Lithium Americas (LAC.TO) $1.00 resistance becomes $1.00 support....

LAC.TO still hasn't seen the "clear sky break out" I've been anticipating from the Cup & Handle chart pattern I've remarked on in earlier posts.  Perhaps it never will, I still like the chances but there's no such thing as a slam dunk, not in the public markets.

But something positive has happened.  

After butting up repeatedly against resistance at $1.00 CDN the stock finally broke through on June 30th 2016 and from that day until now it has not closed below one Canadian dollar.  From July 4th (Canadian markets are open on the 4th, closed on July 1) to present the lowest LAC has traded is 97 cents during the trading day.  But even on the two days shares dipped to that 97 cent level, bulls pushed it back up to at least $1 at the bell.

Does that mean LAC won't fall back below $1 CDN?  No, again...there are no sure things in the markets.  But it is a bullish technical indication going forward when a level of resistance becomes of level of support, which is what the chart shows.

Also take note of the volumes.  The green bars represent volumes when the PPS closed up for the day, and the red bars correlate to days when the PPS closed down.  Another bullish indication is when prices climb on heavier comparative volume and fall when trading is lighter.  LAC closed down .01 cents on the TSX Wednesday (July 13th 2016) but volume was only 737,411 on the various Canadian exchanges, and only 530,134 on the main TSX.  

That's about one quarter of the 3 month average volume on just the TSX, which is 2.1 million. Should volumes pick back up into the 5+ million range I expect to see another + spike in the PPS.  And maybe even that clear sky breakout I believe the Cup & Handle chart has been predicting.

How high do I think LAC might go?  That's a tough question, but the first obvious line of resistance in my opinion is that $1.15 price level that shares hit on July 4th.  If LAC can get above that $1.15 CDN mark then I'm looking at the US side where Lithium Americas trades with the symbol LACDF.  

Just as $1 CDN proved a point of resistance, I think $1 USD could likewise translate into another psychological barrier.  The volumes on the Canadian TSX exchange are more robust, but volumes south of the border are nothing to sneeze at either.  Average daily volume for the past 3 months for LACDF is just a hair shy of 700,000 per day.  

$1 USD is around $1.30 Canadian at current exchange rates.  And full disclosure, I have an order to sell a portion of my shares in around this level.   Will my sell order fill?  I like the chances, but for a third time now....obviously, there are no sure things.  

If history is any guide, I have a habit of selling too soon in any case, witness Nemaska.  If LAC busts through $1 USD and keeps climbing....oh well, I'll cry into the money I made.  But not too much, I'll still be holding what I consider a significant position having only taken profits on a little over one third of my shares.

As I say so often here at Avoid The Bag, repeating the lesson my late great father taught me, nobody ever went broke taking profits.

Good luck and please take note of the disclaimer at the very bottom of this blog.  Also comments are always welcomed provided the tone is reasonable and absent of the usual pumping and bashing seen on most message boards.

A penny stock poised to make MASSIVE long term gains!!!

You've probably come here because you're tired of watching penny stocks take off for big gains and missing the boat.  Maybe you have a friend who bought a stock for something like 10 cents and then saw it explode to $1 or $2 allowing them to realize incredible profits of 1,000% or even higher.  

Wouldn't you like to be one of the players turning hundreds of dollars into thousands, thousands into tens of thousands, tens of thousands into hundreds of thousands....maybe even millions.

You're probably familiar with what is generally called a "pump and dump".  And its not just penny stocks, it can happen on more senior exchanges like the Nasdaq as well.  Hype and promotion are not exclusive to the OTC.  Typically you're looking at companies that have negative earnings, businesses with a history of using their shares to fund operations and for things like rent and to pay salaries.

But that's not what you're looking for.

• You want to "invest" in a solid company.  
• You want a low priced stock that you can tuck away in your portfolio without having to worry that one day the share price will collapse.  
• You want something stable that will deliver long term value.

If you're a momentum player, a penny flipper, someone who likes to catch onto pump and dumps with an eye to day trading for small percentage gains....GET LOST, THIS INFORMATION ISN'T FOR YOU!!!  

I am only interested in sharing this with genuine investors.  With people who are looking for a penny stock play with solid fundamental prospects for incredible gains and little to zero risk. I only want people who have a long term value perspective, even if it is just an OTC pink penny stock.

If that is you, then keep reading.

Are you ready for this information?  Are you salivating at the prospects of monster gains?  I won't make you wait any longer.....here it is.

YOU ARE A MORON, AN IDIOT, SOMEONE WITH MORE MONEY THAN BRAINS!!! YOU ARE, WITHOUT QUESTION, DUMBER THAN DIRT!!!

Do you really think someone is going to share information like this openly and freely on some pathetic blog or investor fourm?

If there is someone who knows about a penny stock that's going to explode, they're not gonna be looking for every Tom, Dick and Mary, giving this information away freely to anyone with a pulse and a trading account.

If someone knows about a 10 cent stock that's going to make monster gains they might let some close friends and family members in on it.  But they're not gonna start pumping and promoting it until they're ready to turn their shares into money by selling.  They'll keep mum until that time when they're looking to take those 10 cent shares and turn them into dollars, lots and lots of dollars.

My advice?  Grow a brain and come back to the markets when you're no longer a gullible fool.

Not convinced?  Still think you can search message boards, stock promotional sites, blogs and other social media outlets for hot trading ideas and find a solid OTC penny stock that will deliver incredible gains and long term value?  Well....you won't have to look too hard.   Click on those ads promising big gains, sign up for newsletters, troll some investor forums....it shouldn't take more than a few minutes.  

Before long you'll have an expert telling you all about some company with supposedly solid fundamentals that is pretty much a lead pipe cinch to be a big player in any number of industries.  It could be technology, a drug company, sports drinks, health food, retail, mining....you name it.

And anyone that dares to suggest its just some pump and dump....they'll be told "this one is different", that they don't understand the fundamentals.  They'll be accused of trying to talk the PPS down so they can buy cheap, or of being short.

Like carnies running the ring toss at your local county fair, stock promoters are looking for you long term players right now.  For people who think you can invest in an OTC Pink penny stock based on the prospect of forward looking fundamentals.  Don't let them down, and enjoy the comb.

ABRW - Too good to be true?

I first wrote about ABRW on June 12th 2016:

http://www.avoidthebag.com/2016/06/abrw-great-example-of-stock-promotion.html

In that post I included the chart which showed ABRW at $1.75.  That was just after it had traded up around $2, a 52 week high, having climbed from lows around just 20 cents as recently as February and March of this year.

Well, it seems there's some more promotional effort at work, and I have to say, it looks good. Seeking Alpha contributor John H. Ford just put up a blog posting on July 8th claiming that Bucha is a $7 stock for his nearly 2,000 followers.  It was also shared on his Twitter account where he has over 3,700 following him.

http://seekingalpha.com/instablog/592211-john-h-ford/4897637-bucha-1-stock-now-worth-7

Not bad eh!!!  How often do you get to buy something that's worth $7 but only have to pay $2?  Man, that's like someone offering to sell you a 2016 Dodge Challenger for just $10,000 instead of the regular price of $30,000+.  I bet these cheap shares are gonna disappear pretty quick.  What idiots would be selling something for $2 or less when its worth $7?

You know what they say though....when something sounds to good to be true, it usually is.  So what's the deal with $ABRW?  Did those who sold over 100,000 shares today at prices ranging from $1.81 - $2.05....did they just get hosed?  Or did they do well to take the cash?  According to Mr. Ford's blog the shares are now worth $7, that's not stated as opinion, its presented as fact.  Did today's sellers not get the memo? 

Okay....what's up.  Why would someone say a stock trading around $2 is worth $7 if they're buying? Its seems to me that's the kind of thing you say when you're looking to sell.  People will buy lots of things (often worthless) if they can be convinced they're screwing the seller.  

"I hate to let this car go for $5,000 because its worth at least $10,000...maybe even $15,000....but I have no choice, I'm leaving the country in two days".  You've probably seen or heard of ads like this on Craig's List. 

Bucha is an OTC listed company trading on the pink sheets with the symbol ABRW.  Its been getting a fair bit of hype lately as mentioned in my earlier posts.  Pictures of Bucha's drinks have been popping up on twitter, someone even snapped a pic of them in a shopping cart.

buchador ‏@buchador_nyc  18h

18 hours ago

@buchalive $abrw - Sunday night shopping getting ready for the work week. This should do it. #buchador

2 retweets6 likes

Obviously Bucha is a real company, no question about that.  It reminds me somewhat of when Tiger Woods put energy drink Fuse "on his bag" and did a CNBC interview about his new endorsement deal.  A lot of people stormed into Fuse Science's stock after that, pushing that OTC Pinkie stock to dollars.  The symbol for Fuse Science is DROP, which is fitting.  Just check what its trading for now and you'll understand why.

Nortel also springs to mind, many investors bought into that debacle because, seeing the phone they used at work sporting the Nortel logo, they knew it was real.  Unfortunately what Nortel was "real" good at was losing money, and at accounting irregularities.

Of course after so many scandals with companies like Nortel, Enron and Worldcom to name just three....more stringent regulations were brought in with the Sarbanes-Oxley act of 2002.  The act is designed to give investors more confidence in the financial data public companies release to shareholders and prospective investors.

Companies that trade in the United States on the NYSE, Nasdaq and OTC must conform to the act, typically referred to as Sab-Ox.  Only companies with stocks trading OTC Pink are exempt.  Oooops.

Okay....but what is ABRW saying and why do guy's like Mr. Ford assert that buying ABRW around $2 is a steal, like that vehicle on Craig's List being given away at a fraction of its real value?

Its because of their acquisition of New Age Beverages and Xing Tea.  The press release touts the acquisition as being a "$50 million+ new business combination".  Mr. Ford's blog claims that New Age is generating $50 million annually.  I assume that to be a revenue figure, but I don't know where to verify it.  New Age, was a private company....not even a pink sheet listed one.  As such they are not required to file financial statements like 10Qs and 10Ks....not even unaudited ones like ABRW.

I remember my late great father telling me about the 3 kinds of lies that exist.  Lies, damn lies, and accounting.

I know this blog is going to get trashed.  Pumpers don't like being called out....and that's what I think is going on here, and that's what I'm doing, I'm calling BS here.  In my opinion this is just yet another OTC hype job.  

Don't agree?  Hey....fill your boots, load up on as many shares as you can afford, I'm not here to tell anyone how to play the markets, I'm just an old retail investor expressing his views on a  blog.  Read my disclaimer. If you really believe ABRW is a steal, then share this blog everywhere you can.....maybe you can buy even more and get the shares cheaper, like talking down the house you want to buy....Only an idiot raves about something they're buying, that just makes the sellers more reluctant and gets them asking for higher prices.

In my opinion this is a classic pump, and often times they work.  Dumpers get lots of cash and buyers get lots of inflated shares, its a zero sum game boys and girls.  

Disclosure:  I have no position in ABRW long or short and no intention of ever initiating one.

Some thoughts on Brexit, Leadership and Donald Trump....

Time for me to take a break from writing about our wonderfully manipulated markets.  A brief pause from offering up my views about the pump and dump games or the short and distort players who try to control investor sentiment.

I want to write about the recent British referendum where voters opted to leave the Euro Zone by a razor thin margin.  To put it in the best British terms...

What a bloody mess!!!  What total bollocks!!!

Firstly, this was not a binding vote, it was basically a plebiscite.  And what it revealed is that British voters are sharply divided on the question of membership in the European Union.  And with a result showing a tiny majority of those voting in favor of leaving, we're left with more questions than answers.  

• Will European agencies based in Britain move their operations to the continent?  
• Will London cease to be a world financial capital?  
• Will Ireland and Scotland leave Britain to hold onto the benefits of Euro membership?  
• If another referendum were called would British voters pull back from the brink and opt for the status quo?  

Voter turnout for the referendum was high, very high when compared to recent norms, 72% of those eligible to vote cast a ballot.  Compare that to any democracy in the western world and it is HUGE, expect in a country like Australia where voting is mandatory.  

But even with 72% voting it means that more than one in four eligible voters declined to participate. That puts the results in a slightly different context.  It means that only about one third of eligible British voters opted to leave. The majority either voted to stay or didn't vote at all.

Should a minority of eligible voters have this much power when the ramifications of leaving are so serious?  

With so many questions swirling and so much uncertainty in the air there is something sorely needed right now, that something is LEADERSHIP.  As things stand right now the British Parliament should replace 'God Save the Queen' as the national anthem with the Clash's 1980's hit 'Should I Stay or Should I Go'.  

My personal view is that Britain should stay, that's my opinion.  I don't think Euro membership is all rainbows and unicorns, but if Britain does leave I think things will be far worse.  But whether staying or going, Britain needs a strong leader who will take decisive action.  

If the decision is made to leave, then get on with it.  Trigger Article 50 of the U.N. Charter and move, start the negotiation process.  And if the decision is to remain, then make it and deal with the fallout, show some bravado, some leadership.  

But right now that is impossible.  David Cameron has resigned his leadership of Britain's ruling Conservative Party and so what we have is a vacuum.  What Britain needs is some Winston Churchill, not Neville Chamberlain.  But as things stand at present its even worse than that, Britain has neither.  

Because of Britain's parliamentary democracy the current vacuum will remain until September 9th when the Tories pick a new leader.  The next Prime Minister will either be Theresa May or Andrea Leadsom.  Leadsom fought on the leave side while May supported remaining.  

Why is this such a tough political decision, and what in the bloody hell does this have to do with U.S. presidential candidate Donald Trump?  I'm getting there.

The reason this is a tough decision is....

• With the electorate so evenly decided politicians don't want to risk alienating half the voting population.  
• Because no matter what decision is made there will be problems
• Because modern politicians lack leadership skills

Imagine a business leader polling an entire company before embarking on a new marketing scheme. Or a basketball coach calling a time out to ask the players if they should go to a full court press.  Or a military commander polling the troops about the best battle plan.

Those people would be fired, and justifiably so.  

Which brings me to Donald Trump.  Love him or hate him, the man does know how to make a decision, even if it is something stupid like sticking his name on things like steaks and an airline.  

Stay or go, pick one and get on with it.  

Who shorts a penny stock and why? Lithium Americas

Lithium Americas is a penny stock.  I would put an asterisk after that however, because I don't believe it qualifies as your typical penny play for a number of reasons.

• LAC trades on Canada's big board TSX exchange, not the lower profile Venture
• The company recently announced a 50/50 JV with incumbent producer and NYSE listed SQM for their Argentinian project
• NYSE traded LIT, the only Lithium based ETF, has LAC as one of its holdings.

Regardless of those points however, LAC still qualifies as a penny stock by the strictest definitions.

With that being said, there is no hard and fixed rule for what qualifies as a penny stock.  For some any stock trading for less than one single dollar qualifies, others say $2, and some go as high as $5. Do note that in US funds LACDF is currently trading under $0.80 cents.

If you're looking to sell LAC short, for all intents and purposes it is a penny stock.  

I'm often surprised by the fact that a lot of retail investors really don't understand short selling. Pretty much everyone understands that its a ''bet'' that a stock's price is going to fall, but beyond that many don't understand how it works or how one might profit from it.

A PRIMER ON HOW SHORT SELLING WORKS

It might help to think of something other than stocks.  Imagine you have a friend with a really fancy watch, one that is Swiss made and is worth $5,000.  Now imagine you find out that this Swiss watch contains a cancer causing element, and that news is expected to be released in another week or two.

How might you profit from this knowledge?

You could borrow your friend's fancy expensive watch, maybe give him $100 to lend it to you saying you need to impress some people at a conference or something.  After borrowing the watch you then go out and sell it immediately, netting $5,000.  But of course your friend wants his watch back. When the news comes out about the carcinogenic element you're able to buy it back for say $100.  

You just made $4,800 from something you never owned.  $5,000 from selling the watch less the $100 you paid to buy it back and the $100 you gave your friend to loan it to you.   

Stocks are no different.  If you have say 100,000 shares of LAC (or LACDF) sitting in your brokerage account, then those shares could be loaned out to someone to be sold short, just as with the watch in the above example.  The individual borrowing your shares will have to pay a fee of course, and with penny stocks it can be hefty, but it can be done.  

If the 100,000 shares are sold for $1.00 CDN the short seller profits provided he is able to buy them back at a lower cost.  If LAC were to fall to .50 cents, then our short selling bear could take $50,000 out of the $100,000 he got from selling the shares short and buy them back, returning them to the broker they were borrowed from.  In this example the short player would have made $50,000 less brokerage and trading fees.

Clear as mud?

Take note though, shorting a stock is exponentially more risky than going long.  If you buy 100,000 shares of LAC at $1 per then the most you can lose is $100,000, that's a lot of money certainly, but its nothing compared to the theoretical losses a short seller could incur.  While a stock cannot possibly go below $0.00 there is no fixed limit as to how high it could go.  

CYNK was a penny stock pump and dump that went from around 5 pennies to up over $20. 

Imagine someone shorting 100,000 shares of CYNK at $1.00 and then being forced to buy it back for $10, $15 or $20....The shorting of 100K shares of CYNK at $1.00 nets $100,000 but if a margin call were to force the short seller to cover at $10, then those shares that netted $100,000 would cost $1,000,000 for a loss of $900,000....at $20 per share those losses double.  OUCHIE!!!

Shorts have to be hyper careful, obviously.  Bears have a reputation for being incredibly diligent in their research because of these risks.  And it is for this reason that I give bears a lot of respect. Facing the potential for losses that, in theory at least, could be limitless....they had better be pretty damn confident in their decisions.

That is why, if I see a stock with 10, 20, 30% or more of its outstanding shares sold short....I take notice.  There are stocks with big short interest of course, but typically they're trading much higher than a single Canadian dollar.   

SHORT INTEREST IN LITHIUM AMERICAS CLIMBS

LAC is nowhere near even 10% short interest however.  In fact its only at 1.14% as of June 30th 2016.

But the raw number is still enough to raise an eyebrow.  The number sits at 3,391,624 and again, that is current up to June 30th 2016 as per the site StockWatch.  Up to June 15th 2016 the number had been 3,044,216 for an increase of 347,408 shares.

In fact short interest for LAC has been climbing steadily since the company completed the merger with Western Lithium (former symbol WLC) and reverted back to trading under the symbol LAC.

Up to March 31st of this year the number of shares shorted was 769,200  By April 15th it had risen to over 1.7 million, then over 1.9 million as recently as May 31st and now (up to June 30th as noted) it sits at over 3.3 million.

On March 31st LAC was trading for less than 50 cents, by April 15th it had climbed to up around 80 cents. On May 31st the PPS closed at 85 cents and now it sits at $1.01 after trading as high as $1.15 on July 4th 2016.  

Obviously short sellers made a bad play.  Or did they?

If you're going to short a stock you better have deep pockets, and that goes double for a penny stock because of the higher margin requirements.  If you're using a discount broker like say BMO, TD or Quest then you can't even short a penny stock regardless.  There are firms that will accommodate those wanting to short penny stocks of course, but you better have a big bankroll.

Just for arguments sake let's assume that those 3.3 million of LAC that have been shorted, let's assume it is one single individual.  And again for arguments sake we'll say the average price they were sold at was .75 cents....half way between 50 cents and a buck.

3.3 million shares sold at .75 cents would net the short seller $2,475,000.00....a hefty sum certainly. But our hypothetical bearish friend doesn't get to go out and spend that money, it has to stay in a margin account.  And that's not all, to guard against a climbing share price our bearish friend will be required to have extra cash in that margin account, perhaps 100% more.  That would mean another $2,475,000.00 on top of what was made from selling the shares.

Our short selling friend now has close to $5,000,000 tied up.  And it gets worse.  LAC isn't trading for $0.75 now, its at $1.00....which means $3,000,000 to buy them back and at 100% an additional $3,000,000 in the margin account.  If the short seller can't come up with the extra million?  Too bad so sad, the broker can then use the $5,000,000 in the margin account to buy the shares back.  

I'm going to wrap this up, there's probably only one or two people who will even bother to read this all the way to the end anyway.

It is my belief that the short selling LAC has seen, that there's a good chance its being used by parties looking to inject some Fear Uncertainty and Doubt (FUD) into retail shareholders.  That or possibly due to Market Maker Broker Dealers (MMs) being surprised by the surge in buying.

If it is MMs, I don't see LAC making a big move until or unless that number declines significantly. If, on the other hand, its accumulators engaging in a little (perfectly legal) manipulation....then hopefully they've accumulated far more than what they're short and perhaps they might be willing to give up the little Wyckoff game, if that is indeed what they're doing.

What?  You've never heard of the so called Wyckoff Method?  Well then, here's some more reading for you:

Secret 1930s Trading Strategy That Hedge Funders Don't Want You To Know About

LED Medical Diagnostics - When promotion fails.....

I am as prone to the sin of vanity as anyone else.  This blog is not yet even 3 months old and already I've put out some ideas that have played out very well.  

I've expressed bullish opinions on Lithium Americas (LAC.TO) at 75 cents and its now at $1.08. Eguana Tech (EGT.V) was another bullish opinion at 15 cents and its over 30 cents currently.  And on the bearish side I've expressed negative views on ZIOP, KTOV and ABRW with all three being down.  

Some of my bullish opinions haven't borne fruit of course, at least not yet.  I did a post on Resverlogix about their phase III clinical trial for their lead compound RVX-208.  That was when the stock was trading in and around $1.30 and it has pulled back to a close of $1.18 today.  And HMPR which I consider to be a low risk play from a buy/hold/prosper perspective, it was written about here at $1.81 and it just closed at $1.76.

Not bad, not perfect of course....but overall pretty good.  EGT has more than doubled, LAC is up around 60% from my predicted low and my bearish calls with KTOV, ZIOP and ABRW are all down with KTOV absolutely cratering from up around $6 to less than $3 currently.

My bullish opinions on RVX and HMPR haven't played out yet, and perhaps they never will but at least with HMPR I am still very bullish.  With RVX I think success or failure hinges on their phase III trial which has a long way to go yet, a very high risk/reward play in my view.

If I was asked to self grade this blog right now I'd give it a B, maybe a B+.  

But it pays to keep yourself humble because success in the markets can be fleeting.  Before starting Avoid The Bag I was writing an InstaBlog on Seeking Alpha.  It was there that I did my first post about LED Medical (LED.V in Canada LEDIF OTC in the US) back on March 29th 2015.  

Beer Budgets And Champagne Tastes - Why Retail Investors Will Avoid LEDIF

In point of fact I'd bought into LMD.V sometime in the summer of 2013, liking the potential for the company to attract the attention of investors with their Velscope device used for detecting oral cancer. The Velscope had been featured on both "Dr. Oz" and "The Doctors" prior to LED Medical being a public company.  

LMD or LEDIF had what I considered to be great potential.  The market cap was small, there were only about 60 million shares outstanding in August of 2013, and trading was thin.....If their story caught fire I figured LMD.V could go from the 30-40 cents it was trading at then to maybe as high as $5 CDN.  

Things did get interesting, Nick Hodge of 'The Outsider Club' fame started touting the company in his email blasts.  I had seen how SBOT traded after this outfit was touting that stock in 2014  with it climbing around 1,000% and figured LMD.V could possibly have a similar run.  A Seeking Alpha Pro Blogger named Dallas Salazar started touting them, Zacks put out a bullish analyst report....I could taste big gains thinking the herd was going to start moving in any day.

Then in October 2013 the company brought on David Gane as CEO.  In checking his history I found that he had a complaint brought against him by the SEC for an alleged promotional scheme from his time with Dicom Imaging Systems, another Dental company.  The SEC claimed Dr. Gane had given out inflated guidance figures in tandem with paid promoters hyping Dicom's stock.  He was exonerated however based on the fact that the guidance figures were forward looking and hence protected by safe harbor provisions.

Was LED (LEDIF OTCBB) going to start soaring?  Would a tsunami of promotion and hype send the PPS up 500% or more?  As you can see from the chart LMD.V never went on a sustained run:

It did pop a little, going up over 50 cents.  But volumes never topped more than a couple million and I figured more was coming....it never did, the herd never showed up.  I had a chance to make a small gain, but I got greedy thinking I could make more.

Despite Outsider Club email blasts, bullish write ups by Pro Seeking Alpha blogger Dallas Salazar, professional IR and bullish analysis by Zacks....nothing worked.  Perhaps Gane's reputation from his days with Dicom squelched serious buying from excited retailers?  

That's life with speculative stocks in money losing companies.  A few will turn things around and become profitable, with their stocks delivering long term shareholder value.  Many more, in my opinion, will see their stock prices rise sharply and then fall, as investors get excited about a story.

Or, as in LMD Medical's case, some will just drift lower and lower.  Sometimes you have to take your lumps, swallow a loss and move on.  And when you do well, remember your failures to keep yourself humble.

Lithium Americas - The Gordie Howe of Canadian Junior Lithium stocks?

Gordie Howe was my late great mother's favorite hockey player.  She taught me a song about him when I was a kid:

Gordie Howe is the greatest of them all

He can stand, while all the others fall

And when he skates down ice

He shoots he scores

We love Gordie Howe

Sorry I can't convey the tune here.  I guess I could make a video with me singing it, but given that I can't carry a tune in a suitcase, ugh.  This pathetic and miserable  little blog would lose the few followers its gained if I foisted my singing (sic) talents on here.  

Why am I comparing Lithium Americas with the legendary Gordie Howe?  Its the second line of that tune, "He can stand, while all the others fall".

Over the past few months LAC.TO has been having a nice little run, and is currently trading at $1.10 CDN, the highest price it has ever closed at.  That's just 5 cents from its 52 week high reached interday the past two trading sessions.  

That compares very well to a number of other junior Lithium stocks that climbed higher and faster, but that have since fallen back (or down). 

• Lithium X Energy (LIX.V) went to $2.85 in April and has fallen back to $1.70 now.
• Nemaska Lithium (NMX.V) reached a high of $1.97 in May of this year but now sits at $1.29
• Pure Energy (PE.V)  up to $1.15 in April now at .69 cents
• Dajin Resources (DJI.V) 30 cents in April 19 cents now

So why has LAC continued to uptrend while all the other juniors mentioned have pulled back?  

I think the mostly likely culprit is dilution.  

LAC has 295,311,916 shares listed as outstanding as of June 15th. There has been some dilution, but not very much.  In March there were 291,974,008 shares.  The increase to 295,311,916 amounts to 3,337,908 more shares or an increase of just 1.1%

Nemaska by contrast showed 206,715,385 listed as outstanding in March 2016, and now that number has climbed to 236,137,873 for an increase of 29,422,488 shares.  That's an increase of over 14%, or about 1,400% more dilution than what LAC has undergone.  And Nemaska recently announced a proposed offering of between 43,480,000 and 52,174,000 more shares priced at $1.15 expected on July 8th of this year.

It should be noted that, concurrent with this share offering Nemaska has received tentative approval for an uplisting to the TSX, and I do think that will help in attracting investors, possibly even institutions which tend to shy away from the riskier Venture exchange.  

Lithium Energy has seen even greater dilution in percentage terms.  As of March 15th the company had 43,820,732 shares outstanding.  The most recent number, current up to June 15th is 60,538,202 an increase of over 16.7 million or 38%.  

Pure Energy, however, has not seen any dilution over this period, staying at the same 66,2 million from March until the most recently available update to June 15th, so obviously the drop in PE.V is not attributable to the printing of more shares.  Perhaps if some Pure Energy shareholders are reading this they can comment.

Dajin Resources though conforms to the dilution narrative having gone from 118.4 million shares in March to 130.9 currently for an increase of about 10.5% 

There is one notable difference between LAC as compared to NMX, LIX, PE and DJI.  The latter four companies all trade on Canada's Venture exchange while LAC trades on the more regulated big board TSX.  It appears that with NMX joining LAC on Canada's big board exchange, they'll be going from the AHL to the NHL, in keeping with the hockey metaphor.

Here's hoping LAC continues climbing, skating down the ice and scoring for shareholders.  

I should note, there is one Canadian listed Lithium mining company that hasn't pulled back, Orocobre, (ORL.TO).  However unlike LAC and the others mentioned above ORL has actually begun production so I don't consider it a "junior" The PPS sits at $4.75, just off its highest ever close of $4.79 on June 23rd, and its 52 week high (achieved interday on July 4 2016) of $4.87.  

Full disclosure:  I currently own shares in Lithium Americas, hence my opinions are not without bias. I have no position, long or short, in any of the other companies mentioned.  Do note that I do expect to sell some or all of my LAC holdings at some point.  

Speculative stocks like LAC and the others mentioned here comport significant risks.  Everyone has different tolerances for risk and different investment objectives.  The bottom line is to sell for more than what you paid, nobody ever went broke taking profits.  

The comment field is always open, but it is moderated....comments that are abusive, contain blatant pumping or bashing, won't be approved.  Pumping and bashing include statements of opinion expressed as fact, such as "Gonna go much higher" or "Look out below".