Talison Lithium, the largest pure lithium producer in the world, is going public!

 In June I wrote about how the market for the electric metal (Lithium) was heating up and I highlighted five  junior lithium miners that stand to benefit from the coming "second leg" of the lithium Bull Market (Fall 2010)

Then in early July I told you about Salares Lithium and its Salares 7 project in the Atacama Desert of Chile, how vast their new holdings were, and how they might be a takeover target as this bull begins its second leg. It was my thought at the time that, because of an overstake of the Salares property by SQM (the largest brine producer in Chile) I believed that SQM might make some sort of offer for Salares.

However, within days of that article in which I made Salares my conviction stock pick, Talison Lithium, a private company from Australia, swooped in on Salares and a merger was announced combining the raw holdings of the Salares 7 project in Chile with the Two producing plants that Talison operates in Australia to mostly supply the burgeoning Chinese market with Lithium. Talison is the largest supplier of the commodity to China at this writing, supplying 66% of Chinese demand.

On Sept 17th, that merger should be completed and the stock of a new company (TalisonLithium Ltd is going public) will launch on the TSE. This will be the largest, pure lithium company in the world and thus the new lithium ETFs will have no choice but to place it near the top of their basket of stocks in the lithium sector.

Salares shareholders (as of the merger announcement) will benefit to the tune of approx 98.2% as their shares will increase from the .62 at time trading was stopped, to approx $1.25 when the new company begins trading on the TSE in Sept. (2.81 shares of Salares for each share of the new entity, striking price between $3.50 and $4 returns over 1.25 to Salares Share holders).
However, this writer will be holding on to his shares of the public version of Talison Lithium, as it will have to be listed in the new Global X ETF recently announced on the NYSE and Lithium indexes which are popping up on the radar screens this year.  Lets face it, in any market, indexes and ETFs cannot afford to ignore the world leader, and in this case, it will be the worlds largest pure lithium play.
Talison operates two producing lithium plants at their Greenbushes operation in Australia. It  has 25 years of production under its belt, supplies 300 companies with lithium and lithium carbonate, including many in China where it is the largest offshore supplier into that market. In its latest announcement of the merger with Salares, Talison management advise they are on track to ramp up production by 100% by 2011 and have many more potential customers knocking on the door at this writing.
That 100% increase does not even include the Salares 7 project in Chile which it acquires from Salares Lithium but it appears there are big plans for that area as well.

Yes, I doubled my money on this trade, but I believe it will double again well before Christmas, and double again before spring.  Maybe sometime in 2012 I might think about selling this stock, then again, when you are on a rocket ship, it is a bit hard to jump off.
Here's to your retirefund.
HP
Electric Metals Market heating up 
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Obama biggest battery booster!

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Pigs really do get slaughtered! So don't be one!

"Bulls make money, bears make money, pigs get slaughtered"
Jim Cramer - Mad Money


Yes, Jim Cramer can drive you nuts with his ranting and raving about stocks and investing. Sometimes he is right, sometimes he is wrong (just like the rest of us) but of all of his rantings, I sure like the quote "Bulls make money, bears make money, pigs get slaughtered". Jim drives home this simple thought every night on his CNBC show, Mad Money.


Jim's style can grate on serious investors and newbies alike, but one thing is for sure, he does try to enlighten the small retail investor and this quote is far and away, one of the best pieces of advice he gives every single night to his viewers. If you don't listen to this golden piece of advice, you stand to lose your shirt, and more.

If your investment strategy is to throw money on hot stocks and hope for a home run, then you should change the game. You are better suited to the game of craps at the local Casino. With that attitude, you may actually do better at the Casino, than in the market.

Economic forecasts are never certain. If you put three economists in the same room, you will end up with three entirely different opinions of where the economy, and by extension, the market is headed. Don't invest in stocks because of an economic forecast! Invest only when you have done your own home work on an individual stock, it's market niche, it's earnings/potential, it's management, it's trading range, and analysts opinions. (Actually we like stocks that are under the radar of analysts, but is for another post).

The bottom for traders is this!  If you have a stock that is up say 20% to 30% and you don't take at least "some" profit, then consider yourself a pig, and expect to get slaughtered. You don't have to sell because a stock is up, but taking "some" money off the table when you are up is simply a fact of good trading.

If as opposed to "trading" you consider yourself a long term investor and you are not concerned with short to medium term profits, you may still wish to "take some off the table". It just make sense because, as you've heard many times, "a bird in the hand is worth more than two in the bush"!

And Pigs can't fly! but of course, you already know that!

Good investing-   HP


PS: and by the way, don't forget to pay down some debt this year. A great investment is not to owe more money than you have. You don't want that burden in retirement, especially in this environment. 

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Investing long term OR trading short term! Do you really need to ask?

Image by Getty Images via Daylife

Businessweek recently asked on it's blog if investing long term in the stock market is still a good strategy for your retirefund, or if a short term "trading" system might be more beneficial. Do you really need to ask this question?

Let's answer that with two more questions shall we! How many of you timed last years market plunge? How many of you "timed" this springs bounce? I thought so! If you didn't time either of these obvious opportunities, then why would you even consider trading short term? This is not to say that you shouldn't sell stocks. That is how you book real profit. However, if you buy a classic car at an auction, you don't sell it at the same auction. You bought it because it accumulates value, and that takes time.

Long term strategic investing in the stock market has returned the most value to investors than any other store of value over the past 100 years. It will continue to do so over the next 100 years. Why? To draw a simple analogy, the stock market for investors, is what the ocean is to sailors. If it empties, it won't matter what ship you have your family in because every boat will be on dry land. In investment terms, no other investment will stay afloat if the market is gone.

That is why you hear terms such as "a rising tide floats all boats" from investment gurus. It is the same analogy used when Warren Buffett says " when the tide goes out, you can see who has been swimming naked"!

Now let's draw another simple analogy for "today's market"! Currently the tide is very low and most boats are aground. If you pick the sturdiest, fastest boats from the ones that are currently stuck on the sandbars, you will definitely sail away and win the race when the tide comes in, and make no mistake. It will come in. It always does!

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