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Cycle Bottom Profile picture
@BULLReturns
Nov 11, 2022 • 8 tweets • 5 min read • Read on X
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
Jul 16
Playing $SOLG via $DGR at a 70% discount has paid off....

#gold
+20% $SOLG = +200% $DGR
$SOLG's cap will triple through 2026 as #gold pushes > $3k and #copper > $7 equating to 16c of value for $DGR, so from 1c, over 10x return
Read 4 tweets
Cycle Bottom Profile picture
Jul 14
We note those calling for a material US market sell off in the next 3-6 months has increased substantially in recent weeks, what have we done 1H 2024 to cushion and provide multi options to take advance of this event:

A) We scaled back on >10 baggers trading on likely...

1/
.... non secure valuations. These include #bitcoin miners like $IREN, excessively valued #uranium stocks.

B) Dry powder is at 35%, & will go to over 50% on the current continued leg higher

C) Physical ETFs holding #gold #silver #bitcoin are included in dry powder

2/
D) Fresh asymmetric themes can decline a further 50% in a market pull back to -96/97% from peaks

E) Still looking for blow off tops to sell into prior to the major sell off this adds to dry powder

F) Often dry powder 10x by sitting in Cash & near cash Vs overvalued equities

3/
Read 4 tweets
Cycle Bottom Profile picture
Jun 21
For our followers: Its the final June tax loss selling next week for the ASX

A few tips to guide your actions
a) #lithium stocks making new lows with credible IRRs, cap < 4% NPV, cap < 0.4x CF 3-4yrs out, controlled dilution = >8x returns
b) $AAU 0.3c = US$4m cap post raise
1/2
#Antilles has tripped massively in 2Q, can it recover materially 2H +1x? $4m legal claim and equipment sales. Project NPVs still US$200m

c) $AEE at 10-13c #uranium, hit by option conversion selling, material raise with negative sentiment and now tax loss selling, 2H +1x?
Our weekend will be spent on review of our 20 #lithium watchlist plays... 5 of these will to 8x within 36 months from current prices.

-25% = 12x

-50% = 16x
Read 6 tweets
Cycle Bottom Profile picture
Jun 20
#lithium on the cycle clock 0-5 minutes range:

Look for > 50% IRR projects round tripping to last cycle lows

Cap < 0.4x CF 3-4yrs out

= > 8x returns
Bottoming process can take another 6 months, but compelling entry points to begin scale in are upon us.... remember 95% corrections with the above matrix look interesting for > 8x within 36 months.
More of our #lithium scale in bids were hit in the last 4 trading days then in the 3 prior months as round tripping to last cycle lows are coming into play.
Read 4 tweets
Cycle Bottom Profile picture
Jun 12
Our Revised NPV fully diluted for Tiris based on todays expanded resource $AEE #Tiris #uranium Image
Notes:

a) Further Expanded resource is highly discounted when using 10% beyond 16yr mine life.

b) High sensitivity to LT contracted prices

c) Excludes Swedish assets
d) Capex diluted share count to 1.15bn shares
Read 6 tweets
Cycle Bottom Profile picture
Jun 12
$AEE every +10mlbs added to reserves at #tiris adds US$120m to the NPV = +150% of current cap. #Aura #uranium Image
Using the full 91mlbs at 80% recoverable, $85 pricing, then our NPV per share comes out at $1.25 on 1.1bn fully diluted share base for #Tiris

We expect 91mlbs to double over 8-10 years given this new #uranium district.
At yesterday lows thats a 89.6% discount to fully diluted full resource NPV.

Excluding upside in Haggan which will add $1 to NPV post #uranium mining ban removal
Read 5 tweets

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