Dear Reader,
Less than a year ago, a google search for “lithium shortage” would have yielded a slew of headlines on the topic of the burgeoning demand for electric vehicles and rechargeable batteries for consumer electronics, and how this is pushing the lithium sector into a shortage.
And yet somehow, between then and now, the bottom fell out of the lithium market — dropping prices for battery-grade lithium by almost 80% from its late 2022 peaks.
Though the knee-jerk response might be one of confusion, what’s happening here isn’t mysterious or unprecedented.
It’s so well understood, in fact, that we already know what comes next. Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
What you’re looking at below is the price chart for high-grade lithium expressed in Chinese Yuan — the currency of the lithium refinement industry’s principal market.
This pattern illustrates a classic bubble-bust cycle, and it’s as famous as it is deadly.
How Lithium FOMA Makes An Entire Population Of Investors Poor
Lithium exploded onto the commodities investment scene in the early 2020s, just as the EV craze went into high gear.
The mania coincided closely with other manias in that same space, including the valuation of the world’s most sought-after EV brand, Tesla (Nasdaq:TSLA).
Along with the ICBM-like ascent of Tesla, two of its most direct competitors in North America, Rivian (Nasdaq:RIVN) and Lucid (Nasdaq:LCID), also went pubic on the heels of the buying spree.
Of course after the mania comes the inevitable — the crash. It happens, literally every time investors get too excited.
First the growth slows, which triggers the initial scare sending the weakest hands scambling to sell making prices drop further, which then leads to more panic.
The cycle perpetuates itself until the fuel has run dry and there are no willing sellers left holding shares.
People who buy into the mania and sell into the panic always lose money.
The yin to that yang, however, is the group of cool-nerved shareholders who buy into the collapse.
This group always makes money.
Want To Win Every Time? Bet Against The Dumb Money
And that’s the group I want to speak with right now.
Because the lithium market, believe it or not, has not actually changed much since the peaks of 2022.
Correction, it has changed, but not in the direction you’d think. Lithium demand is at all time highs. Lithium supply is approaching all time lows. Lithium exploration has never been hotter.
Which makes lithium still the hottest and most important commodity of the 21st century — no less important than oil was to the 20th century.
Investors who ignore the emotions and make calculated risks in the lithium sphere today will see big investment returns before the middle of the decade.
By the end of the decade, as the rechargeable battery market grows by an estimated 200%, they will see their investments balloon.
Now, earlier I said we know what’s going to happen from here on out, and we do.
If the above explanation didn’t do it for you, just look at another recent bubble that we’ve watched inflate, collapse, and then resurge after the weak hands had tucked tail and fled.
Remember These “Collapses”?
Behold, the Nasdaq itself, which essentially tracks the evolution of the consumer tech industry.
The dotcom bubble collapse, which you can see above represened by that peak right around the turn of the century, was nothing but a speedbump compared to the explosive growth the entire tech sector saw in the years that followed.
The same pattern can be seen in another sector that’s near and dear to all of us — housing.
When the housing bubble burst, we all thought it was the end of the world.
The weak hands fled and prices collapsed, but a few steady-handed investors used the historic dips as an entry point and guess what happened?
The market rose higher than ever and without the same kind of fanfare and hype that brought it to near implosion back in the late 2000s.
Today, this same thing is happening to lithium with its bottoming. The smart money is now getting back into the market for the impending bull run.
This means the time to choose your method of exposure, is now.
Stake The Most Important Claim Of Your Financial Life… Right Now
Earlier I talked about lithium exploration blowing up, and it is.
Right now, more than ever before, investments are pouring into lithium exploration around the world, and much of the investment capital is being put up by our geopolitical rivals in the Far East — namely, the Chinese Communist Party.
Well, last summer they got an extra bit of motivation to work even harder, when the biggest lithium discovery in history was made right here in the western United States.
Potentially bigger than all the known lithium reserves put together, this massive discovery was made at the Mcdermitt Caldera on the Nevada/Oregon border.
The Caldera — an ancient remnant of an eruption at the Yellowstone supervolcano — is said to contain between 20 and 60 million tons of lithium.
That’s enough to supply global demand for up to 2 decades.
The company which holds this multi-trillion dollar property is a quiet mining operation, valued at just under $750M — less than 1/2000 the potential value of its resource.
Look, I know if feels risky given the current climate, and especially in view of the price drops, but this is precisely where the future winners are buying in.
They’re taking risks. They’re not listening to those little voices of doubt in their minds. They’re going against the crowd.
Want to learn more? I just published an in-depth presentation on what could be the biggest lithium player of the next decade.
Access is instant, and the information is yours to do with what you please. Fortune favors the bold, Alex Koyfman His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.
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