June 18, 2007, 2:38 am

Get some Nuke in your Portfolio

by: The Financial Blogger    Category: Investment, Market and Risk
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If you are interested in a little bit more risk in your portfolio you might like this post. Lately, I’ve been hearing a lot of good things about Uranium and nuclear industry. In fact the price of Uranium has been skyrocketing from $9/lb in 2003 to $120/lb in 2007. Better than this, some expert expect Uranium to reach more than $160/oz in 2008. That’s 17% increase in only one year. But why there is so much enthusiasm around such dangerous metal?


It might sound funny at first glance, but the Kyoto Protocol is one of the most important reasons why Uranium demand is so high. In fact, nuclear energy doesn’t produce any GHG. Therefore, it meets several criterions for countries searching for cleaner way to produce energy. Some say that it’s the energy of the 21th Century. Beside the nuclear waste (which can be contained), the nuclear power can classify under green sources of energy.


After what happened in Chernobyl decades ago, most companies abandoned uranium exploration and a lot of uranium mines closed for lack of demands. Its price dropped to nil and nobody wanted to hear about nuclear energy for a while. There are very few companies that kept on investing in exploration and exploitation of those mines. This lack of investment for several years results in a lack of productivity. We are now facing a huge increase in demand but nobody can produce enough uranium in time. Even Cameco got one of his biggest mine flooded last year. Definitely, there is nothing to help uranium production.


Now things are different. People understand that the technology used back then might not have been secured enough. But technology evolved and we are now in a better position to contain and manage nuclear waste.


Having written that, I strongly suggest you get some uranium based fund in your portfolio as it might be the next big thing for the following years. You sure just missed a good chance in 2003, but it seems that demand for uranium won’t stop shortly. Then entire world is seeking for resources and uranium is one of them. It is always a risk as nothing is granted, but I surely made the jump. Unfortunately, I’m not your advisor, so you will have to make your own research and decide whether or not you will go for uranium.

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Comments

Ummmmm….. a price increase in uranium from $120 per pound to $160 per ounce, is about a 2100% increase, not the 17% you quoted. If this price change is factual, where do I get in?

by: The Financial Blogger | July 1st, 2007 (6:34 am)

I’m not sure where you get your 2100%. Is it from starting cost of 9$ back in 2003?
I made a I typo, I meant an increase of 33% from $120 to $160.
There are several companies involved in Uranium such as Teck Comico, Cameco or Paladin Ressources. I recommend you make your own researches. Mining company are always risky and I do not wish to recommend any specific stocks.
Let me know if you get in !
FB.