| Moly Market Update |
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| Written by Mike Hoy | |
| Saturday, 25 February 2006 | |
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THE TWO SECTORS IN WHICH I WANT TO ALLOCATE MY INVESTMENT CAPITAL: As I have written for months: I want to be invested in gold and molybdenum. Both these sectors have been standouts in 2006. In fact, I would bet big time money that anyone invested in these sectors have already seen profits that would be fantastic for a two year total portfolio return and we are only two months into the new year. How sweet it is!In prior articles I have written that I believe we have entered a point in time where a year from now the sector or category of stocks that are trading in the $.50/share level are going to be in the $1.50-$2.00/share level. This is giving zero credit to the growth or advancements that companies, currently in this category, will make over the next year. If you happen to own a company that moves from being a Junior Mining Company to a Producing or Soon To Be Producing Company, in my opinion, you will find your stocks trading in excess of $4.00-$5.00/share. If gold does what I think it will over the next year I think these numbers may be conservative as well. I believe this party is just beginning and the opportunities that are in front of us may be a once in a lifetime opportunity We all know many reasons why gold is doing well and will continue to do well so I will not spend any time on this subject in this article. Molybdenum is a different story and I think the world is just beginning to appreciate the future of this unknown metal. I have been involved with molybdenum stocks for two years now. It took me six months to learn how to pronounce molybdenum. It took me another six months to learn how to spell it. I can easily see why the investing community is just beginning to wake up to the sector. The truth of the matter is the analysts behind the sector have also lagged the developing story of molybdenum. These analysts get their information from producing moly companies. The last thing these producing moly companies want the investment world to understand is the real truth about the future of moly and the awesome amounts of money they have made the last two years. The major producing moly companies are making tons of money and they want the pie for themselves for as long as possible.. The last thing that they want is to educate the public and reveal the big secrets that they are hiding. No business wants competition and the best way to keep the competition away is to not invite it to the party in the first place. These major producers have done everything in their power to delay the competition. Their coffers are overflowing with excess capital and they would like nothing better than to be able to control the whole industry. “THE CAT IS OUT OF THE BAG” and the world is beginning to realize that molybdenum may never fall below $10/lb. again. I believe it is just a matter of time before all these so called experts who have been preaching the inevitable decline in moly prices to below $10/lb realize that they have been wrong and will continue to be wrong until they learn the truth. Many of these moly analysts are just like the gold analysts who have been preaching the end of the bull market in gold or a imminent major correction in the price of gold. All I will say to these analysts is “You’re wrong and will continue to be wrong if you do not see the light at the end of the tunnel”
REASONS WHY? I believe the need for countries to solve their “addiction” to foreign sources of fuel and energy are the most pressing problems that countries and the world face today. I plan on having an article out soon dealing with this addiction and what I feel some solutions may be.The bottom line to this whole issue is the fact that hundreds of billions of dollars will be spent throughout the world on solving the dependency on foreign oil and the real winner in the whole equation is molybdenum. It does not matter whether it is oil, natural gas, nuclear or coal liquefaction development. The bottom line comes in facing the reality that huge quantities of molybdenum will be needed to meet the “new” demand created by the development of each new source of energy. The countries who find themselves dependent on foreign sources of energy must deal with the reality that this dependency is financially destroying their countries and the pocketbooks of their citizens. With oil prices having nowhere to go but up the door has been opened making these alternatives totally economical and feasible. The citizens of these countries are one step away from demanding these changes be implemented and the writing is on the wall. The only missing ingredient to this happening is educating the public on the alternatives that currently exist. I personally believe that when the public finds out the truth and the fact that these alternatives have existed for decades you are going to see some very rapid changes. I also believe the timing on making these changes could not be more perfect as the new jobs that will be created as a result of all the new power plants being built will be exactly what the doctor ordered at a time when the patient’s heart has stopped beating.In conclusion, I believe the demand for moly, to accomplish all this new construction and technology, will remain very strong whether our economy is growing or contracting. This makes for an excellent long term investment in my opinion. Like I have said, it does not matter whether they are coal liquefaction, nuclear or oil and gas plants the result is the same; MOLYDBENUM IS THE CLEAR WINNER IN EACH CASE. I now have one last question that we should be asking ourselves. What do you think will happen to the price of certain molybdenum stocks as the world awakens to the facts and the future demand for molybdenum as all these new construction projects become a reality? I think the answer to this question is pretty obvious.A perfect example of this new demand for molybdenum is outlined in Ken Reser’s new article he has out. As a result of all the research that Ken has done I believe Ken is one of the most qualified and respected individuals on the subject of molybdenum. I refer to him as an expert but he is much too modest to attach that label to his name. I guess I can understand why that is because all the so called experts seem to be a little confused these days about the molybdenum market and the future that awaits it right around the corner. I have learned much from my association with Ken. I have attached a link to Ken’s article and I believe this is a must read. When reading his article remember that this is just one example of the “new demand” for moly that is being created that has not even begun to show up on the “radar screen.” As always, feel free to call with any questions.KEN’S ARTICLE; http://www.molyseek.com/index.php?option=com_content&task=view&id=20&Itemid=2Mike Hoy As always; these are just my opinions and should be treated as such. You need to do your own due diligence. |
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