Today we have the attention-getting “Say NO to Lithium Stocks” headline from Dr. Kent Moors in an ad for his Energy Advantage newsletter… and, as you will probably have already guessed, it’s really more of a “Say No to Lithium Stocks (except for this awesome little one I want to sell you one)” ad.
So, naturally, the curious mind of your friendly neighborhood Gumshoe wants an answer — who’s he talking about?
To begin with, he gives a spiel that’s quite similar to most of the ones we’ve seen over the past year — you could really call it a “this pit is full of vipers, but I’ve already sorted through and found the teddy bear for you” pitch. Here’s a taste:
“Yes, demand for lithium is rising…
“And the price has more than doubled in the past year.
“So unless people stop using smartphones and cars, the price will continue to soar.
“But I hate to break it to you…
“98% of lithium stocks are complete garbage.”
And he runs through a list of half a dozen or so of the worst lithium stocks from previous speculative bull markets, including a few that were just pump-and-dump junk from day one as well as a fraud or two. If you’ve been investing in natural resources over the past ten years, you’ve seen that same pattern emerge for any “hot” niche sector, whether it’s rare earth minerals or uranium or graphite or even, when all else fails, junior gold explorers (though it’s harder to make a junk stock stand out with gold, since that junior market is so much larger). Nothing new to see there — we know that most junior exploration stocks are junk, and that risk is high.
Then we get into the “buy something” part of the ad:
“That’s why what I’m about to say will come as a complete shock.
“There is ONE lithium stock that I’m recommending every investor who follows my work buy before November 30 2016….
“Although the majority of lithium companies fail because they’re run by inexperienced and greedy management teams…
“I’ve found the one exception.
“First off, it’s led by one of the most successful teams I’ve ever come across…
“The executive chairman is an entrepreneur, geochemist, and geologist with over 30 years in the mining industry.
“He built his first company from the ground up and sold it two years later for near 1,500% gains.
“He then founded an energy metals miner that two years later sold for a 2,000% gain.
“He did the same thing with a third mining operation, but this time sold it for a 4,000% gain in just two years.”
So that’s what we want, right? The name of his “one lithium stock” that we should buy? And of course, we won’t take his word for the rest of the spiel or get too excited… we remember, after all, that plenty of Dr. Moors’ heavily teased “this one will change the world and make you filthy stinking’ rich” ideas have failed to deliver in recent years. But we do want to know who he’s talking about.
Was that enough of a clue for you? There aren’t all that many lithium companies that are at all legitimate, so many of you probably already have your guess in hand… but let’s check a few more clues, starting with some hints about another person behind this company:
“… he’s teamed up with one of the world’s most successful commodities billionaires…Are you getting our free Daily Update
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“Another energy mogul with an incredible track record…
“This billionaire funded and developed a uranium miner that made early investors 6,950% gains.
“He was one of the architects of a gold mining firm that gained 2,161% for investors.
“He also got involved with a diamond miner when it was trading for $.10 a share.
“A couple years later, it was trading for $200 per share… a 199,900% gain.”
That helps narrow it down still further, as you’ve no doubt imagined — partly because billionaires are a fairly rare breed. By most counts there are fewer than 2,000 billionaires on earth, perhaps a third of them in North America (not that we’re sure this is a North American story just yet)… and even though a decent share of them are connected to natural resources industries, most micro-cap companies certainly don’t have billionaires on their boards or otherwise intimately involved in operations.
And it is, indeed, a tiny company… here’s a bit more from the ad to get our final clues on board:
“… this tiny $88 million company just pulled off something of a miracle…
“It has secured mining claims on massive properties in the two largest lithium-rich areas on earth.
“The first piece of land lies within the only major lithium-producing area of the U.S.
“It’s a 15,000 acre property that sits right on top of five known lithium-filled aquifers.
“And it’s located within a three-and-a-half hour drive of TWO of the world’s 13 estimated lithium-ion battery factories that are being built right now…
“Tesla’s “Gigafactory” and Faraday Future’s Apex Industrial Park.
“The other property covers over 20,000 acres (about the size of 15 football fields) in the northwest corner of Argentina.
“According to a recent survey, it holds over 2.8 million metric tons of lithium.
“At an estimated price of $13,000 a metric ton, that equates to $36 billion worth of the most ‘in-demand’ form of energy in the world.”
Lithium is not, of course, a “form of energy” — it’s a metal that is one major ingredient in the highly efficient lithium-ion batteries that currently lead the market (there are lots of different battery designs and chemistries, including other lithium-based designs, but so far lithium-ion is still i