“Show me the incentives and I will show you the outcome.” - Charlie Munger
Ensuring incentives are aligned positions you for better outcomes.
At the minimum know what everyone's incentives are before entering any deal/investment.
2. Asymmetry
Position for ideally large (unknown) upside and small (known) downside
"If you ‘have optionality,’ you don’t have much need for what is commonly called intelligence, knowledge, insight, skills and these complicated things that take place in our brain cells"-N Taleb
3. Resulting
"We have a tendency to equate the quality of a decision with the quality of its outcome." - @AnnieDuke
You need to have conviction and stick to your process, don't change your strategy just because a few trades didn’t turn out well in the short run.
4. The opportunity cost of not being there
This never gets discussed but there is a very real cost of passing on a great opportunity or trade that goes parabolic
If you think there is asymmetry there then consider taking a tiny position(an amount it won’t hurt to lose)
5. Scaling
If you have a choice don't do everything at once.
Take selling a position; see the company all over the media sell 10%, its mentioned at BBQ another 10%
Kazakh's can now sell their uranium at the spot price to their Swiss marketing subsidiary which can then market it higher aboard or pool inventory to sell at a higher price
No more direct selling into spot market as per Kazakhs transfer pricing laws
ISR Production
“It’s important to keep in mind that ISR production is similar to oil and gas production. It produces a lot when the well is first tapped and then production declines. As the production declines, new wells are drilled to offset the production decline rates."
First is mine exploration and mine development expenditures where Kazak’s have gone from spending $94m a year in 2011 to $18m in 2017. It's hard to imagine an 80% drop in mine exploration and development investment coinciding with increasing production (or even being maintained).