Alternative Energy Investor Discussions

[FANGO]

A forum contributor had brought up the thought of impact the need for lithium for increased battery production would have on lithium mining company stocks. Got me to start reading about these companies. There a bunch of them valued at less than $.10/share and a couple larger players. Not sure if this is a good route to go. Anyone else looked at them?

SQM (Chile) FMC (US) CLQ (Canada)

I looked into lithium a little while ago and this is what I found:

The thing about Lithium stocks is many of these companies are heavily diversified chemical companies. So for example, SQM, the world's largest lithium producer, does a lot of it's business in potash, not just lithium. Look a few months back and you'll see a day where every potash stock took a 30% hit because a cartel in Eastern Europe which was fixing potash prices got broken up. So, SQM, the most popular lithium play, and not a very volatile stock, lost a huge amount of value in a single day. (edit: and I meant to point out that that loss wasn't even on anything lithium-related)

I haven't found a company which just deals with lithium, and I don't know a lot about LIT but if it tracks companies like SQM then it might also be affected by something like that (in fact it looks like it dropped at around the same time as SQM, just not as much).

One note, FMC did bid on a huge lithium deposit which was just found in Wyoming. Apparently this deposit is good because a) it's in the USA, b) it's enormous, c) it's near some other sort of salt product which is used in refining lithium (I don't know the specifics). There's another company bidding on it as well, I forget their ticker, but it's some tiny market cap company which is run by Wyoming state legislator. But basically whichever company gets it will probly see a bit of a bump, and/or have some good growth as the resources get exploited. That said, nobody knows how long it will take for this process to happen.

Here's (old) news on the FMC/Wyoming stuff: Wyoming lithium deposits much bigger than originally expected
FMC Corporation applies for southwest Wyoming lithium leases

I'm not an expert on this stuff, but it seems to me like solar/TSLA will see more growth (or more volatility in general) than these mineral companies, and to me mineral companies are sort of boring. But if you're looking for boring long term investments which won't grow that much, maybe this is a good play. That's not what I'm looking for, though. That said, some of these companies (like the FMC competitor?) are penny stocks and might fail, so you might have just as much risk as you would with TSLA/solars.

I just don't see much there, but that's just my opinion.

 

[kevin99]

This is helpful. Thanks!

I also like to understand how increased demand on Lithium ion battery impact the demand of raw lithium. Quantity analysis will be best. Then of course, how different positions and relevant these mining players are in the market. e.g., here is one story on CBAK:

China BAK to Supply Lithium-ion Batteries to FAW-Volkswagen Automotive Co., Ltd. -- SHENZHEN, China , Aug. 23, 2012 /PRNewswire-Asia/ --

Obviously it is not closely related to TSLA, but it gives some visibility about CBAK's relevancy.

I looked into lithium a little while ago and this is what I found:

The thing about Lithium stocks is many of these companies are heavily diversified chemical companies. So for example, SQM, the world's largest lithium producer, does a lot of it's business in potash, not just lithium. Look a few months back and you'll see a day where every potash stock took a 30% hit because a cartel in Eastern Europe which was fixing potash prices got broken up. So, SQM, the most popular lithium play, and not a very volatile stock, lost a huge amount of value in a single day.

I haven't found a company which just deals with lithium, and I don't know a lot about LIT but if it tracks companies like SQM then it might also be affected by something like that (in fact it looks like it dropped at around the same time as SQM, just not as much).

One note, FMC did bid on a huge lithium deposit which was just found in Wyoming. Apparently this deposit is good because a) it's in the USA, b) it's enormous, c) it's near some other sort of salt product which is used in refining lithium (I don't know the specifics). There's another company bidding on it as well, I forget their ticker, but it's some tiny market cap company which is run by Wyoming state legislator. But basically whichever company gets it will probly see a bit of a bump, and/or have some good growth as the resources get exploited. That said, nobody knows how long it will take for this process to happen.

Here's (old) news on the FMC/Wyoming stuff: Wyoming lithium deposits much bigger than originally expected
FMC Corporation applies for southwest Wyoming lithium leases

I'm not an expert on this stuff, but it seems to me like solar/TSLA will see more growth (or more volatility in general) than these mineral companies, and to me mineral companies are sort of boring. But if you're looking for boring long term investments which won't grow that much, maybe this is a good play. That's not what I'm looking for, though. That said, some of these companies (like the FMC competitor?) are penny stocks and might fail, so you might have just as much risk as you would with TSLA/solars.

I just don't see much there, but that's just my opinion.

 

[Norse]

This is helpful. Thanks!

I also like to understand how increased demand on Lithium ion battery impact the demand of raw lithium. Quantity analysis will be best. Then of course, how different positions and relevant these mining players are in the market. e.g., here is one story on CBAK:

China BAK to Supply Lithium-ion Batteries to FAW-Volkswagen Automotive Co., Ltd. -- SHENZHEN, China , Aug. 23, 2012 /PRNewswire-Asia/ --

Obviously it is not closely related to TSLA, but it gives some visibility about CBAK's relevancy.

LOL I just got CBAK yesterday. Market cap of 26million$, Dont have a clue about it, pure gamble, like KNDI and STRI

CSIQ JAN14 20$calls are at 2.25$ now. Just saying.

Im pretty sure you are right that some news will come out regarding SOL sleepy. That strenght is insane compared to the rest. selling stuff and buying SOL and DQ atm

 

[borat99]

What's going on with JKS in particular today? Is it because it's time for a correction?

My time is bad again this morning. I know on most days **** hits the fan around 10-11AM ET, but today it did at 9:30AM. Hopefully, the whole market is going to come back up a little with 20 minutes before closing bell. My 401k mutual fund exchange should be done tonight and will have fund in the brokerage option to invest tax free in sola tomorrow.

 

[Norse]

Well I guess its all timing now. We know these stocks will go up. And we know there are alot of money waiting to get into the markets. We also know more analysts are following solar. The bears are also shorting. This builds up in my book to be a perfect storm. I have sold Alot of stock today to put it into my options portofolio. The smart thing to do would probably be to have stocks. However this is a risk I am willing to take. I am only playing profit from Tesla since I got in early there. I feel like we are where Tesla was 9 months ago. The obly thing we need is for your goverment to agree, then I do belive the perfect storm is coming.

 

[borat99]

These storms make me sick in the stomach, Norse. Luckily, my solar options are all April contracts so I should have to enough time to make some profit and break even on a few. After this, I'm just going to do common stock and LEAPS until my timing ability improves by six-fold.

 

[AlMc]

These storms make me sick in the stomach, Norse. Luckily, my solar options are all April contracts so I should have to enough time to make some profit and break even on a few. After this, I'm just going to do common stock and LEAPS until my timing ability improves by six-fold.

Sorry to hear. Scares me off from options. I have not done them but have been studying/trying to perfect some strategies without committing funds. Your comments definitely gives me cause for concern.

 

[sleepyhead]

Well I guess its all timing now. We know these stocks will go up. And we know there are alot of money waiting to get into the markets. We also know more analysts are following solar. The bears are also shorting. This builds up in my book to be a perfect storm. I have sold Alot of stock today to put it into my options portofolio. The smart thing to do would probably be to have stocks. However this is a risk I am willing to take. I am only playing profit from Tesla since I got in early there. I feel like we are where Tesla was 9 months ago. The obly thing we need is for your goverment to agree, then I do belive the perfect storm is coming.

Yeah, just have to wait out the government stuff before getting in. That is why I was cautioning people who thought they were buying TSLA at the low after it went back up above $180. I am still waiting on the sidelines until we get a sign that they are getting close to a deal. Right now it doesn't sound that way, and they are playing the blame game.

It's not that the market wants to go down. Its that the market has to go down. It has to tell the congressmen that they are about to unleash financial Armageddon on the world.

The whole global financial system as well as global economic system is based on the fact that the US Treasury is THE safe haven security. Once the politicians start messing with that the whole global financial system can collapse.

This is the second time that congress has played this game. The rest of the world is starting to get very irritated. Markets around the world are tanking because 500 people, give or take, are playing a high-stake game of poker with the 7 billion people's chips.

The market is the referee here and it has to send congress a message. If tomorrow we have a "relief" rally, then it will only prolong the time it takes to get a deal done.

If the markets tank again tomorrow and the day after, I guarantee that congress will have a solution done over the weekend. But if they rally tomorrow and hold flat on Thursday then congress will not have any incentive to get anything done until Oct. 17.

What this means is that if the market finishes this week strong then it will have to tank hard next week. This is a bad scenario in my opinion, because we need a deal done ASAP. The longer we wait the more long term damage this political debacle will inflict on the US. They are playing with the reputation of our "risk-free" security.

We have to get a deal done soon, but if we don't then I would think that the markets have to continue to tank because that is the only way the congress will get its act together.

That is my opinion and I don't see any upside in getting in tomorrow unless you are playing a day trade. If the market goes up tomorrow then we will most definitely see a down day on Thursday unless you believe that congress will be close to a solution on Thursday.

The risk is to the downside in my opinion. I am waiting at least two more days before getting in, although I did get in a little today. I won't get money for two days so I think it will be perfect timing. If I had cash now I would be very tempted to buy in right now, but logically thinking I think it is a bad idea. So the fact that I won't have the cash transferred until the end of the week will probably turn out to be a blessing in disguise.

If the markets do rally over the next several days then I will be very happy too because I already have a huge (relatively speaking) long exposure to the market right now.

I set myself up in what I think is a win-win situation. The only way I lose is if congress completely screws up and we default, in which case I will lose it all; like most people in the markets. Prolonging a resolution could potentially lead to a global recession. Every day longer it takes to get this done is an additional day of significant economic damage to the US and global economy.

So logically thinking the markets have to continue to go down every single day until congress gets this done.

Also, it would definitely be better for the US economy in the long run if tomorrow they passed a continuing resolution and completely eliminated the debt limit, and then flipped a coin on Obamacare; than to continue going down this path of government shutdown and default scare tactics.

 

[borat99]

Listen to sleepy.

I was up big time this morning, but then 10:30AM everything went kaboom. I couldn't sell my calls when CSIQ was above $20. Then it went down so fast I just stepped back and told myself to be patient and wait like what happened to TSLA last week. Hopefully, what happened today will make the republicans rethink and do what's right for the country. A man can hope.

 

[sleepyhead]

Listen to sleepy.

I was up big time this morning, but then 10:30AM everything went kaboom. I couldn't sell my calls when CSIQ was above $20. Then it went down so fast I just stepped back and told myself to be patient and wait like what happened to TSLA last week. Hopefully, what happened today will make the republicans rethink and do what's right for the country. A man can hope.

Speaking from a politically neutral perspective the republicans kind of have to do what they are doing. The democrats were in charge of all chambers and the people quickly voted republicans into the house to lower our spending which was out of control. The republicans have to fight to curb spending, because that is the vote of the people. Democrats in senate are sticking to their beliefs because that is why the people voted them in initially. It is a flawed system, but we have to understand that flaw and continue negotiating all the time and working together.

I think democrats and republicans should sit together and work together on every issue. E.g. both parties negotiate a deal in the house and send it to the senate where both parties make changes to the deal together and send it back and forth until they get a resolution.

I just don't think that the politicians understand what kind of damage every day of shutdown causes, and probably nobody does. We will only know after the fact, which will be too late. It is kind of like pollution and global warming; we will only find out what kind of damage we caused after the fact. Maybe if somebody could quantify to the politicians that we are hemorrhaging, for example, $5b or $50b of economic damage daily then they would get their act together.

 

[borat99]

When I said Republicans, I really meant both sides need to work the issues out together. And because this won't be an overnight process, both should agree to fund the gov and raise the debt ceiling with a contingency that they will negotiate and come to a resolution within a reasonable amount period of time. I just don't get why DC has to hold back the entire county and probably the world to fix its own issues.

 

[Jonathan Hewitt]

I should've listened to Sleepy! However, as long as they work a deal out everything will be ok. If not, we are all kind of done for, anyway. That was my thought process when I got in, haha. I had sold some covered calls on SPWR as a hedge and bought them back yesterday for a profit. maybe i should've waited.

 

[Larken]

If not, we are all kind of done for, anyway.

What do you mean by this? If an agreement on the debt ceiling is not reached, that the whole financial market will tank big time and we're entering a recession? Is this the only logical outcome if they don't reach an agreement? Because if so, the logical thing would be to completely exit all the positions one has and wait till after the 17th I would guess?

 

[sleepyhead]

What do you mean by this? If an agreement on the debt ceiling is not reached, that the whole financial market will tank big time and we're entering a recession? Is this the only logical outcome if they don't reach an agreement? Because if so, the logical thing would be to completely exit all the positions one has and wait till after the 17th I would guess?

That is exactly correct.

The problem with exiting positions is that some stocks might actually go up during this period. I can see the solar stocks going up today as well as TSLA (I can also see them tanking hard again), but probably a little less than yesterday). Then by Thursday you might see congress making progress and the market rally continues. Then if they strike a deal and the market opens up 2% on Monday.

In this scenario, if you cashed out now (at the bottom) you would have missed a good 10%+ rally in your stocks.

Timing the market is always difficult to do. And if you already held through the first 10% loss on TSLA, then it is kind of hard to sell now even though there is a chance it goes down further.

- - - Updated - - -

I should've listened to Sleepy! However, as long as they work a deal out everything will be ok. If not, we are all kind of done for, anyway. That was my thought process when I got in, haha. I had sold some covered calls on SPWR as a hedge and bought them back yesterday for a profit. maybe i should've waited.

You might be alright with solar, it just all depends on the market sentiment. It is very hard to tell which industry gets sold off next. Solar had a big sell-off yesterday, so if there is another sell-off maybe solar doesn't get hit hard again. Or maybe there is a rally and the sector rebounds.

I held through all of my solar position since this mess started and I did very well. Even yesterday my portfolio was only down a little, because of my high exposure to SOL. You just never really know what the market will bring you.

My portfolio has performed the best during the Syria debacle and now during the shutdown. I am glad I did not sell going into these events even though I thought holding on will be a bad idea.

 

[Larken]

That is exactly correct.

The problem with exiting positions is that some stocks might actually go up during this period. I can see the solar stocks going up today as well as TSLA (I can also see them tanking hard again), but probably a little less than yesterday). Then by Thursday you might see congress making progress and the market rally continues. Then if they strike a deal and the market opens up 2% on Monday.

In this scenario, if you cashed out now (at the bottom) you would have missed a good 10%+ rally in your stocks.

Timing the market is always difficult to do. And if you already held through the first 10% loss on TSLA, then it is kind of hard to sell now even though there is a chance it goes down further.

I guess what I am trying to gauge from you more experience investors is, HOW much it "might" tank. I know theoretically it can tank 100% but are we talking about a possible tanking of TSLA stock as much as 50-60% or is this very unlikley? Because if a tanking of +60% of a TSLA is possible or even probably if the debt ceiling isn't raised before the 17th, I would be happy to exit positions and risk missing out on a 10% rally, but protecting me from a massive downfall.

 

[JRP3]

I think Larken's point is that the downside of default is so much greater than the upside of no default the sensible move would be to assume default and get out now. The potential to miss out on a few percentage points of gain doesn't outweigh the benefit of protecting from the huge hit you'd take on default. I'm not there yet, but I have been considering it.

 

[Larken]

I think Larken's point is that the downside of default is so much greater than the upside of no default the sensible move would be to assume default and get out now. The potential to miss out on a few percentage points of gain doesn't outweigh the benefit of protecting from the huge hit you'd take on default. I'm not there yet, but I have been considering it.

Exactly what I was trying to say :smile:, I know it's difficult to predict and that's why I am trying to gauge how big of a drop is probable. The TSLA stock I have I don't plan to sell for many years, but if there's a risk of a 50% drop then of course selling now is something to be considered.

 

[sleepyhead]

Exactly what I was trying to say :smile:, I know it's difficult to predict and that's why I am trying to gauge how big of a drop is probable. The TSLA stock I have I don't plan to sell for many years, but if there's a risk of a 50% drop then of course selling now is something to be considered.

Or you can buy deep otm put options to protect your TSLA if you are afraid it might tank big time.

When I say tank, I mean a one or two day tank like we had over the past week or so. I don't think that stocks will go down too much unless we do default in which case we are all doomed anyway (except for those who bought deep otm put options).

I haven't bought deep otm put options. I considered doing it on the S&P a week ago but I have faith in politicians and they will get it done soon.

 

[JRP3]

I have faith in politicians and they will get it done soon.

Let's think about that for a minute :wink:

 

[borat99]

Another painful day.