By Nigam Arora & Dr. Natasha Arora
Magnet Shortage
The headline today has been that U.S. aircraft manufacturers and U.S. car companies are having difficulties because of a shortage of magnets. Magnets need rare earth minerals.
Major U.S. Rare Earth Miner
MP Materials (MP) is the only U.S. based major rare earth mineral miner.
MP Materials saw aggressive buying, moving up over 11% on the shortage of magnets.
Over the years, China has been trying to drive MP Materials out of business.
Deal With China
The future of MP Materials depends upon the deal President Trump strikes with China.
500% Gain
If talks with China totally break down and China uses rare earth minerals as a weapon against the U.S., MP stock can jump over 500%.
On the other hand, if President Trump strikes a weak deal with China and gives China a free hand, China will again try to drive MP Materials out of business, potentially cutting the stock by 50%.
Keep in mind that recently as a temporary deal, President Trump gave China everything it wanted with very little in return. This was the beginning of the TACO trade (Trump Always Chickens Out).
Please also see Morning Capsules for details of talks with China.
What To Do Now
Those in the stock may consider continuing to hold.
Those not in the stock may consider waiting for a new signal. A new signal will be published when appropriate.
Note: Signal(s) to enter, add, reduce, exit, hold or change.
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This post was just published on ZYX Buy Change Alert.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
Dr. Natasha Arora
Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.
