
You'll miss the buyouts or other deals-Hitachi just inked an agreement with MCP last week-that's why the stock jumped from 28 to 55, now about 51! Look for other miners to deal with the big boys or even for outright buyouts.
Just to keep things straight, it wasn't just the Hitachi deal. There was a series of events that pushed the price of MCP. Earlier in the fall there was the Sumitomo investment, then recently the Hitachi deal. After the initial pop from the Hitachi deal the shares were flat until an article in the NYT (Dec 15): "report says that it could take 15 years to break American dependence on Chinese supplies of critical manufacturing minerals."
http://nyti.ms/f1HVQH
Then on Dec 23 there was the report of China limiting its RE exports:
http://www.businessinsider.com/china-just-slashed-its-rare-earth-metals-...
Then another rumor was being circulated (can't find the specific article) that MCP had resumed "production" and the stock rallied to 55.22. This was reported to not be the case as they were still 12 months away from production and shares fell to 45 in AH. They've regained a little now that China has published a deep cut in exports.
I'm happily invested in specific silver and gold juniors and after making good money once in RE, I'm not interested in speculating more in the RE space. Good luck if you're doing so.
No problem with your info but the Hitachi deal was the spark that sent MCP from 28 higher then the questions about production tanked it but back up to 52+ today.
Anyway, RE does appear to be morphing into some kind of a mania-REE is going especially nuts-up another 15% today with huge volume and with a huge ramp at the end-I don't know what is driving that but I suspect from the action that there is a deal in the making or maybe just a rumor of one.
I have an interesting observation. Yesterday, i was at a commercial electrical supply store buying some all-weather outlet covers and started talking to the guy next to me. Contractor supply stores are less busy these days with construction slow. He and his son are staying busy stripping copper wire from houses. A couple garbage cans of copper wire fetches about $1,000. I thought, wow, we have an economy of dismantaling infrastructure for profit. The next thing he said was even more interesting. His son was approached by copper buyers while in line to sell his copper to the recycler. These black market buyers are offering a higher price than the recognized exchange rate. There is a public price for copper and a black market price. Just like a public exchange rate for currency, and a higher black market exchange rate in 3rd world controlled economies. That was a learning moment. Happy new years to all.
love the anecdote. thanks for posting!
DCHAF is ETF-ish. It trades like a closed-end fund. It's a company that buys REE's, stores them, and periodically re-sells them (for profit, in theory). It regularly reports a NAV.
Imagine that most of the worlds advanced weapons platforms are dependent on Rare Earth elements. Imagine that you are a country that want to expand its influence either through economics or military domination. Wouldn't one of your early steps be to cut off supply of any elements that you yourself might need soon. Another step would be to debase the currency of any competitor to decrease their ability to compete for limited resources. What were the signs prior to WW2?
Imagine that you are a gay faggot taking it up the ass from a cuntry that debases you during the act.
hey Spade, your giving Velo a bad name. descriptive though, i like your language, now what in the fuck are you now?
Some witch turned my chin into a hanging ball sack and a nappy pubic hairdo has replaced my regular hair.
>>at the end of every year I move completely to cash and lock myself in a bank vault for a couple days with all of my money and all of my annual trading records.
What a fucking lunatic
obriously you didnt get the point
Neodymium bitchez
That's the old Saudi/OPEC play to screw u 2x. First reduce supply and jack up the price... then drop price after new production comes on-line and BK the upstarts. Sears used to do it too, a vendor would build a factory to supply Sears and then Sears would force lower prices on them or shift the contract.
REE's are pretty fickle. Pretty small demand and users have much clout. I worked at a uranium mine in 1981 (Denison Mines in Elliot Lake) that thought it was smart to add a yttrium extraction circuit since prices were high. Besides, the Japanese were goading us to do so.
The circuit put out so much yttrium that it crashed prices, which of course was exactly what the Japanese wanted. Bust within 12 months. Haven't touched an REE since and don't plan on going forward.
http://www.raremetalblog.com/
best source of REO source data I've found to date..
the next scam. Go look at pictures of these operations, bunch of dudes carrying sacks of mud on their backs, LOL.
Even better, go to google maps or whatever and type in "baotou mongolia", then look at that beautiful lake there to the west of the city and the glowing crap that looks like burning sulphur, and note the beautiful black residue all over, freaking classic.
As far as MCP goes, it is about as goofy looking as they come. The CEO Mark Smith (former pres of chevron mining), frequently contradicts himself in interviews (and passes it off as inexperience). Yes, they were owned by Chevron, but if it is such a great business, then why did they sell it...or did they, just another shell game?
GS sold their interest, that should tell you all you need to know.
"Chevron Mining Inc. today announced that it has entered into an agreement to sell its Mountain Pass rare earth mining operations to Rare Earth Acquisitions LLC. The transaction is expected to close in late September, 2008.
REA is a special purpose company owned by Resource Capital Funds, Pegasus Partners IV, LP, The Goldman Sachs Group, Inc., Traxys North America LLC and Carint Group LLC."
this is a new trend?
http://agmetalminer.com/2009/10/08/a-rare-earth-mine-goldman-sachs-and-a...