The other reasonRare earth element (REE) stocks have been surging lately.Once unknown to the general investing public, shares in companies thatmine these special resources are now being snatched up without pause.There are few of them that are public, and even fewer that arecurrently making money.
It's a high risk - highreward sector to invest in. But if you have the risk-capital toutilize, it's worth rolling the dice when the table is tilted in yourfavor. Knowing when that is, well, is anybody's guess. This kind ofhigh-risk, high-reward scenario is the nature of speculation.
Rareearths - a group of 17 chemical elements that you can find in theperiodic table - are used in everything from wind turbines totelevisions, iPods, and hybrid cars. Almost all technology devicesutilize them in some way, so you can see why demand for shares incompanies that can bring rare earths to market is so rampant.
Yet,there are few REE mining companies in the world outside of China -even as demand for the precious metals soars. Consider these miningcompanies the clean energy equivalent of oil exploration and drillingcompanies. If you think there's a future for clean energy, by extensionyou think there is a future for rare earth mining companies.
Thesestocks have been posting big returns on pretty much a daily basissince July, and many are up over 100 percent since then. Trying tovalue these stocks is an immense amount of work, and to do so properlyyou'll need to look at what elements are in the respective companiesdeposits, what the market value of the elements are (both present andfuture), the cost to get the materials out, uncertainties, and a host ofother considerations.