Thread by @BULLReturns

#commodities #uranium

To get in alignment with the incoming bottom, likely 1H 2023 (the pivot on monetary tightening and peak USD), several spots will decline by 30% & high beta related equities by up to 60%. Be prudent in ones scale in, we are using future return as a guide.

History indicates 90-95% stock decliners within #commodity sectors often offer interesting recovery returns of 15-20x (all being even), expect this to play out in many cases through 1H 2023.

Where are our bids?
A) where we can obverse Cap/CF <0.5x 3 yrs out
B) Cap < 5% of NPVs

How to use future returns as a scale in guide?

For us we are looking for 8x plus returns over 48 months, so to achieve this an ideal buy in is <5% of NPV and/or <0.5x Cap/CF 3yrs out

These often present themselves near cycle bottoms....

#commodities
#cyclicals
#investing101

Where to locate these 8x plus returners? Likely the very hated niches....where reversion to the mean is extremely likely

#Bitcoin miners down 95%
#goldstocks down 95%
#highbetastocks down 95%
#homebuilders down 95%
More incoming 1H 2023

#investing101

#homebuilders
In the 2008 cycle sell off, 85% declines was the normal, we should expect similar outcomes as the 30yr mortgage moves above 7% 1H 2023

The interest rate sensitive sectors are going to get destroyed over the next 6 months....a massive incoming opportunity.

-95% (2022-1H2023) Vs 20x returns (2H2023-2026)