If You’re Reading This, It’s Too Late

If you’ve been a consistent reader of Fat Tail Daily or our paid subscription services, you’ve likely done well from the recent critical minerals and rare earth rally.

It’s been one of the few themes all Fat Tail Editors have firmly agreed on this year.

Our commodities expert, James Cooper, has been sounding the alarm for months now. He specifically called out the supply chain security issue in June and predicted a bull market for critical minerals back in July.

Lachy and I have also highlighted our fair share. I pointed out Trump’s intention to invest in Australia just days before mining juniors began to surge 100–380%.

Why bring this up? Not to brag, but to deliver a reality check: The train has left the station.

If you’re not already invested in these companies, it’s likely too late.

Here’s what some of these mining juniors looked like at the start of this week:

Source: Livewire as of October 20

This run-up came as the market anticipated strategic partnerships between the US and our miners.

After decades of being asleep at the wheel, the US now hopes to claw back some semblance of security from a supply chain where China dominates ~70% of the supply and ~90% of the processing.

The first significant step was taken this week, when Albanese and Trump inked a $13 billion critical minerals deal.

‘Buy the rumour, sell the news,’ as the old saying goes. These same companies are now pulling back as reality hits.

Long production timelines, huge capital costs, and uncertain pricing are just the tip of the iceberg for these projects.

Yes, government support helps. But $13 billion spread across an entire sector doesn’t transform every speculative explorer into a profitable producer.

Most will fail. A handful will succeed spectacularly. But picking winners at current prices is like buying lottery tickets at a hefty premium.

Most of these juniors will need multiple capital raisings before anything comes out of the ground, diluting existing shareholders.

Even then, Chinese competition won’t simply roll over; they’ll likely flood markets to suppress mineral prices, as they’ve done before.

Floor pricing and US tariffs are already in the works, which could cushion some of China’s pushback. I expect those floor price announcements to be the final phase of this bull run.

But chasing that now is a fool’s errand. That’s not to say these companies can’t be long-term winners.

But investing at these highs is an excellent way to leave your capital stranded for years before you see a return.

Time to go looking for new pastures

Markets are in a speculative fervour, with little concern for price vs value.

This is what emotional markets look like.

That means if you’re seeing the herd rush in, it’s too late.

So where should contrarian investors look while the crowd chases yesterday’s news?

Focus on sectors facing peak pessimism. Here are some examples:

Agriculture technology companies have been hammered despite the fact that food security remains a pressing issue.

One example, penny stock Wide Open Agriculture [ASX:WOA], has recently developed and patented a new type of lupin-based milk.

In April, they signed a deal with food ingredient giant Univar Solutions, which has already taken its first shipment to test within China’s huge bubble tea market.

Or for another angle, uranium miners outside the mainstream remain deeply undervalued despite recent progress in nuclear deregulation.

Elevate Uranium’s [ASX:EL8] recent sale of its WA site to focus on its Namibian projects should have investors taking notice. It’s a good deal that has them planting seeds for future growth.

Select biotech companies working on age-related diseases trade at a fraction of their 2021 highs despite unchanged demographic megatrends.

Actinogen Medical [ASX:ACW] has a minuscule $100 million market cap despite having a phase 2b clinical trial in the lucrative and expanding Alzheimer’s disease market.

They expect interim results in January next year and final results in Q4 2026.

Now, these examples are all highly speculative stocks that require further research before investing.

But my point in showing them is that the market constantly offers opportunities on the unloved side of town.

My colleague and microcap specialist, Lachlann Tierney, has also been searching the ASX for unknown gems.

His latest pick has a tiny $147 million market cap, but he thinks it has all the right conditions to become his pick of the year.

It’s seen a pullback in recent days with the rest of the market and has entered the buy zone.

If you want to learn more about his latest pick, click here.

Your Action Plan

The key is identifying tomorrow’s narratives before they become today’s headlines.

If you already own critical mineral stocks from earlier this year, congratulations.

Consider taking some profits off the table. At least recover your initial capital and let the rest ride.

If you missed this rally, resist the FOMO.

There’s nothing more expensive than trying to catch up with a market that’s already moved. Your capital is better deployed elsewhere.

Start building your watchlist for the next cycle. When these critical mineral stocks inevitably correct 40–60% (and they will), that’s when you reassess.

The long-term thesis remains valid. Western supply chain independence isn’t optional. But entry points matter enormously.

Remember, the market’s job is to transfer wealth from the impatient to the patient. Every day, it offers new opportunities to those willing to look where others aren’t.

The critical minerals rally has been spectacular, but if you’re reading about it in the mainstream press, seeing it discussed on social media, and watching your neighbour pile in, then the easy money has already been made.

The next big opportunity is already developing elsewhere, quietly, away from the spotlight. That’s where you should be hunting.

Stay contrarian. Stay patient. Most importantly, stay disciplined.