Thursday, October 28, 2010

The Rare Earth Bubble Is About To Go Into Overdrive

We've been writing a lot lately about the mania for rare earth stocks.

Companies like MolyCorp and Rare Elements are surging despite having no revenue (let alone income).

All that moves them are headlines. Every time China reduces exports to Japan, they surge. When a German economic minister mentions that his country is at the whim of China, they surge.

And now, there's a new reason they can surge: A rare earth ETF. Gone is the need to do any research or anything like that. Just buy the Market Vectors Rare Earth/Strategic Metals ETF (REMX), which will begin trading today, and your work is done. So long as the bubble continues, you're in good shape.

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