The Pain and Pleasure of Inflection Points

Featuring Adam Rodman

Adam Rodman, founder and CIO of Segra Capital Management, provides a peek into his portfolio. He is still excited about uranium, thinks gold miners could be at a turning point, and sees deep value in specialist ocean-going tankers. He also relives the experience of being short an Argentinian equity market that was rising perilously against him. Filmed on July 3, 2018 in Dallas.

Published on
23 July, 2018
Topic
Gold, Hard Commodities, Latin America, Africa
Duration
33 minutes
Asset class
Equities, Commodities
Rating
29

Comments

  • CM

    Christopher M.

    9 8 2018 14:30

    0       0

    I am so thankful for Geiger Counter Ltd (GCL) and Yellowcake (YCA) being London listed. Eligible to hold in my UK S&S ISA tax-free whoop whoop no Capital Gains Tax!!

  • PS

    Patrick S.

    4 8 2018 11:41

    0       0

    Elaborating on Cameco's tax case - for everyone new to the sector this is probably the lowest risk way to play this as you are getting the Walmart name of the sector at a 90% discount due to all the shenanigans in this sector - No-one seems to speak about Camecos pending CRA case just for all the US watchers out there the way Canadian tax law works is you have to prepay 50% of the worse case scenario in a pending audit. However the exact same case was before the IRS and they settled for 1% yes 1% of the slated amount, they hired the best corporate tax form in the world with expertise in transfer pricing and paid them 170 million dollars AND Canada pension plan, government of Saskatchewan, and government of Alberta are invested in shares of Camecos and with recent lay offs being high profile news do you really thing the federal government (CRA) is going to screw the largest employer in northern Saskatchewan when they are giving money to companies like GM begging them to keep jobs? With all the supply demand stuff if the case goes their way in the next 1-2 months they will get an 850 million dollar tax refund, current MCAP of 5 billion potential 20% day right there.... Even section 232 stuff is hilarious UEC and UUUU CEOs tout their chests how they are the largest lowest cost producers in the US however Camecos can bring 4m+ pounds of production online in the US within 12 months just it is on care and maintenance right now like alot of other stuff - making it in fact bigger. Great interview keep it up!

  • WM

    William M.

    28 7 2018 17:37

    0       0

    Very good, cogent arguments and Adam came back below with an actionable gold trade. Loved it.

  • JM

    Jason M.

    28 7 2018 12:37

    1       0

    Adam is smarter than you are. Give the man some money and stick to your day job. The bubble in everything has you delusional re: your future returns. Unless you are a talented short-seller its time to seek professional help with your portfolio. Suppress your pride.

  • JG

    Jay G.

    28 7 2018 07:12

    1       0

    Adam Rodman completely nails this interview. Does he have a Twitter handle? Even his fund doesn’t. I want to follow this guy. Unbelievably well thought out investment thesis

  • PB

    Pieter B.

    26 7 2018 04:40

    1       0

    Thank you Adam and Roger! This was really great!

  • AV

    Adrianus V.

    25 7 2018 11:27

    0       0

    Good luck going long tankers. With IMO2020 coming up and the low entrance barrier for owners to build Afra and MR tankers means that if there’s a recovery they simply build more tankers. Hard to believe but that’s exactly what’s happening, too much money floating around on the side lines, especially China. There might be periods with spikes but over all a very tough market. Gas tankers on the other side totally different story, especially LNG tankers. Barrier to enter that market is much higher bc of capital involved and they’re not going to be effected by IMO2020 as they use cargo boil off as bumper fuel. Happy sailing!

  • SS

    Sam S.

    24 7 2018 17:19

    2       0

    Not sure I understand enough to rely on reactor operators non-responsive to price increases. 21 gigawatts and a new flux capacitor----back to the future. Maybe short term trades with a long term position to ride the power surges. Captain Kirk to Scotty-----I need more power!

  • PS

    Paul S.

    24 7 2018 07:35

    3       0

    Only issue with the uranium story is that the withdrawn low cost supply may be put on care and maintenance but it isn't depleted/withdrawn forever.

    Makes it difficult for me to see a significant ramp in U308 prices lasting for a time sufficient to benefit investors in developers - beyond the inevitable pump and dumps.

    The 'physical' ETF etc vehicles likely reflect this scenario - trading at such premiums to NTA. It is very difficult to get access to the theme at the prevailing low spot price.

    Great interview though, enjoyable

  • SR

    Steve R.

    24 7 2018 06:24

    4       2

    He's dead right about Blockchain technology!
    Everyone I come across thinks Blockchain is the solution to every problem on earth, they spew out example after example, until I then spew out example after example of how these so-called 'problems' have ALREADY been solved WITHOUT the Blockchain!
    Blockchain is largely a technology in search of a problem where there is none. And I work in technology.

  • JM

    John M.

    24 7 2018 05:35

    2       1

    Adam:
    Great interview. When we finally have a significant correction in equity markets do you think uranium & gold equities will follow the market down (at least initially)? Thanks.

  • LT

    Lucas T.

    24 7 2018 01:19

    7       0

    So if he is unwilling to say the miner names he is interested in, he probably has not accumulated his entire gold miner position yet and may be expecting more lows to buy more. If he was done buying, he would broadcast to the world his positions and why others should buy them.

  • jd

    john d.

    23 7 2018 22:21

    20       0

    Hi Guys.

    Needed to pause this after the U section just to add to Adam's comments. On the supply side, CCJ's looming decision on MR is a major one.

    In addition to this, the sector has a very small number of mines producing most of the global supply. It is also likely that the Rossing Mine (RIO), which is a high cost mine in Africa, will suspend production once their LT contracts (high prices) expire and they are exposed to spot prices (within a year or so).

    Likewise, the Ranger mine in Australia is winding down and due to Native Title issues (licence is not being renewed) will cease supplying U to the market by 2021 and Q-over-Q volume is currently falling.

    The Husab Mine in Africa (Chinese owned) is having significant operational issues and is unlikely to ever reach ifs BFS slated production numbers.

    Kazatomprom, which through its numerous JV's supplies 40% of global U, is an ISR operator. It would appear that they have cherry picked their best fields already and costs are slated to increase in the coming years and production fall. One report suggests by as much as 40% by 2030.

    Demand growth is baked in with EM new reactor builds, Japanese reactor restarts (2030 Government Policy commitment) and licence extensions at existing and aging Western reactors.

    All of this is occurring within an opaque market with the best data sources (UxC) being biased toward utilities as this is where most of their revenue comes from (like ratings agencies pre GFC).

    LT, IMO, this is the most skewed commodity sector for risk-reward out there. The various supply side catalysts are now actually occurring and accelerating.

    Re Ben Hunt, in Game Theory parlance, missionaries like Adam/ RV and many others are spreading the narrative and this is getting more widely received by an investing community which, in turn, will compete with natural buyers (utilities) for U (e.g. Yellowcake, UPC).

    Cheers John.

  • TE

    Tito E.

    23 7 2018 18:26

    2       0

    Roger you cheating swine!

  • KJ

    Kulbir J.

    23 7 2018 12:25

    13       7

    Adam when asked by Roger, if he'd share what's in his portfolio said 'Absolutely, happy to share anything you want to talk about' Yet, when Roger asked him which Gold mining stocks he'd recommend, he said he would like to deflect.

    That was not cool.

  • CC

    Christopher C.

    23 7 2018 11:13

    15       0

    Great interview. If you want to do a deep dive on the Uranium space Marin Katusa has some excellent content available on the web where he lays out who he sees as being the biggest beneficiaries and time frames for performance. IMHO if Gold holds 1200 we see a nice bounce from here. In the miners as well. (Weekly candle on gold looks promising for bounce.) If it drops below 1200 it could flush hard and quickly to next support level. Right now Gold is all about the dollar, CNY, and SDR. Yen looks to be positioned to take up most of the slack if the dollar flushes from here. Just spent 3 months in Brazil.... a couple of different business owners down there were actively but quietly speaking the possibility of the country splitting into two. Those aware are very concerned about what is happening in Venezuela and more recently in Argentine currency. They know it could spread.