Hey@ Metalduster,
Do you have the same problem with BHP?
From BHP's 2018 Annual Report
https://www.bhp.com/-/media/documents/investors/annual-reports/2018/bhpannualreport2018.pdf?la=enForward looking statements
This Annual Report contains forward looking statements, including statements regarding trends in commodity prices and currency exchange rates; demand for commodibties; production forecasts; plans, strategies and objectives
of management; closure or divestment of certain assets, operations or facilities (including associated costs); anticipated production or construction commencement dates; capital costs and scheduling; operating costs; anticipated productive lives of projects, mines and facilities; provisions
and contingent liabilities; and tax and regulatory developments. Forward looking statements may be identified by the use of terminology
including, but not limited to, ‘intend’, ‘aim’, ‘project’, ‘anticipate’, ‘estimate’, ‘plan’, ‘believe’, ‘expect’, ‘may’, ‘should’, ‘will’, ‘continue’ or similar words. These statements discuss future expectations concerning the results
of assets or financial conditions, or provide other forward looking information. These forward looking statements are not guarantees or predictions of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and which may cause actual results to differ materially from those expressed in the statements contained in this Annual Report. Readers are cautioned not to put undue reliance on forward looking statements.
For example, our future revenues from our assets, projects or mines described in this Annual Report will be based, in part, on the market price of the minerals, metals or petroleum products produced, which may vary significantly from current levels. These variations, if materially adverse, may affect the timing
or the feasibility of the development of a particular project, the expansion
of certain facilities or mines, or the continuation of existing assets.
Other factors that may affect the actual construction or production commencement dates, costs or production output and anticipated lives
of assets, mines or facilities include our ability to profitably produce and transport the minerals, petroleum and/or metals extracted to applicable markets; the impact of foreign currency exchange rates on the market prices of the minerals, petroleum or metals we produce; activities of government authorities in the countries where we are exploring or developing projects, facilities or mines, including increases in taxes, changes in environmental
and other regulations and political uncertainty; labour unrest; and other factors identified in the risk factors set out in section 1.6.4 of this Annual Report
Except as required by applicable regulations or by law, BHP does not undertake to publicly update or review any forward looking statements, whether as a result of new information or future events.Past performance cannot be relied on as a guide to future performance.This is perfectly normal and acceptable. Guidance given in the statutory reports is just that, guidance.
When GXY give guidance for the quarter, that is what they anticipate will occur. They are required then to provide the actual figures at their next required reporting interval. It may differ from guidance. That is why market analysts have jobs. Some of the better ones have good contacts or ask good questions.
Savvy individual investors have to find out on their own, hence the utility of forums like HC. Who knows what we might pickup with careful research?
There are slightly differing rules for types and categories of companies with regard to what reports are required to be made, and they are all available on the ASX website.
Periodic disclosure:
https://www.asx.com.au/documents/rules/Chapter04.pdfContinuous disclosure:
https://www.asx.com.au/documents/rules/Chapter03.pdfI know it gets frustrating when the market isn't doing what we want it to and there is the feeling that we've been left in the dark for some reason, but it's the way this matrix works. There are lots of factors at play in share prices, Global, National, Local, Company specific and many more.
I'm not saying GXY couldn't do a lot better with their investor relations, but I think the reason for our share price has a lot more to do with macro factors.
Lithium as a sector IS being played. Why not, it's too easy?
8 years ago, almost no-one knew anything of it as a commodity, it had some limited industrial use and as far as most people were concerned it was a tablet for nerves or something.
Then it started to get a little attention, as Li batteries were in phones and computers, cameras (remember them?) and portable electronics got more portable. In more recent times (say 2015 onwards) Renewables, E/V's and energy generally became more centre stage, and some in financial circles started to pay a little attention. We all know a lot more about lithium's potential now
The problem with emerging sectors, is they are easy prey from two directions:
1. They are a relatively small market.
2. When something's new it generates it's own set of believers and prophets, there are few or no "wise elders".
This opens up great opportunities for manipulation. Almost anything can be trumpeted as the next big thing because no one really understands the limits, mainly because no-one knows anything about the product.
Surely any patch of dirt, salty lake, clay sand, rocky outcrop etc that has a trace of lithium in it is just as good as any other for a lithium mine? You just dig it up, or dry it out and then ship it off to print money, don't you?
Lots of lithium plays that will never go anywhere.
Being a a relatively small market means it doesn't take too much money to trade or short to good effect.
When there is a lot of excitement about a growing group of small cap, non-producing, companies, their share price is all about expectations, not real results. Investors flock to the promise of seemingly guaranteed riches. Pump and dump is the norm, a trader's paradise.
When the commodity's prices go up and down, so do the share prices - but what happens when the commodity's price is opaque? No futures market, no transparency in the marketplace at all? There are few companies mature enough to actually be making any money from it, the majority are explorers or miners that are still struggling to find the finance to develop. Pump and dump. When the market falls, theses companies can't find finance.
Take the charts of all the lithium plays from all the stock markets around the world from the last three years and overlay them. They fit together with very few few anomalies.
The run up from 2016 to the end of 2017 was a classic shorter's paradise. FOMO. Not to say that the underlying premise of rapidly increasing demand and limited supply was wrong, it's just that there was no-one there to point out that most of the share prices that were increasing exponentially weren't backed by production and sale.
The Morgan Stanley precipitated cash of 2018 was inevitable, they just made sure that they had their bets in place and before they told the world "the emperor has no clothes!".
Of course, that call too, was wrong. But it served it's purpose.
If you have access to a lot of money, particularly other people's money, making profits in small market sectors is easy. Particularly if they are new and no-one understands them.
Which leaves us where?
Back where we started. A marketplace. Investing fundamentals.
Galaxy is in great shape, I believe. The mantra around here is correct:
World class diversified assets, good management, a sound set of plans, cash flow, no debt and a balance sheet that's almost too good to believe. Demand for our product that every day seems to be accelerated by new announcements and commitments from major industrial sectors and governments, few mature competitors and a tight shareholding.
I'm happy.
Cheers,
James
