Peak Resources Looking to be a Winner from the EV Boom

It is very difficult to escape from the conclusion that the Dow has peaked. It has been an incredibly lengthy bull market that owes much to QE, but times are changing. We saw the start of an extended topping pattern early in 2018, and as we approach the end of 2018, we should expect that the Dow will give up more ground in 2019. There will be pushing and pulling along the way that will provide opportunities to make trading profits, but don’t be expecting anything better than falls followed by rallies. No record highs are on the agenda.

Previously in 2011/12, we saw rare earth stocks boom not so much because they are rare (because they aren’t), but because the supply is dominated by China and it has not been scared to use its market power. Speculators pushed up prices of many rare earth products by 5-10x. As usual, after every bubble, there is a collapse. Nevertheless, given the passage of time and the increasing emphasis on electric vehicles that rely heavily on magnets that use neodymium (Nd) and praseodymium (Pr), we should be reassessing investment opportunities in the sector. 

 WeeklyComm8December2018.pdf