URANIUM: NO LONGER THE KODAK OF ENERGY
When we first started pounding the table on uranium years ago, the yellowcake was the Kodak of energy. Dead.
Here’s how Chris captured the sentiment around uranium at the time:
Right now the uranium price is so depressed that it will require a near tripling of price to entice the required capital back into this sector — capital that will be required in order to develop production to fill the supply-demand gap which will exist in a few short years hence.
That sounds like a helluva thing to suggest but it’s not my opinion. It’s what the industry has already stated. And here’s the kicker: it’s nothing compared to what will happen to the shares of the companies mining this stuff.
We recommended a basket of uranium plays to Insider members back in 2017. After going absolutely nowhere for a couple of years, our uranium positions are now up anywhere from 4x to 10x — and a whole bunch in between. Most are up 3-4x just in the last 12 months.
From day one, our thesis was that supply won’t be able to meet demand today, let alone in 5 or 10 years from now. This still holds true today. Doubly so, we’d say.
To better understand the reasons for our conviction, Art Hyde (@JekyllCapital) from Segra Resource Partners put together a terrific overview of the intricacies of the uranium space.
If you don’t read anything else this weekend, do yourself a favor and read this.
GET READY FOR GAS STIMMYS
Even at $75-ish per barrel, oil is a major political point of contention these days as the average voter is feeling the pinch of rising prices at the pump.
What happens as oil blasts past $100… or even higher? If you’ve been with us for some time, you know we believe this is a question of when (not if) — especially when taking into account the woke energy policy of Western governments.
Our buddy Kuppy penned a new article around a thought-provoking conversation he recently had with another hedge fund friend. Here’s the skinny:
They’ll give out stimmys to anyone who consumes gasoline. Maybe they won’t give stimmys to hedgies like us, but they’ll make sure everyone else qualifies. Wouldn’t it be hilarious if oil demand actually increased as the price goes past $200??
To read the rest, click here. It really might be different this time around.
GROWTH GETS TAKEN TO THE SLAUGHTERHOUSE
For well over a decade investors poured money into anything that was poised to “change the world” or provide “exponential” never-before-seen, viagra-style growth potential. And it worked spectacularly well. Until recently.
Many of the hot growth names got slaughtered lately (h/t to @charliebilello for the graphic).
Even here, we’re not tempted to buy any of these names. Not just yet, anyway. We are convinced that “value” is going to outperform “growth” from a fundamental perspective from here.
ALL THINGS TRANSITORY…
In February 2020, we started warning that lockdowns will bring about inflation and shortages. This pesky stuff is now part of our daily lives. We recently set up a dedicated inflation channel in our Insider private forum, where members can share their own experiences with all things “transitory”.
Here’s an amusing insight into this year’s Thanksgiving, courtesy of Insider member Robert:
In a big chain grocer in SW Florida yesterday and watched a verbal confrontation from a man who was refused buying two Thanksgiving turkeys. There is a limit of one per customer. The man bought one, walked out, put it in his car and came right back in and bought the second. He argued with the manager the store was only making work and time for him and this was just the beginning of what’s coming. He did get his second turkey. Turned out it was for a charitable contribution. And so it begins.
And another — somewhat ironic — corporate “victim” of inflation:
From the article:
The company — one of America’s last remaining true dollar stores — said Tuesday it will raise prices from $1 to $1.25 on the majority of its products by the first quarter of 2022. The change is a sign of the pressures low-cost retailers face holding down prices during a period of rising inflation.
“Dollar and a Quarter Tree” just doesn’t have the same ring to it.
LET THEM EAT… SOY
Staying with soaring prices for another moment…
Who would’ve thought that “dishing out” nutrition advice is also part of the Fed’s mandate?
We’re willing to bet the Fed pointy shoes weren’t eating their own cooking (pun intended) this Thanksgiving.
Speaking of central bankers… the irony seems to be completely lost on these folks.
Have a fabulous weekend!