By: Ryan Fletcher
Contrarian investing entails going against the herd and at times your gut. Widespread pessimism during the financial crisis of 2008, for instance, created opportunities in some of the spaces under the most negative pressure including banking and automotive. Why? Because the overwhelming negativity was priced in. Opportunity lurked in the crisis.
Similarly today, post-Fukushima the spot price for uranium is hovering near an eight-year low at $29/lb U308, down from its peak of over $140/lb from 2007, and the sector is largely washed out. Pessimism far outweighs optimism.
Cameco, one of the world’s largest publicly traded uranium companies is currently trading 60% below its all time high in 2007 and 50% below its 2011 peak during the Fukushima incident. An ETF that tracks the global uranium mining industry Global X Uranium (NYSE: URA) is down more than 75% from 2011. Gone are the days when everyone was speaking about uranium, on outlets like CNBC and Bloomberg, with the latest market darling and investor favorite.
As a group the Lakeland team is ardently contrarian, as investors and as company builders. The depressed uranium market and spot price created an opportunity for us to enter into the space in 2013, in one of the most favourable locales and jurisdictions for high-grade uranium deposits; the Athabasca Basin in Saskatchewan. With the sector out of the spotlight, quality personnel, mineral claims and consultants, all became available with less competition. When you’re contrarian, you have to have patience, and Lakeland is positioning itself professionally for when the tide comes back.
The contrarian nature of the uranium space hasn’t gone totally unnoticed, with some of the brightest and most experienced resource investors already positioning themselves in the beaten up sector. A recent article in the Financial Times by John Authers about contrarian investor Joe Huber, for instance, I found particularly sharp. A copy is included below:
Be contrary and boldly back uranium miners:
By John Authers
To the contrarians.
Suite 1450 – 789 West Pender St. | Vancouver, BC | V6C 1H2
-- Posted Tuesday, May 13 2014 | Digg This Article |
Previous Articles by Guest Authors
UraniumSeek.com, Gold Seek LLC
The content on this site is protected by U.S. and international copyright laws and is the property of UraniumSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on UraniumSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.
The views contained here may not represent the views of UraniumSeek.com, its affiliates or advertisers. UraniumSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of UraniumSeek.com, is strictly prohibited. In no event shall UraniumSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.