L2 Capital

In today's episode, Marcelo López spoke to Shawn Hackett, president of Hackett Financial Advisors, a company that specializes in providing advice for farmers and hedgers about soft commodities, based on analysis and forecasts of climate cycles. Hackett Financial Advisors helps traders and producers make decisions in agricultural commodities in order to better conduct their business.

Shawn initially discusses global warming and climate change, issues that have been around for some years. He argues for the non-anthropogenic factors that historically influence the planet's climate, in contrast to the view that the human factor is paramount. Hackett explains how solar cycles work, how long each cycle is, the impact that changes in the sun bring to Earth, what sunspots are, what they represent in terms of physical phenomena and how solar winds affect our planet.

Shawn comments on the importance of understanding and monitoring solar cycles for agricultural commodities and how reliable these cycles are. From an historical perspective, he links these cycles to geopolitical and economic events and also to food production abundance and scarcity.

Hackett explains that the sun rotates around the centre of mass of the solar system and not around itself, as one might think. He then correlates this characteristic with the influence that solar activity has on the planet Earth under given circumstances.

According to him, other variables are also important to understand the climate and the changes to which it is subject. He talks about the temperature of the Pacific and Atlantic oceans and their own cycles and how these cycles, associated with solar cycles, impact the climate in the world. Shawn also talks about the El Niño and La Niña phenomena and their relevance to the climate.

Shawn talks about the moment we are in in relation to solar cycles and ocean temperatures, and the effects that they will have on planet Earth. Hackett also talks about the existing technologies to deal with adversities in agricultural production and comments on which commodities producers and traders should seek exposure to at this time.

In today's episode, Marcelo López spoke to Paul Ma, director of CGN Mining, a company that is part of the China General Nuclear Power Group (CGN), the world's third largest nuclear power corporation, and a member of the board of directors of Fission Uranium.

Paul has more than 10 years of experience in the uranium industry, including exploration, development, mining and investment activities. He is responsible for CGN Mining's overseas operations, including development, mergers and acquisitions.

When asked if the uranium market is an opportunity, Paul brought an elaborate explanation, putting into place the most relevant events for the sector over the past 20 years from an historical perspective. He highlighted the characteristics of the last bull market along with several important factors and how they have changed, such as the role of low-cost producers, the Fukushima incident, expectations, the installed capacity of nuclear reactors worldwide and the signing of long-term contracts.

Ma highlighted the existence of a deficit between world demand and primary uranium production and discussed the availability of the commodity in the spot market, the possibility of taking advantage of prices to increase inventories and the importance of guaranteeing a sustainable and reliable supply throughout several decades of a reactor's useful life.

Paul spoke about jurisdictions that he considers interesting for carrying out asset acquisitions in the uranium mining sector, provided some details about two projects recently acquired in one of these locations and mentioned the characteristics he seeks in an M&A operation.

Paul commented on his perspective regarding the expansion of nuclear energy production in the Asian giant, highlighting the technologies used, the importance of reactor standardisation and economies of scale in the process.

Ma also talked about the level of uranium stock in the country, the level of prices observed today and ended by explaining the main risks he sees for the sector.

In today's episode, Marcelo López spoke with Anas Alhajji, a partner at Energy Outlook Advisors, as well as an internationally recognised author, speaker, researcher and specialist in the energy markets.

Anas begins by discussing how the issue of the types and quality of oil is important and how that impacts the world trade in this commodity. In this context, he talks about the characteristics of shale oil produced in the USA, the structure and capacity of North American refineries, the country's exports and imports of oil, the future demand for oil products and the impact of natural gas on the market.

Alhajji talks about the sharp drop in the price of oil this year and how the crisis that the sector is going through is unprecedented and the inconveniences and uncertainties that this creates for OPEC. He talks about his expectations regarding the impact of the coronavirus on oil demand and price.

Anas highlights in his analysis the influence that the American presidential election has on oil producing countries and how this is a decisive factor for the price of the commodity in 2020.

Alhajji points out that the years 2021 to 2023 should be very interesting for the sector and predicts a major global energy crisis, to which he attributes different factors, such as, the underestimation of future demand for oil products and the hype of electric vehicles.

Anas also states his point of view on the dynamics involving shale oil from the United States and Canadian tar sands.

When it comes to investment, Alhajji talks about how he prefers to position himself and where he sees more value along the sector's production chain. He also lists the main risks he sees for the sector and what can be done about the crisis he foresees.

Alhajji discusses his point of view on the expectations of oil demand made by many analysts and the exaggerations that these analysts make when estimating the impacts of certain changes.

No episódio de hoje, Marcelo López conversou com Fernando Ulrich, sócio da Liberta Investimentos, palestrante, autor do livro “Bitcoin: a moeda na era digital” e conselheiro do Instituto Mises Brasil.

Fernando conta sobre sua trajetória profissional, como vivenciou a grande crise financeira de 2008 e como teve seu primeiro contato com a Escola Austríaca a partir de então, mencionando figuras que o atraíram para o assunto, como Ron Paul e Peter Schiff.

Ulrich, que cursou mestrado em economia da Escola Austríaca em Madrid, explica como surgiu e se desenvolveu essa escola de pensamento econômico por meio de expoentes como Carl Menger, Eugen von böhm-bawerk, Ludwig von Mises e Friedrich Hayek.

Ele traça um paralelo com outras escolas de pensamento e esclarece por que os austríacos ficam excluídos do mainstream e do currículo das universidades, com menção à forma como enxergam a economia, o efeito das políticas públicas e a intervenção governamental.

Fernando, que é um entusiasta das criptomoedas, especialmente do Bitcoin, explica por que ele acredita no futuro das moedas digitais e aborda críticas relacionadas a elas, como volatilidade e funcionalidade como meio de troca e reserva de valor.

Quando o assunto é bolsa brasileira, Ulrich apresenta o case para o investimento em ativos de renda variável do Brasil, com considerações sobre as políticas públicas atualmente em curso, macroeconomia, composição do principal índice acionário local, fluxo de capital, participação de estrangeiros e responde se ainda vala a pena investir por aqui.

Sobre o dólar, Fernando dá uma explicação para o porquê de a divisa norte-americana estar no atual patamar frente ao real e fala quais as perspectivas para a moeda. Nesse contexto, ele ainda argumenta sobre a importância de se investir no exterior.

Ulrich comenta sobre os mercados globais e como a atuação dos bancos centrais e os movimentos recentes do Fed impactam os preços dos ativos mundiais. Ele discorre sobre existência de uma bolha de tudo (the everything bubble) e a repercussão que as políticas monetárias têm na sociedade geral e na política, além de tratar sobre como o Brasil reagiria na eventualidade de um crash.

In today's episode, Marcelo López spoke with Kiyan Zandiyeh, CEO and Portfolio Manager at Sturgeon Capital, a London-based investment management company founded 15 years ago and focused on frontier markets in Central Asia and the Caucasus.

Kiyan explains that the company, although based in England, has teams scattered in loco in the countries in which they invest in. This enables them  to follow the local perspective and to manage, in an optimized way, the investments they make in these markets.

The main opportunity highlighted by Zandiyeh and the central theme of this episode is Uzbekistan, a country that, according to him, has essentially attractive characteristics, such as large population, favorable demography, economic diversity, large reserves of natural resources and solid foundations in terms of public finances.

Sturgeon, who has invested in Uzbekistan for 8 years, has followed the profound transformation that the country has undergone in the past 2 and a half years, since the president died and the dictatorship began to dissolve.

Kiyan tells us how the new president, until recently Prime Minister, is leading an agenda of deep reforms and restructurings that are promoting the opening of the economy, which was remarkably closed, and the country's de-bureaucratization. He gives examples of changes in the productive sectors and the foreign exchange market that have had a profound impact on the economy.

Zandiyeh also talks about the stability of the new government and about the country's growth drivers and compares it with neighbours and peers. It specifically addresses the banking sector and the opportunities that exist there.

Kiyan comments on the country's capital market, liquidity, fixed income securities, private equity and the way chosen by Sturgeon to capture the identified investment opportunities.

Finally, Zandiyeh gives his point of view on how the Uzbek economy would react in the event of a crash in global markets and what the main risks of investing in the country could be.

In today's episode, Marcelo López spoke with Mark Gordon, CIO of the Ascent Oil Fund. Before taking his current position, Mark worked for companies such as Goldman Sachs, Soros Fund Management and Janus Henderson, where he focused on investments linked to the energy sector.

Mark explains that the Ascent Oil Fund was formed under the view that there will be a migration in the oil market’s perception from abundance to scarcity, which will cause shares of companies in the sector to rise substantially.

In the context of recent tensions involving the US and Iran, Gordon explains how conflicts in the Middle East may or may not impact oil prices, depending on the factors involved.

From a historical perspective, Mark discusses the role that perception and sentiment, regarding oil scarcity or abundance, plays on prices and market performance. He also lists the reasons why he believes we are in a transition period in regards to this sentiment.

Gordon still contrasts the inventory and sentiment factors from the point of view of their influence on the price of the commodity and its related assets.

Mark talks about shale companies, highlighting the operational and financial aspects compared to conventional oil companies, their advantages and also points criticised by analysts. After that he puts forward his expectations for the industry.

On the recent performance of oil and gas stocks, Gordon provides insights into the possible reasons for the poor performance of securities, especially the E&P ones, even amid higher oil prices.

Mark brings a totally unexpected perspective on the impact that electric vehicles have on the oil sector and the consequences he sees on the development of the EV industry.

Finally, Gordon talks about how he is investing to capture what he believes to be a turnaround in the oil and gas industry, highlighting the types of companies he is fond of in the current scenario and the ones he believes should benefit from the change in sentiment, from abundance to scarcity.

In today's episode, Marcelo López talked to Harris Kupperman, mostly known as Kuppy. Harris is the founder of Pretorium Capital and is famous for being a fund manager with unconventional investment ideas, some of which he writes in the blog “Adventures in Capitalism” (https://adventuresincapitalism.com/). He is always looking for asymmetrical investment opportunities in sectors that are disregarded or even scorned by most investors, which generally end up being the ones with huge potential for appreciation.

Initially, Kuppy discusses his views of the current market and system situation, the possibility of a crash, the factors involved, inflation, central bank performance and comments on what he calls Ponzi stocks.

In this context, Kupperman discusses private equity, the preference of institutional investors for businesses involving privately held companies to the detriment of publicly traded ones, players' perception of volatility and the risks involved in this type of market.

Kuppy talks about being short on the market under current circumstances and how he prefers to be long on some assets as a way to position himself for a market turnaround. From this perspective, he presents the investment thesis of the second largest position in his portfolio, with considerations on micro and macroeconomic aspects, which show his thinking when seeking investments.

Harris also compares the latest financial crisis of 2007-08 against the current scenario, with considerations and analysis of interest rates, defaults, the real estate and mortgage markets.

Kuppy talks about commodities and explains why he believes they are the biggest investment opportunity at the moment. On this occasion, he highlights uranium and its peculiarities.

Kupperman, who participated in the last uranium bull market, describes the factors that influenced the last cycle of appreciation of the commodity, and draws a comparison with the current situation in the sector.

Harris explains the investment thesis involving shipping companies, which today is the largest position in his portfolio. He highlights the cyclical behavior of the industry and the factors that may be critical to a huge appreciation of companies in this industry.

In today's episode, Marcelo López spoke with Mike Alkin, co-founder of Sachem Cove Partners and manager of an American uranium-focused hedge fund. Mike has been following this market for over 4 years as an investor and was a speaker at the International Uranium Fuel Seminar hosted by the Nuclear Energy Institute (NEI) in Nashville, USA, in the last week of October.

Alkin, who also attended the World Nuclear Association (WNA) Symposium in London, commented on the biennial report released by the organizers and on the differences between the two events, highlighting the significant attendance of uranium buyers at the NEI-hosted seminar in the USA.

Mike spoke about his presentation at the conference, which focused on the uranium price discovery, i.e., the process of pricing the U3O8 market from a macro and historical perspective. He drew attention to the fact that this industry is scarcely covered by sell-side analysts, and that the consensus adopted by the uranium buyers lacks important and easily refuted fallacious aspects.

In addition to highlighting factors that are hindering the industry, such as the Section 232 petition and the Trump administration's creation of the Nuclear Fuel Working Group, Mike talked about the functioning of the spot market, its peculiarities and the movements it has observed in terms of player participation and trading volumes in contrast to other times and circumstances.

Finally, Alkin discussed a major issue for investors in the industry, which is the inactivity of buyers in the face of low and unsustainable prices in an attempt to anticipate a price hike and secure low-priced material. Mike explains how the activities of buyers' professionals are structured, the incentives they have and the way they have acted historically.

In today's episode, Marcelo López talked to Otávio Costa, better known in the financial markets as Tavi Costa. Tavi is a portfolio manager at Crescat Capital and he is responsible for macro research.

Tavi begins by talking about his trajectory in the financial markets and tells us more about Crescat Capital, an American company that manages hedge funds. He has been working for this company for the past 6 years.

Then Tavi talks about the main topics he's looking at right now and gives us an overview of those topics.

Tavi then discusses each of the themes in more detail, exploring historical data and using Crescat's proprietary models.

He has a very interesting insight into the US position in the current cycle, and presents data to justify his opinion.

When it comes to precious metals, Tavi discusses the current scenario and outlook for the sector. Also, Tavi talks about the relationship between the US Dollar and gold, with a very different point of view from the market.

Tavi also talks about China, likely future developments in that country, and what Crescat Capital is doing now.

Finally, Tavi reviews his investment thesis and says what can make him change his mind about his investment positions.

In today's episode, Marcelo López spoke with Bram Vanderelst, head of the uranium trading desk at Curzon Resources. Bram, who attended the World Nuclear Association (WNA) Symposium in early September, agreed to come to the L2 Capital podcast and share with us his market insights and his experience in this profession, which is so little known.

Bram Vanderelst, who is a chemical engineer, tells us about his experience and professional career and explains that at Curzon they have a dedicated desk for buying and selling uranium daily in the spot and long term markets.

He, who has accumulated more than 6 years in the profession, talks about the role that a uranium trading desk has for the nuclear fuel market and how it provides liquidity for the industry, even though there are large participants from both sides, i.e., utilities and miners.

Bram talks about the daily life of a trader's profession in a niche commodity such as uranium, the kind of information that has to be researched, contacts that need to be made, and the analysis that needs to be done.

Bram Vanderelst discusses his view of the market with an analysis that begins with the events of Fukushima, the reverberations that the incident caused on the market, on uranium stocks and how the situation has evolved since then. He also comments on the commodity supply deficit and the outlook for supply / demand balance, with comments on the sources actually available.

Bram Vanderelst also discusses the issue of inventories’ tracking, the availability of data and figures related to them compared to other commodities such as oil, for example.

Vanderelst analyzes the effects that Cameco's announced purchase in the spot market of 10m lbs of U3O8 by year-end should have on prices, with considerations of material availability at different price levels and locations.

On the possibility of price variation between locations, Bram explains the arbitrage practices and the reasons that lead to divergences within the context of the nuclear fuel cycle.

Vanderelst makes an assessment of the factors that led to a sharp rise in the conversion prices of U3O8 to UF6 and the possibility that something similar could occur with yellow cake, going through current price levels, mining incentives and the specificities of the uranium market.

Finally, Bram draws attention to what he considers to be the risks that investors, utilities and miners could be ignoring or not paying due attention to.

To know more about L2 Capital Partners, please check out our website!

The L2 Capital Podcast focuses on potential opportunities in the market, and brings to you industry leaders and intelligent conversation about their respective areas of expertise.

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