"$200 uranium is NOT impossible" here's why..

In this short clip, Menachem Sahler explained to me why $200 uranium is not impossible. Even though we might think it's crazy, if we were the owners of a $10B reactor and the only way we would get the invested money back would be by running that reactor, we wouldn't care if we pay $100 or $200 per pound uranium.

During my full conversation with Menachem, he explained to me what his unique investment strategy was for outsized returns in the natural resource sector. You can watch/listen to the full conversation here (free):
https://www.baby-investments.com/interviews

Menachem explained to me a very important concept called "reflexivity". According to Investopedia, reflexivity is a theory that positive feedback loops between expectations and economic fundamentals can cause price trends that substantially and persistently deviate from equilibrium prices.

This basically means that the cure for higher prices is higher prices, as weird as that may sound.

Menachem told me that this concept is often seen in the natural resource market, but it's even more visible in the uranium market now. This is the main reason why mr. Sahler doesn't think $200 uranium is impossible.

He also told me that even small things, like the section-232 uranium reserve in the US, can matter at higher prices, and because they matter, that pushes the price even higher.

According to Menachem, most of the uranium price predictions for uranium don't work and don't make sense, mostly because when the market responds to the deficits, the uranium price can rise quickly and exponentially.

We also talked about the substitution of uranium by things like thorium, SMRs or MSRs. Menachem isn't too concerned about substitution in the uranium market because it's all about the infrastructure. The existing nuclear reactors are made to work in a certain way, which isn't exactly tailored for elements like thorium. So, when a company or a country invests $10B to build a reactor, they won't just leave it because uranium has gone to $200, according to mr. Sahler.

So, even though Jeff Klenda told me that not many uranium companies will make the CAPEX back and ensure a reasonable rate of return for shareholders at $65 uranium, it could go quite a lot higher than that.

I've been wrong in the past to assume that $50-60 is where uranium will settle because the production costs are not the only thing that matters now. Uranium has been a "broken" market for as long as I can trace it back, so I don't expect anything reasonable from it, and now that Menachem has explained this to me, combined with Sprott potentially (possibly) cornering the uranium market, I think $200 uranium is not impossible.

However, I am here to learn. While $200 uranium doesn't sound impossible to me right now, I can change my opinion in an instant if someone presents a compelling case as to why that is. So, if you think $200 is impossible, please explain that to me either in the comments or through email.

This video very well sets up the stage for the second part of our conversation, of which I might publish a clip very soon. In that second part, Menachem explained to me how his unique investment strategy can help him outperform the uranium market, mainly because he thinks that $200 uranium is not impossible.

TIMESTAMPS:
00:00 Reflexivity: why it matters for uranium
02:27 Why people get the price wrong
03:00 Why uranium could overshoot above $200/lbs
05:15 Why substitution isn't as big of a concern for uranium yet

Important notice: none of this is financial advice. None of this is an invitation to make any trades. Your capital may be at risk. Consider both of us very biased as we own shares of some of the companies mentioned herein to our own name. You must always do your own analysis and take your own decisions. Before continuing you must read the full disclaimer at the beginning of the video.

Видео "$200 uranium is NOT impossible" here's why.. канала Resource Talks