Far East Capital Newsletter
Investors are saying it is time to move on
27 Jan 2024

In This Issue

Investors are saying it is time to move on

Last week I was playing the role of a grief counsellor for brokers and investors who have seen the destruction of their portfolios. The encouragement given in December by the pre-Christmas rally seems to have been setting up so many for the New Year stumble as many of the juniors have been crushed down to new lows. Yet, the leading indices are looking good.

The sentiment continues to be middling with leading stocks performing much better than the tiddlers. A number of these speculative stocks had a bad week, falling to new lows as investors seemed to say "out with the trash". Companies in this category include 5EA Advanced, Cazaly, Alto Metals, Anax Metals, Australian Strategic Materials, Cobalt Blue, Gold 50, Kaiser Reef, Krakatoa, Ioneer, LCL Resources, Lepidico, Lunnon Metals, Neometals, Pacific Gold, Poseidon, Talga, Voltaic Strategic Resources and West Cobar. That is not to say that they have no merit, but it does say that the market is over them. Cash has to be released from the dogs to be made available for new stories that offer optimism, no matter how painful it is at the time.

All of the previous EV thematics seem to be unwinding as the new age metals that are so critical for the EV are turning into lepers. Even nickel, essential for stainless steel and more recently for batteries, as we are told, is looking like a bloodstained battlefield. Have all the punters been duped?

You cannot have lithium prices fall by 85% without changes to the supply outlook. The pain will continue in the market until we start to get some clarity here. It is a familiar story across the EV metals.

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