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Cycle Bottom Profile picture
@BULLReturns
Nov 11, 2022 • 8 tweets • 5 min read • Read on X
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Thought of the day: Fighting #commodity price tops will just result in 75% plus stockprice retracements, #cyclicality music always stops, grab a chair early to avoid serious regrets and portfolio destruction. Easy clue to follow, is 65-80% margins above cost curves are peakish.
Those #commodities that are currently near bottoming (0-20%) for the next up cycle 2H2023-2025....

#tin -65%
#ironore -66%
#nickel -60% (moving up)
#Lumber -72%
#zinc -40%
#HRCSteel -67%

Know where you are in the cycle....
1st Quartile candidates for the next cycle...
A deep recession would see industrial metals decline to costs curves or into negativity for high cost producers, this is often around 75% down from 2021 peak levels.

Note we need to take into account those with historic low inventory levels currently.
#Commodities
#cyclicality
Generally zero or negative margins (supply shut down incoming) with low global inventories (lack of dumping overhang) offset with immediate recession demand destruction = #commodity bottoming 1st Quartile entry points

Demand destruction can offset low global inventories in S/T.
#ironore cycle 2H2023-2025

1st quartile $40-90/t = high probability of 4-8x gains in pre-production plays

2nd quartile $90-$140 = 2-4x returns

3rd quartile $140-$190 = 1-2x returns

4th quartile >$190 = high probability of 0-75% loss
#tin cycle 2H2023-2025

1st quartile $12k-18k = high probability of 4-8x gains

2nd quartile 18-28k = 2-4x returns

3rd quartile 28-38k = 1-2x returns

4th quartile >38k = 0-75% loss
Newcastle #thermalcoal cycle 2023

1st quartile $40-90/t = high probability of 5-10x returns from pre-production plays

2nd quartile $90-$130 = 3-6x returns

3rd quartile $130-$170 = 2-4x returns

4th quartile >$170 = high probability of 0-75% declines

#coal

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More from @BULLReturns

Cycle Bottom Profile picture
Mar 6
.....using > 5x cost curve assumptions on NPVs or mid term cashflow will generally let you down, don't use above 2x cost curve as an average assumption to ground you for the down cycle. #commodities
Note a <1x PE stock on near peak cycle spot (>5x cost curve) is > 20x PE at cycle lows (or negative if not a lowest quartile producer) and 5-8x PE using mid cycle assumptions #Commodities
We buy loss making players near cycle lows and sell them on low PEs near cycle highs #commodities

If you don't understand this, then Mr Market will educate you over the next 12 months.
Read 4 tweets
Cycle Bottom Profile picture
Jan 17
The link for those who wish to take up my 5 stock tips offer near the next cycle low.

Fundraiser by Peter Johnson : Something 4 Bali 2 share.google/oBMp9OJj6MRhLn…
gofundme.com/f/something-4-…
DM to alert us of your take up of this offer with a receipt for over $100.
Read 6 tweets
Cycle Bottom Profile picture
Jan 16
......just do the opposite to the masses when they chase the new shiny object way above fundamentals, that's often >3x the cost curve in #commodities.
Lets take #uranium for example, most don't stay above 4x the cost curve for long, less than 2 months. Image
#lithium was an extreme bubble in its last cycle peak at > 5x the cost curve, the supply response was mega in terms of potential new mines for the next decade. The cycle low in 1H 2025 was as destructive as the extreme of the cycle peak in reverse. Image
Read 4 tweets
Cycle Bottom Profile picture
Dec 29, 2025
$MCI.v +38% #gold undervalued nano caps $1 target 🎯 over next 24 months up 100% over last week.

Incoming resource update for new DFS 2H 2026.
#gold -4.5% Vs $MCI.v +38%

Only $3k gold priced in at 30c = Project IRR 200%

$4k = 70c = 300% IRR

$5k = $1.10 = 400% IRR
Nano cap #gold sleepers are waking up $MCI $ESM $AAU #antilles Image
Read 4 tweets
Cycle Bottom Profile picture
May 23, 2025
Out with the impatient, in with fresh holders, round tripping incoming $CXU #uranium
0.7c entry = 9x

0.6c entry = 10x returns over 3-4yrs

0.5c entry = 11x

Assumption: ban removal in line with world trends
The key is don't dilute much as the cap comes in for landing, wait for the rebound
Read 4 tweets
Cycle Bottom Profile picture
May 21, 2025
Why most will never have a 10 bagger?

A) They won't deploy near the cycle bottom

B) They can't do the required sitting

C) They can't deal with the volatility

We harvest a 10 bagger on average every 2 years by ensuring our entry is is near a deep cycle low & 3-5yr sitting.
Note from 2024/25 cycle lows in #cyclicals there will be > 100 10 baggers through 2027.
Characteristics:

A) cap size bottoms below US$20m

B) down > 95% from previous cycle peak

C) bottoming NPV disc > 95%

D) IRR is compelling enough to ensure financing occurs this cycle

E) Mgmt move the project to execution in this upcycle
Read 7 tweets

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