There seems to be no other explanation for the huge drop we are seeing in Albermarle's (ALB) stock price aside from the overall negative mood surrounding lithium miners, seemingly due to expectations of a surge in lithium production in coming years. I bought this stock last summer, and thanks to the price action we have seen this week, the stock price is now back where it was when I originally bought. I already made my longer-term bet on this stock at current prices, therefore I do not view it as an opportunity to buy any more. But if this stock continues to head lower, I intend to buy more, because I think the longer term picture is still very bullish for lithium, which is now firmly being driven by the EV story.
Long-term oil supply picture suggests EV revolution is a must.
In order to better understand the lithium demand story, it is important to take a brief look at oil's potential future. The typical peak oil story today tends to focus on the demand side, with the main argument being that there is a fundamental shift in consumer preference as well as government policy patterns, which is set to render oil consumption obsolete. I personally do not believe that to be the case. I believe that at least for my statistically expected lifetime we will continue to see significant demand for oil, even if demand growth might not continue for the indefinite future. I am not equally convinced that we will continue to see adequate oil supplies for the rest of my lifetime, and if one looks at the following oil discoveries graph with an objective eye, it should not be hard to understand why I believe that to be the case.
