Earlier this week, I noted that high-flying rare-earth miner Molycorp
As you've probably heard by now, a day after I made my call, China imposed new quotas on the export of so-called "rare-earth" metals from its shores. Shares of rare-earth plays like Molycorp, Rare Element Resources
But you know what? While Mr. Market clearly disagrees with me on this one, I'm still right. Eight times book was too much to pay for Molycorp Monday, and it's still certainly too much today, even after the shares gave back their early Tuesday gains. After all, "rare-earth" metals aren't really "rare" at all. In fact, some rare earths are even more abundant than gold … or lead. The thing that makes these metals "rare" is that, because they're more dispersed across the Earth's crust, it's generally considered unprofitable to mine and refine them. (I guess the marketing department nixed the term "unprofitable earths.")
That said, if you absolutely, positively must join this less-profitable-than-gold rush, there are better ways to do so than by investing in Molycorp, Rare Element, or General Moly. As I mentioned earlier this week, Freeport-McMoran
At only 11 times earnings, Thompson Creek
Foolish final thought
Thompson focuses primarily on molybdenum production -- but then again, "moly" is an integral part of most names in this sector. Given my druthers, I'd be buying a company that's got more than just its name going for it -- Freeport if you love dividends, Thompson if you don't.
The Fool owns shares of ExxonMobil, but Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 662 out of more than 170,000 members. The Motley Fool has a disclosure policy.
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