After watching Antonio’s excellent video «I Lost Money in 2022, Here are my Mistakes» I thought I would make a version of my own. (I have made many of the same mistakes since I entered the uranium trade in 2019. The one recurring for me has been: “Don’t go in all at once, ease into a position”).
With this as the backdrop I thought I should look back at what I consider my biggest single mistakes of the last 1,5 years. All of it with the benefit of perfect 20/20 hindsight.
To do that I will go over what I wrote and did during late August to late November 2021 when we experienced a euphoric sentiment in the uranium sector. The Sprott Physical Uranium Trust had just launched their ATM and they were draining all available supply in the spot market. This led the spot price to shooting up past $50/lb from the low $30s mid August 2021 by mid September 2021.
During the same time we saw the uranium equities soar, many up more than 2-3X in less than a month. I do not think I was alone with refreshing twitter often for new numerco updates at the time.
I have the great benefit that I recorded my thoughts on “paper” during this time. The post I wrote on 23. October: «Are you keeping to your investment plan?» is the most damning evidence. There it says I increased my allocation to the uranium sector by 5% during September 2021. To put money to work when the sector is soaring is not exactly contrarian investing, to put it mildly. (This amount is now just barely in the green almost 1,5 years later).
Almost everything that I mentioned in the post as a possible bullish trigger for 2022 came to fruition (nuclear included in the Green Taxonomy, nuclear plants saved from closures, and Japan moving towards restarts), but the market did not reward any of this. The following year would come to be focused on the fear trade. Something that was far from our minds in September 2021.
With perfect prescience (Paul Atreides from Dune style) I should have kept my money in the bank longer. If you want to be a contrarian you deploy funds when the market is more despondent. People with more experience in the resource sector took some money off the table at this time. As my strategy is set on not taking anything off the table until my own set targets, I would not have done this, but I could have been much more disciplined at deploying the funds available. That is what a contrarian would do. I was acting like a trend follower.
I have been able to mitigate this mistake a bit by continuing to deploy funds to the sector in 2022. Sometimes I have hit bottoms, other times the shares found new lows after I had put my money to work. I deployed a large sum in December 2022, and it looks like that may have been the bottom for now.
I do not beat myself up too much with my mistakes, but I will try to learn from them, and I still have a lot of room for improvement.
Even if I have some money available at the moment, I will be more disciplined with deploying them moving forward. My position is already more than big enough that if the market goes on a spectacular run I will be handsomely rewarded. On the other hand, if we see another low in 2023, I will have money to deploy. With some cash set aside I can be aggressive instead of defensive. In the words of Rick Rule: “You are either a Contrarian or a Victim.”