Wall Street’s 60/40 formula was born in 1952 — the same year as the first credit card. A lot has changed since.
That’s why we created a new approach — The H.E.A.T. Formula — to empower investors to spot opportunities, think independently, make smarter (often contrarian) moves, and build real wealth.
Table of Contents
I am going to be in Korea this week, still plan on sending the newsletter out but not exactly sure on timing every day, may also be on a plane all of Tuesday and not able to get to it.
🧠 Breaking China’s Rare Earth Stranglehold: The U.S. Game Plan & Who Wins
China controls ~85% of global rare earth processing — and has shown it’s willing to use that dominance as a weapon. From restricting exports to threatening EV and defense supply chains, Beijing has forced Washington to respond. The paradigm shift came in July when the Department of Defense struck a landmark deal with MP Materials (MP) — a U.S. producer that owns the Mountain Pass mine, refining plants, and magnet factories. The deal isn’t just symbolic: the DOD took equity, installed a price floor for NdPr magnets (~$110/kg, nearly 2x recent prices), and guaranteed offtake volumes. That essentially ensures MP’s downstream earnings and protects it from Chinese dumping. Analysts now model $650m in EBITDA by 2028, versus $13m in 2025 — with government guarantees making the out-years unusually de-risked.
Rare Earth Value Chain: U.S. vs China, Winners & Losers
1️⃣ Mining (raw ore → concentrates)
Winners:
MP Materials (MP) — Mountain Pass mine (U.S.), DoD-backed, vertical integration
USA Rare Earth (private/USAR) — Round Top, TX; magnet facility 2026+
Lynas (LYC / LYSDY / LYSCF) — Mount Weld, AU, non-China scale producer
Energy Fuels (UUUU) — White Mesa Mill (UT), uranium + REE separation optionality
Losers:
Chinese miners (Shenghe, China Northern Rare Earth) — still dominant, but policy floors erode pricing leverage
2️⃣ Processing & Separation (oxides, NdPr, Dy, Tb)
Winners:
Neo Performance Materials (NEO.TO) — REE processing + magnets, undervalued small-cap
Lynas — Malaysia refinery + expansion in AU/US
Energy Fuels (UUUU) — already shipped REE carbonate, scaling NdPr oxide
Losers:
Chinese refiners — FEOC rules shut them out of IRA EV credits; U.S./EU OEMs forced to diversify
3️⃣ Magnets & Components (NdFeB magnets, alloys)
Winners:
MP Materials (MP) — “10X” magnet plant; DoD price floor ($110/kg NdPr)
Neo Performance — specialty magnets for autos/electronics
Downstream potential: MP pivot into motors/robotics, like Howmet’s aerospace pivot
4️⃣ End Use (EVs, Defense, Robotics, Energy)
Defense primes: LMT, NOC, RTX, HWM (F-35s, missiles, drones → magnet demand secure)
Auto OEMs: GM, F, TSLA (supply stability for EVs, robots; Tesla flagged rare earth constraints on Optimus)
Robotics/Drones: AVAV, BA + emerging robotics suppliers
Wind & Energy: GE Vernova, Siemens Gamesa — turbines require tons of RE magnets
5️⃣ Second-Order Beneficiaries
ETF angle: VanEck REMX (imperfect exposure; half China + lithium/titanium)
Critical infra: miners of adjacent critical minerals (Ti, Nb, Co) in Ukraine/Canada/Australia with U.S. offtake potential
📉 Structural Losers
Overvalued “me-too” entrants: Ramaco (METC) trading at >30x EBITDA on hype
Chinese exporters: lose pricing weapon with U.S. price floors & offtake guarantees
Legacy producers without downstream integration: remain stuck in commodity margins
🔑 Investor Takeaway
Think of MP (MP) as the Oracle of rare earths: government-backed demand visibility + price floors = rerate from commodity miner to strategic supplier. UUUU offers a “swing” play on uranium + REE. Lynas and Neo are credible allies, but valuations need care. Downstream, the defense, auto, and robotics sectors are the ultimate beneficiaries of secure, non-China REE supply.
The Investment Strategy Wall Street Hopes You Never Discover
Tue, Sep 30, 2025 2:00 PM - 3:00 PM EDT |
-Why the 60/40 strategy is dead and what to do instead
- How to use AI to uncover today and tomorrow's hottest themes
- 4 unknown edges that still exist in today's market
- How to set up your portfolio for asymmetrical returns
- Little-known asset class that has limited risk and potentially unlimited returns
- 4 ways to hedge your portfolio that don't include bonds
Click Below to Register |
📈 Stock Corner
Today’s stock is MP Materials (MP)…..
It’s pulled nicely into the 50 day moving average.
From Chat GPT…..
If you’re looking for the rare earth play that actually has policy, scale, and cash flow on its side, MP is it. The DoD just rewired the industry with a landmark deal that makes the U.S. government MP’s largest backer, complete with equity, a price floor for NdPr magnets at nearly double market levels, and guaranteed offtake. That means MP’s downstream earnings are essentially de-risked, a rarity in the mining space. The stock has already doubled since July, but in my view this isn’t just a miner anymore—it’s morphing into a strategic supplier to Apple, GM, and the Pentagon with a path to motors, drones, and robotics. Think of it as the Howmet Aerospace of the next decade: a commodity producer turning into a high-margin industrial champion. Yesterday’s consolidation looks like a pause before the next leg higher.
📬 In Case You Missed It
We talk about crypto, tokenization, and some of our ETF filings…..
🤝 Before You Go Some Ways I Can Help
ETFs: The Antidote to Wall Street
Inside HEAT: Our Monthly Live Call on What Wall Street Doesn’t Want You To Know
Financial HEAT Podcast https://www.youtube.com/@TuttleCap Freedom from the Wall Street Hypocrisy
Tuttle Wealth Management: Your Wealth Unshackled
Advanced HEAT Insights: Matt’s Inner Circle, Your Financial Edge
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