CNBC Fast Money shouting Rare Earth Bubble! The same way they've been shouting it's Gold bubble. Fast Money is notoriously bearish when it comes to commodity in general. They're incredibly bullish on Finance and Equity shares. I loved it when they try to shoot down Peter Schiff whenever he recommended people buying Gold shares. Molycorp CEO said the short term spike in price is not what people should be focusing. There could be a bubble occurring when you got a spike like that. CNBC quickly jumped into the word bubble and take the entire word out of context. He never said the long term price is bearish. I agree that price of REE could come down (on a short term basis) after a big spike, but overall REE (and commodity in general) is still bullish on the long term. Video here: http://www.thefinancialtube.com/video/8359/Rare-Earth-Bubble http://www.cnbc.com/id/39786632/There_May_Be_A_Bubble_Occurring_Says_Rare_Resource_Chief PS: I found a remnant of CNN page talking about Rare Earth bubble, but the page had been taken down for some reasons. Bob Chapman talks about Rare Earth. Fast forward to 12:00. http://bobchapman.blogspot.com/2010/12/bob-chapman-on-discount-gold-and-silver_17.html (Bob Chapman was mistaken to say Plutonium and Uranium are Rare Earth. I'm not sure he knows what Rare Earth Elements consist of). Well folks, I don't know about you, when you got CNBC and CNN and a throng other mainstream media channels saying something is a bubble the truth is the EXACT opposite what they're saying. Isn't it funny they never said Property bubble or Equity bubble??? Until they burst.
As a contrarian I will say that REE will see some downward correction, but it will not last any great length of time, and soon the value will increase dramatically. China has cut back it's exports, so REE has a bullish fundamental, short term bearish but long term very bullish. This is another asset class like precious metals, whose position is currently undervalued as it stands now. Gold, silver, other PMS and rare earths are all undervalued from an inflation-adjusted perspective. It's only a matter of time before they do catch up. Deflation in the intermediate term will push them down quite a bit, but once that is done and dusted I can see many golden opportunities.
Even if there IS a REE bubble, Lynas and Moly will do well as companies. Users will line up to buy their output.
These guys would brand a commodity class in a bubble each time they reach a new time high. It's only a matter of time before ALL commodities branded in a bubble. What next? Sugar in a bubble, Cotton in a bubble!? Well EVERYTHING is in a bubble, EXCEPT for Real Estate, Common Stock, Treasury Bills and Bonds. I loved it how they are very quickly mention that Molycorp went from $30 to $27. But they don't say anything when the stock went from $27 to $38, 3 months later! Rare Earth is a commodity, just by inflation adjusted price REE are entitled for those price spikes, they've been long overdue. 2 people on TV I really can't stand, Jim Cramer and that Fast Money's Melissa chick!
