Finally Some Love
Tuesday, December 05, 2006

Imagine my surprise when I opened this morning's Wall Street Journal to see on the front page a lead in mentioning uranium (which gave off a bearish chill down my spine) only to find that once I read the article it was absolutely bullish (sometimes you must read between the lines and use the head on your shoulders)!!!!!! Although the only miner mentioned was Cameco with USEC's refining capabilities also mentioned and then PG&E being mentioned as a consumer of this material, the main point was that a true uranium shortage does exist! Not only that, but odds are that it will only get worse before it gets better.

The financial news media writes about intriguing topics which include industries and stocks, however most of the time they wait for their very own readers (in this case the readers of The Wall Street Journal who happen to be investors) to discover the stocks that they then profile. Case-in-point is Cameco, great industry with great assets (although some may be in better condition than others), but the main point is that many people have already discovered this company (market cap is about $15 billion mind you). They are on the right track with uranium, but they focused on the wrong people (the utilities). Anyone who is a true investor would be able to read through this supply/demand problem and know right at that moment that they needed to begin researching those who actually mine the “yellowcake”.

As I turned on the television this morning at about 11 AM, in hopes of watching and hearing something from the Wall Street Journal writers on CNBC, I was amazed to find a Citigroup analyst touting nuclear power. WOW! Two in one day, however once again I was disappointed because he recommended, GET THIS, ALL UTILITY STOCKS! Now I have no research to back this up, but I truly cannot think of one industry where they GREW profits as their main input for their business model increased dramatically in value. Yes those companies could lower costs if they build one of the first six new nuclear plants to replace older, polluting coal plants, but the main point is that each year their input will rise in price for the foreseeable future.

This is most certainly the tip of the iceberg in terms of media disclosure. Something exciting will happen where the spotlight will be forced upon this industry and then all will know where at least part of the market's speculative money has been flowing the past couple of years. We stick by our prediction that SXR, URE, and FSY will be the next companies to have their stocks increase dramatically due to fund investing (mutual, index, hedge or other) followed by the general public. We also like those other junior picks where we believe our money has the potential to double within a year. We will continue to watch as the media picks up on this evolving investing idea, and our bet is that the “talking heads” will fall in love and begin to run with it. After all, excitement sells papers and increases ratings.