Did you miss one of the biggest stories of the past year?
If you did, you’re not alone.
The story was uranium… the Rip Van Winkle of commodities.
It always feels like the entire uranium price action goes to sleep for years (maybe not quite 20 years like the titular character from the Washington Irving classic). No one can make money from it…
Then, without warning, it “awakes” with a burst of excitement… folks make money… and it returns to slumber.
Today, and for the past few months, it has awoken from its slumber.
But what happens next? We’ll share a thought or two below… and show you how one of our experts got into this story before the price started to take off.
Before we get to that, a brief look at today’s market action…
Market Data
The S&P 500 closed down 1.6% to end the day at 4,845.63.… the NASDAQ fell 2.2% to close at 15,164.01.
In commodities, West Texas Intermediate crude oil trades at $75.76, down $2.10…
Gold is $2,052 per troy ounce, down $2…
And bitcoin is $42,499, down $1,054 since yesterday.
Now, back to our story…
A Long Time Between Peaks
The uranium story is probably the most underreported market boom of the past year.
But not everyone ignored it. There were signs… And one of our investing experts was on it early.
The question is, did you read it… and did you act on it?
Here’s what our expert wrote:
One of my longtime contacts is a senior staffer for a member of the Armed Services Committee. That’s one of several Washington committees involved in the nuclear space.
That committee interacts with many other important members in the areas of energy, homeland security, and defense. This means my contact is well positioned regarding insight into several of those key areas as well.
[…]
[My contact] lets me know which bills from key areas of bipartisan agreement are about to be introduced. He also shares his take on the chances of them moving forward in the legislative process.
And he told me that, right now, there’s a lot of bipartisan traction in the House and Senate in nuclear.
The expert in question is Nomi Prins, our resident Wall Street and Washington D.C. insider.
And the quote above comes directly from research Nomi wrote and published last July.
Since Nomi published the research (green arrow on the chart), the uranium price has nearly doubled from around $55 per pound to around $100 per pound.
Having that personal insight and contacts certainly helped.
Across Nomi’s publications, she has recommended six stocks within the uranium and nuclear sector.
So far, those picks are up an average of 21%. That compares favorably to the S&P 500, which is up only 12% since Nomi shared her first nuclear-related pick with subscribers.
As always with the uranium story, it’s now a case of how much longer the boom lasts before it goes into another Rip Van Winkle-like slumber.
But there’s still time. And this whole story shows the importance of Nomi’s connections… and the influence D.C. has on the economy.
Take this from Bloomberg News today:
The Biden administration is poised to lend $1.5 billion for what would be the first restart of a shuttered U.S. nuclear reactor, the latest sign of strengthening government support for the atomic industry.
The funding, which is set to get conditional backing from the US Energy Department, will be offered as soon as next month to closely held Holtec International Corp. to restart its Palisades nuclear plant in Michigan, according to people familiar with the matter.
Naturally, government money doesn’t guarantee success. We know that. But assuming the loan deal goes ahead, it shows (proves, even) that D.C. is serious about nuclear power.
And if it’s serious about nuclear power, uranium has to play a part in that.
On top of that, earlier this week Yahoo! Finance ran a headline, “22 countries want to triple nuclear power. Is there enough uranium to go around?”
The story explained:
Earlier this month, the world’s largest uranium miner, Kazatomprom (KAP.IL), warned it will likely not meet its production targets in the next two years because of mine construction delays and a lack of sulfuric acid needed for uranium production. Uranium prices shot up to 2007 levels this month, sitting above $106 per pound.
You see what we mean about the long slumber? The last time the uranium price was this high was in 2007.
And Nomi isn’t our only expert to push the uranium idea.
If Chris Weber (another of our experts and editor of the Weber Report) is right, the nuclear and uranium boom isn’t about to end soon.
This week, Chris advised his subscribers to buy into this trend too. He even quoted Legacy Research co-founder Doug Casey as a reason to buy now:
When the market turns to gold stocks, it’s like trying to force the contents of Hoover Dam through a garden hose. In the case of uranium stocks, however, it’s more like a soda straw. It’s a very, very small market.
Wild imbalances in supply and demand, accompanied by equally wild swings in price, often surprise people who aren’t familiar with the resource business. But it is the very nature of the beast, and it is one of the reasons speculating in it can be so profitable – if your timing is good.
That analysis is exactly right. It’s why you see the kind of price action in the chart above.
It’s also because, frankly, it takes a long while for investors to forget the prior boom-and-bust period. It seems 15–20 years is about how long it takes for the memory to fade.
If we believe history generally repeats, then at some point, the boom will end and prices will fall. As always, the million-dollar question is when?
Unless, of course, this time is different!
Report Card Part II, Friday
A quick reminder that we reveal Part II of the Legacy Research Annual Report Card, this Friday.
Meanwhile, if you recall from Part I, released last Friday, Jeff Clark received an A+ for his entry-level trading service.
From the period October 12, 2022, to December 31, 2023, those who followed Jeff’s recommendations could have seen a trading gain of 114%. That was with a win rate of 82% – a terrific result.
If you’re new to trading and need someone to help guide the way, Jeff is your man. You can check out the details of his service here.
Bigger Gains in Less Time
On May 9, 2022, Marathon Oil (MRO) stock hit a new low of $24.20. Twenty-two days later, it traded at $31.43. That’s a 29.8% gain.
But our new trading guru didn’t buy the stock. He told folks to play the trade a different way. His way resulted in a 373% gain.
On July 19, 2022, The Walt Disney Co. (DIS) closed at $99.61. That was up nearly 10% from three trading days prior. That’s a pretty good gain. A missed opportunity?
Nope. On August 11, the stock closed at $117.69. That’s an 18.1% gain. But our new trading guru didn’t buy the stock. Again, he told folks to play the trade a different way. His way resulted in a 179% in the same time frame.
And on September 2, 2022, Universal Display Corp. (OLED) closed at $106.60. The stock was trending lower. It was at $127.43 just a few weeks before.
What to do? Well, on September 23, our new trading expert closed the trade. On the day, the stock closed at $97.59. If he had bought the stock, it would have been a loss. If he short-sold it, it would have been an 8.4% gain.
Our new expert didn’t do either. He told folks to play it a different way. His way resulted in a 339% gain… in just 21 days.
We’ll unmask our new expert soon. Stay tuned.
More Markets
Today’s top gaining ETFs…
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Siren Nasdaq NexGen Economy ETF (BLCN) +1.9%
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VanEck Inflation Allocation ETF (RAAX) +1.4%
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First Trust Brazil AlphaDEX Fund (FBZ) +1.4%
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First Trust India NIFTY 50 Equal Weight ETF (NFTY) +1%
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Franklin FTSE India ETF (FLIN) +0.9%
Today’s biggest losing ETFs…
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ProShares Ultra QQQ (QLD) -3.9%
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Invesco Russell 2000 Dynamic Multifactor ETF (OMFS) -3.1%
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WisdomTree U.S. SmallCap Earnings Fund (EES) -2.8%
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iShares S&P Small-Cap 600 Value ETF (IJS) -2.8%
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SPDR S&P 600 Small Cap Value ETF -2.8%
Mailbag
If you have any questions or comments for our experts here at Legacy Research, we’d love to hear from you.
Write to us at [email protected] and just type “Daily Cut mailbag” in the subject line.
Cheers,
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Kris Sayce
Editor, The Daily Cut