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Busting the Lithium Bubble Myth

Written by Keith Kohl
Posted November 8, 2017

A few years ago, a friend told me one of the most gut-wrenching investment stories I’ve ever heard.

Years ago, she’d gotten a temp job working a table at a computer convention.

While checking out the various tables, she quickly found herself in a long conversation with a rep from one of the dozens of tech companies that were set up.

He even offered to let her buy a few shares of the company right then and there.

She declined.

That was the day, dear reader, that my friend turned down the chance to buy stock in Apple in the ’80s when it was selling for less than a dollar.

Today, it’s trading above $174 and is one of the most dominant computer technology companies in the world.

Look, we both know there’s nothing more satisfying than perfectly timing an investment.

And no one wants to kick themselves later by missing out on an opportunity.

Sometimes it’s the fear of a bubble that keeps investors from the biggest investments of their lives.

It happened to my friend, who was skeptical about the success of a fledgling computer company.

It happened when Bitcoin first arrived on the scene.

It happened when no one believed oil would hit $147 per barrel.

And it may be happening to you right now...

Lithium Myths Busted

If reassurance is what you’re looking for, look no further than two of the world’s richest billionaires.

Believe me, they didn’t get that way by sitting on the sidelines...

When one billionaire starts chasing after one investment, our ears perk up; when a second billionaire ignites an all-out war against the first in order to dominate a market, then we should be taking full advantage of the situation.

And right now, we’re watching the battle of the century take place between two men whose names might be familiar to you: Elon Musk and Warren Buffett.

Both are racing to secure supplies of one critically important metal: lithium.

Now, you may be wondering why I’d call lithium a risky investment.

The answer is simple: It’s not… so long as you’re looking for those lithium profits in the right place.

And make no mistake, the lithium market is in turmoil today.

Skyrocketing demand, brought on by both the EV market and the utility energy storage industry, has pushed lithium prices to new highs over the last few years.

You can see the value of lithium-centric stocks on the rise by watching the Global X Lithium ETF (NYSEArca: LIT), which is up more than 64% in the past year:

image_lit

And anytime we see a significant price increase, there’s always a concern over bubbles bursting.

Thing is, we aren’t looking at a lithium bubble.

Prices are rising due to high demand, and these supply/demand dynamics could take years to reach a balance — if they ever do.

Until then, this lithium shortage has Buffett, Musk, and others on the offensive.

And here’s where we capitalize on both of them…

The Lithium Bubble and Other Myths

Lithium isn’t some brand new, speculative investment that sprung up out of nowhere.

That doesn’t mean there isn’t danger, mind you. It feels like every day I hear about a new lithium company bursting on the scene with little more than a few acres and a dream.

Even established players in the field are only making marginal progress forward.

The “Big Three” lithium producers — Albemarle, SQM, and FMC — are bolstering their production lines to keep up with new demand. These companies are also known to practically every investor in the market.

Don’t speculate, but don’t just settle for the biggest fish in the pond.

It’s a balance my readers and I have built our energy profits around, and the lithium story is no different.

If you think you’ve missed out on the lithium boat already, I can assure you you’re wrong… but you won’t be for long.

Don’t wait on this… click here for the FULL STORY.

Until next time,

Keith Kohl Signature

Keith Kohl

follow basic@KeithKohl1 on Twitter

A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.


IN CASE YOU MISSED IT

Cobalt prices have doubled in the last year.

cobalt 2016-2017

I think they’re going to double again.

And my cobalt price forecast has Musk scared to death. His biggest challenge won’t be convincing investors that shares of Tesla are worth the astronomical $350 apiece; it will be locating secure, reliable sources of cobalt and lithium in the future.

Without it, Musk might as well scrap the blueprints for his next four Gigafactories.

Fortunately, he may not have to look very far from his home base in Nevada.

I’ll say it again: Sell Tesla; buy this.

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Elon Musk's Lithium Revolution is Upon Us

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