Why Uranium?

Let's look at uranium for the long run, plus my uranium holdings

Those of you who know me personally know I’m a HUGE uranium bull.

The largest percentage of my investing capital is in physical uranium trusts and the uranium miners.

The main reason I have not written about them in a long time is because they are so volatile. Most people cannot stomach the volatility, in my opinion. Personally, I have a core position but use the volatility to trade around 20% my holdings.

But I think it needs to be discussed. In my opinion, this trade is one of the most obvious trades out there. I am not a uranium expert but I think I’m fairly well in the know. I have my ear to the ground, so to speak, in the uranium market and have been following the U market for many years.

My wife might actually unknowingly be an expert in uranium as she is often in the background while I’m listening to my interviews on the topic.

Sarcastically, she often tells me,

“Oh yay, another interview on uranium. Riveting!”

So, let’s get to it….

Another Cigar Lake Moment inbound?

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Why Uranium?

The general thesis is actually not complicated. Demand is rising globally around the world. Supply is diminishing. There’s obviously a bit more to it than that but if you only take one thing from today…..that’s it.

The Russian ban on uranium to the U.S. is ICING on the cake and was never factored into the equation!

Since Fukishima, there has been a significant underinvestment. Fast forward to today and the world has openly recognized the critical need for uranium going forward.

So let me try to break it down into 6 simple reasons why I think investing in uranium might be a good idea.

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1. Rising Demand for Clean Energy

• Nuclear Power Growth: The world needs clean, reliable power, and nuclear energy is the perfect fit. It’s one of the best ways to generate electricity without adding greenhouse gases.

• Global Expansion: Countries like China, India, and Saudi Arabia are aggressively expanding their nuclear reactor fleets. MANY reactors are currently under construction worldwide, with many more planned.

• Energy Security: In an era of geopolitical uncertainty, many nations are reconsidering nuclear energy to reduce dependence on fossil fuels and achieve energy independence.

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2. Not Enough Uranium to Go Around

• After the 2011 Fukushima disaster, uranium prices fell, and mining companies cut production. Now demand is rising, but supply hasn’t caught up.

• This mismatch between supply and demand will drive uranium prices higher.

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3. Uranium Prices Are Still Low (For Now!)

• Low Spot Prices: Uranium prices haven’t fully recovered, meaning there’s room for growth as demand increases and supply stays tight. Yes, price has come off floor but there is still room to go higher.

• Cost Inflation in Mining: Rising costs for inputs like labor and materials may also contribute to higher uranium prices.

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4. Strategic Stockpiling and Investment

• Government Stockpiles: Countries and corporations are building strategic uranium reserves, particularly in response to geopolitical tensions (e.g., U.S. restrictions on Russian uranium).

• Financial Players: Investment funds and ETFs are buying physical uranium, removing it from the market and further tightening supply.

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5. New Technology Could Boost Uranium Use

• Small Modular Reactors (SMRs): SMRs represent a new wave of nuclear innovation. They're cheaper, safer, and more flexible than traditional reactors, expanding nuclear’s market potential.

• Future Technology: While it’s not here yet, nuclear fusion could become a game-changer and drive demand for uranium even higher.

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6. Inflation Hedge

• Like other commodities, uranium can serve as a hedge against inflation, as rising costs tend to lift commodity prices over time.

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🔴 Risks To Consider

• Regulations: Not everyone loves nuclear power, so politics and regulations could impact the industry.

• Market Volatility: Uranium prices can be unpredictable, so expect some ups and downs. Expect some REALLY BIG ups and downs. It’s the most volatile market I know.

• New Technology: Advances in renewable energy storage could reduce the need for uranium over time.

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🟢 How to Invest

There are several ways to invest in uranium.

I think the next leg up is not far off.

Physical uranium, producers, developers and explorers. I personally focus on