Do battle with what you don’t understand.
I have a contentious relationship with abstract art. I’m not a stuffy traditionalist, either; and while I don’t particularly enjoy impressionist art, I don’t need to love Monet’s water lilies to work myself up to an understanding of why his paintings are so beloved. Among the brushwork and the color palette and the novelty of subject and form, there are intrinsic things that art experts can point out to me as exemplary. Experts help me turn my “I don’t get Monet” into “I don’t fully appreciate what went into the creation of this work.” It’s a losing errand trying to objectively analyze art, so I can rest easier knowing that I’m not a bad person if I don’t much care for Monet.
Which brings me back to abstract art.
I’ve spent a fair amount of time in art museums over the years, especially for a Midwestern philistine trained in the sciences, so I can identify a Marc Rothko painting from a mile away. There it is, hanging on the wall in the modern art gallery, taunting me. It’s not an original thought to say that I don’t get Rothko but, well, I don’t get Rothko.
Rothko was a fairly prolific artist, too, so almost every big US art museum has at least one. Most of them are huge (the one above is nearly three meters tall) and colorful. And when I see one, I begin my psychic battle with it as if I were from Asimov’s Second Foundation.
Rothko always wins.
When I lived in Washington D.C., I brought friends with me to match wits with Rothko. “Why is this considered good,” I’d whisper to my friend in the quiet gallery of the modern wing of the National Gallery. “Is it the brushwork? The canvas?” My friends were as clueless as I. And so finding (and facing off with) the Rothko wherever I go became a bit of a ritual for me…and I’m still winless. Rothko remains on display worldwide.
Another abstract feature of the National Gallery is Barnett Newman’s Stations of the Cross – fourteen sequential works arranged along the edges of an isolated gallery with a wooden bench at the center. It mystified me. So I’d sit there and try to figure it out.
And I remained clueless; the meaning continued to allude me. I could find no implicit reason as to why this art claimed such a hallowed spot at a top-tier museum. I returned to the gallery again and again, frustrated by my inability to “get” it.
“Why are you so obsessed with these paintings, dude?” My friend said, nudging me towards a more engaging museum on our visit to the National Mall.
My transfixion with the series, with the space, with the ritual of returning to the same spot to look at the same art – I already knew what made this art special because I was totally under its spell. It’s the entirety the space – the quietness, the lightning, the straight lines, being surrounded by the starkness of it all – that can’t be felt by looking at .jpegs of the paintings online.
The beauty of Newman’s Stations, and of the various Rothko paintings, is how they make me feel. I don’t understand them, and it’s in the lack of understanding that I am drawn back to them. And as my relationship with these paintings (and all art, really) changes over the years, I will know that I am no longer in the place that I began.
data is not information
We are awash with data. Even our sports are infected by a 24-hour news cycle and the multiplying horde of advanced statistics. We count cases and standardized testing scores and a dozen greek letters on our options tab and polling data on whether we liked the tan suit the president wore. The tree makes a sound when it falls in the forest because we instinctively record every bit of data on the slightest chance it’s valuable one day. Google ferries us directly into the inner sanctum of every field and every trade, into places once reserved only for the experts.
But data without narrative is noise, and too often our narratives are written by folks with less-than-objective outlooks rather than experts looking to turn data into information.
Like my war on Rothko, I am also at war with uranium. It hovers over my life like the Moon menaces Clock Town. There’s so very much data, but I’m usually dissatisfied with what I read in the public sphere about that data. Uranium’s rapid ascent is a foregone conclusion in too many minds, and every bit of news must support that conclusion or risk being discounted as FUD. “I don’t know” is a deeply unsexy phrase in a world of triple-digit price targets and laser eyes.
uranium isn’t really a commodity
I would never be so ignorant as to claim that markets like gas and oil are simple, but there is a simple sort of comfort in transparency. Commodities with a robust futures markets and significant interest on both sides of the trade feel complete. The making of this sausage – the sausage here being the ever-evolving consensus of market-makers expressed in the bid/ask of futures – is the handiwork of thousands of professionals doing and re-doing the numbers. And I find the predictions of futures markets believable, at minimum, given the heft of knowledge and power that goes into their making.
When news breaks – a wellfield fire, an unexpected election outcome, a big move by a major producer – those futures markets indicate how this news will affect the forward curve. Smarter minds may know better than this snap consensus (fortunes are won and lost in the knowing), but this rudimentary compass is available to test my own initial reaction.
And at least for the big commodities, a tourist can rely on a few things:
- There is a community of professional analysts working in the space
- There is significant financial interest on both sides of the trade
- There is price transparency
- There are regulations governing reporting and market structure
For uranium, there is a dearth of professional analysts, a limited number of participants taking directional positions (with effectively zero volume in futures), minimal price transparency available to the public, and inconsistent reporting across jurisdictions. A lot of these problems arise from the small size of the uranium market, but some of them probably persist out of inertia (or spite). There’s no one-size-fits-all uranium contract. And while there are several indicators for the price of uranium, such as what is available via brokers and analysts, it’s a far cry from the sort of pricing data we get in more substantial markets. Even worse is that the only exposure most uranium investors have to these specialist uranium analysts is meta-criticism from prominent investors and bootleg conference slides. [The bootleg slides posted to twitter are usually missing the “do not duplicate or photograph” disclaimer…so much for an accurate reproduction.]
So when uranium news breaks…*crickets*. Take the example of Cameco’s Monday morning announcement in December 2020 that Cigar Lake was temporarily closing under duress from COVID-19. The world’s largest operating uranium mine placed on indefinite shutdown – to uranium what all of Saudi Arabia is to oil – and the price didn’t move. Flat for days in a year-end crunch. This isn’t to say that there wasn’t any indicator of a sentiment shift, as uranium equities responded with a few green days and a subsequent run-up, but there was very minimal underlying price action and even weakness in the new year. How far down the list of commodities would we need to go to find a true comparison to that kind of anemia?
terms of engagement
As much as investors professional and retail believed that an increase in the underlying uranium price was (is) imminent, the data defied their expectations. Even now, in the midst of a buying spree by financials and developers and producers alike, expectation is still (at least somewhat) disconnected from reality. How are we to understand something that so deftly and so regularly defies expectation?
We need to chew on it. It’s more modern art than modern science.
Without the guideposts of more efficient commodity markets, we are forced to use less than perfect data. We chuck animated gifs at Numerco tweets. We take counsel from biased sources. We scale the paywalls. We retweet nonsense because it aligns with our views. We use EV/lb. [Please, for the love of all that is good, stop using EV/lb.] But it is all a bit unsatisfying, isn’t it?
With the clean lines and beautiful shadows and dignified content of Renaissance high art, “normal” commodities are easy on the eyes. Accessible, even. Uranium is abstract. Opaque, but enticing in its evasiveness. But it’s an altarpiece made of tinfoil where natural gas’ is made of marble; it’s tucked away in a side gallery off the beaten path. Lots of new eyes are on the space these days, though.
If we want to understand the possibilities of the future of the uranium space, tempered down from Doctor Strange’s 14,000,605 possible outcomes to merely a handful, it requires real, honest engagement and wide open eyes. And a double-spoonful of “I don’t know.” The fun of this is that ah-hah! moment when months of grinding yield one or two great insights.
Art criticism is dumb. Writing a blog about uranium is also dumb. Combining both is not much better. But if I am to hide something down here at the bottom margin, some last pearl of wisdom, it’s that uncertainty is ubiquitous in today’s uranium space. But my own attempts to conquer the fog at the edge of the map (or in this case, forward in time) have been rewarding, and I credit the uranium twitter community for good banter and great networking, chipping away the excess marble of my ideas down to a more presentable state. So give me a shout if you ever want company to stare down a Rothko…or a juicy technical report.