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Trading rare earth stocks and investing in Lynas Corporation

|Includes:REMX

Personally, I have owned and do own a lot of rare earth stocks. Many are trades. A few, like Lynas, are long term investments. I define a trade as a holding based on short term catalysts and an investment as supported by a long term growth story.
What I find most odd right now, is trading on a prior event when this investment stock is loaded with catalysts in front of it in the near term (good investor call on tap (based on prior ASX announcements), first concentration from a mine outside China, Japanese Asia and European contracts in the pipe, first to positive cash flow, first to foreseeable earnings, development of the LAMP (Lynas Advanced Materials Plant), and probably first to global listing). That is a lot in the near future for Lynas.
On the flip side, I keep waiting to sell the other rare earth stocks because the trades are reaching high valuations and there are no immediate catalysts available for most of the other stocks. Still, every time I try to close on my Moly trade something moves the stock. Today it's the government, previously it was rehashed news ect. Now, experience has taught me to ride my winners as long as it makes sense. But I also know that fundamentals will be served over the long term.
The reality is Lynas is the best rare earth stock from a fundamental perspective AND it has the best near term catalysts in front of it at this stage. The current price is a buying opportunity. We have seen the Quarter Announcements and things look great. Nicholas Curtis should not have sold his shares at this time. But he would have to be a glutton for punishment to flip shares knowing he will lay an egg on the upcoming investor calls. He may have seen this buying opportunity coming and will reload or maybe he just was not thinking about any of this. Some of the smartest people I've met occasionally stop thinking for a moment here and there.

But the fact remains, this stock is much closer to cash flow positive than any other. It is the richest mine, the best valuations, the clearest path to earnings, and the shortest wait. Watching each tick of a stock requires a fairly reserved mindset. I don't like to do it unless I'm planning on selling or buying. I'm adding or holding my Lynas till March. At that point I might trade some shares around a core position if March 7th looks like a sell the fact event.

But very few stocks have multiple catalysts to support the stock even if one issue were to go poorly. Believe me the bio tech with a poor trial or a new product launch delay generally breaks a stock too much to keep it. In Lynas' case, ask yourself if any one of the current catalysts mention are delayed or fail to materialize, would you dump the story? I wouldn't. Lynas has been on time and on budget for quite a while, and I'd stick it out even if things got a little rocky. Meanwhile, I will be trading out of some of the other all promise- no hardware stories I get from my other rare earth trades.
That's my opinion.

Disclosure: I am long OTCPK:LYSCF, MCP, REMX.

Additional disclosure: I rotate through several rare earth exploration projects in Australia and in the REMX

Stocks: LYSCFIQ, REMX