The stock market in the USA seems to be going up on fumes. Most of the gains are coming from about seven
companies.

Here are some of my ideas based on the current market:

I am not a licensed investment advisor. I invest my own money for the long term. I am not trying to time the market. Everyone should do their own due diligence.

Uranium
There is a huge deficit of production to demand in the market. A nuclear reactor must use uranium or it will go idle.  The current needs per year are 190 million pounds and the total world production is 140 million pounds.

The uranium miners have had no incentive to invest in developing new mines for 30 years or so. First there was the Megatons to Megawatts program with the Russians in which weapons were converted into uranium for the reactors.  This stopped in 2013. The last bull market run of uranium ended in about 2008 and then the Fukushima disaster occurred in 2011.

The spot uranium price went down to 20-30 dollars per lb. Back in the last boom it went to 140 dollars. Currently the spot price is just over 100 dollars. This time there is a difference to 2008. The two major producers, Kazatomprom (world's largest supplier) and Cameco (2nd largest supplier) are oversold and both have announced that they production will drop this year. There will be no new mines coming into production until at least 2029 at the earliest.

There are concerns with Kazatomprom being located in Kazakhstan. The market fears that Moscow and China could control where their supplies are delivered.  Even though major western utility companies have contracts with them, it is no guarantee that they will honor
their contracts.

I believe that this bull market is just getting started. The trick is to be invested in the right companies, stable countries, good management with a strong track record and financing. It is not a good idea to just invest in a name with "uranium" in the name.  Unfortunately there is a lot of uranium located in unstable areas such as Kazakhstan, Niger (recent coup) Ukraine, Namibia, Russia etc.

I have followed this market since the late nineties. I was in Hathor Exploration who found a mine with grades off the charts. The stock
had a big run up but was bought out by Rio Tinto. This mine is located in the Athabasca region in Alberta Canada.

There are a few ways to play the market.

a) ETF's

Sprott Physical Uranium Trust  (SRUUF)  - This should be a core holding. They own physical uranium

Sprott Uranium Miners ETF - (URNM) - This invests in uranium miners and developers

b) senior miners - the larger companies like Cameco, BHP (they mine everything), Uranium Energy (UEC), Energy Fuels (UUUU) and UR-Energy (URG).  Another company is Denison Mines (excellent management team).

c) explorers - there are many companies out there exploring. I don't want to give names at this point. You need to do your own due diligence. Each company that is serious does test drilling and sends the samples to the laboratory to get assay results by labs that are licensed. Otherwise it could be misleading to investors to give false results. Now they have technology to test using drones to find aerial geophysical surveys. Then they check the rocks on the surface before deciding where to test drill.

These companies have severe fluctuations in either direction and aren't for the faint of heart.

If you are interested in these these more risky investments, I strongly advise that you get a book on mining terms and how to read assay results.

The author of "Mark Twain, Samuel Clemens, said "A gold mine is a hole in the ground with a liar standing on top of it"

Knick

Thanks for sharing useful information.