It’s Lit-hium

After my adventures researching the coal and energy sector and probably sending a few of ya’ll to sleep (you’re welcome), I started to think about clean energy and the future. I started thinking about the $1 Trillion infrastructure stimulus bill, and how that will hopefully kickstart the U.S into a greener future. While I am by no means the first person to think about this, the more I thought about it the better of a trade it became to me.

I rolled through a couple of ideas that would benefit from this bill, I thought about electric vehicles, nuclear energy, concrete/asphalt, steel, solar energy. You name it, I looked into it at least for a brief moment. The obvious one that comes to mind is to get into the Electric Vehicle market. You have the big names that came out over the last few years, TSLA, NIO, XPENG, Nikola, and then the big auto companies with their lines as well. In my opinion, I think Tesla is a way overpriced ponzi scheme as many people refer to it. If you got in early, GREAT you made a killing, and if you got in at the peak around $900, then I’m sorry for your loss. So with all that said, the auto-industry as a whole is going to become more diluted with additional vehicle makers plus the traditional ones. So EV’s were a “That’s a no for me dawg”.

I looked into solar panels, and I think we’re still just a little too far out to really make them a significant portion of our energy output. This is due to prices still high for installment. Also, many solar companies are trading at high levels after the hype during the pandemic.

The 2 things I decided to take a closer look at was the steel industry and the EV battery industry. A few tickers I looked into for steel were NUE (Nucor) and X (U.S Steel Corporation). I am taking a fairly short term approach on this trade, banking on the passing of the Infrastructure Bill in the House of Representatives. The bill was passed in the Senate today 8/10. With prices of steel rising due to increased demand and producers able to limit the amount of steel flowing through the system they are able to take relatively high profits.

A few of the Lithium companies I looked into were Orocobre, Albemarle, Galaxy, Lithium America’s Corporation, and an ETF with the ticker LIT. With the EV car market on the rise and competition between them all, I decided to get into some of these Lithium mining/manufacturing companies. After doing research on all of these companies and listening to a wise quote “you show me a mine, and I’ll show you a liar standing in front of a hole”, I decided to buy into the LIT ETF. It has companies of all parts of the Lithium supply chain, from mining, to EV companies, and battery manufacturers. However, seeing my stock not move at all while most of the names mentioned above were popping off like 6% I sold that ETF and created my own little ETF of Lithium companies. I set a portion of my capital, about the norm of what I would put into a single stock and split the amount between Orocobre, Albemerle, and Lithium America’s Corporation. I would have bout into Galaxy however Orocobre and Galaxy have agreed to a merger so in reality the 2 will be the same. President Biden also recently passed a bill stating all vehicle manufacturers need to be at 50% EV production by 2030. The only thing I can hope for at this point is that all of this news isn’t already baked into the prices of these stocks as the information is fairly recent.

Current Holdings:

Long Term Plays:

1. AMAT – Semi Conductor components manufacturer
2. JPM- Big Bank take little bank, Been hanging on to this for a longggg time
3. TGT- Target… just look at the chart
4. IVV- S&P 500 Index Fund
5. PLD- Prologis, Warehouse real estate company
6. SPEU – SPDR European stock ETF
7. VONG- Russell 2000 Growth ETF
8. Lithium grouping ( ALB, OROCF, QS, LAC)
9. ONEQ- ETF of the Nasdaq 100
10. AMD- Microchip producer

Short Term Plays:

1. VSCO- Victoria’s Secret, mentioned in the previous post, up 24% in a couple of days
2. SD- Sandridge energy, Oil production
3. X – Steel Infrastructure Bill play

Disclaimer: As always, nothing in this Blog is investment advice. Before investing you should always discuss with a professional. These are just the authors opinions.