You REALLY should cover that short today. You may believe that rare earths are going to cheap prices ... but they aren't now, even with drops from the ALL-TIME HIGH PRICES. And it is scary that the prices are now lower than those ALL-TIME HIGH PRICES, and anyone with any conservative estimates is probably calculating future potential at prices that are lower than the recent ALL-TIME HIGH PRICES.
I would hate for my position to be short. Even if I saw a price decline, you know, from those phenomenally wild ALL-TIME HIGH PRICES. A pullback from ALL-TIME HIGH PRICES, I mean that has to be bad news, right? But will people take you seriously ... they might focus on the fact that rare earth prices had a fantastic run up for YEARS!!! To ALL-TIME HIGH PRICES!!!
it is the other way around. where do you think the prices are quoted from for future orders.
do you know how many customers molly has? is it over 10? over 5?
does any 1 customer equate to over 20% of sales? do you think that 1 customer has an advantage over molly if molly is try to sell above spot?
treat rare earth like the business cycle.
4th quarter people buy goods
3rd quarter manufactures assemble and ship
2nd quarter raw materials are processed and delivered.
1st quarter orders from the manufactures dribble in to the raw material guys.
molly is a raw material guy.
when i refer to quarter i am referring a normal fiscal yr. 1st jan,feb,march and so forth.
prices dropping like a rock is not good, no matter how you spin it. when prices drop manufacturers wait to order, possibly even ordering in the second quarter. 1st quarter doesn't end till march30.
to come out when your stock is beinging attacked by short sellers, and the long holders are shakey b/c they see the prices --and say we have limited visibilty, but we feel confident, stock down 20-30%.
or it could go vice versa. i hold no position. i am looking to get in when the cycle is right, i don't think it is right for capital intensive companies right now.