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Gold/Mining/Energy : Sarissa Resources, Inc. (SRSR) -- Ignore unavailable to you. Want to Upgrade?

To: Zilyunz who wrote (228)	1/4/2012 11:06:13 PM
From: sense	1 Recommendation Read Replies (1) \| Respond to of 7627

I was going to address that link, again, but you beat me to it... In the long term, base metals minerals prices will on average generally tend to keep up with inflation, and that's about it. But, note, the linked article was dated in 2008 or 2009... and see what happened to REE prices in the time that has passed since they published it ? Whoops. If metals prices keep up with inflation "and that's it"... what that is saying is either that supply and demand are always in balance, and/or that the markets are incredibly efficient ? Or, it's saying that the period used tends to eliminate price variations that occur in a shorter time period than is useful in their analysis ? Of course, not everything else does keep up with inflation that efficiently... or, we'd probably not see desperate people stealing copper now by prising chunks of it off of public buildings, stealing cast statues, etc. It's nice that metals prices do tend to keep up with inflation... as otherwise miners would quit mining and the global economy would collapse. So, what it seems that's really saying is that historically, demand doesn't exceed supply in those widely used base metals for very long... because, it's not like a year of bad weather will ruin the crop... and most of the mundane minerals used in large enough quantities to have futures markets dedicated to trading them are already diverse enough in their supply, and in diversity of industrial demand, that there really isn't much global supply or demand side risk. And then... did you note what that document showed about REE that looked "different" than the others ? Perhaps they should have mentioned... "prior results may not indicate future performance"... which they probably would have gotten if they'd run their analysis past the SEC or the CFTC before publishing it. What that points out, mostly, is that widely available and widely used and traded metals have market functions that are different than "minor" metals, in which disruptions of supply, or transformational events that alter demand, can have truly dramatic impact. Look at the price impacts in the PGE metals in the period where a new technology... catalytic converters... were suddenly made a requirement on every auto manufactured ? Look at REE's in the period in which there was a combination of supply disruption and technology driven alterations in demand ? Look at the precious metals, where the global monetary system risks and other factors, like inflation risks, create significant price volatility ? SRSR has niobium... a minor metal with some inordinate supply chain risks and other supply price risk factors that result from dependence on a highly concentrated source of supply. And SRSR appears to me to be the source of a good portion of future price risks in niobium, which will tend to matter a lot more to SRSR's future competitors than it will to SRSR investors. SRSR also has REE's concentrate potential, with some of the REE market issues and risks as others . SRSR also has gold, with the monetary issues as a driver... and all of those introduce some price risk issues which are largely outside the scope of the publication. I'll have to go back and look at their REE bit, again, and see if "they botched it" is the most appropriate descriptor ? So, if SRSR is also looking as a couple of potentials in VMS deposits in copper and nickel... I think it may not be all that bad a thing to have them help to balance out the portfolio with a couple of non-precious but still "monetary" metals... that have "monetary" upside with potential remonetization of metals, but also have that stable (according to the publication) base of industrial demand underpinning them.