“We don’t want Treasury yields to collapse, as that’d signal a hard economic landing,” said Jim Woods, leader of the Intelligence Report investment newsletter. But a drift lower, especially in the 10-year Treasury Note, would help support the market multiple and make the argument for a 20X valuation (up from the current 19X) more viable.”
Investors will pay attention to Fed Chairman Powell’s comments about future interest rates, especially during speaking engagements such as last week’s Jackson Hole Economic Policy Symposium, Aug. 24-26.
A good way right now for investors to pursue profits is through nuclear power equities, Skousen said. Nuclear fission is nearly 8,000 times more efficient at producing energy than traditional fossil fuels or even solar, water and wind power, he added.
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The construction of average U.S. nuclear power plants required 40 metric tons of steel and 190 cubic meters of concrete per average megawatt of electricity generating capacity, Skousen commented. Compare that to a typical wind-energy system, which requires construction inputs of 460 metric tons of steel and 870 cubic meters of concrete, he added.
Woods Likes a Fund Among the Four Uranium Investments
“The Russian conflict is going to bolster the case for continuing nuclear energy output at current levels with existing facilities,” said Jim Woods, who heads the Successful Investing and Intelligence Report investment newsletters, as well as premium trading services such as High Velocity Options.
“There is also a good chance that several nations take additional steps to enhance their energy security using this established method,” Woods continued. “Those factors enhance the appeal of global stocks engaged in the discovery and production of nuclear components.”
Woods’ preferred vehicle to participate in this sector is the Global X Uranium ETF (NYSEARCA: URA). The goal of this diversified ETF is to provide investors access to a range of companies engaged in uranium mining and the production of nuclear components, including those in extraction, refining, exploration or manufacturing of equipment for the uranium and nuclear industries, he added.
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Plus, the stock paid a small dividend of $0.049 on December 29, 2022. Dividend payments never are guaranteed but it would not surprise me if another payout was provided by the company late this year, too.
Paul Dykewicz interviews Jim Woods, who heads Intelligence Report.
Four Uranium Investments Climb as Clean Energy Gains Appeal
The White House guidebook for the Inflation Reduction Act provides a detailed overview of the clean energy and climate mitigation, agriculture, and conservation-related investment programs. It further identifies eligibility to apply for funding. A quick glance at the guidebook shows an emphasis on government funding of projects, not ways to curb inflation, stem price increases and stop runaway mortgage rates.
Bob Carlson, a pension fund chairman who also heads the Retirement Watch investment newsletter, said he prefers to invest in uranium through iShares MSCI Global Metals and Mining Producers (PICK). Carlson mentioned the exchange-traded fund (ETF) to me last fall and it has advanced since then by double-digit percentages.
“I was attracted to this ETF even before the invasion of Ukraine,” Carlson told me. “The mining companies had gone through a long bear market. They worked to reduce debt and otherwise clean up their balance sheets. Their more efficient operations mean most of them can profit at relatively low prices for their commodities and will earn strong profits as prices rise.”
Retirement Watch leader Bob Carlson meets with Paul Dykewicz.
Michelle Connell, who heads Dallas-based Portia Capital Management, commented that she prefers to invest in PICK rather than individual uranium companies. One reason is most of the stocks held in PICK are profitable, while having positive revenue growth and book value. PICK also has shown superior long-term performance versus gold and silver ETFs by outperforming the precious metals on a total return basis for one year, three years and five years, Connell said.
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“Maybe this is a better way to hedge for inflation than a gold ETF,” Connell said.
One point of caution is that PICK is market-cap-weighted, with its top 10 stock holdings comprising more than 50% of the ETF’s portfolio, so underperformance by one of those key positions could crimp the fund’s returns, Connell continued.
Freeport-McMorran (NYSE: FCX), of Phoenix, Arizona, ranks near the top of the ETF’s biggest positions. The company owns copper mines worldwide. Copper is in short supply and is used in many manufacturing processes, including green technology and electric vehicles, Connell continued.
Michelle Connell heads Dallas-based Portia Capital Management,
Former Republican presidential candidate and media mogul Steve Forbes, who I interviewed last month at the FreedomFest conference in Las Vegas, recently said the “green energy” projects funded by President Biden are “expensive” and “not good for the environment.” Especially for those who are skeptical of his views, you can click this video link to hear his reasoning.
Four Uranium Investments Rise Along with Mortgage Rates
Mortgage rates in the United States are at a level not seen in over 20 years, a stark difference from a couple of years ago when families were refinancing to lock in low rates, according to a recent note from BofA Global Research. In the United States, refinancing rose to $2.6 trillion in 2020-2021 when the Fed lowered interest rates to zero. The number of U.S. homeowners without a mortgage today is near 40% and among those who aren’t so lucky, 85% are on a fixed-rate mortgage.
“For these households, the debt burden remains unchanged during a hiking cycle, only impacting those with either a floating rate mortgage or a home purchased after rates went up,” BofA wrote. “This makes the Fed’s policy tool somewhat of a blunt instrument, potentially requiring higher rates and/or holding rates higher for longer. However, the other side of the coin of a less powerful monetary policy is that consumer spending seems resilient on the back of strong employment and a tight housing market.”
Forbes accused the Biden administration of spending hundreds of billions of dollars on “schemes” to replace fossil fuels with renewable energy sources. For instance, Forbes said one wind turbine requires the use of 2,500 tons of concrete that goes 30 feet deep into the ground.
“Imagine trying to reclaim that land,” Forbes said.
Four Uranium Investments Ascend as Wind Power Wanes
The wind turbine also requires 900 tons of steel and 45 tons of unrecyclable plastic, Forbes continued. To operate the wind turbine, it requires 700 gallons of costly synthetic lubricants that are vulnerable to spills since they must be replaced each year, he added.
Wind turbines are shown in the waters between Denmark and Sweden. Photo by Paul Dykewicz
Solar and wind farms need “gargantuan” amounts of land, Forbes said. For example, New York City occupies 205,000 acres of land, but it would require 2,000,000 acres of land to fuel the Big Apple solely with renewable energy, he explained.
A 100-megawatt gas-fired turbine is about the size of a residential house and would provide electricity for 75,000 homes, Forbes counseled. To give equivalent energy to the same number of homes, 20 wind turbines would occupy 10 square miles of land.
“Renewables are very expensive,” Forbes continued. “Cost overruns here are as common as they are at the Pentagon.”
I spotted wind farms in northern Poland helping to supplement other sources of energy. Photo by Paul Dykewicz
Poland is one of the countries putting wind farms to use in wide open spaces. Photo by Paul Dykewicz
Wind farms are “notorious bird killers,” degrade existing transmission lines and displace wildlife, Forbes warned. Plus, what should be done with the 1,000-pound batteries in electric vehicles that require replacement with no recycling of the worn-out ones? he asked rhetorically.