Thread by @lxvresearch

Has been sometime since we discussed #uranium, specifically $CCJ $CCO.

Some might have seen a @cameconews seasonality chart based on the last 20-years of trading. Like the one included here.

Looking at this chart, one thing stands out: buy $CCJ just ahead of the Q4 rally $URA

At face value, following the seasonality fits well with the narrative of #section232 and $CCJ buying from the spot market.

The thing about averages, however, is that they reveal less than what they cover.

$URA #uranium

Take for instance, the correlation of $CCJ YTD price performance to the 20-year average YTD price performance. The two time series are negatively correlated... And not just a little

#uranium

Take the best performing years of $CCJ over the last 20: 2003, 2009, 2004 and 2005. YTD performance of $CCO in 2019 is almost perfectly negatively correlated to the price performance YTD in each of those years.

#uranium

Now take the worst performing year of $CCJ over the last 20 ex-2008: 2011. The YTD price performance of $CCO in 2009 is almost perfectly correlated with the YTD performance in 2011. Meaning that the stock is on track to generate an annual price return of -55%. #uranium

The thing is though, 2011 was the year of the #Fukushima disaster. So it probably doesn't make sense that 2019 would follow through in the same way.

#uranium $CCJ $CCO $URA

So the message is this: don't invest in #uranium because you think the seasonality is in your favour. Invest because you understand that the fundamentals are favourable $CCJ $CCO $URA #NobodySaidInvestingIsEasy