Postponed bullmarkets – Uranium etc

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Postponed bullmarkets – Uranium etc

  • Ty Martin

    With particular reference to this weeks edition of Sprott´s thoughts ( http://sprottglobal.com/thoughts/ ) featuring Rick Rule, I wanted some investor insight on the so called postponed bull markets in industrial commodities, particularly Uranium. Am I correct to use the metaphor of a beach ball being pushed deeper underwater at a slower but steadier rate which will delay capital investments in the sector, which will in turn cause an inevitable supply crunch maybe more dramatic than if the spot price allowed more investment now? I guess platinum and palladium are for there own reasons in a similar situation. I like the uranium thesis presented by Rick and I think the nuclear industry growth will overpower the weakness in global electricity demand which we are experiencing now.There must be a lot of money tied up in the constuction of new nuclear power plants so we should expect those to be in full operation as soon as they are finished. We may have to wait a little longer as investors but there may be a more dramatic turnaround. Excuse my rambling but I would very much welcome any thoughts or possible error´s in my coclusions. Cheers

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  • Anonymous

    Ho Ty, yes I think you are correct with your thoughts. The nuke reactors are going to be built and will generate additional demand, but the short term demand that would have been introduced into the market by the japanese has been delayed. It is important to note that the japanese are building more reactors as well so they know that they will have to resume nuclear power generation in the future. The low prices for LNG will eventually solve the problem of low prices for LNG, although this will be on a different timeline to the nuclear supply demand. Real growth in the global economy is failing to materialize, but like all things in the beautiful cycle of funny money, it will eventually arrive.

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    Ty Martin

    Thanks Tom for the response, are you invested in the sector?

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      Anonymous

      Sure am Ty, PM’s, PGM’s, Agriculture, Oil (will buy more of when I find good companies trading for a fraction of their npv) and will buy uranium in the future as well.

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      Anonymous

      What about yourself Ty? Coming to the new orleans conference in oct?

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        Ty Martin

        Cameco,UEC and Fission in the nuclear space. Interested in some others like denison. I like PM´s and PGM´s too . I won´t be there unfortunately.. Flat out with the kids haha

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        • Anonymous

          ah yes…completely understandable….the girlfriend isn’t too happy I’m going, however she likes the idea of a fancy house and shopping trips so I have permission.

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        • Gary Bendall

          I am a super noob in speculation, and have been going through all the material posted on here related to speculation including videos and liberty guides and the discussions. I am at a loss when it comes to the acronym soup. What is PG and PGM? I am also interested in know how you make a determination in regards to an entire sector or industry (I am speaking about the first two posts here). How did you arrive at those conclusions?

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        • Gary Bendall

          Great interview. Like I said, I am brand new to this and I am currently reading The Intelligent Investor by Graham, reading the posts on here, and watching the video series by Rick Rule. I also read your posts and watch your interviews which are very informative, thank you. Without Liberty.me, I would not have this wonderful opportunity to learn as much as I am from smart and sound people!!

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    Rick Rule

    Bear markets become bull markets in a couple of ways in ,my experience. Demand creation can occur as part of the economic cycle, or as very cheap commodity pricing generates such positive utility that utilization increases dramatically. Supply destruction happens when industry pricing is below the cost of production for so long that the industry is effectively decapitalized, and depleting assets are not replaced or rehabilitated.

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    Ty Martin

    Thanks Rick,I’m curious to hear if you have personally reallocated out of uranium investments to take advantage of other more imminent situations. I questioned my own holdings but have come to the conclusion that my 5 yr time horizon should be sufficient to be rewarded investment wise .

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      Rick Rule

      I have greatly reduced my uranium and uranium equities holdings

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    Ty Martin

    Coming from you i find it to be pretty instructive. I appreciate the answer, cheers.

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    Anonymous

    Japans reactors are set to come online soon arnt they?

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      Ty Martin

      Only weeks away I believe. Should draw some attention though it obviously won´t impact so much on the demand side to start with. Many analysts believe it will be the turning point in sentiment. I´m looking at high grade projects with scale at moment. Do you have any particular leanings at this time Tom?

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    Ty Martin

    No worries Maurice. Take your time and if you got around to it that would be great. I find it very interesting that with China slowing down it actually masks an impending supply crunch. I believe they are building close to 30 nuclear power plants at present and these will come online as they have environmental motivations and lots of stranded capital already invested. Supply destruction with utility capacity increases should in theory mean demand will flare up again. Not sure on the time frame. Rick has suggested that Japan doesn´t have the same level of urgency to put the reactors back online. I believe we will see a dramatic turnaround but it will require patience and maybe short term downside risks. Keep up the good work!

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    Ty Martin

    Hey Maurice, Much appreciated! I subscribed and look forward to it. I see you have a lot of other interesting articles I plan to go through too. Great stuff 🙂

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    Anonymous

    @rrule its also bloody good quality! Looking forward to the interviews Maurice!

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    Rick Rule

    I can personally attest to the fact that Maurice is a serious and hard working blogger in the space. And his hard work is, unlike mine, free! subscribe!

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    Ty Martin

    I can assure you that you have dramatically helped my understanding of the resource sector through countless free educational interviews readily available. I have a very long way to go but I feel leaps and bounds in front of where I once was. From my own experience,I found the cognizance required to survive these markets can be established by learning some essential principles like markets work, being contrarian or you will be a victim, having cash and courage to stay the trade, speculators must look for when not if questions etc. It all makes so much sense. This will be my first bull market and I feel lucky to have understood these principles.

     

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    Ty Martin

    Great Maurice. If you could touch on long term uranium supply contracts I would appreciate it. Thanks again 🙂

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    Ty Martin

    Maurice, Another company all should keep an eye on is NexGen Energy. A very professional bunch and I am extremely impressed with there ongoing success in their exploration underway next to PLS. I am biased as I own a bunch of their shares but I see the latest drill core photo´s are showing some very black massive pitchblende out for assay soon. Interestingly, Doug Beattie who was the Cameco´s lead mining engineer for the conceptualization of McArthur River is very bullish on NXE and an outspoken shareholder. He spent many years travelling around looking at different projects and rates Arrow right up there. I think FCU and NXE will certainly benefit that part of the basin and who knows how much they will ultimately find.

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