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Market Rubbernecker

  • Ken - Chief Rubbernecker

The First Rule of Performance Club...

“The first rule of Fight Club is you do not talk about Fight Club.  The second rule of Fight Club is YOU DO NOT TALK ABOUT FIGHT CLUB!”   -- Tyler Durden from Fight Club

February 25, 2024

There’s no better way to anger the investment gods than to brag about past investment performance and wax eloquently about assured future returns.  So, let me prostrate (had to spell check that twice at my age) myself in humble appeasement straight off.  Past performance is no guarantee of future returns, we are due for a short-term pullback, and I am no wiser (or hopefully dumber) than I was a few short years ago.  I continue to confidently make investment decisions under the assumption that there’s a 50% chance that I’m 75% right about 90% of my predictions 60% of the time…ish.    

We had another strong year of performance in 2023 which was all the more satisfying after posting gains in what was a bloodbath of a 2022 for most.  We’ve now strung together an enviable and outstanding 5-year track record across all risk buckets, and we owe much of it to one key investment decision.  About 5 years ago, we dipped our toes into the radioactive wastewaters of uranium stocks.  The sector had just suffered a brutal 10-year meltdown, and by the time we started building our position the entire investable uranium industry was valued at only $7 billion, equivalent to the market value of Kohl’s stock at the time.  An entire vital energy industry for the price of a middle-America retailer of khakis and throw pillows.  It seems so obvious now, doesn’t it?

Historical price of uranium
Uranium Price Chart

When people learn what I do for a living, they often ask what stocks I like.  Five years ago, the only person who showed any interest when I mentioned uranium mistakenly thought it was the name of a new cryptocurrency.  Around the same time, two women on Bumble reported me for “excessive uranium badgering” and my local Toastmasters club politely disinvited me after my five consecutive uranium speeches led to a 73% drop in membership.  Obvious signs of an imminent bottom.  I canceled my Bumble and Toastmasters memberships and plowed the saved fees straight into uranium, along with a bit of your savings.  It was a good call. 


Timeline of Aspera Uranium Commentary

January 2019 - “I ultimately expect uranium to move up over $50 with the equities posting triple digit gains.  This is a good example of the type of undervalued and unappreciated story I like to own.  Nobody is talking about uranium.  There is zero interest in the small sector.” 

July 2019 - “While most investors are still enamored with the grossly overvalued tech sector, money-losing private equity companies, negative-yielding debt, and scandal-ridden cryptocurrencies, the neglected and unloved uranium sector offers one of the best risk-return trade-offs I’ve seen in my career.”


January 2020 - “I’ve mentioned uranium in the past, and I’m more bullish today on that space than I’ve ever been.  We’ve been slowly building our exposure as the industry searches for a bottom, and it’s now the second largest exposure in most accounts. I can’t time the exact bottom, but I can’t think of a better risk-reward proposition over the next 5 years.”

March 2020 - “As I’ve highlighted in the past, this entire industry is currently worth a paltry $7 billion. When the next uranium bull market kicks off, we’re going to see fireworks.”

March 2021 - “Our uranium holdings are now our largest position in most accounts, and uranium remains one of the most compelling opportunities I’ve seen in my career. We methodically built out our uranium holdings over the course of a year and a half, and our patience and diligence has recently been rewarded. There will be significant pullbacks along the way, but I expect a multi-year bull market in this space.”

August 2022 - “Our uranium position has played out almost to the letter so far, and I’m as bullish today on uranium’s prospects as I’ve ever been. Uranium prices already hit our initial $50/lb target, but that number will have to move meaningfully higher to encourage the development of uranium mines the world will need. If my optimism isn’t clear enough, I sold my mountain getaway last summer and rolled the proceeds into uranium securities. So…yeah…bullish.

For many years, just about every news article related to uranium was awful.  The Fukushima nuclear accident kicked off a multi-year buzzkill for the industry as Japan shuttered its nuclear plants, and the world hit the snooze button on newbuilds.  Industrial giant, Germany, announced plans to completely abandon its nuclear power generation, and the only nuclear power plant under construction in the U.S. was experiencing huge cost overruns.  Green renewable energy was all the rage, but zero-carbon nuclear was hated by environmentalists.  If you didn’t know better, you might think that uranium was responsible for Covid, climate change, the fentanyl crisis, Jan 6, and the 2020 University of Kentucky cheerleading scandal.  All the while, the nuclear power industry’s marketing message amounted to, “Hey, sorry we suck so bad, but yeah…we kinda suck, and we hope to suck a little bit less at some indeterminate point in the future.”  

Fortunately, we didn’t have to wait too long for the suckiness to wane and our thesis to start playing out.  The huge disconnect between supply and demand for uranium started pushing prices higher, memories of Fukushima started to fade as Japan began restarting its nuclear plants, and the environmental benefits of nuclear started to shift perceptions.  The unexpected kicker was the Russia-Ukraine war which served to highlight the importance of energy security.  The industry has been benefitting from these huge tailwinds for the past few years.  The following is a sampling of news articles from the past 18 months which illustrate the much-improved sentiment for uranium.   

Media Headlines the Past 18 Months (in order)

  • The World Won’t Get to Net Zero Emissions Without Nuclear Power – Forbes

  • After The Fukushima Disaster, Japan Swore to Phase Out Nuclear Power.  But Not Anymore. – NPR

  • Japan To Extend 60-Yr Nuclear Reactor Life, Build Advanced Reactors – Kyodo News

  • Van Eck Launches Uranium and Nuclear ETF – ETF Stream

  • Is America Heading Toward a Nuclear Energy Renaissance? – Popular Mechanics

  • French Parliament Passes Law to Accelerate Construction of New Nuclear Reactors – Le Monde

  • Aging Takahama Nuclear Reactor Restarted After 12-Yr Halt – Kyodo News

  • Ontario Starts Pre-Development Work for New, Large-Scale Nuclear Plant – The Canadian Press

  • Sweden To Clear Obstacles for New Nuclear Reactors – ZAWYA

  • Uganda Picks Russia, South Korea to Build Two Nuclear Plants – INTELLINEWS

  • Modi’s Nuclear Power Push Gains Traction with New Plants on Way – Bloomberg

  • Italian Nuclear Industry Revival on The Table – Nature

  • Rwanda Signs Agreement to Build Test Nuclear Power Reactor – Reuters

  • Minerals Council Pushes to Lift WA Uranium Ban as Surprise Poll Reveals… – The West Australian

  • European Commission Is Willing to Consider Subsidies for Nuclear Technology… – EuroNews

  • Bulgaria Is Launching the Construction of 2 US-Designed Nuclear Reactors – AP News

  • US, UK to Push Pledge to Triple Nuclear Power by 2050 at COP28 – Bloomberg

  • Pritzker Signs New Law Lifting Moratorium on Nuclear Reactors – U.S. News & World Report

  • Microsoft Targets Nuclear to Power AI Operations – Wall Street Journal

  • Poland Approves Construction of SMR Nuclear Units at Six Sites – Reuters

  • EDF Energy Aims to Extend Life of UK Nuclear Plants – BBC

  • Ontario to Refurbish Nuclear Plant to Meet Growing Electricity Demand – The Globe and Mail

  • Nuclear Power Plant Construction Boom Fueling Billion Dollar Growth for Uranium Market – Financial Post

  • Iran Begins Building 4 More Nuclear Power Plants – MSN

  • Growing Support for Nuclear Will Drive Industry Forward in 2024 – Reuters

  • Biden to Offer $1.5 Billion Loan to Restart Michigan Nuclear Power Plant – Bloomberg

  • Britain Wants to Make Nuclear Power Plants Cheaper to Build – The Economist

  • Ukraine to Start Building 4 New Nuclear Reactors This Year –

  • Estonia Plans Small Nuclear Reactor to Quit Oil Shale by 2030 – Euractiv

  • Growing Support for Nuclear Will Drive Industry Forward in 2024 – Reuters

  • Czech Govt Now Seeks to Build Up To 4 Nuclear Reactors Instead One to Reduce Price – Newsday

  • Ottawa Pledging $50M for Bruce Power Nuclear Plant Expansion – CBC

  • India to Add 18 More Nuclear Power Reactors with Capacity of 13,800 Mwe by 2032 – The Economic Times

  • U.S. Seeks to Boost Nuclear Power After Decades of Inertia – New York Times

  • China Able to Accelerate Word’s Fastest Nuclear Power Expansion – Bloomberg


The Long and The Short Of It

Our uranium stocks have been terrific past performers, but that’s old news now.  Much of the easy money has been made now that uranium prices have climbed 5-fold and many of our uranium equities are up 300-1000%.  Could prices rise significantly further?  Absolutely.  The 2007 spike in the price of uranium to $137/pound is equivalent to about $200 in today’s dollars, so prices would still have to double to reach new inflation-adjusted highs.  Of note, that 2007 spike occurred at a time when there was an excess of uranium supply in the market, the exact opposite of today’s situation. 

The industry is facing a significant supply deficit in the years ahead which only grows with every nuclear plant life extension and newbuild announcement.  It takes many years to bring on new uranium supply.  This is an important distinction from some other commodities, like oil and natural gas.  When petroleum prices spike, companies can respond fairly quickly by putting additional drilling and completion rigs to work.  In addition, large price spikes lead to less demand as consumers pull back and fuel switching occurs at the margin.  Supply increases, demand decreases, and prices moderate.  Nuclear power plants NEED uranium, and the cost of uranium is a small portion of a nuclear power plant’s cost.  There is no demand destruction when prices increase, and there is no ability to bring on new supply readily.  The easy money may have been made, but (barring another Fukushima) uranium and uranium stocks have plenty of runway left.

We’ll continue to employ our core-tactical discipline as we taxi down the rest of this runway.  We have a target uranium weighting for our accounts.  We’ve pared back our holdings following large rallies as our sector position became too large relative to our already significant target.  Conversely, we’ve added to our holdings opportunistically on the inevitable pullbacks.  We also take advantage of one-off opportunities, such as the huge sell-off in share of Global Atomic Energy last summer following the coup in Niger.  We were able to pocket a 50%+ gain in a few months on that trade.  I anticipate more of the same going forward, paring back after rallies and adding on significant pullbacks.  As valuation and interest expands and the uranium sector moves higher, our target weighting will trend lower until we’re eventually out completely.  We could be involved in this space for many years still, or we could be gone in short order should an upside panic occur.  Uranium has had its Hangover.  We bought in during the Zach Galifianakis stage, we’re currently in the Ed Helms phase, and we’ll be completely out when we hit the Bradley Cooper era.


Ken Bell, CFA, MBA, currently in Ed Helms phase

Aspera Financial, LLC

The Market Rubbernecker is associated with Aspera Financial, LLC, an investment management and financial planning firm based in the Cary, Raleigh, and Durham area of North Carolina. This and all Market Rubbernecker missives and musings (written, oral, or mimed) are subject to the disclaimers, disavowals, and hindquarter-coverings found at

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