Thread by @UraniumIronman

Some Friday ramblings
Recession is here. $WMT, $COST, $TGT all prevaricated their way around shoddy earnings - it was freight! Cost inflation! Food & fuel!

In their declining sales you see the elasticity of discretionary consumption. Prices are high and going higher - the Fed will wreak havoc on financial assets but real carbon shortages (PADD 1 distillate is particularly grim) won't be tamed by 50 bps

The Fed has not been shy about their intentions. "The neutral rate might be 3.6% and we won't hesitate to hike higher" or Bill Dudley former Fed pres '18 openly waffling in BBG about how asset prices need to drop to spur an inverse wealth effect

Pair this with memory of 'Xmas massacre 2018 (or '99 bubble) and you must agree that investors still enamoured with $ARKK require psychiatric visitation. Equivalently for oil those calling for $200, $250 are content to accept that a Fed actively bent

On demand destruction, higher interest rates, and prospecting inspired by $180 WTI won't bring the equation back into balance. Capex discipline, (currently) roaring EM demand, stockpile drawdowns will take oil higher from here. But it should be acknowledged that

To go long $WTI into a recession requires a bit of uncomfortable rationalising. So what to do? Channel your inner Hungarian and remember that returns are made by discounting the obvious & betting on the unexpected. I sit in a barbell of outcomes that are almost inevitable

Newcastle coal hit $400+ for May and is >$200 for the rest of the strip. Assuming no more hedges (a tall order perhaps) the met/thermals are going to earn their enterprise values in EBIT _this year_. Coal use in China & India is only growing

So makes little sense for these cos to have EV/EBIT reflecting terminal decline. Other side of the barbell - #uranium miners $PDN $FIND $EL8 etc. that won't sell a pound for another 18-24 months (if that, for the latter two). $PDN has a similar capitalisation to $BTU

One can privatise itself by next year and the other has no revenue. But higher #uranium prices are necessary. I sit in $U.U as my largest position knowing that a ride to U3O8=$80, or whatever the incentive price will be, is essentially inevitable. Barring another nuclear episode

Those who can maintain the courage of their convictions will be rewarded by pricing that accurately reflects the state of supply. In this I have certainty, not just because of functioning (if you squint) capital markets

But because I believe humanity the world over is gradually realising that nuclear is perhaps the singular solution to clean baseload energy. Hard to go a week without a new sovereign jawboning about buildouts or actively assigning tenders

This all discounts the obvious. Where's the unexpected? Arguably already behind us. #SPUT, removal of almost 1/2 of enrichment, newfound governmental enthusiasm for #nuclear as Russian O&G has suddenly lost its lustre.

My feed is full of prognosticators wondering when the $VIX washout happens, when the next bear market rally is, or when the Fed capitulates. Against the advice of Soros, I've fumbled in and out of hedges for the past two weeks, more gleeful to see action & execution

Than be a prudent investor. I don't know when the S&P capitulates. Maybe $XOM $CVX are big enough by the time $TSLA hits $100 that the index isn't drubbed all that much. More likely than not the tech savants betting on fairy dust EBIT in 2028

Will get worried and wash out. Why? They haven't discounted the obvious. At current valuations, they aren't even betting on the unexpected. They're investin' like Bon Jovi - on a prayer - and one by one LPs and managers will lose their nerves.

#Uranium may get hit further, but we, unlike the Potemkin village of unicorn investors, posses the real power of markets to reprice a situation that requires it