So guys, first off I finally sold my holdings in Tesla that I’ve been in since 2012, enjoying around 40% growth every year. I didn’t sell it because the stock has gotten riskier (although it has) or that I think it’s going down any time soon (though there’s a 50/50 chance of that if Model 3 fails). I got out of that, and a lot of other positions including my shares in AutoHome (a company I really love right now) because I needed cash for a project. More on that later.
Right now, though I want to go back to the electric vehicle opportunity. I still believe in Tesla, but like I pointed out last November, from next year we’re going to see a lot of competition hit the market in the EV industry. I’m not talking glorified golf carts like General Motors has been teasing us with. I’m talking all the big boys, with all the doped up electric super cars: Mercedes Benz, Audi, all of them. It’s good validation for Tesla but it’s not necessarily good for their bottom line. And being that all these other companies have multiple income streams, established brands/markets and strong balance sheets, they could undercut Tesla with prices that will make customers a little too happy for Tesla to compete with. This potential situation makes it difficult for one to bet on any single company in the coming EV take over, even one led by as brilliant a CEO as Elon Musk.
So what’s an investor to do?
Just a few days after I sold my Tesla stake, ST brought a company he stumbled onto to my attention. Albermale Corporation is a company that produces bromine and lithium chemicals in their mines in Chile, Australia and potentially China. 25% of their revenue, and maybe 40% of their net income come from lithium. And guess what lithium is good for? All those pesky little batteries meant to power those electric motors of all those EVs that are hitting the market, that’s what. Elon is building a Gigafactory targetting 500,000 batteries annually to make his cars competitive? Lithium. All the other guys piling on to start making their own EVs? Lithium.
Albermale is leading the pack in the lithium production space and is the best pure play for the EV revolution that I’ve seen so far. Like they say, the people who make money during a gold rush aren’t the miners, it’s the guys selling shovels. Albermale is selling the shovels right now.
During the time I’m doing my Due diligence, the company’s stock has already run from $109 to $115. I’m tempted to start buying at least until I have a few thousand in the company but I have to weigh that against my other opportunities. If you are looking for a good stock to buy for the EV industry growth however, Albermale (ALB) might be worth your look.