Banter and General Comments, page-3038

Hi @Thesi and thanks to you and all the people who have been generous with their time and research here.

Glad to see you’re doing well and still in the habit of trying to reel me back in to posting.

It seems that you’re absolutely in your element here,

making sure everybody’s drinks are topped up and we all remember our sense of humour and shared humanity,

and even the town drunks have a broad shoulder to dribble on.

You are already immaculately well-researched in the lithium sector so I'm not really sure why you keep putting up the Bat Signal for me to show up.

I’m getting a little too paunchy to get suited up 

to apprehend kids who are stealing somebody’s lunch money.

I also sort of don’t care and lunch needs to be bought one way or the other.

Besides, I’ve looked and there aren’t any real baddies left in town to beat up,

not ones I could hit where it hurts anyway,

just some lost teenagers, a PLS fanboy who writes posts on Friday nights after his mum slips his dinner under the door, and a few wits of the F-category.

I wouldn’t even be deploying the subs to take them out.

The instos have their work cut out for them just keeping a lid on the price

by trying to encourage shorter term profit taking

which basically doesn’t work because the more active traders become

the more retail shorters become nervous, the more profitable the short term traders,

the more they come back hour after hour, day after day

and that ratchets price up. General rule of thumb only….

The only people that actually really need to buy the stock are the 17% short

and they seem to have hit their credit ceiling for the moment.

I really appreciate what you do here @Thesi, but you don’t need my analysis.

My current analysis is that you are unashamedly in love with Galaxy analysis

but that also makes you slightly prone to slightly emotional behaviour

and that is probably because you probably operate in a semi-private backroom hothouse of Galaxy opinions and 

feel every investor’s frustrations, and then feel the need to echo and respect them.

Inclusivity and all...

However, as Nietsche once said - “Be careful when looking into the void - that one does not also become the void”.

The other sage advice is to beware of too many cooks in the kitchen, design by committee etc.

We can't run this company from an anonymous forum designed to sell adverts for executive fidget spinners.

Myself, I wouldn’t say I was in love - I just feel I understand this company's strategy, and agree with the roadmap for it, as designed by AT, feel that he is the right man for the job, and doing it well under highly challenging (and fairly random) global market circumstances

and that the sheer amount of money that is spent on this stock, day after day,

is no surprise. $4m+ a day is being handed over (even if quite a bit of that is "green screen cgi").

It really takes a blind man to overlook the accomplishments in such a short time.

Only the majors have made this kind of money selling lithum. $500m last year.

It's a class act, and on balance it's a company that has very much smaller chance of failing to achieve its plans than bathing itself in glory as the first Australian lithium major.

I better not get too carried away now. 

I don’t think anybody has the time to hear all of what I have to say, least of all me.

I mean, I’ve heard it all before too.

It always comes back to fundamentals.

Future earnings growth. Bank Balance. Capable Management. Location Location Location.

The share price was driven into the ditch as soon as the strong Q3 quarterly and POSCO deal were announced

because the short position was balanced too dangerously and a massive US bank was about to lose its shirt. 

Now, the sound of grown men crying here is drowning out any attempt to calmly discuss future growth, to the point that the last 10k posts have rendered the readership of this forum down from 100k/month to around 27k/month.

I guess I'm not the only one who no longer posts or reads as much as they used to.

I take on board that the market is not all about logic.

We were sold down last year when it was not logical to punish the company.

It just fit a specific financial institution's agenda at the time.

It was part of a global lithium shorting strategy and we were simply collateral damage in a media beat up.

But that is as far as we could see into it with the last of the Morgan Stanley Sub holders documents.

Now - so many people are here applying logic illogically.

How much more than $500m should the company have made last year to earn your respect?

The share price is what it is, but judge for yourself if this a company going up or going down with $500m in the bank.

It's human nature to need to understand and apportion blame to others

and the more AlphaMale our mindset, the more it is everyone else's fault but ours when things do not pan out the way we want.

As to what is ahead for the company in 2019, the only thing I would like to point out are the 2 words that AT has used

more than once. I heard them back in 2016 and there they were in the quarterly phone hook-up.

It is worth considering what they mean in terms of another possible tranche of 100s of millions of dollars in additional revenue.

I understand that when a forum has long been carpet-bombed by dumb crap

that those who want something different will start theorising and intellectually trying to raise the bar

or admonishing management for perceived misdeeds.

However, over-laying your own management concept at this point

may not be quite as useful as contemplating those 2 words and what they represent to AT's post-Jiangsu debt-allergic management mindset.

Those 2 words : “Free Carry”.

The market may have underestimated the scale of GXY’s bank balance by the end of 2019

by a staggering amount, even with SDV construction going at full swing. POSCO cash may or may not be considered as part of this equation.

Do you see what I mean?

Ah screw it. 

Everybody knows what I’m talking about.

The instos who are shorting know it, and the fundamental wonks know it.

Galaxy could start an annual dividend now and still have the cash to build SDV and JB.

I’m leaning (quite selfishly) more towards a dividend at the moment as a modest 10c/share $40m dividend would just about pay my living expenses for the year.

Certainly would give Galaxy share price an epic boob job

and probably bring the shorting era to an ignominious end.

Not a special dividend -mind you - an annual one.

I think it would probably send the right message to the sector, that lithium is here and massively profitable, and Galaxy has comfortably turned the corner into growth AND dividends.

In contrast, share buy backs can just feel like more trickiness and market manipulation.

But whatever works...

To paraphrase a famous writer - “I may not understand the market but I have lived it through”. What I mean is that this stock can change direction in a heartbeat and it will bring out the typical chorus of dancing girls singing “It was sooo obvious. I always knew it would turn. so lucky I backed up the truck in the $2s….etc”.

Things is - I like where I have placed my bets. Now I just wait for the wheel to turn and the market to catch up with me.

My life is pretty different now and I spend my time differently.

I’m sure you’ll all be glad to hear more irrelevant personal stuff.

Last year I quit the smokes.

This year I'm kicking social media out the door.

This is probably all I am going to post in 2019.

I have a big life-mission project on the go and I can’t get it done and deal with social media pinging away in the background.

What do I expect to see happen?

I think the market has priced in about as much negativity as it can possibly manage to squeeze in, here and globally.

Galaxy has been the victim of its own success and the Small Minded Tidy Town Tall Poppy Syndrome that infects the ASX.

(a common and unfortunate peculiar success-allergic Australian mindset).

There are a few Chinese credit things floating around that remind me of how 2016 started out.
Brexit and Trump's shut down have some latent negativity too but the market is being very cautious that it doesn't miss the expected relief rallies

and doing a certain amount of that now, assuming that there may well be some fairly big surges when things are sorted out.

Lithium-wise its completely oversold and our share price has already assumes much lower pricing and lower production.

The high level of shorting conversely still protects Galaxy from global shocks by bouncing hard each time bargain covering becomes available.

January 2018 presented the first tracer bullets for a $2b+ valuation with the simple rationale that SDV under construction would need to move well into that range to adequately reflect purchase valuation and protection from take over.

And this was prior to the exceptional northern tenement deal. Some analysts claim that POSCO did a rather awful deal there. Too bad for them, a poor giant Korean steel company getting out-manouvred by wily old AT from teeny little Galaxy.

I don’t understand the concentration on the money clearing issue.

What is the big deal as long as its earning interest for us now? 

SDV is not waiting on that money it is all about the FID and the partnership, the equity and future profit-sharing deal.

Our partner has to come up with a figure that fairly prices in their share of 40+ years of profits from brine production.

Then there is Offtake and whether or how much they would like to lay claim to, and then the pricing regime..

Not exactly back of the envelope stuff.

AT has refused to do a deal at the bottom of the market and that seems to suggest

that Galaxy shares are not part of the package.

The WA hard rock deals signed by our competitors have been Bottom of Market and Position of Weakness deals

and have diluted shareholders and weakened future capacity to do better ones.

The SDV resource represents a massive high quality tier one brine resource that is ready to go. 

There isn’t anything else on offer to the market in the same category. The long and costly foreplay required for a brine operation has been done.

Galaxy can and should simply give the low-ballers the cold shoulder and wait them out.

This is 40 years of share holder value that is riding on the equity/offtake deal

and Galaxy has other ways of getting there. Alone being the obvious alternative.

@Thesi you are absolutely correct.

Modular production, alternative tech and some shared infrastructure with POSCO may represent a very attractive Plan B with AT’s middle finger to whoever it is that is trying to leverage temporary global weakness to play for a bigger/cheaper chunk.

As for the global scene - this is all going to be a bit glib - but the All Important US Market is off to a cracker of a January, best one in 13 years (after Santa was shot down over Missouri) which suggests we’re seeing much more than a dead cat(santa?) bounce. 

Basically every rich guy in the world knows that bank interest just does not get you laid as much as you’d like to be. 

And what is the sexiest unfolding story for that folding money?

Keep it folded or spend it on an EV + power wall + solar combo.

Or buy lithium shares. And where do you do that? The minnows or the majors?

Nah. Galaxy obviously. Best positioned for a run when the markets realise how well they’re set up for a massive and broad battery minerals re-rating. 

Why? The investments in production has to happen now for them to bring on the supply for the expected surge in 2025.

All the future demand analysts are saying this same thing. There is not enough supply in the pipeline. Not enough money being spent right now.

So why is it so fashionable to ignore this and call it all Fake News? It’s more head in the sand stuff. 

It's coming so fast now. Who can not see the near future headlines declaring the top 10 selling cars dominated by battery models?

I just don’t find there is much point debating any of this with people who will never be persuaded.

I am glad that some of you can find the energy to do so

but don't get too caught up in it. Plenty of idiots use brick-throwing as their strategy to get served up valuable research for free.

Let them work it out for themselves. 

It has become a rare thing, even on an anonymous forum for people to admit that they have been wrong.

For those that see what is happening then I just feel this is all the rantings of Mr Obvious.

Visiting family the night before Christmas Eve, my nephew was on the roof whooping because the Tesla rocket was visibly firing 14km above in the Busselton night sky. Christmas day and the young guys in the family were all talking about electric vehicles. Hydrogen fuel cells came up as conversation and they could see why that wasn’t going to compete with lithium. I didn’t even need to sing from no lithium gospel songbook. They’re talking about it all the time now.

They were all over the subject and massive fans of Mr Musk.

The kids who are just about to buy their first decent car are not in love with petrol and are getting very excited about what is happening as high tech and transport converge in the drivable iPhone of their generation.

The war is over. It is so over.

There is no resistance now. Mopping up has begun.

When was the last time you heard an auto company pushing back

and saying “nah. We’re good without batteries. Here is our 2025 line up of all petrol vehicles”?

All that is left now are just some signing ceremonies and the final surrender documents to sign.

What is the point of spending the R&D on new petrol vehicles now?

It is much more likely that they will have to deal with a market much more restricted by Chinese style govt emission mandates.

Petrol is not faster or better or safer. And it won’t be cheaper for long.

Trump has invoked a possible Border Crisis to build his Wall of Spikes

and the first analysis from the US was - What if the Next President invokes a Climate Crisis?

Yeah. That would be something. Plenty of heads would roll and now there is a handy place to display them..

If/When Trump gets rolled then it could easily be construed as a mandate to move the US quickly into line with new global expectations instead of berating GM for prioritising their EVs.

Is this the real reason we are shorted? Because the US govt isn't on board with renewables?

Huh? California is already road-testing the next Democrat administration's policies around EVs, fully supported by their more moderate Republicans. That the US private auto industry is going EV all by itself, without subsidies or govt support, says it all.

The US would be better off supporting the massive strides made by Tesla than trying to spoiler because of a failure to accurately read the data and where some of the biggest changes in blue collar US employment have occurred, that being in the renewable sector - solar installation being one of the biggest.

Like I said 6 months ago, the Chinese are now capable of getting a sub $10k EV on the road right now.

What you get isn't much but it shows it's possible.

For Australians, even Tina from the typing pool would probably baulk at it for her first vehicle.

Even if it came in hot pink.

But the main point is - young drivers are not wedded to the smell and sounds of petrol engines

and most of us are looking at sticker price AND mileage when we buy. 

VW puts an electric Golf on the road at approx current ICE price and my wife will be beating me around the head with her lead handbag until I get her one.

Battery costs are projected to drop below $100/kw this year. Now they’re talking up $80/kw.

I can remember knuckleheads saying that the next generation won’t even want to buy cars.

Eventually that may well be true but the new era’s car-as-service driverless Uber industry will emerge with fleets of EVs because - well I said “fleet” and anyone operating a fleet of anything wants maintenance and fuel cost to be lowest.

For the Alpha males there are 600km range performance vehicles. Yes you have to be well-heeled. I can imagine Bugatti et al aren’t that happy that their customers are complaining that they’re being left at the lights by a family of 4 in a 2 ton electric Tesla SUV that costs 6 times less money. 

There is nothing like a billionaire’s rage at being forced to watch a kid slurp an ice cream through the back window...

When I rocked up at Galaxy forum, I turned up to enlisted in the Anti-petrol-anti-coal-what-about-the-children Army

and it was already over bar the shouting.

And that was back in 2015.

err..OK. Maybe early 2016 the last enemy guns when silent.

Now they are saying 2018 is peak ICE vehicle.

It happened so damn quick that we didn’t even see it happening.

The only thing that happened quicker was the equally rapid invasion of our stocks by the late-comers, and this forum with knuckleheads and BS artists.

The market makers can change the price of our stock but they can’t change the fact that the war has been won. 

There is just so little ground to cast doubt on the business plan of solar + lithium.

This is what is causing all the pain.

Galaxy has a massive cheque in the bank

and its being priced down as if to say that this did not happen.

There is a massive lithium counter attack still to come.

Anybody reasonably rich can do it - though some collusion is handy. Push a little and slaughter the retail shorter in the process, which in turn makes it uncomfortable for the insto shorter, and we already know that there are established limits to when appropriate collateral must be provided.

There is 10s of millions to be made from a short squeeze, rolling back this over-sold and over-manipulated stock. 

It won't happen tomorrow. There is still too much teenage angst in the bedrooms.

It will happen though. Even in its muted form, the slow disappearance of the short position is effectively the same thing.
The free market will do a fine job of pricing this stock fairly.

After every battle there is a lot of smoke in the air.

That is the noise and confusion that the shorters have loved.

Realistically, it shouldn’t take long to clear, and investors will realise that there are only a few companies that knew what they were doing in terms of a clear-headed portfolio of assets and production that is not risky all-in-one-basket style.

Galaxy was the only one to put together an ETF style geographically and chemically balanced set of hard rock and brine 

and so freaking what if its a year or 2 in the waiting?

Galaxy are too far ahead of the rest of the ASX to be copied.

The POSCO cash is the start of how we climb the next mountain and that money is already in the bank earning interest.

2018 was pretty crap for our share price - BUT the oversupply fear campaign put the dagger through the heart of plenty of lithium hopefuls too, and that isn’t exactly bad for producers in the short-medium term. It focuses attention on picking probably winners, not betting there is a prize behind every door.

The lithium carpet baggers just added to the volatility and the optics of a get-rich-quick sector

and hardly anybody feels sorry for overnight millionaires when they lose it all the next day.

I always thought the micro-juniors would evaporate. 

They were quick trades but not dependable survivors.

The WA northern hard rock companies have yet to show their accounting and how well being tied to Chinese controlled carbonate price is working out for them. In the meantime shorts are increasing a lot faster there than here.

Why the shorting?

The financial sector must have also been burnt pretty badly supporting CRs in untested/badly managed lithium companies too,

and now the majority of them are uninvestable and diluted out of proportion to their assets and prospects.

The only real pushback to lithium positivity is happening from the shorting industry, which can co-ordinate very broad media attention with whatever spin it would like. The last MS note based on Orocobre's poorly worded announcement was a case of sheer desperation and inept analysis.

Of course, a year of manipulation has created a short term sentiment deficit with those old Swiss Cheese Chinese Walls of the financial sector extracting their Lithium Tax in return for not loading up when it was all getting started, and now biding their time with the strategy to whipsaw retail out their comfortable seats before the next leg up.

But when does that happen?

When is that big "when" going to happen.

Personally, I don’t think there is that much time before lithium producers take off again.

A dozen minerals needed for electrification are in short supply. Any of the beginning to run again will remind the entire market how poorly the slowly the supply side has been getting its act together. Once the EV ads start rolling across the screens it may already be too late to build a decent position.

But who the hell cares what I say? Even I don’t. I do not have any impact on share price

and I’d rather go to the beach than beat my fists on the regulators’ doors

or repeat myself endlessly.

This is basic 101 investing stuff. 

Its meant to be rocky if you arrive before they pave the roads for Joe Public.

This is 2019 and the 21st Century is finally about to start.

But please - don’t pay attention to me.

It really is a beautiful Summer out there and I my only recommendation is get your sleep, stay healthy, get out as much as you can and enjoy it.

See you all in 2020

AC