I’ve been holding CCJ basically since that reactor went critical in Japan. In fact, the only reason I bothered to purchase CCJ was BECAUSE of the reactor.
As an observation, in the face of natural disasters, people are horrible at honestly judging a situation. They ALWAYS skew to the pessimistic, end-of-the-world viewpoint. And especially with radiation, where the radiation level does not even determine health risks so much as radiation-time, people get goofy.
Case in point: I say to you, “you’ve been exposed to ‘high’ levels of radiation for a few hours.” Let’s suppose that “high” is around the range where death becomes 50/50 according to statistical observation. Rank the following outcomes in terms of likelihood: Death, cancer, sickness – no cancer, and no impact.
Most people, upon freaking out at this statement, would immediately order these outcomes in terms of the fear they have to them – death is most likely, followed by them developing a cancer, followed by them only getting sick, and finally leading off with them scraping by unscathed.
In reality, this is completely wrong.
When exposed to high levels of radiation, the most likely outcome is cell death; since we’ve already specified 50/50 chance of mortality, this is the highest outcome (as all others must fit inside 100% probability), followed by sickness without cancer (survivable cell death), and finally followed by no impact occurring.
The likelihood of developing cancer from 1 hour of exposure at any magnitude of radiation remains effectively the same – zero (this is not to be confused with the implications of absorbing radiating materials into your body, which is why unprotected exposure to radioactive materials is frequently associated with cancers).
This is a good example of panic creating opportunities. The fact that none of the Japanese workers have died from radiation is indication that they will be alright and a reminder that nuclear energy, while complex and potentially dangerous, can be managed safely.
Other examples include the Macondo well in the Gulf of Mexico, the threat of an Iranian blockade of the Hormuz Straight, the impact of peak oil on net global oil supplies, the relevance of the Y2K bug to global finance, etcetera.
Now, I will demonstrate first hand again the kinds of profits that can be made by keeping a level head when “freaking out” is the cool thing to do.
You see, CCJ’s price has been lackluster of late, to say the least. Yet, I continue to hold it after purchasing logarithmic intervals from the entire spread of $29 all the way down to $17. It comprises an enormous portion of my allocations (just under 20%).
But that is about to change.
In a matter of months, Russian recycled nuclear warheads will stop entering the marketplace as fuel. At such point, current uranium production is insufficient to maintain current fuel demands of all global reactors.
And the number of those reactors is increasing – not decreasing.
Germany’s promise to switch from nuclear fuel to alternative energy sources is weak. They have no chance of accomplishing this…nadda, zilch, zero. The technology does not even exist is terms that could make this possible, at this time.
And Japan will not be decommissioning any of their own reactors, despite public mood on the subject.
The reason they cannot do this is China.
Japan is an island nation with few natural resources. The majority of their consumption comes from abroad. The whole reason they went nuclear to begin with was to create a quasi-self-sufficient power grid for the country. The major catalyst for that choice was fear of China’s naval capacity.
Your standard nuclear plant can run for upwards of 500 full power days before needing to reshuffle the fuel rods. That’s a year and a half of power, without fear of supply disruption.
If Japan were to start converting away from nuclear, it would expose itself to two risks it currently doesn’t have: the first is daily fluctuations in the price of fuel (all of which it must import), and second, the risk that China tries to blockade their supply routes.
If Japan made the switch, and China ever decided to interfere with them, then they would have literally a few months to respond before watching their entire grid fault out. Nuclear gives them options to respond to military provocations – as the Chinese have so kindly reminded them of.
Uranium is set to soar, and CCJ is the biggest beneficiary. By this time next year, I will be insufferably gloating.
8 Responses to Just A Matter Of Time For CCJ
what do you think of URRE
I didn’t really care for it. Too small – I like Cameco because they are big and cash flow positive.
I’m not exactly sure how long it will take for uranium to turn around – I’m just guessing and I don’t want exposure to the small stuff in case the rut outlasts them.
But if there was one micro cap stock I would throw money at on a guess, it would be UEC. They’ve gone from zero production and a high stock price to actual production (and increasing) and a lower stock price (go figure).
heard we all have cancer cells, it’s only a question of whether or not they are active? probably when 12/21/12 hits the aliens will press a button and it will force these cells to take over and behave to do their work for them
Cancer can lay dormant for prolonged periods of time, only to reactivate in the presence of glucose. There were some interesting studies I’ve heard of that involved trying to starve out cancer only to see it come out of remission months later with a vengeance.
Cancer also has this rather interesting ability to go apeshit just before it dies, in a quest for food, meaning the final phases of treatment actually helps it to spread, in some cases. Asymmetrical body functions are fascinating.
Had considered ccj before…might take another look as you make a valid case.
A good thesis. The only issue is the “relative value” vs coal and nat gas. A flood of mines in Australia and or Russia will be a plus, or if cigar lake gets factored back into their estimates.
Since no melted faces were revealed (evident in that black and white movie on Hiroshima and Nagasaki) after the tsunami, there is no reason not to be a holder of this bellweather…..unless the energy complex as a whole is vulnerable.
Forgive the “new guy” question, but why not just buy URA as a pure uranium play?
You can do that to, if you believe uranium prices are going to soar – I certainly do.
But with a company, you get active management and profits aren’t totally tied to market price like a commodity. There’s price elasticity for finished product.
Plus, URA is an ETF – and basically all ETFs are slated to go to $0.00. So with an ETF bet on a commodity, market timing matters a lot more, whereas with a corporation you can get the benefits from uranium appreciation but with profitability keeping your head above water while you wait. And if uranium prices start to drop, the corporation can try and restructure to still make you money.