The five stages of a shortage
Every shortage on this site gets one of five stages. The stage says where the market is in the story, not what to do about it.
Stage 1: Starting
Stage 1, Starting: supply is tight and prices just began to rise, but the stocks have not moved yet.
What a reader should take from it: earliest and rarest. Watch for the first price hike.
Circuit board materials and tiny capacitors, US-made drone parts
Stage 2: Pulled back
Stage 2, Pulled back: the shortage is real, but the stocks fell on one specific fear.
What a reader should take from it: the bet is that the fear is wrong, so name the fear.
Optical lasers, Uranium enrichment, Switchgear, Gas compression, Solid rocket motors and interceptors, Rare earths and magnets, Antimony, Senior housing, Rocket launch
Stage 3: Priced in
Stage 3, Priced in: the shortage is real and the stocks already reflect it.
What a reader should take from it: the shortage is real, but the market already knows.
Memory and storage, Server CPUs, Grid builders, Copper and tungsten, Senior housing landlords, Robot motors
Stage 4: Slow build
Stage 4, Slow build: multi-year demand with no sudden squeeze.
What a reader should take from it: steady, not explosive.
Glut
Glut: there is too much supply and prices are falling.
What a reader should take from it: too much supply. Gluts show how runs end.
Servers and assembly, Natural gas and nuclear startups, Drone makers, Lithium, Obesity drugs, Humanoid robot parts
Questions
What are the five stages of a shortage?
Stage 1 Starting, stage 2 Pulled back, stage 3 Priced in, stage 4 Slow build, and Glut.
What does a stage 2 shortage mean?
Stage 2, Pulled back: the shortage is real, but the stocks fell on one specific fear.
Does a glut mean the stock will fall?
Not necessarily, but a glut means supply exceeds demand, which is the opposite of the pricing power a bottleneck gives its makers. It is education, not advice.