From an article written in 2010 , some valid points and retrospect to consider -
".. you want to own a commodity where supply is incapable of responding to even a small bump in bids.” In other words, buy the commodities where it is most difficult to produce more. Though hardly a new insight, it’s one that investors sometimes forget. One commodity that aces this simple test is uranium.
As Mitchell sums up: “Uranium is well below cost of production, with a superb demand curve.” We’ve made the demand case before, too, and we won’t rehash it here. Suffice it to say that a slate of new nuclear plants means a robust demand for uranium for years to come. There are few commodities positioned as well for the next several years.
Buy uranium. This unique energy source is a “backdoor play” on the growth of Emerging Markets.
There are 436 nuclear reactors in 30 countries around the world. But here’s the important thing; there are over 200 new plants in some stage of planning, engineering or construction. And most of these new plants will open in a Developing World nation.
But there’s not even enough uranium coming from the world’s mines right now to supply the current power plants across the world, let alone a couple hundred more. Thus, the uranium story is really quite simple. It is a supply and demand story. There is a lot of demand and not much supply."
BKP Price at posting:
0.8¢ Sentiment: Buy Disclosure: Held
