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@BULLReturns

Mar 23

Realities with 75% of nano cap #gold explorers, or potential pre-production plays:

- lifestyle operations for the CEO/chairman
- burning matches, dilution can be 95% prior to achieving much
- timeframes of 1 year become 4 rather quickly
- require huge margin of safety for entry

What sort of margin of safety do we hear you ask?
- Cap < 5% NPV < 30% resource
- Cap < 25% of optimized annual cashflow
- IRR > 100% at $2500 spot
- Insider ownership > 20%
- Independent due diligence on Financing to verify DFS
- Cap/oz < $4

Even with all the above 40% will likely drop over.

Hence ensure one doesn't over pay and have a spread of 5 holdings in the theme.

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@BULLReturns

Mar 22

Thought of the day: Recency bias from #commodity peak when everything in the rear vision mirror looks "solid" is an optical illusion, around the bend a cliff is coming into sight a "recession", often stockprices drop 75% plus. Demand can get slaughtered at the margin.

#lithium & #coal are great case studies for those of our followers who don't understand nothing is rare at 80% cash margins and 20% cost.

#cyclicalinvesting101

While balance sheets are materially improved on 2020 levels, so few 95% corrections, but 50-65% are still reality with 75% spot falls from peaks.

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@BULLReturns

Mar 21

https://twitter.com/lisaabramowicz1/status/1637738352962158594

$SBER up 19x if depositary receipts were purchased <50c and converted plus incoming 200% dividend yield. A little outperformance over 12 months Vs peers group in Europe & US. Another successful #asymmetric theme in play.

https://twitter.com/lisaabramowicz1/status/1637738352962158594

Who would have thought the globally best investment theme over the last 12 months would be #Russianstocks (purchased in crashed DRs) that 83% of the world pop didn't sanction?

Note the buy valuations (using 3yr trailing pre-war averages):

Dividend yields > 100%
PE < 0.7x

Entry on these sorts of multiples with future growth applied has always provided 10-20x returns over 5 years on cycle bottom deployment for a theme.

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@BULLReturns

Mar 17

https://twitter.com/benbakhshi/status/1636390996366987268

PEs < 3x there are hundreds out there in Frontier markets, many growing eps at 20% per year plus. Let alone Fossil fuel stocks.

https://twitter.com/benbakhshi/status/1636390996366987268

Remember a < 3x on peak #commodity spots is > 15x on spot lows

Note many think #Coal #Natgas & #oil stocks looked cheap on 2022 low PEs, in fact 65% were expensive.

#coal avg prices will drop by 50-65% over the next 2 years Vs 2022 average.

#natgas avg prices will drop by 50-60% over 2023 Vs 2023 avg.

#oil likely 30%

The market values

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@BULLReturns

Mar 16

#Uranium cycle realties:

- multiple 50% sector drawdowns

- explorers can drawdown 80% intra cycle

- it's unlikely to swim against the pack of other #commodities

- the constant reloading of spot supply with lack of utility buyers creates uncertain in price discovery

1/2

- another 20% downside can't be ruled out for this down-leg, 35% plus for high beta burning matches (2-6 months of further pain)

- the next upleg (if backed by $65-75 spot) will provide 2-3x returns for the sector & 6-9x for high beta burning matches (4-18months out)

#uranium

So in the context of S&P500 3000 target 🎯 what will that mean for your favourite #uranium plays bottoming:

$AGE 2.1c
$BMN 90c
$GLO $2
$LOT 12c
$UUUU $4
$BOE $1.40
$PDN 41c

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@BULLReturns

Mar 16

To call the bottom of #commodities #uranium in 2023, one must call the market bottom 1st, if you have no idea on that, then you will accummulate too early, as many are doing.

Note: under aggressive #contagion conditions 95% of #commodities are heavily correlated together.

The 5% will likely be extremely short on inventory levels, with lack of short term supply response.

#uranium spot market receives reloading of up to 1.5mlbs per month...

...therefore a truly real supply shortage is when Utilities are forced to buy over 1.5mlbs per month, with other buyers taking the total to over 2.5mlbs per month, then the spot price will actually trend higher. Until this happens (or a sustained risk on period later in 2024)...

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