- Created on Monday, 10 January 2011 17:34
- Written by Sara Nunnally, Editor, Smart Investing Daily
- Hits: 5427
On Thursday, I received the following e-mail from longtime Taipan Publishing Group subscriber S. E.:
A big stink has been made about Rare Earth Metals. Some at Taipan 6 months ago talked about it pushing readers to watch it. NOW it is exploding. REE has climbed from $2.00 to nearly $15.00 as an ETF.....HAS THIS RUN TO FAST AND FAR? OR.... is this based upon the combination of the falling dollar, the Chinese cutting back on supplies to the U.S., the hype about the Chinese cutting back in the supplying and distribution of REE (Rare Earth Metals), and the combination of REE being needed in the market place to manufacture all the things people consume in the Electronics World? To Sara Nunnally, I have been reading your stuff for 3 years. You got my attention when I read an article on Vestas Wind Systems 3 years ago running 1 small country and the future of Wind Farms. We have e-mailed each other before, and you have published my findings as well. You write some great materials for individuals to ponder for investing. Sara, is REE just getting started and could the run up be spectacular as a $50.00+ ETF based upon the Dollar debasing, (declining), inflation, Chinese pull back, usage in industrial demand and consumer demand? ---YOUR THOUGHTS???????????? -----or has REE gotten ahead of itself?
It's always great to hear from our subscribers, especially those who have followed us for so long.
Subscriber S.E. asks a great question, and I've been a believer in the potential of new energy technology and alternative sources of power for my whole existence as an editor for the Taipan Publishing Group. And believe me, I've taken my hits for it...
I've been called a liberal tree hugger, and even a pansy, but the truth is, many of my recommendations in the alternative energy sector were winners, and that wasn't because of my political or environmental leanings. It was because of my due diligence and research.
That said, I turned to one of the most knowledgeable editors in our group for his take on Rare Earths... Michael Robinson, editor of American Wealth Underground. What follows is his generous contribution to S.E.'s question.
Thanks for our inquiry on rare earths. Your questions are quite astute. In short, rare earths are on a tear for all the reasons you mention.
So, let me give you my consistent message about rare earths and precious metals investing. This is a very volatile field marked by big runs up and then dramatic pullbacks.
If you don't like volatility this is not a good field of investing for you. Moreover, I tell people to invest in this field only with those funds they can afford to lose. Therefore, timing entry points is particularly tricky.
Having said that, I strongly believe that every investor should have some exposure to natural resources stocks in their portfolio. We are living in what I call the Era of Gold 3.0.
By that I mean, planet Earth has reached the tipping point in which global population growth and a growing dependence on technology will put all natural resources stocks under price pressure.
Heavy rare earths are vital for a wide range of technology products as well as major defense systems -- satellite communications, missile technology, hybrid cars and critical magnets.
Despite the huge run-up in the prices of rare earth stocks of late I still have a buy order on all four positions. REE is enjoying a lot of upside because it is one of the few traded on a major U.S. exchange.
Avalon Rare Metals has recently been listed on the AMEX. This should give it the type of extra liquidity that helped lift REE. Many investors avoid buying stocks on foreign exchanges. This is important because all four companies are based in Canada.
Quest Rare Minerals recently received recognition as "Prospector of the Year" for the quality of its discovery at Strange Lake. I provided subscribers to American Wealth Underground with an exclusive interview with Quest's CEO.
Great Western Minerals last month said it is in negotiations to acquire another rare earth company. Despite a recent pullback the stock remains above both its 50-day and 200-day moving averages.
I hope this information is of some help to you.
I want to thank Michael for his answers to S.E.'s questions, and add one more iron to the fire. Michael mentioned hybrid cars... Hybrid battery technology, and even technology for fully electric vehicles, is in high demand. The Chevy Volt and the Nissan Leaf are ushering in a new era in the automotive industry. Ford just announced its electric Focus, with talk of a plug-in hybrid version next year.
We are on the verge of a hybrid future.
I encourage you to check out Michael's service, American Wealth Underground, for more information on rare earth metals and other technology-based investment research.
P.S. The demand for higher gas mileage and environmentally friendly cars is on the rise and sure not to slow down. To meet these growing demands, the auto industry is now using new clean power technology: Green Power Metals. But what are Green Power Metals and what should you be aware of? Learn about the investment opportunities in the clean energy sector by registering for our free Webinar: How to Cash in on the Clean Energy Future.
Editor's Note: More than $4.6 trillion in commerce (5% of the global economy!) depends on a critical group of natural resources. And China has a choke hold on the supply! The battle to secure these vital resources will drive the shares of several companies through the roof. This URGENT FREE REPORT shows how you could make gains of as much as 950% or more in this coming crisis.
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