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Uranium, The Bond Market, and USD Comments

Cory
November 17, 2017

Doc joins me today to look at the charts of Uranium, TLT and the US Dollar. We address some technical factors as well as touching on the fundamentals that are the long term drivers.

Also of note gold is starting to breakout. This happened after we recorded but is of note at $1,293 currently.

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Discussion
21 Comments
    LPG
    Nov 17, 2017 17:54 AM

    Hope everyone is doing well,

    Apologies if this has already been posted, but here’s some more color re: Uranium.
    http://palisaderadio.com/david-cates-bad-news-story-from-cameco-is-good-news-for-uranium/

    Personally, when someone responsible for 12% of global production halts operations for 10mths… I pay attention. They are “news”, and there are “NEWS”. CCJ announcement last week fell into the second category, imho.

    For full disclosure, I’ve spent the past few months adding to my uranium positions (Bob Moriarty and Chris Temple are witnesses of that).
    It was getting a bit scary to do that lately, but things have – imho – finally worked out (w. CCJ announcement). And things are, imho, most likely than not gonna be totally fine over the next 2-4 yrs. I’ve had a few email exchanges with some money managers, and let me tell you they “get” the significance of CCJ’s news – and none of them had uranium exposure before the news.

    One name I own was over-allocated, and as it moved up 100% in a few days following CCJ news, I sold the over-allocated shares (meaning I brought back the position size to what i what originally I intended it to be).
    OTHER THAN that tiny sale of an over-allocated position, I HAVE NOT sold any share of the 7 names I own (my cost base for each stock was relatively low as I had added in the past few months) and do NOT intend to do so for a while UNLESS a company makes announcements which SIGNIFICANTLY (negatively) deviate from my investment thesis.

    IMHO, too many “good things” can happen for the uranium sector in 2018-2019, so imho, selling HERE is not the most appropriate thing to do given the sector risk/reward profile at this point in time.
    IF the Kazakhs announce again they wanna curtail production one more time, what will happen to the stocks again ? Those who don’t have shares/exposure will be left, as I like to call it, “chasing ghosts”.
    Or let’s think about it differently: IF the Kazakhs are still serious about their 2018 IPO, or they gonna go for it at $20-23 spot when valuation will be ridiculously low for them or will they try their best to make sure prices are higher ? It’s the same thinking process as Aramco IPO – no need to complicate things.

    Talking about not complicating things, for those unconvinced, I’ll finish with the best arguments I heard about investing lately, and they come from Bob Moriarty: “people over complicate things. Buy things when they are cheap, sell when they get expensive”.

    Uranium is cheap, and the sector valuation is RIDICULOUSLY cheap. Bob is right: things are that simple: no need to complicate indeed.

    Good luck to all,

    LPG

      Nov 17, 2017 17:51 AM

      Hi LPG and good thoughts.

      Yes, that David Cates interview has made it’s rounds along with other ones he’s done. I respect his opinion as the Boss of both Denison and the Uranium Participation corp.

      Personally, I have built core positions in ,y 6 favorite Uranium miners and am doing a little nibbling here post Cameco news about cuts/layoffs. I’m still not in a big rush, but will likely add to a few more over the next month. I want to get my full dirty dozen back in place over time.

      Typically there is a 60-90 day run in Uranium stocks from Nov/Dec through February. Looks like CCJ just kicked things off so I may lighten up in Febe IF we get the Q1 run.

        Nov 17, 2017 17:55 AM

        Uranium Participation CEO: Industry finally facing reality

        “Uranium Participation simply holds uranium for investors. CEO David Cates told us a month ago that the market is oversupplied by about 10 million pounds a year, and it’s time for the miners to seriously consider closing some operations. We get his reaction today to Cameco taking a huge mine offstream.”

        http://www.bnn.ca/video/uranium-participation-ceo-industry-finally-facing-reality~1254635

          Nov 17, 2017 17:58 AM

          Denison Mines CEO: We Can Add Huge Value Through the Drill Bit

          SmallCapPower

          “Denison Mines Corp. (DML) (DNN) President and CEO David Cates took the time to speak with SmallCapPower at the recent Formula 1 Capital Conference in Montreal, discussing the clean energy future for uranium as well as Denison’s plans to develop its core asset, Wheeler River, which he expects will become Canada’s next uranium mine.”

          https://www.youtube.com/watch?v=VkkKnjPt02o

      Nov 18, 2017 18:55 PM

      I recently bought positions in several now well established companies ( not too har to do since after the last great uranium price rise, the majority of the companies went away and we have been left with10-15 viable companies. any thoughts on your favorites, LPG, among this group? I have bought Denison, UEC, URG, Nexgen, Uranium fuels (UUUU), and Fission. I suspect we might have a spike with the Cameco announcement, and the last spike earlier this year lasted a couple of months. Sounds like you expect the rise to be longer lasting?

        LPG
        Nov 20, 2017 20:16 PM

        Dan,
        My apologies for the belated response to your question.
        The list of uranium names you named is an interesting starting point, imho – I own several, but not all of those.
        To summarize my thoughts, I expect a progressive – and accelerating – rebalancing of the U3O8 market, while the sector was until recently pricing a lot of bad news (and still, to a good degree).
        So imho, sector wise, taking a 2-3 yr view, we’re in a case of limited downside vs. very interesting potential upside.
        Hope that’s clear.
        Best to you and good luck investing.
        LPG

    Nov 17, 2017 17:22 AM

    Doc, with the rise in gold and silver today, do you still see them dropping soon prior to rising in 2018? Gold to 1220-1240 and silver 16-16.50?

      Nov 17, 2017 17:38 AM

      Pardu, the odds are that the PMs stay in this weekly trading range yet for weeks if not months. They look pretty good right now but I don’t believe we get a meaningful breakout until sometime in the future.Having said that, I’m not selling my stock positions but will add going forward. I don’t really care at this time what the bullion does since there isn’t a lot of percentage risk to the downside for most of the companies I hold.

      Nov 17, 2017 17:39 AM

      By the way, I agree with LPG about uranium. We have to be patient on those stocks as well.

    Nov 17, 2017 17:52 PM

    Doc,
    I like UEC. Do you think it will go down to low 1’s again?

    Nov 17, 2017 17:19 PM

    Cali; I like them too. Yes, you’ll see $1.10 again—I’ll probably add to my position then.

      Nov 17, 2017 17:33 PM

      I’ll be adding to my UEC anywhere a little over a buck as well. It is a highly liquid company that is traded on the NYSE (which is a big plus, like with NXE).

    Nov 17, 2017 17:31 PM

    Ura was up 3.8% today and up sharply from the bottom Wednesday.

    Nov 17, 2017 17:05 PM

    Upgrade allows continued operation of Ringhals units
    17 November 2017

    “Some SEK900 million ($107 million) will be invested in installing independent core cooling systems at units 3 and 4 of the Ringhals nuclear power plant in Sweden. The legally-required safety upgrade will enable the two reactors to continue operating beyond 2020.”

    http://www.world-nuclear-news.org/C-Upgrade-allows-continued-operation-of-Ringhals-units-1711175.html

    Nov 17, 2017 17:41 PM

    Dang, you boys see this? Do you know how many oil blends there are?

    https://www.themaven.net/mishtalk/economics/oil-pricing-how-many-blends-are-there-bjmT0VdZY0q0yMcKvqgoiQ

    Nov 17, 2017 17:09 PM

    Dang, here’s a family of four that just had their Bammycare policy raised to 36,000 a year! AND with a $9200 deductible.

    http://www.zerohedge.com/news/2017-11-17/helpless-raging-charlottesville-families-shocked-these-2018-obamacare-premiumsits-ho

      Nov 17, 2017 17:10 PM

      The gotta change the name from Affordable Care Act to Unaffordable No Care Act!

      Nov 17, 2017 17:37 PM

      Dang, read the comments…Priceless!