Bullish commentary: In the wake of Japan's nuclear catastrophe, uranium investors have taken it on the chin. Uranium stocks have sold off sharply as radiation fears spread around the world.
The Global X Uranium ETF tumbled -17% last Monday and opened down another -15% on Tuesday.
So what's a uranium investor to do? Is it time to cut and run... or double down?
If I were you, I'd listen to Warren Buffett: "Be fearful when others are greedy and be greedy when others are fearful."
I'm with Warren on this one. This is a major buying opportunity to pick up quality stocks at a discount as nervous investors unload uranium like crazy. Here's why:
This kneejerk reaction is grossly overdone. The iShares Japan index fund is down just -6% since the earthquake yet uranium producers in North America with minimal ties to the situation are down -25% or more. That doesn't make sense.
The ruined reactors consume just 2% of the world's uranium. The other 435 reactors worldwide will be as hungry as ever for uranium, even if Japan scales back its usage.
India and China are still fully on board. China plans to triple the size of its reactor fleet from 13 to 40 over the next decade. India wants 10 times as much nuclear power. That puts steady pressure under uranium prices.
No matter what happens in Japan, nuclear energy is not going away. Think about the BP oil spill in the Gulf of Mexico. Naysayers said there would be a permanent ban on exploration -- but we're drilling again. At the end of the day, our voracious energy needs outweigh the risk of an isolated incident.
As Buffett suggests, it takes guts... but taking stocks off the hands of panicky sellers almost always pays off in the long run.
So I'm a buyer at today's prices. I think uranium stocks will regain all their lost ground and a whole lot more.
Not to mention... there's a looming squeeze on uranium prices coming out of Russia that few people are aware of. When it hits, uranium could go through the roof.
News 
Market Data 
Discover 
