Got this off of the MMGG thread on SH-lol; now loantech I want to own some MMGG, but I want to surf a lower priced stock up to it and then jump across.
That is just the way I do it-lol.
e.g. I think IZN will reach MMGG's price at some point then I will sell 1/2 of my IZN and buy MMGG.
Speculation!, ARU area play! Perfect set up. The ARU holders know the area and know the area plays. ARU is 30 to 60 times the value of these other area stocks.
And the ARU area plays have a lot of action now, so lot of guys will sell ARU and specualte on area plays. GML .95 and SKE .80 seem to be two of the best. They ahve both pulled some big holes!
From: dailywealth.com
Worldwide Zinc Crisis: How to Play it
by Tom Dyson (May 19th, 2006)
The world is out of zinc...
I’m not joking. All industrial metals are scarce right now, but none are as scarce as zinc. There simply isn’t any available.
I learned this yesterday on the golf course. Chris Hancock specializes in Asia. He is the author of a publication called the Asia Strategy Report. We were paired together in a corporate golf outing. While contemplating my approach shot to the sixteenth green, Chris started talking about zinc…
Kohler Inc. is a huge manufacturing conglomerate, best known for making bathroom fittings like sinks, latrines and faucets. They coat their products with zinc to stop corrosion.
“I was just in Hong Kong,” Chris told me, “and while I was there, I met up with a friend of mine who’s the manager of several Kohler plants in China. He told me they’re having trouble with zinc… they can’t find it anywhere.”
Chris continued: “At first I didn’t pay much attention. But then at dinner that night, I sat next to a guy from my MBA class. He’s an investment banker with UBS Warburg. He says all the traders at Warburg are buying zinc like crazy and that the zinc price is about to run. But get this...
On the plane back from Shanghai, we start chatting to the lady in the seat next to us. It turns out she manages a plant in Chicago for one of the large office supply retailers. She said she’d been in China visiting factories. We told her we had been doing the same thing. We asked her how her trip went - if she’d had any problems sourcing materials for her plant – and she told us she did. She couldn’t get hold of any zinc!”
I hate to say, "I told you so"... no, actually I love it...but that's not the point. The point is, on July 20, 2005, when copper was $1.60/lb., I wrote that copper could reach $4.20, a rise of 162%! That was a bold prediction, and not a bad prediction, since copper hit $4.00/lb., within a year!
silverstockreport.com
Excerpt: And what about copper? At current prices of $1.60/lb., $5000 is 3125 pounds. Again, it's not nearly as convenient as 55 pounds of silver! Furthermore, most copper is produced in a form that is inconvenient to store, such as pipes or wire! Copper's recent low price was $.70/lb.
I'm interested in copper because I have invested in several silver exploration companies that also happen to have copper with their silver, such as O.T. Mining (OTMN.PK), Mines Management (MGN), and Capstone Gold (CSG.TO). Just in the course of keeping track of my stock picks, I've watched copper prices rise over 100% in the last few years.
The copper market may be getting ready to see prices explode upwards. Now, if copper moved up 6 times like oil has, copper would be $4.20/lb.! I don't think that's unrealistic, since the oil market is probably more than ten times bigger than the copper market, and it's much easier for smaller markets to see greater volatility.
So, why am I talking about copper when I was talking about zinc? (Besides to help establish my own credibility?) Well, the copper market is related to the zinc market. Both are base metals. Both industries have seen lagging investment for years. Both industries were plagued by very low prices making many mining companies suffer during 1999 to 2001. Both are booming due to demand from China.
But now let's focus on a few differences. In copper, inventories at the LME have climbed four fold from 30,000 tonnes to 120,000 tonnes at the LME in about 7 months, from August, 2005 to March, 2006. see kitcometals.com
But the LME still only has about 2.5 days worth of world copper demand (while growing).
And the LME is down to 8.5 days worth of zinc! (and still rapidly shrinking!)
With copper, there are substitutes. In some cases you can use PVC pipes instead of copper. Or you can use aluminum wiring instead of copper, as has been recently reported in China. The interesting point with aluminum is that aluminum has historically been priced higher than zinc, until only recently, when zinc prices rose higher than aluminum.
Can they substitute zinc's primary use in galvanized steel? (About 75% of zinc's demand?) I don't know. In some applications, I'm sure they can do without, since the difference is a matter of longevity. But that's a matter for the free market, and individual users to decide.
As long as zinc inventories continue to decline, and as long as we know that it takes at least two years to bring major new zinc mines to production, I think it's safe to say that investing in zinc is a good idea.
So, how high will zinc go? Due to the shortage, the price-insensitive demand, growing world trade, booming China and India, and long time to new production, and exaggerated price movements due to futures markets, I think zinc could hit $4/lb within the next 2 years; but probably sooner. (And that implies that copper, which is typically about twice as high as zinc, could hit $8/lb., or maybe slightly less.) And when zinc begins to shortly hit new highs again, above $1.75/lb., I suspect that this "dip" in the metals will be over.
But I would not invest in the futures market, nor buy zinc options. That's gambling; where your gain comes at another's loss.
Instead, we can work to help solve the zinc crisis and shortage by investing in zinc exploration and mining, where our gain creates gains for others as they benefit from having available zinc!
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