Fundamentals... Fundamentals...Fundamentals....I realize fully that this is an extremely painful time to be an investor in lithium. Not just Citical Elements, but pretty much any lithium company.
In fact, many may not survive at the small explorer end.
Market sentiment sucks the life out of it and feeds on itself in a negative way. That is the current reality.
And yes I know that I am more likely to see the glass half full when it comes to CRE than some but I also have deep portfolio wounds from year over year loss. Very deep. Yet logic still tells me this is not a real loss. It is a paper loss only and will be erased.
But I have to admit....all that is real dollars, real trendlines, real patterns.... really painful to contemplate.
BUT, not all companies are created equal.
Group 1 -- Those with drill results, no money and no permits... they are in a bad way. Send prayers. They are in suspended animation until this turns around. Then they need to dazzle somehow if they still exist.
Group 2 -- Those with contracts and production are still down dramatically year on year. Not as bad as the first group for sure. But look at Albemarle y-o-y even.... not pretty.
CRE should not be put in a basket with group 1. CRE is lumped in with the NO PERMIT, NO MONEY, NO PROVEN RESOURCE gang. It isn't right and isn't fair but it is what it is. That is what CRE looks like with no hole in the ground, no sales, no agreements. CRE is in a different class.
Who cares?
When this changes and things need to happen fast because prices are starting the upward move, CRE is on the edge of forward movement. Ready to go. Discussions can reheat very quickly when the economics change. Spreadsheets get updated, critical thresholds get crossed in the arithmetic and suddenly things happen fast and away we go.
The others will have taken their shoes off and reclined knowing that they need to somehow fight for attention again and try to rebuild excitement while their shareholders are 75-80% down in value.
I am a retail investor. Not institutional.
The retail investor right now is dressing wounds and trying to find a filament of hope. Me too.
The retail investor has driven CRE into the ditch along with everything else because we are not properly differentiating the situation we are in from others. Institutions have, I suspect been gobbling up whatever spins off the retail investor over the last year. They know this is a longer game.
Great companies are also down right now. Big decreases year on year.
Remember that.
Maybe misery does love company.
We are not a producer yet.
But CRE is far from a hope and dream. It has late stage engineering, cash, long-lead orders made, Proven Resource, additional resources yet to be proven, permits of all sorts. We are different.
This video below is from last August when the market was soft but not yet completely tanked.
Still an excellent lesson in there. Smart thinking for those who play strategically rather than whipping around emotionally.
Get a coffee. Listen to the words.
Understand the differences.
Ignore the dates. We know those were missed. Yes yes.... that always hurts the sentiment but this is different than other missed dates (yes there have been too many missed in the past, i agree)
REMEMBER that the market has been sliding down a greasy path for all sorts of reasons. OF COURSE dates will be missed.
If the price of anything is dropping, the lineup of individuals willing to sign a contract on both sides will diminish. Nobody wants to do anything without feeling a floor of some sort under their feet and no seller wants to fire-sale if they don't have to. CRE didn't have to.
I can forgive that the dates became meaningless as they were presented last Summer/Fall.
I am relieved CRE has cash to spend and keep the planning moving forward so that the spring is further compressed for when the rebound happens. It can happen quickly. Those who are closest to the finish line will win the race. Not all companies will restart at the same place.
If you want to find a little peace in your day. This Eric interview may help do that.
We are not alone in this. I believe that time and patience will be key.
https://www.youtube.com/watch?v=rs_dGZN65HY
The doom and gloom will pass.
HIBL