The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Hi bangrak, always good to read your thoughts...
Yes, the variant is losing strength and eventually even this will have passed. In the meantime, one can take advantage of market sentiment in various sectors.
De-carbonising energy is no easy feat indeed. Take Germany for example (a country that has led this sort of effort in Europe for quite some time). A recent study revealed that complete decarbonisation of this industry through the use of green electricity would require 600TWh of electricity per year, which on its own would double the demand for electricity in Germany. Currently, in Germany solar and wind generate around 200TWh of electricity.
Never mind infrastructure requirements to deliver electricity at a current suitable for fast-charging (A 13A household plug won't do). There is also the environmental impact of lithium mining and the difficulty in recycling batteries, although this can be overcome with improvements in engineering.
For personal use, EV's do have a place, but for commmerical applications this is simply not practical or mature enough at this point in time. There isn't anything concrete on the horizon either. So the best bet there still has to be hybrid. Or am I missing something?
Meanwhile, fuel cells, although great for platinum producers, have considerable engineering challenges as well. None of this appears mature enuough to indicate that any of the targets in eight years time are realistic.
The UK would certainly require a few more nuclear power stations and a considerable investment in infrastructure to make EVs a reality for the many.
Right now, it's a priviledge of the few.
And no. I don't look at Tesla drivers with envy when they stand helpless in front of a 'bricket' car.
Oh, and given all the brouhaha about inflation rising (who would see that coming with interest rates near zero. Really?) There is a hedge on precious metals precisely against that. At a P/e near 3-4, it's not a bad bet at all.
I wrote that down now.
We see next year.
I would not count on it.
There is still a lot of uncertainty surrounding the global pandemic. Although it doesn't appear as lethal as last 'season' , it is sufficient to spook market participants. I am not particularly worried about these short term price movements, unless I want to take advantage of discounts.
Every year I review my original position on my holdings. I buy every holding for a specific reason, and write that down.
My original position was that the move to EVS won't happen at the projected estimated pace . I am not even sure we will have the necessary infrastructure in place either, never mind the capacity to distribute that much energy. Although we should do our best to lower the emissions, we might only see about 10% of the worlds car pool being EVs in 8 years time.
So the demand for the world's rarest metal, Rh, is expected to increase as regulations tighten. In the meantime, I gratefully accept the value that the board generates in Form of dividends. Nothing wrong with that.
SLP being a low cost producer gives it a competitive edge and it is run competently.
So my original position still hold and I shall continue to hold the stock, welcoming any weakness in short term pricing.
At some stage, reality will kick in. That's when we see the rally. I have no idea when, but I imagine it is before the 8 years are over.
Chatmandu
No report ever mentioned appetite for growth by aquisition. It is indeed a terrible strategy in pinciple.
However, there are projects in the pipeline---mentioned. So it might we worth a bit of input about the boards strategic view. Another question would be how much more can the current process be optimised? Or are we looking at providing better feed quality by 'our own diggings'?
Reasonable questions, I would think. There are a lot of mentions but a bit of a clearer statement at some stage wouldn't hurt.
Value trap would be a bit of an exaggeration.
What raise my eyebrows was that guidance for this FY is flat (ie same as last year), alas at less enthusiastic---but still very good-- basket prices. That there is a decrease in enthusiasm is understandable.
My question is? What are the future plans? I am not advocating growth at all costs, but is this it? There are projects in the pipeline but it would be useful to hear a little bit more about where the board wants to steer the company going forward.
Hi ic152
Fretting about share prices on a daily basis isn't very good for one's sanity.
There are really only two options
1 - get out
2 - stay and take advantage of negative sentiment (market inefficiencies)
But then, that's me. In the meantime I am rubbing my hands watching BABA and V. becoming cheaper and cheaper.
Best
It's virus season. At least in this continent (Europe)
Nervousness, maybe. Anticipation of the past replaying itself? Probably.
Keep your eye on the facts and the practicality of things. When sentiment (we make most of our decisions emotionally) swings unfavourably towards inevitable facts.
Well...
That's the disconnect one can take advantage of, or just wait.
How much infrastructure do we have to support alternative means of keeping the lifeblood of commerce alive (transport)?
Look at it from this lens and one can see that so far not a lot has moved apart from a few more toys for the entitled. Unless we see substantial investment in infrastructure, what are the probabilities now?
Add to this the rather low cap of SLP, swings do not take a lot. Not by institutional standards (read: volatility).
My question to the board would be: Whats the future for SLP? There are capital projects, but they are long in the tooth and I apprecicate the regulatory and capital investment impact. But it would be good to hear about a vision going forwards. Are there any plans to grow? It could do with a bit more of a comittment towards shareholders outlinign their thoughts and strategy. We've waited long enough.
Our organisation is very involved with the NortH2 project. It is a very good resource if you are interested about reliable information on the role of hydrogen in the decarbonisation plan.
"The decision of the German Federal Constitutional Court on the Climate Change Act will probably also lead to climate-neutral hydrogen becoming even more important. A study by the chemical industry from around two years ago shows that the industry itself, as a customer, views it this way too. The study revealed that complete decarbonisation of this industry through the use of green electricity would require 600TWh of electricity per year, which on its own would double the demand for electricity in Germany. Currently, in Germany solar and wind generate around 200TWh of electricity. From this alone it is evident that we need to import climate-neutral hydrogen: we cannot meet this demand strictly with electricity generated in Germany."
Full interview is on https://www.north2.eu/en/blog-en/in-gesprek-met-prof-dr-ir-christian-kuchen/
Hard to see PGM demand slowing or eroding.
A lot of 'enthusiasm' (irrationality/impracticality) is still riding on EV vehicles.
I do like the tech, but the realities of Lithium mining (huge footprint -- whichever way you look at it), impractical ranges for commercial use and whatnot, are still not in the generally perceived picture.
And that's where the opportunity lies -- pending on your view of future developments.
Fuel cells have the potential of replacing ICEs, but they are (still) extraordinarily difficult to engineer, never mind infrastructure.
So the best bet for most commercial (or most) users, is hybrid.
I let you draw your own conclusions.
Currently, the vote (sentiment) is against this proposition/reality. Once the practical implications set in, that picture shifts.
In the meantime, it's just worth holding SLP for the dividends and cash generation (and shareholder value focus) alone.
Let that sink in.
So, once the picture becomes glaringly clear, where does the valuation go? No idea. But it's most likely better than now.
Taking advantage of people's misjudgement and unfortunate sentiment is what value investing is really about. Do you have the stomach/temper for it?
Patience.
Dear social media generation.
Life is not an Echo chamber where mediocrity is applauded ad continuum. Not too long ago, in Europe we burned people alive on the stakes whose opinion we disagreed with and who challenged the echo cambers of their time.
Please, lets not return to that and celebrate free thought and critical thinking.
Investing is an activity where a lot if this is quintessential. One always has to consider the bull as well as the bear case. I am always happy and interested to read the thought from both sides. Over the last 30 years it made me a much better ---and richer--- human being (not only financially).
To be clear, it's utterly stupid to bully the few who are brave enough to voice doubts about current status quo and herd thinking.
In this game, it is absolutely necessary and encouraged.
So please, don't be daft and filter messages or petition against shorting. None of this will improve your score here. However, the abscence of critical thought will guarantee only one thing: an even worse performance and abject intellectual poverty.
Please, learn how to be responsible for your decisions and learn from mistakes instead of blaming third parties for your mistakes.
I shall never sign a misguided petition like this.
Hi marineclark
I am not sure where you get this reference from, but Charlie and Warren are rather outspoken against leverage.
Warren has spoken about the dangers of using leverage.
"But to make money they didn’t have and didn’t need, they risked what they did have and did need. That is foolish. That is just plain foolish. It doesn’t make any difference what your IQ is. If you risk something that is important to you for something that is unimportant to you it just does not make any sense."
“If you’re smart you don’t need leverage; if you’re dumb, it will ruin you.”
"It is crazy in my view to borrow money on securities. It’s insane to risk what you have and need for something you don’t really need… You will not be way happier if you double your net worth."
"Leverage can magnify returns if you are right, but it can also lead to ruin if you are wrong. If you invest smartly you don’t need the leverage to begin with. And if you do use it, watch out below. "
“My partner Charlie says there is only three ways a smart person can go broke: liquor, ladies and leverage,” he said. “Now the truth is — the first two he just added because they started with L — it’s leverage.”
I'm not advoacting it myself
Yep. I actually sold a position that nicely appreciated by 25% (it would be hard pressed to go further) and bought SLP with the entire position at 86.0p. So I'm rather happy with the current run.
But then again, that one was a no-brainer.