Unlike a few posters on here who continue to claim that they knew all along and were very confident that everything would be fine, I am being honest with myself when I say that I cannot read the future and readily admit that I did not know how bad the nuclear accident would end up and how badly it would affect the nuclear industry and uranium shares in general.
My decision not to buy back in to PEN was based on this fact, my own personal tolerance level for risk and the concept of opportunity cost.
When I looked at the nuclear accident, I did not only take into consideration how the actual accident at Fukushima would end up but also the likely negative implications it would have subsequently. For example, while they have appeared to have successfully now brought most of the reactors under control, there is still very little info available on : 1) how much damage the radiation leaks have done to the environment; 2) how long the radiation will remain in the environment; 3) whether the exclusion zone of 20-30km in Fukushima will be habitable and if not how long will it remain uninhabitable; 4) are areas outside the exclusion zone affected as well; 5) how this will impact on the acceptance of nuclear energy by the rest of the world; 6) whether this will result in a stricter approval process for nuclear reactors and cause a delay in approvals.
As there were and still are IMO too many uncertainties, I decided not to buy back in to PEN even when it fell to the mid 5 cent levels and continue to only monitor the situation now.
In relation to the concept of opportunity cost, I personally feel that the 'Nuclear Renaissance' has been affected by this event at least in the short to medium term. Based on this, I have decided that there there may be other sectors that would have potentially more upside than the uranium sector and have decided to look for opportunities in other sectors instead, at least in the short term.
My decision is not so much based on whether PEN's share price will go up, but rather whether other shares will provide me with a better return compared to PEN.
PEN is a great company with fantastic management but I personally feel that due to a potential stalling of the nuclear renaissance, it's upside in the shorter term may be limited. Before the disaster occurred, because of the hype surrounding the 'nuclear renaissance', it was not hard to imagine PEN's and other uranium company's share price going to crazy levels significantly above it's fundamental value or NPV. However, now because of what's happened, I personally feel that this is less likely.
The above is just my personal thought process on why I continue to sit on the side lines and have decided to invest in other sectors.
To all other readers of this post Please note that I am not trying to downramp PEN and I am just responding to jasejdv3's qeury eventhough i'm sure I will be accused of downramping.
In an ideal world, with unlimited funds, I probably wouldn't have sold any uranium shares because I continue to believe in the longer term future of the Nuclear industry. Unfortunately, in the real world, everyone has limited funds and has to make a decision where best to invest those limited funds.
As I have already mentioned above, I cannot predict the future. It may turn out that the incident will have no impact whatsoever on the nuclear and uranium industry and the nuclear renaissance may continue unabated. If this happens, then PEN's share price will easily reach new highs especially with the many potentially great announcements due in the near term.
All the best with your holdings. Interested to hear other peoples thoughts on why they have chosen to invest or not to invest (in a civil manner please and hopefully backed up by facts and reasons).
PEN Price at posting:
11.0¢ Sentiment: None Disclosure: Not Held
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