Two Events Just Hinted At Explosive Growth Ahead

Last Monday the administrators were called into Paladin Energy. Paladin if you’re not familiar is (or should I say was) a uranium producer. 

Bankruptcies happen all the time, so why should we care? 

Well, for starters Paladin wasn’t just any company.

It was a previous market darling in the last uranium bull market. It has now followed some 80% of its siblings into a death spiral where employees are released back into the wild armed with pink slips, equity holders have been rewarded with brokerage statements all neatly printed… in red, and management teams get to bicker amongst each other as to whose fault it is while their trophy wives are told they’ll have to forego the collagen implants.

This is what happens in devastating bear markets.

Here is what equity holders have been treated to for the last 5 years. You could have had more fun setting fire to your own hair.

Now that equity holders have been wiped out, the bond holders will be left to fight over the remaining assets.

Better than being an equity holder but not a position you’d want to be in. 

The reason I bring this up is because this is EXACTLY the kind of news I love seeing. Not because I’m a mean bastard, even though I’ll admit to a certain amount of satisfaction in seeing this probability ahead of time and steering clear of Paladin. 

I love it because supply and demand matter a great deal and, quite honestly, when I invest, I want an unfair advantage. Paladin rolling over and pointing its feet at the sky decreases the supply side and increases my advantage.

When companies fail, their stock goes to zero. The bond holders are left to squabble over the leftovers. But also… when this sort of thing happens in the face of a favourable (yes, favourable) supply and demand setup, then it’s time to put down your coffee and pay attention.

Here, take a look at the entire sector I’m talking about: