Green battery metals is what we identified as the most juicy investment opportunity of the decade. We did so based on a very structured approach which was based on the most profitable opportunities in the previous decades. Our weekend update to Momentum Investing members elaborated which qualified as the longest, most detailed update we have ever written (featuring 45 distinct charts) we concluded that the green battery metals mega trend is is part of the clean energy super cycle. We identified several stocks in this clean energy super cycle that have tremendous upside potential.
As a refresher, this is the summary of how we concluded that green battery metals will qualify as the number 1 investing opportunity of this decade:
Simply because of the big rotation that comes with market crashes. We saw this in 2000 and 2010 so we should see it again in 2020 and beyond. It is commodities that came out of a major bear market, so some segments in the commodities space should create a secular trend in 2020 and beyond.
Moreover, this makes sense, fundamentally. Commodities prices typically react on supply/demand dynamics. If renewable energy is going to continue to grow this decade it will be the commodities as inputs into green batteries that will be in high demand, ultimately even potentially in supply deficit. IF this is what’s underway the market will react to this, way before the real deficit hits in the real world.
In Super Cycle In ‘Green Energy’ Metals Starts In 2021 we explained which metals are crucial and expected to hit a supply shortage (squeeze) in the next few years: lithium, cobalt, graphite, vanadium, nickel. We also wrote:
History shows that bull runs in these metals don’t happen concurrently. They rise one by one. As an investor the trick is to be go overweight, per strategic metal, as each bull run unfolds. It’s ok to keep a one or two smaller allocations for the long term, but we want to have a larger allocation in each bull run. That’s exactly the strategy we will apply in this strategic metals super cycle, particularly in our Momentum Investing strategy and portfolio.
And in Negative Interests On Savings Accounts? Green Battery Metals Investing Is The Answer we explained that the investing strategy should be about picking individual stocks (as opposed to ETFs), diversify slightly but rotate and consolidate as the next metal uptrend starts.
Fast forward to today.
We noted in our detailed Momentum Investing research note today that 2021 is shaping up to become a really awkward year: several stock market indexes printed a series of ATH while the vast majority of stocks have been declining. The few exceptions are in the space of clean and clean energy combined with shipping (container shipping and dry bulk shipping, not tankers though).
We concluded after looking at 16 distinct metals that any metal that has any link with energy is part of the group of outperformers. We looked at our biggest success of this year (a Sydney based lithium miner that doubled this summer) and found a very clear pattern which we consider the recipe for success in 2021 and beyond: a rounded reversal chart setup in any green battery metals or clean energy sector is the key to success.
We found several stock charts with almost identical setups. Some them in advanced stages, some others in early reversal stages. All of them with tremendous upside potential especially as they look to follow a similar path. Our Momentum Investing update published to premium members earlier today qualifies as the best one we have ever written, the most in-depth with the most charts. We believe the insights in there are ‘pure gold’, and an absolute must read for any investor with a medium to long term investing horizon.