COFFEE WITH CARROT HEAD!
GRAPHITE GRAPHITE AND MORE GRAPHITE. THE RULES OF ENGAGEMENT.
Get a plain piece of paper and get a pencil. Now look at the tip of that pencil. Can you imagine that you are looking at an element that is actually harder than a diamond and over 10 times tougher than steel when converted to something called Graphene? Sounds like a monster.
While posting the last coffee article I received one of the usual subscriptions which mentioned Graphite. Well the headline says it all this particular article will concentrate on Graphite. Our usual understanding of Graphite is much to do with the bit that we find at the end of our pencil. I think most of us were more familiar with it when we were in grade 3 unless you are an architect or an engineer. That is the way things are and when I was using a pencil I never thought about this small ingredient becoming important enough for investors to consider it seriously. Slowly but surely Graphite is becoming a mainline product that is attempting to become a vital key ingredient of the future when having been shunned for the last two decades.
From my initial studies of Graphite the current production is about 1,100,000 metric tons. Most of this is produced in China about 73%. There is a lot of graphite in China, India, and Madagascar. Graphite is used for conductivity, lubrication, heat resistance and bonding. The mineral is also used in batteries, fuel cells and nuclear reactors.
Graphite is used in Lithium ion batteries better known as Li On where it is roughly 20 to 30 times more used than lithium by weight. By 2020 the hybrid vehicles will reach a production of 6,000,000. Currently the production rate is about 400,000 vehicles per year.
The EU and USA have now placed graphite as a supply critical mineral.
Graphite is also being researched for use in high speed micro processors as it conducts electricity at a rate of 30 times faster than silicon. This research is far form a viable solution so do not get your panties in a twist. It's not so much as if it conducts electricity quicker, rather it’s a question of control which has not been solved and IBM at least states that while there is potential its simply that, and will not replace silicon any time soon. We are looking at the future in terms of a time scale of 10 to 20 years and a lot can change in that time.
There are several types of mined graphite that comes out but the one that holds the highest price is something called flakes. These come is several grades. I do not understand the technical aspect of this and I need to do some more research.
Still considering the fundamentals of the above we can now take some interest in the material. There are a number of companies out there which are into graphite mining. These are some of the ones that should be researched into.
(Some of the descriptions have been copied from the companies websites)
Northern Graphite Corporation is an Ottawa-based Canadian mine development company that is listed on the TSX Venture Exchange under the symbol "NGC" and also trades on the OTCBB under the symbol "NGPHF".
Northern’s principal asset is the Bissett Creek graphite project located 100km east of North Bay, Ontario and close to major roads and infrastructure. The Company has completed an NI 43-101 Preliminary Economic Assessment Report on the project and has subsequently initiated a bankable final feasibility study and commenced the environmental and mine permitting process which are both expected to be completed in the second quarter, 2012. Northern anticipates that it will be in a position to begin construction of the mine in the 3Q, 2012, subject to positive results from the final feasibility study and the availability of financing.
Standard Graphite Corp. SGH.V is focused exclusively on the exploration and development of a large portfolio of flake graphite properties in Canada. The company is rapidly positioning itself as North America's premier pure-play graphite exploration company and it controls 100% interest in 13 highly prospective graphite properties within known graphite districts in both Quebec and Ontario. This is an early play company and I have not done too much research on these companies.
GrafTech GTI is a company with 125 years of experience in the carbon and graphite industries. In the late 1800s, it actually supplied arc carbons to Cleveland, Ohio, enabling the city to become the first in the world with electric street lamps.
Today, GrafTech's products are used in a variety of industries including steel, energy, technology, chemicals, aerospace and transportation. The company has 19 manufacturing facilities strategically located in over 70 countries spanning four continents.
Of all the companies out there GTI would stand out at the moment as one of the companies that may be in a good position to move ahead if the demand for graphite and its variants increases. GrafTech is also the twelfth-largest patent holder for applications in the field of graphene. It currently holds even more patents for graphene applications than big name companies like General Electric (NYSE: GE), Bayer AG (ETR: BAYN) (FRA: BAYN), and Canon (NYSE: CAJ).
GTI is currently oversold. This would be the first company that I would research and if one os going to get into Graphite my entry would be first through this company.
Flinders Resources Ltd. (TSX.V:FDR) is Toronto Venture Exchange listed resource company that owns 100% of the Kringel Graphite Mine, a unique and strategic European graphite project in central Sweden. The Kringel Mine, with rated capacity 13,000 tonnes per year of flake graphite, operated from 1996 to 2001, when production was halted due to falling graphite prices. Since then, the Kringel Project has been held on care and maintenance.
I am not recommending that anyone invests in Graphite based companies at this moment but suggest an initiation of interest in the subject.
This article gives you some more information on this company as well as some others and explains what graphene is. http://seekingalpha.com/article/4716...l?source=yahoo
Lets analyse our subject matter. First of all graphite has been used since at least when the pencil was invented. We probably think of graphite when we think of a pencil. So it has not made a huge impact in the last ten years. What has changed now, that it warrants an interest? The change is the product graphene.
Graphene has suddenly garnered interest due to the potential of using it in alternative energy. (Glimmer of a light here as to how it relates to us).
As we are aware one of the fundamental issues among others for batteries is that the charging time taken to recharge a lithium battery is excessive. If we were burdened with an electric vehicle our major issue would be on how to recharge the battery. Even if the battery were to last for a long haul journey such as perhaps 500 or even a thousand miles, the time taken top recharge the battery is a major hurdle. Currently we would require at least several hours to recharge the battery. However recent discoveries in graphene show that in theory this recharge time could reduced in smaller batteries to mere seconds or a minute at most. (Ok blink now)
Graphene is the result of breaking down graphite, a cheap, readily available material commonly used in pencils, into layers one atom thick. In this form, it has remarkable properties.
The above was taken from this article. It is a good read. http://phys.org/news/2011-07-graphit...y-storage.html
We are at the beginning of a technology thrust when it comes to electric cars. The hybrid provides us with a bridge to where we need to get which is pure electric. Like a jigsaw we have several disjointed parts that appear not to fit but with patience and remarkable breakthroughs in science we may be able to get a clearer picture. I am least interested in technology or how it happens. I think for the majority the application and the convenience are the key points. For investors we are tasked with the monumental ordeal of sifting through a plethora of information and to analyse which of these breakthroughs will eventually become main line enough to create a profit. In many ways it is better to go with the horse that has probably been ahead of the rest. However there is always the chance that a contender may make it to the top. The world is dynamic and so is progress. Today’s top is tomorrow’s bottom. Graphite has potential. There is a downside to every thing. We often find that time is not on our side and to address this we like to go with the majority. We find a target but we do not shoot it until the entire platoon is shooting out there. Graphite is a target that we can keep an eye on. Graphene is not today or even next year. We are looking at ten years in the future and ten years can change a lot of things. So why the interest today?
The answer to that is that, this story is the same as rare earths. Graphite has the same recipe coming up as Rare earths did. News letters are getting into this product. China is possibly looking at holding back the supply, and governments have noted it as an essential commodity just like rare earths. These are all ingredients which lead to whetting the appetite of potential investors and providing us with a potential of certain key stocks moving up rapidly just as rare earths did when Mr. Dines brought them to his subscribers attention. Stocks like QRM and RES blew their tops on nothing but air. Today QRM is pulled back at least half if not 75%. RES has also dropped drastically. That is a possibility on some of the above mentioned. Still Graphite can be used even if graphene is still on research. Three of the companies are either near production, are producers or manufacturers or are on maintenance. This makes them better than possible movers in the near future if various subscriptions suddenly begin to take an avid interest in Graphite as is now occurring with at least one subscription.
The past has happened and cannot be changed, the present is too close to think and that simply leaves us with the future. I have not brought anything new in terms of new ideas or investments for a long time. For once I would like us to be ahead of the crowd, at least in terms of information if not anything else.
Speaking of Rare earths it would a good idea to keep an eye on them at these prices. They have dropped a lot and I am keeping an eye on just two. QRM and RES. Both stocks are Dines introductions. Both moved up heavily but have now regressed reasonable prices since last years boom. QRM.TO has dropped down to previous lows and can be a speculative buy at 1.75 or lower. Now currently sitting at 2.02- Just a heads up! RES.TO had dropped to below 3.50 in January but is now back up to 5.50. Still it could drop from here as I see a possible downturn happening in the summer doldrums. This is no guarantee that it will happen but it often does and if you are in profits you may want to take them off the table before the middle of May. This is when things begin to take a down turn.
Gold is ranging between 1622.00 (Estimated low) to 1680.00 (Estimated highs) I have done a Fibonacci range and I am gratified that the price is falling or rising within this range. I have been studying Fibonacci for some time now to see if we can find entry and exit points. While I do believe gold should move, it is simply an anticipation, a calculated outlook based on the fact that if it does not go down then some fundamentals will push it up. Summer is usually a dull time for gold so we may see some drop. Ideally with gold it is not worth speculating on a daily or even weekly basis in the futures markets. Its about long term trends and this will play out over several months at the very least. In the last three months we have had a lot of range bound graphs. Uranium is range bound, gold is range bound, silver is range bound after initial signs of life. The only anomaly are the PM stocks which have taken a beating with the exception of Silver Wheaton (Ok technically it has dropped but not as much as the others). Most of them have dropped drastically so consider many of the producers in these as some of them are at a price you would four years ago pay for exploration companies and willingly too yet the market is now reluctant to invest in producers at the same price. Are we missing something here? Should we not be taking a contrarian view here? Gold stocks ???? Anyone ??? Dime a dozen??? Fire Sale!
Currencies have also take a step back on the longer scale with the pound ranging between 1.56 and 1.60 while the Euro continues to range between 1.29 to 1.32. These are fairly tight ranges and make it difficult to trend trade. I must say that I continue to have more confidence in commodity backed currencies. I still have more faith in the US dollar than I do in the Euro or the British Pound. Still the governments will continue to control the eb and flow as best possible. What would bring strength to the dollar? A major war or an eminent one. Seasons may play havoc and I hear things are a little funny in the soft commodities markets especially in cotton and coffee. Something not right with that market so something may happen soon. Coffee anyone?
I wanted to write a little about the rules of engagement. I think that will infer the business of marriage. Sadly that is not what I am talking about today. I am referring to the rules of engagement for stocks. The problem with the rules is that they should suit your nature still the following is one set of rules that I have thought of and perhaps they are not new still its worth considering them. They do not apply to any specific volumes or size of capital stocks. They are simple and other rules can be added if one thinks it is necessary.
I call it the 4 entry point and exit point system.
STOCK MARKET 4 ENTRY AND 3 EXIT POINT SYSTEM.
RULES OF ENTRY CONDITIONS.
1. Oversold position noted on RSI indicator.
2. 5 sma crosses over 10 sma. – Alert
3. 10 sma crosses over 20 sma—Entry 3- 50% of full amount allocated BUY
4. 20 sma crosses over 55 sma – Entry 4- 50% of full amount allocated BUY
EXIT STRATEGY- LOSS 10% BELOW LAST BOUGHT AMOUNT PRICE- SELL FULL AMOUNT.
RULES OF EXIT STRATEGY PROFIT.
1. Overbought position achieved (May not occur so ignore if below all conditions are met.)
2. 5 sma crosses under 10 sma – Alert.
3. 5 sma crosses under 20sma- Exit point 1- 50% of full amount allocated. SELL
4. 10sma crosses under 20SMA-Exit point 2- 50% of full amount allocated SELL
With the above method we are looking to trend but ignore some drops in prices as long as we are in good profit. So even if we do loose 50% stock by selling we continue to remain invested with 50%. If the chart reverts back to an up trend. Do not reinvest what you have removed rather continue to hold the other 50% where now the rules of exit apply once more. This only occurs if the previous high is breached and the trend continues to move upwards having taken a good breather. Any resistance in finding a new high should be considered as a warning. The exit strategy of taking a loss can be changed according to what you feel comfortable with.
One should try to build their own rules of engagement but one must also follow them diligently rather than moving in and out using gut feeling try out your rules first on a simulated account before applying it to the real thing. It requires a long term sampling. Perhaps use historical data but be true to yourself and see if the system allows you to make money in the longer term. Small losses may occur but if the longer outcome is profit than its good. The RSI is simply to alert you that possible long positions or short positions are imminent.
None can predict what will happen this year or the next. The only thing predictable is the unpredictable. We can merely speculate as to what will happen in the future. We are entirely dependent on the mass to see the same picture as us and that does not happen often, otherwise the entire world would be reading up on threads such as these and others. Recent reports state that the UK is already planning sky roads. They are anticipating that traffic will be too heavy for the small island and sky cars will be the way of the future. Plans are made for anything and everything just as a chess grand master plans for any and every move and counter move. Investors cannot afford to be any different. We are the point men in this thread and in others like this. We head the spear, heading into an unpredictable horizon. We take the maximum risks taking the brunt of failures for the rest in the hope that we will hit at least one target that will make it all worthwhile. Normal investors do not take such risks, Institutions wait for individuals like ourselves to amass in order to point the direction for the heavy artillery to come in later and provide heavy support but by that time many of our kind will be have been exterminated. The survivors will be granted a small reward perhaps to survive and fight another battle another day. Such is the destiny that we have chosen. A thankless job and reminds me of a phrase I read somewhere in an office; “ Doing this job is like taking a piss in your pants you get a warm feeling but no one else notices.” I apologize and it was rather crass of me to say that but it fits us.
Uranium 1 is what my instincts are telling me to concentrate on and I mentioned that a position was coming into play and to keep an eye on it. Recent coverage of it by JP Morgan makes it main line now.
Uranium and alternative energy 2 thread has now hit 31000 hits. More people are interested in Uranium now than at any other time since this thread was started. I am glad and hope that the stocks suggested will make it big at some point in the near future. I truly am in need of the amber nectar now. I hope you will join me again in the coming weeks.
Have a good weekend and begin preparing for the summer lows that will most likely come. Statistics show that we have a 50-50 chance of hitting them.