Lithium Stocks Show Resource Cyclicality

The simplest way to make money in the resource space is to find a clear trend and identify companies with good share structures and management teams within that trend.

Anyone that’s been in the resource space for any amount of time knows that critical metals — especially in stable jurisdictions — are becoming more and more coveted.

Nick Hodge called it “the electrification of everything.”

Recognizing this was a trend that would continue for decades... we got to work.

I flew to Argentina, looked at some very attractive projects in the Argentine salars and identified one company in particular that had a very undervalued asset and a clear path towards production and being bought out.

Then one of the nastiest bear markets ever in the resource space took hold and decimated good and bad companies alike.

That very undervalued company —  Advantage Lithium — was down some 65% within a year. I bought more. Told everyone else to buy more.

The company hit a low near the C$0.20 level.

It was bought out by Orocobre in February of 2020 for 0.142 Orocobre shares for every Advantage share —  or C$0.42 to Advantage shareholders.

Subscribers wrote in asking what to do. Some were upset.

I told subscribers to buy more or hold.

Fast forward a year and a half later and those same C$0.20 shares now have a value of C$1.22 as Orocobre just hit a new all-time high and is poised to head higher. 

What changed?

The market caught on... the trend has accelerated... and subscribers that had the foresight to buy/hold are now sitting on substantial gains. 

I’m sharing this story because in a year or so I’ll be doing the same with precious metals stocks…

Explaining to you how obvious buys like Hannan Metals (TSX-V: HAN)Magna Gold (TSX-V: MGR) and Revival Gold (TSX-V: RVG) were in August of 2021.

What you do with that information is — like everything — up to you.

I’ve been taking advantage of the current lull in the precious metals market to top off positions and write more checks.

Look forward to reminiscing in a year or so. 

Let's get it!

Gerardo Del Real

Gerardo Del Real
Editor, Resource Stock Digest

For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Resource Stock Digest, Junior Resource MonthlyJunior Resource Trader and Junior Resource Insider. For more about Gerardo, check out his editor page.

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