Uranium and Nuclear Power Investing Mega-trend For the Next Decade
Commodities / Uranium Nov 07, 2010 - 06:32 AM GMTBy: Nadeem_Walayat
Ten years ago the investment mega-trends to get on board where the emerging markets and commodities such as Gold, all clear in hindsight you might say, so what about the mega-trends for the next decade ?
Well, apart form inflation which impacts on virtually EVERYTHING, the next big growth area given the fundamentals of climate change and arrival of peak oil has to be NUCLEAR. To be blunt the environmental fundamentalists have once more been found to be barking up the wrong tree for several decades by pumping out anti-nuclear propaganda for the past 30 years, which is why in the west nuclear power has been a bad word with hardly any nuclear power plants having been built, which is GREAT NEWS for investors ! Because that means your going to be getting in near the ground floor of a new multi-year if not multi-decade nuclear boom!
How else are the governments going to power future energy demand whilst at the same time cutting carbon emissions,, if not by building literally hundreds of new nuclear power stations over the next 20 years.
This boom has not even begun, I can imagine 20 years from now when the boom is in full swing as the flood of investment money has generated much technological advancement, every city and small town will be planning to have its very OWN mini nuclear power plant given the economics involved at that time for cheap clean energy. It's akin to buying Gold in 2001, not long after fool Brown sold half of Britains Gold reserves near the 20 year Gold bear market bottom. However nuclear investors are lucky as the boom and bust of 2007 in uranium prices should have put nuclear power back onto the radar screens of long-term investors.
For commodity investors the focus is on riding the uranium bull and bear markets as investor sentiment sends the price into cyclical boom and busts within an overall secular uranium bull market. The current price of $56 is set against a low of $40 earlier this year and a 2007 peak of $138, which as the chart above illustrates shows a market that is in the early stages of its next multi-year bull market that will likely see Uranium peak at a price north of $138 some years from now.
For stock investors there is the big Uranium miner Cameco and the smaller Paladin playing catchup, or ETF funds that have a wide exposure to miners and power generators such as the Market Vectors Nuclear Energy ETF, and remember stock price movements are usually leveraged to the underlying commodity.
My long-term investment strategy is simple -
a. Slow accumulation by averaging into mega-trend positions.
b. Buying market panics in sectors that I track (covered at length in the Inflation Mega-trend Ebook (FREE DOWNLOAD)
Investors need to learn to plan ahead to ensure one accumulates during the periodical cyclical busts, that way one buys when others are selling at market lows and sell when others are buying at market highs, unlike the way most investors operate who tend to join the booms just before it goes bust because they pay too much attention to the mainstream press, which ensure booms are euphorically reported upon and busts are overly pessimistically reported upon which means investors are usually too scared to buy when prices are cheap, and don't forget that the BlogosFear which 90% of the time just regurgitates the output of the mainstream press. So identify mega-trends and have your strategies prepared not just days in advance but YEARS, Accumulate and Buy the Panics and Sell / take profit on the Parabolic Euphoric Booms, the in between is just time.
Therefore there does exist an continuing opportunity for portfolio exposure to the new nuclear mega-trend, where volatility will breed opportunity, just as the crisis of the past decade generated huge multiple opportunities to jump aboard the commodities and emerging markets mega-trends so will the opportunity to accumulate into uranium and nuclear power.
In the long term all booms eventually end and where uranium is concerned that will perhaps be when nuclear fusion power becomes a reality, though not for at least 30 years, so plenty of time for today's investors to ride a uranium fission boom.
For 50 more pages on investment mega-trends see the Inflation Mega-Trend ebook (FREE DOWNLOAD)
Your mega-trends monetizing analyst.
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By Nadeem Walayat
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Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on UK inflation, economy, interest rates and the housing market and he is the author of the NEW Inflation Mega-Trend ebook that can be downloaded for Free. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.
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