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This week, as opposed to last week, I was only joined by two people; the Norwegian fund manager Gjermund Groven, to talk about how he’s coping with losses in uranium, and Dr. Quinton Hennigh to talk about the news released by some of the paying supporters of this website; Nevada King, Eloro Resources, and FireFox.
Dealing With The Uranium Crash
Like Justin Huhn said in his Uranium Market Minute; “it’s easy”.
Call it a cliche, but I learn under people like Rick Rule, who tells me that – in the long-term – the uranium market will go higher.
How could he know something like that? Easy. Rick has taught me that a market that can go up, and must go up, will go up. Obviously, these are the financial markets. Nobody knows nor can give you guarantees of what will happen. Rick is exaggerating for effect. What he’s saying is that when something (a natural resource) is set up in a way where the price must go up or the supply perishes – which is what’s happening in uranium right now – and if there is room for the price to run – which is definitely true for uranium – then the probability of a move to the upside is rather large. Rick being Rick, likes building his life around probabilities, which is why he recently told me he’s enjoying the lower prices and betting big on uranium.
To be able to stomach the volatility, though, Rick tells me that one needs to exercice patients and prudence before going into the trade.
Making sure that you’re able to be patient starts by understanding the thesis and building your own conviction. That way, when prices drop, you will know that is only temorarily and that the market – as pointed out about – can and must go up.
Making sure you’re prudent is very personal. Think about it in terms of risk/reward. What will happen if this market does a 10X from here on? What if it falls another 90%? Do you make a couple of dollars from the 10X but lose your house from a 90% drop? That might not be a great risk reward. That could make sure that you’re missing the prudence part, and it could fail you in this trade.
Nassim Taleb’s general trading strategy is very interesting to share in this instant. He says that he aims to win only 1 out of 10 times but win big, while losing just a very tiny bit the other 9 times.
This was discussed more in-depth in the video, and Gjermund gave his contribution as well.
I’m not saying uranium will go straight up from here. It won’t. Nothing ever does. Nobody can foresee it either, even if it did. Nobody knows where uranium is going over the short term. However, the probability of uranium being higher over the long term is rather large, as pointed out above. Again, I don’t know when that might happen, which is why I don’t bother with shorting, options nor margin, but the probabilities of that happening are rather high.
This doesn’t mean uranium is a sure thing. Let that be loud and clear. Nothing is a sure thing in the markets. Also, I’ve no idea what I’m talking about since I started in natural resources about 2 years ago and have a lot to learn.
Please read this, and the full disclaimer over here, it is really important and for your own good:
This video should not be considered investment advice of any sort. Some companies mentioned in this video are paying customers of this website. The contents of this video are general and impersonal in nature No trading recommendations are being made in this article. Be diligent and do your own research before risking your capital. The investment decisions of the author are based on their own investor profile. This includes, but is not limited to, their risk profile, their cash balance, and their debts. The author likely has a higher risk appetite than yourself. That’s why you may never assume anything on this website to be personally tailored to your situation. Resource Talks, nor the Author of this article are a registered advisory service and we do not give investment advice. Our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. Always consider that companies discussed in this video and the people discussing them have a financial relationship.
00:00 Important warning
00:20 How & why I stay calm during corrections in uranium
09:10 Fund manager’s approach to uranium
29:45 Gold & silver “technical analysi” (more like a rant)
34:00 Nevada King anounces results from 3 drill holes
41:00 Eloro Resource technical report + financing + bad timing
54:20 FireFox magnetic survey results
Was there something wrong with what the guest said? Did I fail to ask an important question? Please tell me about it. Criticism and skepticism are highly welcome.