Cameco Corporation’s Time Has Come

I had a wonderful four day weekend, which culminated in a celebration. I would share that spirit with each of you on this fine evening. I hope all is well wherever you are.

Catching up on today’s action, the signs are beginning to shift to CCJ’s favor. The stock rallied another 3.7% today.

This is a long awaited development.

Back in early 2011, after the Japan earthquake set off the greatest nuclear threat since 3 Mile Island, sheer panic had set in the public broadcasters. I watched, amazed, as men and women with no special understanding of nuclear power drowned out actual industry experts on live television with their warnings of calamity and doom.

No claim was too exorbitant. The calls for widespread death and pestilence were matched only with the audacity of the foregone conclusion that nuclear energy must be completely dead.

I let my pipe burn out, tasting only the lingering roast of the cayuga, as I shook my head in disbelief at this spectacle…

And then, I laid my reputation on the table and began slowly accumulating shares of CCJ, right in the midst of the panic as a nuclear reactor literally melted down on international television.

Now, this is actually the second time I’ve seen a strong resurgence in CCJ’s stock price, leading me to believe in the possibility of a price recovery. The stock had hit the mid teens earlier, and after that discernable bottom, I thought perhaps those days were past. Alas! It was not to be. CCJ’s shareholders proved themselves cowards with the recent collapse of U308 spot prices; incapable of seeing the greater theme.

This rally could be just another such fake. Yet, I have reason to believe it is not. There is great timing of the move, which coordinates with significant developments in the uranium space. Japan has announced they will fast track a discussion of nuclear energy – I believe they have no choice but to continue on the path. Germany (which previously announced a full scale out of nuclear power) has made decisions appertaining to their grid which make abandoning nuclear power impossible. The US has been rather cheerful about nuclear, finally giving permission for the construction of the first new nuclear power plant in decades. China is pushing full steam ahead. India has signed fuel trade agreements with Canada. And Russia is done flooding the markets with HEU from decomissioned warheads.

Whether or not this is the triumphant finale to my symphony remains to be seen. I wait with bated breath.

There is only one number I’ve come to stare at every week, and that’s the published uranium spot price. It’s up over 7% in the last month.

It’s astounding, really. I know that the number has absolutely no bearing on CCJ’s operations, whatsoever.

But I am convinced that the number has a very meaningful impact on CCJ’s stock price.

For some reason, humans are always on the lookout for “a reason”. The quest for this unattainable cause has destroyed men. It has brought nations to their knees. It has set killers free and thrown the innocent behind bars.

And now, there are potentially millions of dollars waiting for “a reason” to buy CCJ.

I don’t get it. I mean, if CCJ is a good buy, why not just buy it? Why wait for “a catalyst.”

If you suspected that your gas line was faulty, would you wait for the presence of “a catalyst” to fix it? Would you wait until lethal and volatile gas was flooding your home to patch up the issue?

“Mmm, no sir, that is simply preposterous,” you remark while stomping your foot on the ground. “I believe I need a catalyst before I move to fix that gas line.”

“Now please remove yourself from my study, you charlatan salesman. It is almost noon-thirty, a time each and every day when I practice the ritual of smoking my pipe.”

Hell no. If you saw there was a problem with one of your lines, you wouldn’t care what the expected life of a gas pipe was, or the statistics of an explosion in an average home, or presumably would you wait until your house was the ideal location for a life shattering explosion.

You’d step in and fix the damn thing.

But that’s not how the mentality works in markets. When you spy misallocated risk in market, for some reason totally unknown to me, the accept response is, “We wait, good sirs. We wait until the moment when it’s probably too late to act.”

“We wait for the signal.”

BAS executives gave a press release this morning containing select operational data from November. Here’s the quick recap; drilling projects for natural gas are real weak and demand for their services was kicked in the teeth in November.

BAS is off more than 7% before the open.

They are now forecasting an even deeper slowdown in the first quarter of 2013.

Now let me tell you how December is going to go. Worse than November, leaving expectations for the first quarter of 2013 even lower than they are now.

But at these prices, BAS remains cheap. And as companies go, it’s flush with cash in a sea of dying competitors.

I expect drilling for natural gas to pick up in 2013, provided we continue to witness natural gas prices holding onto recent gains (no double dipping into the $2 spot prices again, if you please).

That will lead to a second half spaz run in BAS shares, assuming all goes roughly according to plan.

The North America energy revolution is underway. It has not stopped. It has merely been delayed in wait for better pricing.

Hurray! Since late October I have been clamoring for a mindless stock market melt up, and it’s finally here. For the rest of this month, I demand fifty DOW points a day in no volume upside. This is my right as an American.

Please note the noticeable laggard of this Christmas jubilee; natural gas.

The price of natural gas has been bleeding. The above average warm weather is getting natty longs down, who pumped the price going into fall, betting on cold. Evidently these people can’t afford the $10 it takes to buy a weather forecast. But hey, that’s alright…

If you missed it, Michigan became the latest State to enact Right to Work legislation. Snyder signed that bill last night.

Personally, I feel the bill was a strategic mistake. Michigan is a pro-union state and this will come back to bite the overzealous conservatives who presented it. They did so largely on the (absolute) failing of the unions this November to enshrine collective bargaining in the Michigan constitution.

But just because this union proposal (Prop 2) was thoroughly rebuffed doesn’t mean the State’s support of unions has suddenly changed. A large silent majority of people in Michigan don’t trust Democrats or Republicans and they want moderate governance. Punishing Democrats by slaughtering their union doles will have a cost.

Plus today, social conservatives are going crazy in Lansing, stuffing a Christmas bill with wish list goodies. That’s not going to end well. (Social conservatives cannot be trusted with anything).

Still, I’m going to take a minute to revel in RTW, regardless of the outcome. It’s going to be an especially smug Christmas, as I have been given the greatest gift anyone could ask for. The gift of getting to blazingly mock those union sympathizers in my extended family at Christmas dinner.

After looking through the crop of candidates vying for their place on iBankCoin, I humbly offer support of the 9th floor banner to the one casting mold under “Raul3”.

I do this because I feel he will work diligently and hard. Because I see from his posts that he’s putting a good deal of elbow grease into his studies. And because he’s active on Twitter – that place I go to throw eggs at union jackasses.

Now let’s get some democracy up in here like we’re crushing opposition tents at a State capitol building.

I have not banged on this pot in a while, yet its presence should have been taken as a foregone conclusion.

Still, for a moment, I’ll hang it on a shelf.

Earlier this year, I didn’t believe we’d go over the fiscal cliff, mostly because I thought “that would be stupid”.

And stupid it will be.

At the end of the day, I blame the Freshmen Tea Party Republicans for this, because they willingly surrendered a voting majority, tied their hands behind their backs, and jumped into the water – Javert style. What the hell is this, the finale of Les Miserables (that looks incredible, by the way)?

Now the ramifications of this will be dollar weakness. Also, we’re already getting calls for more Fed easing? I think that’s premature, just like the calls for QE3 were initially way premature.

But no matter what, I’m seeing a few months of intense dollar pressure, which will likely translate into EURUSD support near this 1.3 mark.

But make no mistake – over the next several years, the EURUSD will enter sudden periods of cascading, which together will lead the dollar and euro to parity. The resumption of this inevitability will probably recommence this spring.