The latest investment scam: rare earth metals
THE Mail has a piece on investment scams. The usual list of people trying to sell you over-priced opportunities to lose money. Hard pressure sales tactics, you should invest now, don’t miss out on immediate profits. Yes, we’ve all heard these sorts of things before.
They list three of the scams: boiler rooms selling illiquid or unlisted shares. Carbon credits (in which there is indeed a real market but they’ll make sure you overpay for them) and plots of land which never do seem to get planning permission.
However, there’s anew one on the block now: rare earth metals. And as we here at the Anorak are years ahead of the Mail we’re able to tell you about it before you lose money.
The basic pitch is that China’s cornered the market and that prices are going to zoom. So spend £5,000 now on a few kilos and cash in in the future! This is actually my professional area, these weird metals, and there’s really only three problems with this pitch.
1) They overcharge you to start with. What they’re selling you for £5k has a value more like £700.
2) The amounts are nonsense. No one in industry would ever buy a couple of kgs of these things off you. Just doesn’t happen. people order by the 100 kg to 100 tonnes. So there’s just nowhere to sell these things.
3) China’s not going to corner the market. New mines are opening up and prices have fallen 50% this year already.
So, financial advice for 2013: if anyone calls you up and suggests “investing” in rare earth metals the advice is that you tell them to “fuck off pronto”.