The Nuclear Bull Market
If these all come on stream, that means we will have over 619 or a 40% increase of nuclear reactors in the world, not counting the results of many studies by more and more countries looking for alternatives to a shrinking oil supply.
Even well known environmentalists are starting to advocate nuclear power as the prime alternative to fossil fuels. Patrick Moore, one of the founders of Greenpeace said "Expanding nuclear energy is one way that we can actually [reduce] reliance on fossil fuels in a big way," "Nuclear energy is the only non-greenhouse gas-emitting power source that can effectively replace fossil fuels and satisfy global demand."
USA Today reports that: "Nuclear power creates virtually none of the pollution that causes climate change and delivers electricity cheaper than other forms of generation do. If more reliable and cleaner energy is the goal, nuclear power has to be part of the solution." So what does this mean for investors?
The key for investors is to understand that nuclear plants are powered by uranium. Without uranium, it is lights out. What investors also need to understand is that the cost of uranium in the overall cost of running the nuclear facility, is minimal compared to other fuel sources. As the cost of uranium increases, the impact on the cost of the nuclear plant is minimal. This is not the case with other forms of energy.
Uranium also has the advantage of being a highly concentrated source of energy which is easily and cheaply transportable. The quantities needed are very much less than for coal or oil. One kilogram of natural uranium will yield about 20,000 times as much energy as the same amount of coal. It is therefore intrinsically a very portable and tradable commodity.
Like any new bull market, the initial investors always "look wrong" to the investment world - it is a fact of the human psyche. Three years ago to even suggest that Nuclear power was a solution for the global energy needs was considered "ridiculous". Today, we have leading environmentalists promoting nuclear power as the leading solution to global warming and the high cost of fossil fuels. Supply-side deficit a reality.
From Morgan Stanley - Global Insights Mining fails to keep pace with demand. Uranium mine production in 2003 satisfied only 53% of our estimated demand for uranium. The balance of demand was met from stock depletion and dilution of weapons-grade highly enriched uranium. This has been the case for at least the past three years, when mine production accounted for only 55% of demand. This situation has, in our opinion, kept prices relatively low until recently, with utilities now starting to push prices higher in anticipation of a supply shortage.
Make no mistake, the uranium consumption worldwide is increasing dramatically and the supply is dwindling. The boom for this sector is started now and those who invest in it now could be in for the investment opportunity of a lifetime.
The simple fact is that Uranium is in a crisis shortage, and the supply gap is growing by the day. In 2003, we recommended uranium stocks to our subscribers when uranium was selling for $11 a pound. Today it is selling for $62.50 a pound - meaning that uranium has increased over 468% in 3 years!! Better yet, most of the stock prices of the uranium companies that we invested in have skyrocketed to over, 500%, 700% and a few over 1,000% in that same time period.
As well as these stocks have done, there are plenty more profits to be had. The truth is that the mass investor has not even heard of investing in uranium and has no idea that there are uranium stocks on the market. At this point, the average investor doesn't know the difference between uranium and aluminium. They have no idea that you can buy shares of uranium companies that explore and produce uranium. Check it out - ask a friend or work colleague who you know invests in the stock market to name you one uranium company - then watch the expression on their face. Ask the same question in 2 years and we bet they will know 2 or 3.
Although uranium has skyrocketed in price the past few years, it is no where near the level that we believe that it will reach. In early 1980, uranium was priced at $110 (adjusted for inflation). We fully expect that uranium will again reach this level on this bull market. If we are correct, then there are some huge profits to be had for those investors savvy enough to get in before the masses do. Uranium is starting to get some play in the mainstream media. Recently, we have seen China sign a significant deal with Australia securing large amounts of uranium for their planned nuclear expansion. We reported over a year ago that the Chinese have been looking into many of the Canadian uranium companies as well. We believe that this is just the start of some huge deals to be made as countries look to secure their energy future.
Similar to the precious metals, uranium will slowly move from page 16 news, to page 1 news. When it reaches page 1 news, the masses will jump on board. And when they do, we will be selling. The successful investors are the ones that identify new bull markets, invest in them early, then sell out of these markets once the mass investors jump in. When everyone moves to one side of the boat, it is time to get off the boat.
The bottom line is that demand has outstripped supply by 160%, and this gap is growing every day. The Time To Act Is NOW!
The fact is, the price of uranium is up over 460% in less than 3 years. There are no guarantees in life, but we believe that investing in uranium is the closest thing we have seen to guaranteed profits in over 20 years. We believe that this is an investment opportunity that is greater than the internet boom, and even greater than the gold bull market currently under way.
Related Tags: uranium, bull market
If you are interested in participating in this uranium bull market and want to know what stocks we are buying and why, simply click go to thetrendletter.com/nuclear_bull.htm and select the subscription option that suits you best.
Martin Straith - editor of the Trendletter @ www.thetrendletter.com.
Article Source: thetrendletter.com/nuclear_bull.htm
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