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Tuesday April 15th
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Poetry heals the wounds
inflicted by reason.
– Novalis
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Thinking is oftentimes the hardest part of investing and trading. There isn’t much news going on right now, so it’s worth it to step back, and try and think through what impacts the current tariffs could have…and what stocks could benefit.
Right off the bat, we know that auto tariffs are a key part of Trump’s plan. Yes, he’s announced a potential pause on them. But if auto tariffs do go through, who would benefit?
On one hand, you could argue that companies like Ford and GM — domestic car manufacturers — are an obvious choice. And you might not be wrong. But I would prefer to focus on companies that I like to trade…companies like Carvana.
If auto prices increase, Carvana should benefit from that.
I think the stock has room to run from its current levels. A pretty nice little setup with the 9/20 crossover. Maybe it runs to $240?
Let’s move on from auto tariffs.
China announced over the weekend that they would be limiting exports of rare earth minerals to the U.S. These rare earth minerals are sorta important to all our technology, so this is obviously a big blow.
However, the U.S. is incredibly gifted when it comes to rare earths as well. The only problem is, environmental regulations have made it nearly impossible to extract these vital minerals. Our biggest deposit is in California’s Mountain Pass mine. This mine is operated by MP Materials.
As you can see below, their stock soared yesterday after the China export ban news.
It’s coming back down today, but it’s expected that Trump will sign an executive order to create a strategic mineral reserve stockpile. If the regulations are cut back, MP Materials could be well-positioned to grow over the coming months. The stock is trading for just $26 right now. All-time highs were $58. I could see it hit $36 over the summer.
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Testimonial of the day
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To Better Trading,
Alex Reid
