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Lithium: I Missed This Gold Train

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Tesla

As an investor, I think that following emerging trends is absolutely essential for long-term success. In the past, I’ve always tried to do my best to stay ahead of the curve, but this time around, I missed something most obvious to everybody out there — The electric vehicle (EV) revolution.

Back in 2013, I bought up shares of Tesla Motors (TSLA) aggressively, and made a pretty penny in a very short period of time. Because the Model 3 seemed so far away, I kind of lost track of the whole EV story, and thought that I had much more time to get well situated for the upturn.

Well, since I started investing in gold mining stocks, I kind of always knew in the back of my mind that investing in lithium would be the way to go to best leverage the impending revolution in the automotive industry… TSLA is simply too expensive right now, and I would say the odds that shares 2x, 3x, 5x from here are very low… In short, Tesla would have to achieve massive success with Model 3 in order for shares to multiply so ferociously.

On the other hand, many of these lithium stocks were trading for pennies, so the inherent leverage presented with these investments is staggering, much like is the case with gold and silver mining stocks.

Lithium is already on the move… Just wait until the demand from China kicks in, like it did with smartphones…

lithium

Check out the 1 year performance of the following lithium stocks: Pure Energy Minerals (PE.V), Galaxy Resources (GALXF), and Lithium Americas (LAC.TO).

PE.V_GALXF_LAC.TO_chart

Galaxy Resources is up over 1,000% Y/Y! Pure Energy Minerals is up almost 300%!

The torrid performance of these lithium stocks continues today:

Pure Energy Minerals Lithium Americas

I will confess, I’m pretty disappointed in myself for missing this evolving story… The lithium boom is definitely something that I should have been watching more closely, because to me the electric vehicle (EV) revolution is the most obvious “next big thing” in technology. Similar to the smartphone revolution from 2007-2015, the EV is going to change the landscape for the entire automotive world. In short, if you want to invest in the future, you should find a way to hitch a ride onto this developing trend. With hindsight, I should have known that the buzz would reach a short-term fever pitch shortly after the Model 3 unveiling at the end of March…

 

Oh well, no point in crying over spilled milk…

 

On the brightside, shares of Perseus Mining (PRU.AX; PRU.TO; PMNXF) have received the re-rating that I was expecting, although I am a bit surprised to see shares up so much already, rising 13.64% this morning!

PRU

Even with the spike, I still strongly believe that shares of PRU.AX/PRU.TO/PMNXF are extremely undervalued, so I am anticipating a further re-rating to continue over the next few months so that this company can catch up to its mid-tier gold peers operating in West Africa.

As I previously mentioned to readers, I was buying up shares of Amara Mining (CLUGF) most aggressively last week… Actually, I added to my position last Friday, the last day of trading for shares of CLUGF. I now own 250,000 shares of CLUGF, which is my largest position by far. To accommodate more shares, I sold 5,000 shares of B2Gold (BTG), and 2,150 shares of Pretium Resources (PVG) last Friday.

As announced, the merger between Amara Mining and Perseus Mining is now complete, with the High Court of Justice in England and Wales sanctioning the scheme of arrangement on April 15, 2016. So, it’s a done deal at this point.

When the dust settles, I will receive 170,000 shares of PMNXF, and warrants that will entitle me the right to purchase an additional 85,000 shares of PMNXF at a fixed cost of A$0.44 good for a period of 3 years… It’s pretty crazy, but the warrants are already in-the-money, with the re-rating that has occurred today… If gold can keep doing its thing and climb higher, these warrants will become increasingly more valuable throughout the years. Without a doubt, it was the allure of these warrants that caused me to load up on shares of CLUGF so heavily last week.

 

Still, I will say again, I’m pretty disappointed with myself for missing the lithium story… I know that it’s still early-stage, but the quick gains are now gone, and I really have no excuse for falling asleep at the wheel.

 

Live and learn…

 

BTW, I am still water fasting, but I thought it was important that I get this post out… I’m going back to sleep now.

 

Happy Hunting!

 

Photo Credit: Tesla Motors

{ 4 comments… add one }
  • BeSmartRichNo Gravatar April 18, 2016, 1:22 pm

    Holy cow. 1000% is truly insane. Oh well… What’s done is done. Will have to keep my eyes open for next Lithium 🙂

  • olliethepugNo Gravatar April 18, 2016, 3:48 pm

    Hello! What are your thoughts on GGN? It has a strong dividend return & could ride the gold wave.

    Cheers! Love the blog & congrats on your new-found freedom!

  • Investment HuntingNo Gravatar April 18, 2016, 6:05 pm

    I bought 500 shares of DJIFF a few months ago. They own a Lithium claims that are really close to the new Tesla battery facility in Reno, NV. Not sure if it will ever take of, I it only cost me $500 to find out.

  • Income SurferNo Gravatar April 19, 2016, 7:30 am

    Nice work buddy! I debated Lithium with R2R, and decided against it. I wish I had been less distracted by the trip, and gone after the PMNXF warrants though. All I can say is nice focus Jay!

    I hope your week is starting off well
    -Bryan

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