Stocks continue to recover from their panic bottoms of last November, many of them having doubled or more from then (case in point: General Electric).   All this seems very healthy to me given the lack of real world data indicating any sort of resumption in economic growth.  We get only data indicating a slowing in the rate of decline.  On top of that, we know there are more shocks to come:  huge default rates in loans on commercial real estate which lags the economy, the likely bankruptcy of both Chrysler …

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Here’s a summary published at SeekingAlpha.  Note the P/E seems to be off.  I make it about 14. http://seekingalpha.com/article/127329-sqm-reports-revenue-growth-for-eighth-consecutive-year#comment-436464

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Are stocks and oil bottoming?

Was last Tuesday’s 350-point rally the beginning of the end of the bear market or just a false “bear trap?”  And a related question: “Did oil bottom at $33 and will it get re-tested?”  Let’s see what we know.

Some things we know

Sometimes the objective observable facts can yield fairly clear conclusions.  Usually that’s not the case.  Usually you can use the available facts to make a decent argument in either direction.  But sometimes the facts seem fairly clear.

For example, there should have been clarity about being …

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My recent post on “Battery Wars” was a broad overview of the ongoing global struggle to develop one or more cost-effective batteries to power a commercially viable electric or hybrid vehicle. Follow-on commentaries to that post have added more substance and I invite readers with knowledge to add their views on the viability of lithium-ion vs. current NiMH batteries - or any other alternatives. Because  lanthanum, a rare earth element, is essential to the NiMH battery, the business of mining of rare earth elements and related investments has …

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A horse race is in progress that will determine the next generation automotive power plant.  In order to break our oil addiction cars must transition to electric power, which means the power plant must be either all electric or plug-in hybrid electric.  Either one requires a battery with vastly better cost/benefit ratios than is currently available.  The two near term favorites to fill the bill are nickel metal hydride and lithium-ion; a long shot on the outside is ultracapacitors.    Competing battery technologies also include an improved lead-acid battery and …

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Our current investment trauma marks the end of an era of excesses in credit and real estate markets, of course.  But it also denotes that the United States is undergoing a far more general and significant transition - not only to a new government with a radically different agenda, but more lastingly into a whole new climate for investments. 

Gone is the era of wind-to-the-back investing powered since 1982 by continually lower interest rates and the virtuous influence of the baby boomer demographic bulge working its way through the U.S. economy …

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Here is a concise, erudite, and entertaining history of the lithium business and SQM, the world’s largest lithium supplier.  I have been unaware of this history of SQM and the contest for control of it between a Canadian potash giant and a Chilean gentleman related (sorry to report) to the late dictator Pinochet.  Some interesting investment perspectives regarding SQM include:   1. It’s lithium business is not presently prospering due to new, low priced Chinese competition, the incipient global depression that is reducing sales of consumer electronics that …

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As the global economy heads into terra incognita and the stock market tries to prove it has seen the worst my thoughts, for whatever they are worth, are: 1. Some economic observers such as John Thane, the CEO of Merrill Lynch, and JC Penney’s CEO Mike Ullman are saying the current economy is comparable with the Great Depression.   We need fiscal stimulus (since we’re nearly out of gas in terms of monitory stimulation potential).  How much?  If we’re going into a depression the quantity of fiscal stimulus needed …

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Will the world run short of lithium as electric and electric-assisted cars use li-ion batteries?  That is the speculation debated in the article posted below:  October 31, 2008 4:00 AM PDT Electric-car race could strain lithium battery supply Posted by Martin LaMonica 40 comments The headlong rush to create electric cars for green-minded consumers may come with a significant economic and environmental cost. Lithium ion batteries–the same used in electronic gadgets and laptops–have become the preferred battery type for plug-in hybrids and …

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SQM Reaffirms Market Outlook Tue. September 30, 2008; Posted: 12:50 PM   SANTIAGO, Chile, Sept 30, 2008 /PRNewswire-FirstCall via COMTEX/ — SQM | Quote | Chart | News | PowerRating — Sociedad Quimica y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A), in light of the high volatility experienced by world stock markets and in SQM share price, reiterated its statements from its second quarter 2008 earnings release regarding its expectations that results for the second half of …

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Mr. Buffett’s investment tends to validate two concepts: that electric vehicles will become increasingly important and that a cost effective lithium ion battery can be part of the solution in the short term.  That is more good news for SQM, the world’s largest lithium supplier.  One negative to keep in mind is that demand for electric vehicles may not be robust unless and until the price of oil is seen to be high and going higher.   Recently that has been the case, but sentiment could change.   The economic weakness …

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Rough Seas This is just simply tough, this business of unwinding the radically leveraged bets of unregulated financial institutions - investments banks and hedge funds - and the unregulated bets of radically leveraged institutions - banks, Freddie, Fanny.  Bear may be followed  by Lehman.  Now hedge funds are liquidating and dropping like pop-ups just past the infield as their investors pass the threshold of acceptable pain and call back what’s left of their funds.  In the wake of hedge funds’ liquidating sales the real worth of great companies like …

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Details of GM’s plans for the first-ever production model plug-in hybrid electric vehicle (PHEV) were discussed in a report in today’s Financial Times.   The car is still scheduled for 2010 delivery.  Now we know that it’s 400 pound lithium-ion battery will have a 40 mile range and will be recharged on the move by a 4 cylinder gas engine which GM says will let the vehicle get about 150 miles per gallon.   I suppose the engine cuts in automatically when the battery gets down to a certain …

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The next five years will clearly be a transition period from the petro-car to the electric car.  But this transition will feature an interesting horse race between two different battery technologies, a lithium-ion (Li-on)  or an upgraded Nickel Metal Hydride (NiMH) powered battery.  Apparently Toyota and Honda, the two currently leading makers of transition hybrid cars, do not think the Li-on is ready for prime time yet.  They reportedly are going with an upgraded NiMH battery.   Carlos Ghosn, on the other hand, is taking …

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Here is a news report (The Guardian) about global lithium supplies and potential demand from hybrid electric vehicles and EV’s   http://www.guardian.co.uk/technology/2008/jul/31/motoring.energy What is going to power our cars? With oil supplies a continuing concern, focus is switching to lithium for electric vehicles. But debate rages about how much of it is available Danny Bradbury The Guardian, Thursday July 31 2008 Article history Chile’s Salar de Atacama is home to some of the world’s richest deposits of …

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