An interesting article from the Sydney Morning Herald regarding Hyundai. HY is the fifth largest producer of cars globally. A solid Korean company. Of interest is that the company changed its articles of incorporation last Friday in order to:
“secure resources for the development of eco-friendly vehicles.”
This of course means rare earths, in particular neodymium. A spokesman had this to say about the company’s objectives:
“We will make efforts to vigorously secure rare earths and other rare resources used in cars.”
Over the years I have done a fair bit of business with Korean companies. A part of their success is their tenacity. They won’t quit. Someone described it to me once:
“They are like rhinos. When they decide to go in one direction, they put their head down and just charge through the bush until they have arrived at the destination. It isn’t pretty. Anything in the path is trampled; the animal often suffers injuries in the process. But they will die trying to get there”
When a Korean company with a $40b market cap decides it wants to “vigorously secure rare earths”, look out. It will happen. If the 5th largest auto company is doing this, you can expect that some of the bigger players are soon to follow suit. If you followed that logic you would have to ask, “what’s GE doing in this?” Their wind business is booming. They must be one of the largest end users of REs as a result.
I don’t recommend individual stocks. That’s a good way to get egg on my face. For what it is worth I do own some of the dozen or so names that are connected to the RE story. I’m not buying more. It looks to me that we have some mining stocks that are trading at internet type multiples. Caveat emptor on this.
Big, big money is going to be made on REs. Hyundai’s move just tripped off round two of this story.
Note: I’m nutty enough to have walked around a “likely” location looking for a meteor fragment. All you need is a stick and a neodymium magnet or two. Tape it to the end and poke it around and hope you get lucky.
There are dozens of sellers online. They don’t cost much. For $20 you get what you need. Beware. These things are incredibly powerful. I have busted up a few fingers and nails just prying them apart. And don’t even think of putting it next to a cell phone. When you see just how strong these things are, you will understand what all the fuss is about.
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