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Thoughts on Uranium (10/5/10)

You know, there was a major surge of interest in uranium back in the early 2000’s, and tons of venture capital flowed into the uranium mining companies at that time. Uranium was being touted as the “next big thing” in the investment world, and shoe shine boys galore had tips to give. Although the premise was correct, and nuclear energy is definitely something that I believe we’ll see more countries move into in the relatively near future, the hype machine took over and caused lots of speculation, resulting in a white-hot uranium market, and uranium hitting over 130 bucks a pound. Unfortunately for average investors, an industry such as uranium mining is not known for any “quick turn-around” type of scenario, so most of the money that was poured into the market for exploration and so forth seemingly yielded no fruit at the time.

Funny thing is, now that the majority of investors have turned their attention away from uranium, there are more prospects for uranium mining growth now than ever before. Our addiction to foreign oil is getting more and more expensive (monetarily and politically) and increasingly unsustainable as time goes on, so there are several countries that are ready to make the move to nuclear, and it won’t be very long before they do. Iran may have nefarious purposes behind wanting to be a nuclear player so badly, but I think it’s amazing that such a politically backwards country at least has enough sense to explore better energy sources in light of the future. China earlier this year (in June of 2010) bought a sizeable amount of uranium (5,000 metric tons) We in the good ol’ U.S. of A. have shied away from nuclear power ever since 3 Mile Island, and images of Chernobyl still dance in our heads, almost to the point of being a “ghost” in the country’s psyche. Interestingly enough, the money that was flooding into uranium exploration back in the early-to-mid-2000’s is now actually showing some fruit…the mining companies have actually made advancements due to the capital investments of yesteryear. These things take time and patience, which most investors lack. I say, find a good quality list of uranium mining companies (U308 Corp being among them), and position yourself for a strong move up due to what I see as an inevitable move into atomic expansion by most developing (and developed) nations.

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