The Bigger Short

➡ A significant opportunity is shaping up in the energy sector, specifically around uranium, due to a severe shortage of supply, against a rising global demand. Despite natural abundance, the deficit in uranium, essential for nuclear power generation, could lead to a dramatic surge or ‘super spike’ in uranium prices. This situation echoes the 2007 uranium bubble and resembles the scenario portrayed in ‘The Big Short’ movie, but this time around, it’s in the energy sector and not real estate.

The bigger short is shaping up and fortunes will be lost and made depending on which side you line up on. Just like in the original Big Short movie that made investors like Michael Burry and Kyle Bass fortunes and somewhat famous. But this time it’s not in real estate. Instead, it’s happening in the energy sector and one of the most important assets in the world responsible for powering. 30% of homes in the United States, 70% in France, and it’s about to be incredibly short in supply.

I’m talking about uranium. Now, regular viewers know that I’ve been making videos about uranium for well over a year. And while we might have been a little bit early, the uranium prices and companies have exploded higher. And now everyone’s talking about it, of course, after the moves have already been made. But in this video, I’m going to break down the massive bigger short that’s showing up in the uranium market.

I’m going to break down the math, what I think could happen and how we can all be prepared for what’s happening next. It’s a fun and exciting story with huge upside potential. So let’s go. All right. Welcome to the channel. If you’re new, my name is Mark Moss. I make these videos to change the way you think about money because, yes, almost everything you’ve learned is wrong, and everything they show us is wrong.

And it’s hard to know what’s going on. We have to cut through the chase. Now, I’m going to explain this to you. We’re going to break down some math so you can look at it. But before we do, I just want to jump in real quick and give some credit to my good friend, my good Budy Cuppy from Puerto Rico. When I lived over there in 2021, he was like my best friend.

He’s a brilliant fund manager, an amazing trader. Him and I, we shared many Friday night dinners, steak dinners at cowboys, and he would share his uranium thesis with me. He was right, and I’ve been right. And I’m going to share with you some more of his research and math, and I’m going to link to it in the show notes down below in the description if you want to go read his report.

So if you haven’t seen The Big Short, the movie, if you haven’t seen it, you should. And if you have, then you should watch it again because there’s a big correlation to what’s happening right now, but not in real estate again, but in nuclear fuel. I’m talking about uranium. Now, in the movie, the Wall Street guys in suits thought they were so smart. They thought there was no way that a group of Wall Street misfits could have figured out that the real estate markets were going to crash so spectacularly.

Now, when the misfits, Michael Burry and friends were negotiating, buying credit default, swaps the CDs with the banks, they laughed at them. The bankers couldn’t believe that anyone would want to buy insurance against these things failing. And if you haven’t seen the movie, I apologize. But spoiler alert, the banks were wrong. The banks were caught way off sides in this move and the squeeze happened. And the big short paid off huge for those misfits that saw the market misallocation and they took advantage of it.

And for those paying attention, like you and I, there’s another massive market misallocation forming, and it’s forming an even bigger short. And we can jump on it right now. So let’s look at some of the math. Now, you know, prices are the equilibrium of supply and demand. If demand is more than supply, prices go up. But usually those high prices are the cure for high prices. Unless, of course, the buyer has to buy regardless of the price.

What does that mean? So typically, when prices go up, people buy less of them. But in some cases, the buyer has to buy regardless of the price. And then if that’s the case, the prices just keep going up. So let’s break down some math here. Now, nuclear energy is now in favor, right? The world’s scrambling to add it. About 30% of the US homes use it for electricity.

And the US has just turned on a brand new reactor. China is building 150 of them. Even Saudi Arabia, the energy king, is building nuclear reactors. And they need uranium to run. Now, the world’s horribly short on uranium. So if we look at just some back of the napkin, some rough math, but if we look at the first, the supply, remember, it’s an equilibrium of supply and demand.

So on the supply side, in 2024, the primary supply will be about 150,000,000 pounds. The secondary supply will be about 10 million pounds for the total supply of about 160,000,000 pounds. Now, for the demand side, rough math tells us that the primary demand will be about 190,000,000 pounds. The initial fuel loadings will be about 15 million pounds, and the overfeeding will require an additional 5 million pounds. That brings the total demand to about 210,000,000 pounds.

So if you’re doing the math, back of the NAPCAN math here, it’s a deficit of about 50 million pounds. Now, there’s a whole lot of assumptions baked into those numbers, like assuming the big producers like Kamiko and Kazatom Prom, they hit their production targets even though they’ve had extreme difficulty the last few years doing that. It also assumes the situation in Niger gets resolved, that Russia doesn’t decide to withhold its supply.

That’s a big assumption that no other mines have technical issues, that more reactors don’t get lifetime extensions or permission to restart. Finally, this assumes that no government stockpiling and more importantly, no investment demand will permanently sequester pounds. Despite that, we’ve already seen investment demand in 2021 and 2022 running at about 50 million pounds. So the deficit, it’s massive, and it’s at risk of growing even larger. Now, the deficits could then expand for at least a number of years.

So first of all, let me just be clear. I don’t think that the world’s going to run out of uranium. It’s actually pretty plentiful as a commodity. However, there appears to be a gap period where for a few years, the deficits are going to just simply overwhelm the ability to ramp up new production. Remember, as investors like us, like in the Big Short movie, we’re always looking for mismatches.

And the bigger the mismatch is, the more profitable they can be. What I see setting up right now, it looks like it’s going to be a super spike in the uranium price that we’ve seen before. And I’m talking about not just a double, not just a triple, but a true super spike that could basically stun everyone. Remember, as a utility, you’re not allowed to run out of energy.

If you’re a utility with a nuclear reactor, you’re not allowed to run out of uranium. So if the price goes up, you just simply chase it. You have to continue to buy. And it looks like the market is just starting to notice this. If you look at the chart of the uranium, you can see that the price rallied hard into 2007. And then understanding why this happened in 2007 is pretty important.

So if we just look at Wikipedia, which by the way, don’t trust everything you read there, but in this case, we can see that the uranium bubble of 2007 saw exponential growth in the price of uranium, starting with a peak in 2007 at about 135 pounds per Wikipedia. This coincided with significant rises in stock price of uranium mining and exploration companies. Mining exploration, resource companies have a multitude higher because of the leverage.

Now, a possible direct cause for this bubble was the flooding of the Cigar Lake mine in Saskatchewan, which has the largest undeveloped high grade uranium ore deposit in the world. So a flood took out one of the biggest uranium deposits in the world, so it crimped the supply. Other factors are speculation, triggered by growing expectations around India and China’s nuclear programs and a reduction in available weapons grade uranium.

The bubble coincided with renewed discussions regarding a renaissance of nuclear energy. Now of course, that didn’t happen. It was talking about happening in 2007, but it didn’t. Now prices started to come down a little bit, coming back down to normal after that super spike. And then kind of the final nail in the coffin was the Fukushima reactor meltdown in Japan, which took uranium price down 88%. There was also, because of that happened, there was a safety issue.

There was a negative view of nuclear energy. But now that’s all changed. And today nuclear is back in fashion. Politically, things have changed in a big way. With nuclear energy support now being mostly bipartisan today, most governments are now pro nuclear technology’s changing. We have small modular reactors. They’re starting to emerge. Even Google is buying small reactors to power their server farms. Sam Altman from OpenAI is investing in them.

And even Bill Gates, I’m no fan of him, but you can start to see the sentiment shifting. The markets have woken up to the nuclear and uranium back on the rise. The new bull market is here. A few of the companies I’ve covered on these videos in the past few months and years have really started taking off. As a matter of fact, several of them up 100% in just the last few months.

But I still don’t think any of them realize just how short the actual energy companies are and what the squeeze is going to do to the price. Now, playing this market is tricky. You can’t just take delivery of uranium. Obviously, most of the big companies have already had big moves, and so you don’t want to chase them. The time to get in was when I was talking about them last year or two.

But there’s some really good ways to play it right now, and that is in one of the companies ready to bring fresh new supply to the market. And I want to break down one of them for you right now. Now, as I say, once in a while, I’ll do these videos, and it’s full disclaimer. This is a promotional video. I’m not telling you to buy this. This is for educational purposes.

It’s promotional. But I do want to show you exactly what I’m looking at. How you can find your own great deals and so you can learn more about the different regions, how these companies work, and again, how you should evaluate your own deals, how you vet the team, how you invent the insiders, and more. Okay, so what happens when some of the most successful resource investors in the world quietly assemble the largest land package in the very best uranium region while uranium was in a bear market and very few people noticed? And then they get that package and they make it ready to go right as uranium market takes off? Well, if that all happens, you get an expansion, you get an explosion.

And that’s what’s about to happen with Atha Energy. The symbol is Saskf, which they now own the largest land package in the prolific Athabasca region. And they’re not just bigger than uranium explorers. They’re bigger than everyone. So how did all this happen? Well, it starts with talent, and experience always starts there. So that’s why we always start looking at the team. Now, first we have Matt Mason and Tim Young.

They’re two wildly successful prospectors in the area. They’ve been there for over two decades, and they’ve made a bunch of big discoveries. And more importantly, they successfully sold them off. One thing to build them, it’s another thing to sell them. So, for example, Hather Exploration, which was sold off to a big name. Maybe you’ve heard of Rio tento. Back in 2011, they had another really big discovery that was sold off to Next Gen Energy, which is one of the most celebrated energy companies over the last decade.

They crushed it on this project. After Next Gen drilled it, their stock price jumped from seventy cents and went all the way to $8 today. And for Matt and Tim, who found it, they still own 10% of the company today. So they’re rich, they’re successful, they’re very well known in the area. And I always like to start there. I always like to start at the team. Investors, we invest into people, and Atha Energy has a stellar group beyond those two.

We can look at the founders, obviously, but we can dig in deeper. We can see Troy Boisjali atha’s CEO. He was previously, before he was at Atha, he led development of aero development, and under his leadership, he increased their resources by 70%, which causes significant price appreciation for the stock, as you could imagine. And before NextGen, he was with Kamiko, which is another massive giant in the space there.

He worked on projects in the Saskatchewan area, eagle Point Mine, and he made them more efficient in producing better. Under his leadership, he took a mine that was already had exploration on it, had already 10,000 holes drilled that had been producing for over 25 years. And with his fresh look, with his skill, he was able to find another 52 million pounds of uranium. There’s also Doug Ingledall. I don’t want to go too deep into him, but just Google his name and you’re going to see he’s one of the biggest names in the space.

Also previously working for the giant Cam Eco as well, at the MacArthur River facility, you also have Mike Castano, he’s their CFO now. He’s in the money guy, he’s the finance guy, and he’s already helped them raise $25 million. And if you look at the insider filings, you can see that he’s been buying stock every few days for the last three months now. So the team is stellar.

Now, the next thing that I look at after the team is I want to look at the project itself. And like I said earlier, they’ve accumulated the largest land package in this entire basin. It’s over 3. 4 million acres. It’s literally surrounding everything and anything that’s in the basin. And their foresight and genius had them doing all this right after the Fukushima disaster, right when uranium was hated by, when there’s blood in the streets, so to speak.

So they bought it when it was hated, when nobody wanted it, and so they were able to get it all basically dirt cheap. They bought dirt for dirt cheap. They made the ultimate contrarian bet over twelve years ago, and now they’re taking it public. Now, another thing that stands out on this deal is the shrewd deal making these founders have made. You see, when they sold off the previous successful projects in that energy giant to Next Gen and ISO Energy.

They created special carried interest deals, and they vended them to Atha Energy. This special carried interest is like having a warrant or an option on the company. So as those companies continue to drill and develop, they’ll call Atha and ask, hey, do you want to spend some money into this and earn on the deals? Then Atha has the option to participate in the growth with no additional cost or risk, all upside.

So Atha Energy has the land package. It has the team, it has the track record, it has the interest on two of the most successful projects in the region. And they have huge stockpiles of cash now in the bank. And they’re currently surveying and getting ready to drill right now. When they raised 25 million, it was at a $1 stock valuation. And today we can still get in about close to that.

It’s about a dollar 20 or so right now. And I like it because it shows that it’s, well, one, we’re close to where the insiders got in, and it also shows that the market’s already starting to see the value and it’s already starting to move up. Now, this company has the most amount of cash of any explorers in the basin. So think of it this way. Uranium bull market? Check.

The best jurisdiction in the world? Check. The largest land package in this jurisdiction, check. Considerably the most amount of cash on hand, check. Not a single drill hole in the ground yet. So all the upside potential is in front of us, check. And two founding shareholders and a CEO whom amongst themselves created billions of dollars in shareholder value, check. Now, it’s like having a huge ETF on exploration in the basin.

And if you think uranium is about to see a massive shortage like I do, and uranium is in a bull market like we can already see, then you’re going to want to have a piece of the biggest land package in the best region for uranium in North America with a successful and experienced team. Now, I do want to say real fast that I love these small producers because the returns can be massive, but they can also be very volatile.

They can also be very risky. Other uranium companies I’ve talked about were volatile, right? We saw them go down after I talked to them, and it took a while before we saw their prices shoot up. So you need to manage your risks appropriately. You need to manage your allocation size appropriately. You need to manage your stop losses, and you also have to have the right time frames. These things take time to develop.

But however you take advantage of this new uranium market that’s just starting, don’t take your eye off of it, because I think it’s going to be a long bull run. But let me know what you think. Is uranium back? Is nuclear power back and if so, will the price shoot higher? And how do you plan on taking advantage of it? Leave me in the comment down below. Of course, as always.

Give me thumbs up if you like the video. If you don’t, you can give me a thumbs down. That’s okay. But at least tell me why in the comments down below. Subscribe if you’re not already. And that’s what I got. To your success. I’m out. .