I’m a dyed-in-the-wool contrarian, but I admit putting your hard-earned money in a hated investment that’s been falling for months – or even years – is easier said than done. It’s a tough, counterintuitive step to take.
And yet, when it comes to nearly anything else, who among us can resist browsing the “sale” section for the best deal, or waiting to get a “Black Friday” discount?
The truth is, investing isn’t different.
Contrarian investing is the purest expression of the “buy low, sell high” paradigm. It can net those brave enough to be “first in” some outsized long-term profits.
That’s why I’m excited to show you an asset that couldn’t be more hated right now; after a years-long struggle, it’s at the “point of maximum disdain.”
And that should be your first clue that the profits here could be huge…
Investors Are Treating Uranium Like It’s Radioactive
There are lots of reasons for the mainstream to “hate” an asset: It’s too cheap, too risky, too common, not enough upside potential… the list is endless.
Uranium production is too expensive.
Currently, it costs more to produce a pound of uranium than it sells for. The shortfall is so bad, almost none of the uranium companies can turn a profit at spot prices. Uranium prices were off 40% last year, hitting a 12-year low under $18 per pound.
In fact, it was the worst-performing energy commodity of 2016.
The result is easy to predict. Worldwide uranium production has dropped off dramatically. A lack of profitability has caused some mines to either scale back production or shut down entirely.
Despite annual global consumption around 68,000 tonnes, the sector only produces some 50,000 tonnes.
The only reason there hasn’t been a supply crunch is because existing stockpiles are being drawn down…
…So far. That’s not going to last, and I’ll show you why.
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