I got cut off by a Tesla Model S yesterday on my way to work, but I won’t hold it against Elon Musk personally. Believe me, when you start seeing Tesla cars quietly rumbling along the streets of downtown Baltimore, it’s hard not to immediately take notice.
Then, when Musk let the C-word slip this morning, I couldn’t help but smile as I got goose bumps from the possibilities.
I wasn’t the only one to catch Elon’s intentional slip-up. One of my cubicle cellmates, Chris DeHaemer, could hardly contain himself.
“China! He’s going to take over China now?!?” he grumbled, more to himself than to me. Now, I can’t rightly blame him for getting worked up.
You may have come across the headline this morning, too, when the Tesla CEO announced that his company could begin producing cars in China within two years.
So when Chris asked me for my opinion on the matter, there was really only one thing to say…
China’s Surging Lust for Lithium
First, it’s important to see why Elon Musk is so interested in the Middle Kingdom.
To put it simply, China is dominating the lithium market right now. The country accounted for about 33% of global lithium demand in 2014. It was being used in everything from batteries and glass to grease and air conditioning equipment… even synthetic rubber.
If things keep going the way they have been, 2015 is shaping up to be another record year for lithium consumption in China.
Now, get this little tidbit: The rumor around the market campfire among analysts is that China is expected to post the strongest yearly demand growth of any major market over the next four years.
Of course, lithium batteries and grid energy storage will be the major catalysts for growth and drive demand for lithium battery equipment to record heights.
China, however, is just one part of the lithium story.
Outside of China, it shouldn’t be surprising to learn that lithium demand in North America is expected to grow at the fastest rate through 2019. The nearly half-a-million Tesla cars that the company is expected to produce by 2020 would eat up as much as 17% of the world’s lithium supply today.
But while the demand side of the lithium revolution is charging ahead, the question is, to what extent is it out-pacing supply growth?
Just take a look at the world’s largest lithium producers and reserve holders:
It’s no wonder China, who holds the world’s second-largest amount of lithium reserves, is posting record consumption every year.
And that, dear reader, is where our opportunity lies…
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Make a Mint Mirroring Musk: It’s About Supply, Stupid!
My veteran readers probably understand why, back in my office, I had just one reply for Chris: “It’s all about supply, stupid!”
Chris wasn’t even slightly fazed, because for once in a long while, we were both on exactly the same page. He just gave me a serious look and nodded in agreement.
And even though we both felt the supply side of lithium held a tremendous opportunity for individual investors like us, Chris certainly wasn’t expecting what I told him next…
First, understand that the world’s lithium supply is in a pretty similar situation to our global supply of crude oil. In 2010, national oil companies (NOCs) accounted for 75% of the world’s oil production and a jaw-dropping 90% of crude reserves.
Well, there’s even more disparity when we talk about lithium supply…
Just three company account for more than 90% of the world’s lithium production.
Fortunately, there’s a serious catch here — one you absolutely have to recognize for what it truly is: an investment opportunity that comes once a generation.
Look, I understand that you, or any investor that has followed up on the lithium revolution, for that matter, have come across those three lithium producers — it’s impossible not to!
And only recently have the media and various analysts jumped on this OPEC-for-lithium trio (LEPC, maybe?) as potential investments: FMC Corp. (NYSE: FMC), Albemarle Corp. (NYSE: ALB), and Sociedad Quimica y Minera (NYSE: SQM).
I’ve even read someone touting the Global X Lithium ETF, which holds a basket of lithium stocks, with these three producers making up one-third of the fund’s holdings.
Sadly, had you followed their advice over the last two years, you would’ve come up with something worse than a goose egg…
You would’ve lost a chunk of your hard-earned cash.
Here’s how those stocks would’ve performed for you:
This is why it pays to have the right kind of information before buying the majors. It’s the reason there are much more profitable oil investments for you besides Exxon.
It’s the same situation when it comes to lithium.
While those three multibillion-dollar lithium companies would have lost your investment — and then some — this small, select investment community easily doubled their money inside of just six months!
They did it by putting their money into a ground-floor lithium company with a tremendous upside. In fact, it wouldn’t surprise me in the least to see them double their money again now that Elon Musk is greedily eying up a region that is shaping up to be the world’s next “Lithium Hub.”
I strongly recommend you check out this lithium investment for yourself.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.
