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What: Shares of rare-earth miner Molycorp
So what: Today's selling pressure follows on the heels of a downgrade and a major price target cut last week from JPMorgan. The whole rare-earth sector is getting hit, with others like Rare Element Resources
Now what: A lot of this year's bullishness in the sector is tied to China cutting exports and driving up prices. The JPMorgan analyst who downgraded the stock last week, Michael Gambardella, had mentioned prices for elements like cerium, lanthanum, and neodymium respectively had dropped by 48%, 36%, and 22% from recent highs. When looking for companies to invest in, a sustainable competitive advantage is the way to go. If the only thing a company has going for it is temporary surging prices for its products caused by one government’s decisions, that's far from sustainable.
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