Nuclear Stocks: Should You Buy Now?
The Dynamic Wealth Report
March 16, 2011
by Justin Bennett, Editor
The headlines are shocking…
The earthquake in Japan is a disastrous turn of events for the world’s
third biggest economy. The earthquake and resulting tsunami released an
unbelievable wave of destruction.
Watching the footage of the churning mass of water and debris rushing
across the Japanese countryside is gut wrenching. Houses, cars, boats,
you name it… the waves were tossing them around like a child’s
playthings.
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The destructive force of the tsunami is simply amazing… and
saddening. Thousands of people lost their lives in recent days. My
heartfelt condolences go out to all those affected.
Unfortunately, the tragedy isn’t stopping there…
Japan's nuclear industry is in a state of emergency. The Fukushima
nuclear power plant in northeastern Japan was hit hard by the
earthquake. With power knocked out, backup cooling methods aren’t
keeping the nuclear reactors cool.
Now there’s a risk of a nuclear meltdown…
Obviously the situation is terrifying, especially for those in the
surrounding area. At this point, nobody knows how it will play out. Let’s
hope authorities get the situation under control quickly.
World stock markets are obviously concerned.
Investors are running for the exits in recent trading. Nothing makes the
market go down like uncertainty. Fear has a way of making investors sell
first and ask questions later.
Take nuclear stocks for example…
Cameco (CCJ) and many other nuclear related stocks are getting hit hard
on the news.
Why?
With the problems in Japan, investors are worried governments around the
world will put a halt to nuclear power expansion. While the short-term
concerns in Japan are real, the long-term nuclear worries are just that…
worries.
You see, the world has very few options at this point…
Abundant, carbon-free energy is desperately needed. According to the
US
Energy Information Administration (EIA), the world’s rapidly growing
population is going to need 87% more electricity by 2035.
The question is where is all this energy going to come from?
I would love to say that alternatives like solar and wind can provide
all of the world's energy… but they can’t. Electricity demand is simply
too large for renewable sources to supply it all. Alternative energy will
play a growing role, but it can’t provide all the world’s electricity.
This means things like coal and nuclear will have to provide the lion's
share of electricity. These energy rich technologies are essential to
modern society. Without them, we’d be living in the dark… literally.
Yes, there are potential dangers with nuclear. Once in a long while, we
have an issue like what’s happening in Japan.
But don’t forget, coal-fired power plants emit huge volumes of carbon
dioxide… 24 hours a day. And according to scientists the world over,
decades of burning hydrocarbons is causing a green house effect on
Earth.
With global warming becoming a serious problem, carbon free power has to
be an essential part of future energy supplies… and nuclear is our best
bet.
This means the recent sell off in nuclear related stocks is a tremendous
buying opportunity…
CCJ is presenting a great entry point for long-term investors. Several
uranium miners are also looking very attractive at current prices. But
be aware, the situation in Japan is still developing and these stocks
will likely see huge volatility in coming weeks.
I suggest keeping a close eye on nuclear stocks in days and weeks ahead. Once the situation in Japan is under control, these stocks could see a
big surge.
• Live Cattle (Over $1.13 a pound)
Live cattle prices are in a strong uptrend thanks to low feedlot
supplies. Front month prices on the CME are trading above $1.13 a pound,
up 20% from the June 2010 lows.
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