Thought of the day: Return compounding is all about timeframes in #cyclicals, 10x over 5 years reinvested in 10x over 5 years reinvested in 10x over 5 years with 1-2 year waiting between reinvestment = 1000x over 17-19 years. Are you formulating your compounding plan?
Our working example:
$BTU from $1.21 = 13x < 30 months
deployed into:
$IREN from $1.32 = expect 10x over 48 months
deployed into:
Unknown at this time = 8x
Total return = >1000x
Documented is previous tweets
Why $BTU it was -98%, with a reasonable probability of a debt restructuring, coupled with quarterly cashflow that could move from $20m to $500m = 30x re-rate
Why $IREN is was down -96%, reasonable survivability runway, cashflow ability at $50k #Bitcoin would equate to >5x entry
@GjStocks An example: $WKT
At 10c it's 5-8x returner over 5yrs
At 5c it's 10-16x returner over 5yrs
So the lower the sp goes with unchanged core assumptions, the higher the return.
The vision required includes - successful project implementation and scalable production over 5yrs.
@Pedro82854342 What's falling to 15-20yr lows?
#preciousmetalstocks ??
If #lumber falls below $300, what opportunities will be available?
@GjStocks Why 99% won't be able to compound a portion of their portfolio at 1000x over 19 years?
- average holding period is 3 months compared with the 5yrs plus required
- very few have the emotional position to buy on -97% sales
- the perceived low risk near cycle tops
@SemiGodDevil The key for what comes out of the oven is 80% based on spot price for #cyclicals
#Bitcoin next cycle peak? US$75k-175K
#Uranium $95/lb average for the peak year? $AEE $FSY $WSTRF $EU
Expandable #graphite > $2000 basket price? $WKT
#Metcoal next peak year 2027> $400/t $CKA
Turning $20k into $20mil over 20 years is the objective:
1st asymmetric trade 20k becomes $220k
2nd asymmetric trade 220k becomes $2.4m
3rd asymmetric trade $2.4m becomes > $20m
How to pick your 1st asymmetric trade? #cyclical
1st -96-98% is fertile ground (market cycle bottoms offer)
2nd Mean reversion given cashflow reversion, look for where spot prices can 3-5x from lows
3rd Safer ground is where the sector behaviour is consistent over cycles
One niche example: based on #gold spot +50%, #silver +100%
#preciousmetalstocks
Nano caps <$20m with compelling possibilities at >$2500 spot
$GPR was a recent one 1-1.7c accummulation range
$WWI at 0.5-0.9c is on our watchlist @ $2500 spot project IRR> 70% & NPV>30x cap
@Peak_Ascent We would add that burning match #preciousmetal explorers are tricky beasts, they are not our preferred focus generally speaking. Too many are lifestyle cash burners for the CEO. Several are approaching extremely low historic valuations, so it would be remiss if we didn't zoom in
@deruyter1667 $IREN would have struggled to go bankrupt in the worst sector conditions, ie. if Bitcoin went to 8k.
At $1 was trading at 0.3x 2024/25 CF
Implied > 20x upside
Note how $IREN trades over the next 18 months as #Bitcoin achieves:
35k = $4.50-5.50 +4x return
70k = $14-16 +15x return
105k = $22-28 >21x return
#Energy is on the move....
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2025 #Uranium is about service bottlenecks (sticker shock to Utes) + Russian supply cuts to the US + unexpected supply cuts (KAP pivot to East + negative events)
2H 2025 several US Utes will likely require action on replacement supply sources = Spot buying (8-12lbs)
New data centres requiring speed of implementation will look for the quickest solutions likely gas powered module products avoiding long interactions with slow moving bureaucracy.
As our followers will recall, we used $GBTC at its 50% disc near cycle lows to achieve our #bitcoin exposure, our scale down for this cycle commences at $84k through $135k over the next 12 months. This will equate to >10x returns from GBTC over a 3 yr holding period from 4Q 2022.
The cycle continues to dictate our 10 bagger position, as it should do for our followers.
This will also complete a full exit from our #bitcoin miners, that were not fully scaled out at earlier 2024 peaks