Minyan Mailbag: Cobalt plays (?)
"There is no free lunch.... but this is close (if you can answer the question)"
Minyans: Our goal at the Ville is to provoke thought and discussion with the "Big Idea" that the collective knowledge of the community is greater than that of anyone on their own.
Today one of my loyal e-mailers stumped me with the below question regarding ways to invest in cobalt (and some thoughts on catalysts for the price of same). I've conceded my ig'nance on the topic and am passing along the lunch offer (or a donation of similar value in the winner's name, should the winner not wish to go on a lunch blind-date of sorts with one of my wise buddies) to whoever can answer the question:
"If you can find me a way to play Cobalt outside of the following ways, I will buy you lunch next time (the winner) is in SF:
PD (Phelps Dodge, on the NYSE)
AAA (on Toronto)
FCO (on Toronto)
First Quantum (on Toronto)
Physical delivery or futures...
Reason in this....Hybrid Electric Vehicles (HEV's)
I thought they were a joke at first, but the things are gaining traction. Toyota (TOYOF, otc in the states) predicts 3mm by 2008. The power for these things comes from a battey called nickel metal hydride (NiMH). 7.5 % of these are made of pure COBALT- that is 2.1kg or 4.6 pds per car.
If you take 3mm units x 2.1kg, then the HEV market will create an additional demand of 6,300 mt of cobalt per year by 2010.
As you know I have done a TON of work in commodities and let me tell you, cobalt is one of the tighest markets out there. In my opinion, there's a large chance for a demand-based rip in price.
Also, for what it's worth, I have been buying tons of uranium names in the past 3-5 months. NUCLEAR energy is coming back in a HUGE way."
Send your answers HERE and I'll pass them along to our quizmaster for final judgement.
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