Q&A Series #2: Section III (Questions #19 - #24)

A third batch of questions and answers arriving for the holiday season.

Q&A Series #2: Section III (Questions #19 - #25)

Hi all, this is the next batch of Q&A questions and answers collected from the community chatroom on the Substack page. I aim to continue doing these periodically and my wish is that you all find the information I can provide through them valuable.

Happy holidays and see you in the new year -

Q19 from Andrew: You mention Thich Nhat Hanh --- what can you tell us about you have learned about pursuing/achieving wealth, dukkha, attachment, mindfulness, and compassion -- you often make a note of telling us of your love for us -- is that grounded in the brahmaviharas / metta or something else? Also impermanence and emptiness!

I wrote a little about this in my recent article on financial gain and values. As I’ve continued to traverse this path (whether the journey is in finance or in life more broadly), I’ve found as a through-line experiences that, time and time again, validate the idea that our attachments can and do create the conditions for our own imprisonment. I know that might sound cringe, dramatic, or edgy. It’s reminiscent of what a teenager would say, rebelling against western ideology and all of that. But all the same, it is what I have found to be true. We set down a cloth into the stream of our many accomplishments and attainments and then attempt to wring it out into our mouths in order to nourish ourselves. For me, that nourishment is short-lived. And then it’s mostly transformed into a kind-of expectation, where falling short of what it means or implies about us tends to bring suffering, as does the threat of losing it or having it fall away altogether.

Believe it or not, I have yet to spend any of the money I have made this year on anything outside of reinvestments and a few donations to charity. Part of it is genuine bewilderment about how to use it and another part of it is that I’m trying to be mindful of my attachment to it. There are so many goods in this world that we fixate on and essentialize as identity-makers. Wealth, education, communities, hobbies, professions. We glue them onto ourselves and when someone asks “Who are you?” that’s what we show them. But of course, we aren’t any of them. And we can lose more-or-less all of them. A tenure track professor misses the mark and is displaced from their profession, someone that lives to climb rocks or run long distances finds themselves paralyzed, a devoted partner finds their significant other has been unfaithful. We outsource what validates us to something impermanent and then we suffer when it is lost or when the well runs dry in the purpose and meaning it gives to our lives. I know with certainty that if I went and bought a mansion today, my happiness in a years time would not be meaningfully changed than it is today, sitting in my small apartment. Speaking of the brahmaviharas, perhaps we could look to cultivate equanimity instead. And that is cultivated by what is already here.

As far as my experience tells me, equanimity and emptiness are direct markers of each other. And there is unbelievable freedom that comes alongside them. The most breathtaking and beautiful place of peace.

Q20 from CB: You commented in your last publish that Rapidsx is evolutionary and ReElement chromatography is revolutionary. Do you think that these technologies can and will coexist or do you foresee a movement towards one or the other?

They would very likely coexist. But it’s a fair question to ask which would become more dominant between them. And there, I would say that I think if chromatography can be proven to scale, it may well be the preference, especially for projects that haven’t already burrowed into the construction and cost associated with conventional solvent extraction. Lower environmental footprint and capex, modular and supposedly efficient to deploy and implement. I could see the case being made for that technology.

It all depends on proving scalability and executing on high volume contracts, however. It also depends on how licensing is handled. For what it’s worth, I would give rapidsx the advantage if asked the question “Which technology is more likely to scale successfully?” and chromatography the advantage if asked the question “conditional on scaling successfully, which technology would be more attractive?”

As an aside, I think it’s helpful to distinguish between the company and the technology. For the former question on successful scaling, I would give rapidsx the advantage both in terms of having the most compelling conceptual path to scaling (that is, I would wager the tech itself is more likely to be scaled effectively theoretically) and the advantage in terms of the capability of the company behind the technology in being able to execute and scale actually, in the real world, today.

Q21 from Prendi: What are the 11/21 DOW $700M for Vulcan/Reelement implications (or lack-there-of) for Energy Fuels? Thanks!

It’s a bit complicated. I think the implication is that the US government is willing to put their money where their mouth is gambling on the scalability of chromatography over the gold standard methods already established in the industry and which Energy Fuels is building out and relying upon. The upside they see, if successful, is much lower cost and environmental footprint, among other things.

That being said, I think that there are parallel paths that will run in the USA with one set of midstream anchors separating mixed rare earth carbonate and the other set separating monzanite. I made a crudely drawn graphic that goes over that here. I don’t think that there will be one winner between ReElement and Energy Fuels. I think their operations will run in parallel to each other and both streams will be important for domestic and international business, as well as national security and defense.

I think it’s also telling that Energy Fuels has MOU’s with both Vulcan and Posco, just like ReElement (well, the latter has more than MOUs, they have actual offtakes and JV-type partnerships also being floated or executed on paper).

Q22 from Janman: I’m interested on your current thoughts on LYSDY. The market seems to not like them at the moment, but than again, everything else I touched seems to have gone red 🥺

I am a fan of Lynas in the long-term. They ran a lot this year during the months leading up to the sell-off in October. I do have questions about their management and ability to deliver. They are supposed to have a plant in the USA in progress, for instance, but they’ve sort-of bungled that from what I can tell and I don’t think they were particularly forthcoming about that (just my two cents). You can read about that a bit here. I also don’t love that they are reliant on the whims of Malaysia for continued output and success in much of their operations. That is a risk that I wish they hadn’t needed to mingle themselves with.

That all being said, I think that they are well-positioned in a time when there is large-scale incentivization happening across the sector. They were a first-mover on western rare earth commercialization. There is a lot of good that they can see in the future, especially if price floors are established and partnerships continue to build out across western-aligned interests and governmental forces.

Q23 from Josh: Your ability to analyze this sector through the broader lens of Western alignment, geopolitical tailwinds, strategic deficits in the supply chain, and which projects can actually anchor a resilient North American–Australian network has shaped how I evaluate these companies. Seeing the six positions you hold with the strongest conviction would help translate that framework into a real portfolio.

Q24 by Jduffy: You’ve mentioned that you’re working on consolidating your investments to favor a more long term outlook within critical minerals. What are a few of the companies that you’ve divested from within the last couple months and why? And which companies are your strongest long term convictions and why? … What I care most about with these companies is the why behind all of it? You’re very insightful and I have thoroughly enjoyed reading your breakdowns. Makes me ponder my own decision making and you’ve forced me to look inwards at my own investment strategies. As always, thanks Steve.

Just a note that I see and recognize these questions. I think a Q&A allocation can’t really do justice to it. But I am working on this in my own way and my next piece of action will be further updates to the Trading Terminal page. I’ll try to say something there about exits and divestments as well.

Thanks all.

Warmly,
Steve

Disclaimer: I am not in the business of giving financial advice. That is, I am not a financial advisor. None of what I say here is a recommendation to hold or not hold shares or other instruments of any particular company or series of companies. All that is contained on my page is research in which I convey and substantiate personal views and commentary about where sectors, economic policies, industries, so on, may go. As always, please do your own research and understand the risks involved before placing any trades. I am not responsible for any of the decisions you choose to make.