What to do with Molycorp?

By Anonymous Questions, March 1, 2013

As former member of the Irregulars, based on a recommendation in one of your articles last year, I have made a mistake in investing a significant amount in MCP.PR.A (NYSE)in my RRSP portfolio in January 2012. The preferred shares lost about 60% of their value and seem to be in further decline until the mandatory conversion to common stocks in March 2014. My dilemma is to sell them right away, or wait for some possible rebound to minimize my loss. I would appreciate your opinion on this matter.

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4 Comments on " What to do with Molycorp?"

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Travis Johnson, Stock Gumshoe
I haven’t looked at the rare earths market at all in many months and don’t have an opinion on Molycorp right now. If other folks are curious, I expect the article you’re talking about where I discussed the Molycorp Preferreds is this one from January 2012: http://stockgumshoe.com/reviews/oxford-club/what-is-the-black-ops-resource-%E2%80%93-51-times-more-valuable-than-gold/ That article, which was in the Friday File but has now been unlocked for everyone, was a teaser deciphering from an Oxford Club pitch that hinted at Molcyorp common — to summarize, I said that I liked the preferred better than the common but wasn’t particularly confident in either. Since then, the preferred… Read more »
I am not familiar with this stock but I have a thought on the subject. It appears like this person is blaming Gumshoe for a loosing investment. First if the stock lost that much why not decide on a max loos point and cut it loose before it’s worthless? But to blame Travis is childish when everything I’ve seen in Gumshoe resoundingly advises investors to do their own due diligence and speak with their own adviser before investing. But to sit by and loose everything without a plan as to when to abandon ship to me is senseless. In Short,… Read more »
Mining sector is the worst sector to be in right now. Rare earth bubble went bust back around the time you bought this stuff. Commodity prices are flat to negative and mine costs are out of control in many cases. Molycorp faces these and several other issues, if you do some research you will discover the uphill battle they are facing. They just diluted further, have accounting issues, have bungled their business plan, and the market for LREE’s is soft. They have essentially nil for HREE’s which is the one area now where you can get a little traction in… Read more »
Chris Sartore

I did own this stock for a time. I had a 25% stop loss which kept me from losing more on this investment. Consider using 25% stop loss on any future investment.