Investing

Is now the time to invest in uranium stocks?

  • Last Updated:
  • Nov 9th, 2017 11:09 am
[OP]
Member
Jan 19, 2013
275 posts
46 upvotes
Toronto

Is now the time to invest in uranium stocks?

I've been doing a bit of research on uranium and I can say I am bullish with uranium stocks in the next couple of years.

With the expansion of the Chinese energy sector, we can start to see the slow transition from coal powered energy to nuclear energy. A few of their nuclear plants will go live next year. I think this would be the most cost efficient and realistic approach for China to battle their air pollution problems. Uranium is traded through long term contracts.

Despite to what happened in the past history with nuclear disasters, we can learn to create new methods of preventing nuclear Melt downs. I believe China had developed a reactor that is meltdown free. This is a big game changer if this is the case.

I know uranium can be debated with lots of pros and cons but I want to be able to take advantage of the first 3 years of my investment plan.

I've shifted my portfolio from a diversified all high yield equities (mostly blue chip stocks) to 100% commodities. I know this is a really risky portfolio but it had been paying off extremely well. I've dedicated all my time to studying the in and outs of these Commodities and the business of specific stocks.

Last year, I had predicated a bad start to the economy in 2016 and a possible market crash and recession back in late October 2015. I had made a lot of investment mistakes and learned from it as a new investor. I had to pull out at the time and take a loss of -16% portfolio (worst investment was Amaya). I was determined to invest the right way by doing my own qualitative and quantitive research. Read books about investing (not your get rich quick books) about understanding a business and how to read financials. Courses on micro and macro economics, supply and demand and etc.
The most important thing was having a plan and how to use these investment vehicles to get to point a to b.

Anyways fast forward today, My portfolio is up an outstanding +70%.

The uranium stock I've invested in is NXE (Nexgen Energy) I bought 5000 shares @.64 last year in December. This junior miner company has the richest and highest quality uranium in the world. I think it's now at 1.42.

The other stocks I have in my portfolio are gold stocks. I'm invested in LSG and CRJ. I bought these back in early January and I'm bullish long term with gold. These are doing so well!

I only have 3 stocks in my portfolio right now and no high yield equities. I don't see a need of any diversification for other high yield equity stocks since I believe they are all over valued and I'm 100% sure we're going to have a correction soon.

All my junior miner stocks are undervalued but are making great profits and is cost effective today's market compared to bigger mining companies

What is everyone's opinion on uranium and the stock you would invest in?
130 replies
[OP]
Member
Jan 19, 2013
275 posts
46 upvotes
Toronto
I hate to admit this but I'm tin-foiled hat investor. I believe the fiat system will shift back to gold standard and we'll have a market crash in April or beginning of May. Two major catalyst to watch out for are opec meeting or fomc meeting. I don't see interest rate hike in April. It's all a bluff.

After we have a market crash and recession, China industrial sector will pick up and I see uranium as the go to commodities to help jump start the economy with the new source of power instead of coal.
Member
Apr 8, 2009
315 posts
69 upvotes
do you know that Canadian Uranium companies are BANDED from selling their products to China?
the up swing is due to India's order which is really really really small potatoes comparing to China's demands.
It's a shame that the Harper government did this, maybe the Liberal will change it, but dont bank on it.

another factor to consider is that China is moving on to THORIUM reactors in the near future.
due to mining of rare minerals in China, China has a huge stockpile of thorium in hand,
[OP]
Member
Jan 19, 2013
275 posts
46 upvotes
Toronto
I did read about thorium. I don't see this being implemented in the next 3 years. Possibly in 5-10 at least.
Jr. Member
Nov 30, 2015
154 posts
29 upvotes
Toronto, ON
Don't know anything about Uranium but just a couple quick comments:

- Blue chip stocks are for the most part pretty near a surefire win when diversified (I agree with you that equities are currently overvalued and due for a correction but at the right valuation blue chips are unbeatable in terms of guaranteed decent returns)
- Commodities are pretty elastic based on supply and demand so you could do really well or really poorly
- Its fine to take large risks to achieve large rewards but think through what compounding with smaller less risky investments could get you, depending on your investment timeline this might persuade you to hedge your bets a bit in case you are wrong. You learned this the hard way through Amaya, I learned it the hard way through a small Bio-tech company when I was much younger
- Finally one thing I always hear time and again is know what parameters you have to get in and what parameters to get out, while your research may have indicated that Uranium is a good short term bet make sure you know when it starts to become overvalued, personally I wouldn't stake my whole portfolio on commodities, I would diversify and pick a few less volatile investments so as to balance things out in case I need the money or to preserve a certain level of return
[OP]
Member
Jan 19, 2013
275 posts
46 upvotes
Toronto
socialmindset wrote:
Mar 26th, 2016 10:35 am
Don't know anything about Uranium but just a couple quick comments:

- Blue chip stocks are for the most part pretty near a surefire win when diversified (I agree with you that equities are currently overvalued and due for a correction but at the right valuation blue chips are unbeatable in terms of guaranteed decent returns)
- Commodities are pretty elastic based on supply and demand so you could do really well or really poorly
- Its fine to take large risks to achieve large rewards but think through what compounding with smaller less risky investments could get you, depending on your investment timeline this might persuade you to hedge your bets a bit in case you are wrong. You learned this the hard way through Amaya, I learned it the hard way through a small Bio-tech company when I was much younger
- Finally one thing I always hear time and again is know what parameters you have to get in and what parameters to get out, while your research may have indicated that Uranium is a good short term bet make sure you know when it starts to become overvalued, personally I wouldn't stake my whole portfolio on commodities, I would diversify and pick a few less volatile investments so as to balance things out in case I need the money or to preserve a certain level of return

- I agree blue chips are a win when diversed to offset some lost on other stocks. I still keep track of my old portfolio to see how it does in todays market. I try my best to learn from the old while maintaining my new one. I was planning to get back into these when I think the price is at a fair 'discount' before jumping back in. Also, diversification only works depending how much money you invest. For me, I'm investing about 8k, so to me, it make sense to stick to 1-3 stocks vs 5-6.

- Commodities is something people can study and understand how it works in supply and demand situations. But also, it's important that you choose the right company to invest in. There are ETFs for both bull and bear x3, but I find that a lot more risky. I feel its more for day/swing traders. That's why I did a lot of research as opposed to jumping into the "blue chip" companies for commodities. I think there is more upside to junior companies, especially looking at their financials and how they operate at the most cost efficient business structure. Based on "past performance" miners did very poorly during the bull market between 2012-2015. If a crash were to happen, I think they will still be able to operate at a profit depend on the company you invest it.

-My mistake with Amaya was being financial illiterate and following analyst and fool.ca and etc. I saw their profit margins and past performance based on "looking" at charts and that was the biggest mistake. Management is also very important too and how their actions reflect their business. Also, i've learned not to trust all these opinions from analyst. At the end of the day, they are publishing these articles to benefit or manipulate the market. I've learned to stay away from these things and just do my sold research on the product/commodity, and the business and how the macro economics play a cause and effect to what you're investing in.

As average investors, we will be always looking on the outside of the business and not knowing the inside of how things work. But having that financial literacy does help you pick the best business out of the bunch. Just because we all know big names, doesnt necessarily mean they will do well.

- The hardest part about investing is letting go and not being to greedy. It's easy to buy, and hard to let go. That's why investors need to come up with a plan and exit strategy in case you're wrong. In my situation, I'm already profiting over 70% on all three of my stocks. In this situation, I have leverage to get out at a profit if things go south. You just have to set a stop limit of loss and be happy with how much profit you take. Lucky for me, I managed to "time in" when to buy these stocks. To be honest, I was very skeptical of the outlook of 2016 market back when i first started investing in October. The hardest part was selling my entire portfolio and losing $900 in the process. I was doing research on what stocks will be a good hedge in worst case scenario and it lead to gold before the gold bugs jumped on the band wagon. I also had to think ahead of time to find out what will excel during a recovery stage of a recession and I thought about uranium as a alternative energy source for China to switch their coal to nuclear.

Gold will have it's "over valued" moment but I don't think we had reached to that point yet. I bought a few ounces of physical gold and silver to diversify my portfolio as opposed to investing most in paper gold. It's always good to have a small amount of leverage than 0% in extreme situation which I hope doesn't happen.


My opinion about the market and fiat system:
I wouldn't go to the extreme and think the world will fall apart and we will start to trade gold and silver coins. I believe there will be a transition to have currency backed by gold in the future. It may happen this year or in the next 5-10 years. Nobody will know. It's still good to have some sort of leverage if that case happens. My portfolio at the moment is 70% cash, 20% stocks, 10% physical gold/silver. I took some of my profit and converted it in physical gold and silver.

The fiat system will eventually fall apart. Even with all the QE and stimulus, it wont help the situation long term, just making the bubble bigger. We have a new generation that has so much student debt, unable to find full time jobs, and horrible government for the US. I wouldnt be surprised if all the countries starts depegging their currency away from the USD and adopting gold standard. But this is all speculation, but still a possibility.
Deal Addict
Nov 9, 2013
1907 posts
666 upvotes
Edmonton, AB
I would stick to Amaya shares.

Edit - In all seriousness, personally I would stay away from a commodity like uranium and I wouldn't buy a junior minor given the inherent risks.
[OP]
Member
Jan 19, 2013
275 posts
46 upvotes
Toronto
I think there is is a loop hole for chinese investors to have a large stake in "exploration" companies like Fission Corp (FCU) vs buying out and owning uranium companies in Canada. Perhaps there might be loop holes for exporting it to other countries and reselling it to China as opposed to selling it directly to them. I haven't looked into this but I will now to see how that works.

I also have to do more research on the important of "high-grade" uranium and why people would want to put a huge value on this vs getting it cheaper from kazakhstan or Australia.
[OP]
Member
Jan 19, 2013
275 posts
46 upvotes
Toronto
treva84 wrote:
Mar 26th, 2016 12:34 pm
I would stick to Amaya shares.

Edit - In all seriousness, personally I would stay away from a commodity like uranium and I wouldn't buy a junior minor given the inherent risks.
That's ok. Everyone has different approach for investing. I think it's easier to stay away something you're not familiar with. We can't all be be knowledgable in every sector. I just decided to focus on sectors I understand to a certain extent than the average investor who has a diversified portfolio in many sectors.

For me, I don't know the oil sector, so I stay away from that. I also haven't experienced a market crash in my lifetime of investing, so it would be interesting how things will play out and how I can capitalize in other sectors.
Deal Addict
Nov 9, 2013
1907 posts
666 upvotes
Edmonton, AB
NakNak wrote:
Mar 26th, 2016 1:06 pm
That's ok. Everyone has different approach for investing. I think it's easier to stay away something you're not familiar with. We can't all be be knowledgable in every sector. I just decided to focus on sectors I understand to a certain extent than the average investor who has a diversified portfolio in many sectors.

For me, I don't know the oil sector, so I stay away from that. I also haven't experienced a market crash in my lifetime of investing, so it would be interesting how things will play out and how I can capitalize in other sectors.
Keep in mind as well that there is a very high chance that many analysts who get paid to research the sector have probably thought more about this than you and have many more resources at hand to uncover information and this information is mostly "priced in" to the current value of the stock, so you are less likely to uncover a diamond in the rough.

However the smaller the company the less attention it gets, so that is in your favour. Of course, smaller companies are inherently more risky.

Also, I know you reflected on this, but why did you go wrong with Amaya? You mention because you blindly followed a Fool article - it probably told you something you wanted to hear - this is called confirmation bias. By coming on RFD and asking for opinions that support your hypothesis you are essentially repeating the same process, just in a different medium.

When you comment that you understand the sector "more than the average investor" you're also exhibiting classic over-confidence.
[OP]
Member
Jan 19, 2013
275 posts
46 upvotes
Toronto
treva84 wrote:
Mar 26th, 2016 1:26 pm
Keep in mind as well that there is a very high chance that many analysts who get paid to research the sector have probably thought more about this than you and have many more resources at hand to uncover information and this information is mostly "priced in" to the current value of the stock, so you are less likely to uncover a diamond in the rough.

However the smaller the company the less attention it gets, so that is in your favour. Of course, smaller companies are inherently more risky.

Also, I know you reflected on this, but why did you go wrong with Amaya? You mention because you blindly followed a Fool article - it probably told you something you wanted to hear - this is called confirmation bias. By coming on RFD and asking for opinions that support your hypothesis you are essentially repeating the same process, just in a different medium.

When you comment that you understand the sector "more than the average investor" you're also exhibiting classic over-confidence.
Where I went wrong with Amaya was the time I bought it at around $30 a share which was over valued. I didn't buy it at "discount" price and at that time, the USD dollar was really strong. With my outlook of the market future, I felt that I could be making better investment with higher returns than waiting 3-4 years for it to bounce back. This really affected my portfolio at the time and I felt I could be using that amount of money and capitalizing in other sectors. And with this decision, it was the best decision I had ever made to allocate the money to other investments as opposed to waiting it out.

I haven't looked back at Amaya but I already priced in a value I would re-enter again along with some other stocks.
These are the ones I would look at again IF the market does crash. But I would need to spend lots of timing researching these other sectors..which I haven't focused on yet.

PHM - .25
AYA - 7.50
DOL - 45
WSP - 25
TD - 25
TSL - 85


I guess I am repeating the same process, I just like to hear opinions from others and etc. This is part of my qualitative research and see how I can use others opinion to modify my plan and things I might have not factored in.
Deal Addict
Sep 20, 2014
1147 posts
364 upvotes
Calgary, AB
Two things:
- Is now the time to invest in uranium stocks? That depends on what your outlook is on uranium. Any commodity producer will be at the whims of the near term market price of the commodity. And how well you see the demand continuing in the future. I, for one, think that nuclear is a far better option than burning either coal or natural gas for power generation but after Fukushima, it has had a negative image. So you need to factor that in to your analysis and come up with a realistic expectation. Even then, it would probably be a better bet to buy companies with a low cost of production, abundant reserves and buy them at a discount to their intrinsic value. If you're taking on a risk, ask to be compensated for it.
- You claim that we are going to be going back to the "gold standard" is not a very prudent one. As far as I'm concerned, we got off of it for a reason. None of the problems you have mentioned will be cured by a reversion to the gold standard. Instead, it'll likely bring up new challenges. Currencies, overtime, will be devalued regardless of whether they are backed by gold or not. Fiat currency gets rid of the role of what is basically a pointless metal as the middleman.
Penalty Box
Apr 16, 2012
3565 posts
677 upvotes
Greely
Why don't you first address other prediction before making any more predictions?

i-think-were-entering-another-global-re ... a-1843689/

You predicted another global recession in 2016. I'm still waiting on that.

You bought Amaya stocks at $30 a share..


Please make more predictions so I can do the complete opposite of you.
Deal Addict
User avatar
Feb 25, 2014
2157 posts
314 upvotes
Mississauga
Who's dere
Oh sada kehra bapu karda black nee, Jehra tere shahir (Toronto), Le lawan flat nee
Deal Addict
User avatar
Mar 16, 2010
1561 posts
682 upvotes
Hamilton
treva84 wrote:
Mar 26th, 2016 1:26 pm
When you comment that you understand the sector "more than the average investor" you're also exhibiting classic over-confidence.
This thread almost seems like a classic case study out of my CFA level 3 material in behavioral finance. Overconfidence, illusion of control, etc. Textbook adventurer (impetuous and confident) behavioral sub-type with his ability to predict the the future and holding concentrated portfolios. These are typically the kind of people that blow themselves up long term.

We're either seeing some not so high level trolling or OP genuinely believes he's identified a superior strategy that bay/wall street hasn't identified.

Nickles worth of advice OP. Stick to index funds or ETFS. Thank me in 10 years.

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