I would like to bring up an interesting point for discussion.
The previous global bull market occurred from 2003 to 2007. Over that time the spot price of uranium leapt an incredible 120% from $10/lb to $130/lb. In the latter part of 2007 the uranium market crashed - demonstrated by the fall in spot prices from the ridiculously high $130+ levels to sub $50 levels by the latter part of 2008. This spot price crash preceded the overall market crash, but also continued through it hitting further lows in 2009 and only fully finding it's bottom in 2010. In many ways the overlap of the market collapses covers up how much of the decline in U stocks was due to the falling price of uranium and how much was due to the general market crash.
Interestingly PDN and ERA (our biggest ASX U stocks) started their next ascent at the end of 2008/beginning 2009. This is when most global indexes (including the ASX) also began their recover, but more than a year before Uranium prices began to recover.
At the end of 2010 all was looking rosy in Uranium's next rise from rags to riches. There was actually quite a dramatic fall in U prices in the first three months of 2011 (spot dropped from over $70 to about $60) even before the earthquake struck on 11th March 2011. 3 years later and we are still not sure if we have found a bottom in the U spot price (http://www.cameco.com/investors/markets/uranium_price/spot_price_5yr_history/) - that is the cameco uranium spot price chart and the best for zoning in on historic dates, have a play with 2011 until today.
Although Uranium spot had already started a decline in 2011 we can't be sure if it was the beginning of another bear cycle or just a short term decline in a long term bull cycle - as far as I know (welcome any info on this too). Fukushima meant we would never find out. The point is that in recent history we have not had a uranium bull market outside of a overall bull market. I believe that given Fukushima was an extraordinary event we can not include the current U bear cycle as a natural cycle. Meaning we have neither had a natural U bear cycle outside of the general market's bear cycle.
Leading to the big question: Given we are now currently 5 years into a general bull market - which looks pretty precarious - and people expect that the Uranium to begin its recovery over the next 1-3 years, it seems rather likely that there is going to be a cross over. Capitulation in the general market is likely to meet optimism in the Uranium market. So what will happen to U mining stocks?
My guess: Investing in uranium is always going to be thought of as somewhat risky by the majority. Most Australian U mining stocks are pretty small cap and so riskier still (compared to lower cost, higher grade, far larger foreign U companies). I believe if U mining stocks started to recover and we had a general market crash then they would be back to where they started at best. This would actually be a fantastic time to buy as the actual fundamentals would be stronger yet the prices would be driven down purely as debt would be less available, people would be more risk adverse, negative sentiment towards stocks in general, large investment firms withdrawing funds etc etc. If you bought at this point (while everyone would be telling you not to) you would also then be carried up with the inevitable next general bull cycle (that of course wont look inevitable at the time). The only two alternatives to this are that the U sector amazingly continues upward while the rest of the market capitulates (extremely unlikely) or U stocks remain in the doldrums anyway until the next market crash then begin an ascent when the general market turns at which point they would be rising off a much lower low. There is of course the chance that magically the economy reaches further highs on top of the current unsubstantiated highs all the way to say 2018.
If you disagree with this opinion of U stocks being unlikely to rise when general markets crash. I would be interested to see this idea backed by a time in history when a strong uranium bull market occurred against the tide of a general market crash.
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