Ferg Profile picture
24 Nov, 10 tweets, 2 min read
Thread

Molten Salt Reactors look to be a game-changer

History has always involved progressing up the energy density ladder and MSR technology fits this bill

Six considerations

1. Public perception

2. Safety

3. Cost

4. Efficiency

5. Waste

6. High heat processes
1. Public perception

Nuclear needs a rebrand & PR makeover

When people hear nuclear the likes of the Chernobyl series or nuclear weapons spring to mind.

MSRs achieve this and address both safety concerns and waste concerns (the two most common nuclear reservations).
2. Safety

MSRs are "walk-away safe"

An operator couldn't melt it down even if they wanted to

MSRs aren't vulnerable to a terrorist attack as they work at atmospheric pressure, so a breach would cause the fuel to solidify without a significant release of radioactivity
3. Cost

By design, they are relatively simple (no containment domes and far fewer moving parts)

This could make them accessible to developing countries

Their small size lends them to factory-based mass production

The fact they can run on nuclear waste is cost saving in itself
4. Efficiency

"Conventional reactors typically use only 3-to-5% of the available energy in their fuel rods before the fuel rods must be replaced due to cracking"

MSR doesn't have this issue and can use up most of the rest of the available fuel in these rods to make electricity
5. Waste

Because of this efficiency waste remains radioactive for a relatively short time ~300 years or less (compared to 10,000years for conventional nuclear waste).

This is obviously a huge sell that MSR consume nuclear waste and produce very little themselves.
6. High heat processes

The most interesting to me being hydrogen.

MSRs could produce hydrogen using both thermal and electrical energy making the process very efficient

Using 78% thermal energy & 22% electrical its estimated hydrogen could be produced for less than $2kg
This moves humanity up the energy density ladder

Wood < coal < oil <nat gas < hydrogen < nuclear

MSRs being as/more economic than coal would cause mass adoption in developing countries which is key with 6.5B people set to increase to ~8.5B by 2050 doubling the energy system.
As what we have currently is developed countries 1.3B people pursuing inefficient and uneconomic renewables with predictable results

While developing countries 6.5B people are focused on keeping up with energy demand and increasing their standard of living, not ESG or emissions
If going to comment that renewables are the answer please read this first: traderferg.com/renewable-deba…

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More from @trader_ferg

25 Nov
Thread on #coal

Thermal Coal Demand

The narrative is that thermal coal is in terminal decline & will be replaced by renewables and nat gas moving forward

Coals in decline in developed countries, but we often overlook the fact that developed countries are the minority globally Image
Coal still accounts for almost 40% of global electricity production

It pays to remember is that developed countries comprise of 1.3B people while developing is 6.5B people which based on demographics is on the way to 8-8.5B people by 2050.

This doubles the energy system. Image
Where does coal demand stand currently?

There is 1,790,642 MW operating globally (1m MW is in China)

There is 199,572 MW under construction or +11%

There is 297,829 MW planned or +17%

So in total, this means adding nearly 1/3 to the current global coal plants

Decent growth.. Image
Read 5 tweets
23 Nov
A history of oil with The Economist covers

It's one of the better contrarian indicators

Drowning in Oil

March 6th, 1999

Oil = $17 barrel

Impressive timing. ImageImage
The end of the Oil Age

October 25th, 2003

Oil =$30 barrel ImageImage
Recoil

May 31st, 2008

Oil =$139 barrel

Once again impressive timing! ImageImage
Read 5 tweets
19 Nov
Thread

Charles Ellis had the idea of the "losers game"

Professional tennis is a "winners game" i.e. you win by hitting winning shots

Amateur tennis is a "loser's game" i.e. you win by not making mistakes.

Investing is a loser's game.

Avoiding making stupid mistakes is key
The 1st rule is to avoid anything that prevents you staying at the table

Always be long time & avoid margin

Rick Guerin was Buffet and Mungers equal in intelligence yet he wanted to get rich quicker & used margin

He got margin called in 73 & sold all $BRK to Buffet at bottom
2nd rule: Is to make sure the company can stay at the table.

Cashflow?

Cash levels?

Debt levels?

When are debts maturing?

Will they be able to roll at the same terms?

Historic rate of dilution if small miner?

Read the 10Q and 10K do the work!
Read 7 tweets
17 Nov
Damn this comparison is chilling from Neil Postman

I need to read a Brave New World following reading 1984 a few months ago.

“We were keeping our eye on 1984. When the year came & the prophecy didn't, thoughtful Americans sang softly in praise of themselves.
The roots of liberal democracy had held. Wherever else the terror had happened, we at least had not been visited by Orwellian nightmares.

But we had forgotten that alongside Orwell's dark vision, there was another - slightly older, slightly less well known, equally chilling:
Aldous Huxley's Brave New World. Contrary to common belief even among the educated, Huxley and Orwell did not prophesy the same thing.

Orwell warns that we will be overcome by an externally imposed oppression.
Read 8 tweets
10 Nov
Thread

These are 10 heuristics/ideas that have served me well and I lean on them whenever considering a decision or making an investment.

Benefited hugely from the ideas and wisdom of Charlie Munger, Howard Marks, @jposhaughnessy @morganhousel and @nntaleb.
1. Incentives

“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
Read 11 tweets
10 Nov
Thread

I've been trying to wrap my head around how we headed up in this mess of multiple lockdowns

Don't buy the power grab(few exceptions) or incompetence arguments

Listening to @profplum99 interview @Gavekal a theory was outlined that makes a lot of sense

CYA=Cover your ass
Now CYA was always fairly prominent in democracies

Adding social media to the mix was like adding 100x leverage to a trade(makes it easy to blow yourself up)

So politicians were terrified of being held accountable for deaths

So obviously they have zero incentive to take risks
"Now that every policy choice is reviewed and debated in real-time by millions of people around the world, CYA has become all-important.

Politicians have to put policies in place to hedge against the wildest tail risks imaginable."
Read 9 tweets

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