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- Is this a reason to drop uranium?
Greetings Contrarian,
This is The Next Big Rush, your daily drop of mining / energy news, even when it's freaking Sunday there is little to report . Where we come together and use the word "alas" to sound shmart. 🥸
On this first edition of the Sunday Issue (for people on the western side of this little planet), we're going for an Agony Aunt style letter. A real one. Since we're obviously making this up as we go, hit reply if you enjoyed this or want to throw virtual tomatoes at us.
Dear Editor, I love the new bullet newsletter, thank you for your time on this. Your comments on the last issue (check it out here) really exacerbated my anxiety about the market. I'm invested in uranium and have heard numerous explanations for why it should go up, but then there are actions like Sprott and miners buying from the spot market which make me question the tightness of the market.I've also wondered what will happen when they inevitably sell the excess uranium they have been acquiring. The recent news of a miner selling their stockpile has caused concern about the possibility of flooding the market, which has further destabilised my confidence in this investment. I would appreciate hearing your perspective on this issue. Thank you for sharing your insights.Best,Uranium Nail Biter
Dear Uranium Nail Biter,
First of all, the lack of confidence in one's investment thesis usually means one of two things 1- you may be over-invested or 2- you currently depend on others for your investmentsIt may not be fatal if you trust the sources and understand the risks, but this comes at a cost of possibly being exit liquidity for investing "gurus".Regarding SPUT, they do not sell and if they ever want to, they would probably have to signal it to the market long before they do, since trust holders would have to vote for it, which would give you PLENTY of notice.
Here's a better explanation by the top hat himself:
Next, we must look at the whole context and the reason for people being upset at any company selling into spot right now.
The picture is:💩 Stocks were flat to down (read: people were pissed)
💩 Spot price was frozen even with great fundamentals (read: people were pissed)
💩 Junior mining CEOs are paid whether the company makes money or not, which creates irritation by shareholders if the stock price does not appreciate accordingly or is disproportionate. (read: people were pissed)
I'm not convinced the amount they sold amounted to "flooding the market", but alas, it did not help the cause and given the context above, it was the last drop for many.
Anyway, if you're unsure of any investing thesis, you gotta go back to basics, try to poke holes at it and either gain conviction, or divest accordingly.
At times, being in a group is detrimental because there's a lot of tribal thinking, but if it wasn't for that, there are a lot of bits of information we wouldn't come to know.
At the end of the day, nobody else pays your bills but you, so act accordingly.
Happy speculating,
The Editor
P.S. The Editor has tried to poke holes in this thesis and as a result, finds herself very very deeply invested in uranium, to a fault.
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational/entertainment and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
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