But lithium ain’t one – Fat Tail Daily

“You crazy for this one Rick!”

— Jay Z, 99 Problems

“Rick” is a wild thinker and major music producer, who set the music charts alight multiple times.

And as my ASX small-caps watchlists are suffering today, let me suggest that perhaps a little wilder thinking is the tonic.

You see, Rick Rubin understands demographics.

Just like I sometimes like to think of charts as a map of the demographics of perceived asset value over time.

(If the music references don’t hit for you, apologies, this note is definitely about lithium investments.)

Bear with me, because I’m not saying you gotta like the hip-hop genre — I was just 5 years old when the genre burst onto the scene.

And I have Hank Williams and Jimmy Buffett cassettes on my desk right now; let it be known:

Source: Lachlann Tierney

BOTH music and markets move in cycles

AND: Lithium too — just like all commodities.

And this could be its last cycle, ever.

That’s what I’m really saying.

Noting, of course, that lithium is more of a “specialty chemical” than a commodity — that’s straight from the horse’s mouth of Joe Lowry, who I’ve luckily met before and runs the excellent Global Lithium Podcast.

Joe’s old and wise enough to remember the first lithium bull market, which took place before I even worked in markets.

That was the first cycle for lithium.

Styles of music cycle as well — just ask Rick, who traverses multiple genres across a stellar production career.

So this morning I looked at a book on the shelf called The Creative Act: A Way of Being by Rick himself.

I haven’t fully examined it, but Rick has some good points.

Take this seemingly platitudinous riff of his:

“Look for what you notice but no one else sees.”

It’s actually quite sage advice for investors seeking that little edge in the market — you might be one of them.

Well Rick, that’s exactly what
I did in September last year

No one wanted to hear that lithium would come storming back.

And yet here it is:

Source: TradingEconomics

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That’s right, I recommended four companies to readers of Australian Small Cap Investigator for what I called “Lithium’s Final Run”.

Turns out, I had noticed something across my large network of various finance types I talk to and gauge for market sentiment shifts.

Suddenly, the people on the ground were noticing a shift in attitude.

The capital markets’ appetite for lithium was no longer a case of full-blown rigor mortis, and this sleeping beauty had found a pulse, however faint.

That murmur was barely noticeable to the wider market — certainly not in the headlines of the mainstream financial press.

You might be able to feel and sense these things you notice, but “no one else sees”.

My dear father got into Tesla shares at US$18, currently trading at ~US$400 a share.

Cherish these nuggets of insight if you ever think you are onto one.

That’s what we do at this business — try and find the golden “edge of the curve” ideas.

And then send them straight to your inbox.

Thanks for reading today, and just quietly, have a little read of what I’m saying about lithium right here.

It’s not without risk, but then again, Rick Rubin’s a pretty crazy guy.