More thoughts on the @Official_WSB crowd jumping on the uranium trade…
Wallstreetbets’ laid out the obvious uranium bull market story well on Reddit a couple days ago. 10mm followers and you can see in the market they are now taking action.
It’s such a compelling theme and imho has the greatest certianty of working out fantastic of any commodity bull I’ve ever seen or read about in history. Why?
Cause it’s a super tight commodity that takes years to materially expand supply. Utilities will be $500/lb plus if they have to and the total market size is just so tiny it’s crazy. The world richest 100 people see there net worth’s fluctuate more than the entire sector daily
Absolute pos companies like $gme stock have had similar market caps to the entire sector. Fucking retail video game seller that has fuck all profit potential and just leases it’s stories vs 11 percent of world electricity fuel. #fuckme!
Anyhow so here’s what’s now happening. The $gme stop Reddit crowd with the help of wallstreetbets #wsb is jumping in the game. These guys know how to create a squeeze and max returns for themselves. In the initial #wsb post they suggested buying calls in $CCO juniors and $u.un
On Friday $ccj and $cco (USA and Canadian listings for Cameco 2nd largest uranium producer) were sprinkled all over the list of top traded stock options on the exchange obviously this surge is the #wsb gang taking action. Plus we’ve had two big days on $u.un and uranium juniors
The exiting part is that this is the very strategy they used on $gme and $amc. They are crazy aggressive and work as a mob and are buying option contracts in near months. Meaning options that expire soon like sept - dec etc.
So what happens when they do this? Well, brokers, hedge funds etc. They see lots of bids to buy cco options at $25, $30 or $35 dollars etc and with healthy premiums. So they decided it’s worth the risk to reward to ‘write covers calls’. So they sell the call option and buy stock
Sorry but if I’m not explaining this well enough to newbies but the essence is that by simply buying lots of calls in stocks like cco they create buying in the stock by brokers, funds and speculators. So it really makes their money impactful on a stock and in this case a sector
Uranium play is just now starting for them so we can expect much more inflows and volatility… much much more. As per the investment case laid out by $wsb everyone knows they should first focus on loading up on the Cameco calls and the junior miners before squeezing $u.un
Understand this.. the plan is to first load up on #uranium sector torque then buy $u.un likely with the same strategy. They will start bidding for calls and create massive demand for the stock as brokers come to write the covered calls
So when I see the huge volume in Cameco calls it gives me a great feeling of certainty that there will be much more $u.un demand coming. Much more. Consider how much $cco market cap has lifted this week 20.45% or $1.82bln vs $u.un ~$1bln total cap
I expect they will get aggressive in the coming weeks on $u.un as well and we could easily see it double and take the uranium price up with it. Some people have been doubting my predictions and calling me a hyper and pumper. But I’m just laying out the facts as I see them
After decades in the investment world I understand the mechanics of how money flows and different players interact. I’ve studied the uranium sector for 20 years and rode it from bottom to top 2003-2007
I didn’t own a single uranium stock for the last decade but I watched knowing at some point I’d get my shot at a 2003-2007 run again. Covid washout I bought my first stocks in a decade March 2020. Cco mine shut downs due to covid made me double and down my positions
Sprott taking management of $u.un made me add more buy physical uranium to front run them.
All the while I’ve been watching the $gme $amc action and have believed they will come. Cause this trade is so perfect for them.
So just be careful my early #uranium loving friends…
We are about to enter a new phase.. the uranium mania is now just starting again and you can take your models and your technical analysis and toss for get about them for a few months. They will hurt you more than help you. You got to hold on for dear life now
The robinhood/weathsimple gang is coming and wallstreetbets just applied a cattle prod to the bulls balls.
Look at the charts of $gme and $amc and be honest where you would have sold. If you were in early 99.9% you have been out at a fraction of today’s price.
I hope those of you that did hard work and believe in the benefits of nuclear power to fight climate change will be able to hang on and prosper. Then allocate capital to other good themes and causes. Don’t let them shake you out.
I know I’m gonna get lots of questions and dms about ‘covered calls’. The basic concept is that sophisticated investor look for the opportunity to sell a call option while owning a stock. The risk of owning the stock is more than offset by the value of the call they sell. Google
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“Gitzel said approximately 1000 people were affected by the shutdown.
He explained that once satisfactory purchase contracts are in place for McArthur River uranium, it may take one-year to 18-months to restart production.” mbcradio.com/2020/12/no-imm…
I ain’t afraid of the Mcarthur River restart as far as uranium price goes for the next 2 years.
You can bet when Cameco laid off 1000 people 4-5 years ago they would have kept the best and offered older employees early retirement
Point being it will be more difficult than the market thinks to hire 1000 work in a market where skilled mining labour is hard to come by globally. Hire and train then commission. It’s also not a ‘simple’ mining project
Everyone should consider this tweet and what horse shit this is from $cco $ccj is stuck in a bear market mindset and once again missed the turn to the bull market.
My prediction is that $cco $ccj is going to have to burn huge sums buying spot to feed contracts they must deliver into. They will end up rushing the restart of Mcarthur River out of desperation and dig themselves out of a contracting hole by offering utilities longer term deals
This happens all the time at in bull markets companies extend poor contracts and just make things worse. End up giving up huge profits.
I prefer investing in companies that are lead by execs that have the vision to see that the market has changed from bear to bull
Hello Fuel Buyers, are you starting to understand what’s gonna happen in the coming months?
When spot Uranium jumps $3.50 to $49/lb it actually attracts more money to the sector. More money in $urnm and more money to $u.un
The investment community looking for ‘squeeze plays’ doesn’t get sticker shock, they get excited. The $3.50 jump is just confirmation that people like me will be proven correct and the price will run and break the all time highs. $180/lb inflation adjusted
The $3.50/lb price jump is confirmation that the financial community has the utilities caught in a squeeze.
Would be sellers of uranium will continue to lift offers and fear selling in this environment.
As I see $pdn crossing $1 and being added to the ASX 300 feel a great sense of accomplishment cause this time I nailed the bull market in Uranium on my own. I don’t have to argue with co-workers about who made the uranium call this cycle as people try to take credit for my work
Also the gains are mine, I don’t have to stress for months and wait for ‘the big guy’ to get around to calling me into his office to ‘have the bonus talk’. I don’t have to plead my case and wait for others to decide what bonus I deserve for making the clients money
I don’t have to make my rounds and have one on ones with a bunch of partners in the firm and argue with them to try to get my fair share of the fees I generated. So much bullshit I’m so glad to not have to deal with anymore. :)
Chatted with @METhompson72 about the project in the summer and have been picking away ever since. I find I’m waking up in the morning with the latest drill results stuck in my mind and feeling the urge to get a bigger position.
Huge Brazilian land package with the last two rounds of drill results being some of the best holes I’ve seen in my entire life. The value / grades of the copper holes make it an excellent huge copper play with amazing economics regardless of the copper price
The value / gold grades over huge widths would make it an excellent stand alone gold mine as well. With both high grade gold and copper it simply blows my mind and I find it surfacing in my dreams. This is a $5/sh company in the making even if the gold and copper price stays flat
This is a very constructive day as after the big 2 up days we had sput is doing volume at a healthy premium. Given its drop and premium shrink my bet is many took profits in the morning on mining stocks
But the resilience is a sign of strong new buyers. The diamond hands are coming in and taking stock away from longer term holders that have made incredible gains already. Can’t blame some for taking what’s already been life changing gains.
But it’s the action like that that shakes out the original bull riders. The patterns change and we are now in that more steep wide mouth column and it’s time to consider the use of semi log charts to look for new extremes to be hit