Justin’s note: Earlier this month, we showed you why Crisis Investing chief analyst Nick Giambruno says we’re on the cusp of another uranium bull market.

Nick recently caught up with Doug Casey and Rick Rule at the Sprott Natural Resource Symposium in Vancouver for more on this huge opportunity. Doug and Rick are true legends in the resource space. It’s hard to think of two other people who have had more success in the uranium market.

Over the next two days, I’m sharing their conversation. I think you’ll be fascinated by what they have to say about the coming boom…

Nick Giambruno: Doug, you wrote a pretty thorough article in your newsletter back in the late 1990s recommending uranium. And it was hard to have better timing. Anyone who acted on that information probably made life-changing wealth.

Back then, the uranium market was in the middle of a bear market that had lasted almost 20 years. So what made you so confident about it? What did you see that others did not?

Doug Casey: I’ve always been a uranium bull because I’m kind of a boy scientist. Rick knew that, and Rick always felt the same way for the same reasons. So he called me up and he said, “Listen, we ought to be looking at this.” And I said, “That’s a great idea, I totally agree.”

So I wrote that 12-page article on uranium, and another four pages on nuclear power plants. And the timing was pretty good. It was a little before the bottom. But look, you had to like uranium for all the technical and scientific reasons, and you had to like it because nobody even knew or cared that it existed. You had to like it because there were only about five uranium mining companies in the world at that time. All the stars were aligned from my point of view, and Rick felt the same way. So it was a really excellent pick.

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Nick Giambruno: That leads me to my question for you, Rick. You once mentioned that at the beginning of the previous uranium bull market, you were trying to figure out which juniors were the best. Not being able to decide among them, you decided to buy them all.

It kind of reminds me of the story of legendary contrarian Sir John Templeton back in the late 1930s. At the time, there was an incredible amount of fear in the world.

Templeton knew that extreme fear had pushed US stocks down to ridiculously cheap prices that couldn’t be sustained. So he simply bought every US stock that was selling for less than $1. He was right, of course, and it was the start of his fortune.

And that story about you buying all the uranium juniors in the late 1990s reminded me of that.

Now, such an approach was practical then, when there were only around five uranium juniors. But today we have around 20. It doesn’t seem an optimal use of capital to buy them all this time around. What do you do to distinguish between them today?

Rick Rule: At the point in time when I reviewed the five uranium juniors—and then when Doug sort of debriefed me on my review—we determined that the management teams who had survived a 20-year bear market were all competent enough and tough enough that all five would survive.

It’s worth noting, if my memory serves me well, that the worst of those five went up 20-to-1 in the ensuing bull market.

Fast-forwarding to today, in the 20 or 25 companies that either are or allege to be in the uranium business, there is still an unusually high proportion of good management teams relative to number of listings, at least if you compare it to the rest of the mining sector.

My suspicion is, out of the 20 or 25, there are 12 or 15 that are good bets to survive through the rest of this bear market to participate in the next bull market.

The limiting factor, however, is that I ask individual retail investors to limit the number of companies in their portfolio to the number of hours per month they are willing to spend on research and knowledge maintenance. So if you assume that a retail client is willing to spend five hours per month on uranium names, my only belief is that they should ration themselves to five positions. Certainly, it’s their money, not my money, so I can only suggest what they do rather than tell them what to do.

I suspect that if you buy the best five names—of course depending on how you do that allocation—that you would do quite well in the uranium space now.

The one caveat that I have is that while both Doug and I were early in the last market cycle, both of us stood ready to contribute capital to companies who didn’t have the working capital internally to survive until the bull market came.

And I would suggest to people who are interested in speculating in the space that they understand that it could easily be 18 to 24 months from here before the market turns. And investors who take a position now in companies should be ready to participate in subsequent private-placement offerings which might otherwise dilute them.

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Nick Giambruno: Doug, you have an interesting saying: “when the wind blows even a turkey can fly.”

How does it relate to uranium?

Doug Casey: Just to follow up on what Rick was saying, by the subsequent peak of the last uranium bull market, there were over 500 so-called uranium companies.

That’s an unbelievable number, quite frankly. And it turned out that 95% of them—or more—were turkeys, but they were all able to fly because the wind was blowing.

When a bull market comes along, all these cats and dogs start howling. It’s going to happen again. I’m very confident of it because all the world’s governments have been creating trillions and trillions of currency units since the crisis started in 2007. That money has already created lots of bubbles. And plenty will flow into uranium, which isn’t a micro-cap or even a nano-cap market. It’s a pico-cap market.

Nick Giambruno: It sounds like a contrarian investor’s dream.

Speaking of which, Doug, I know you know the importance of accurately defining words. So what exactly is a contrarian?

Doug Casey: A contrarian is somebody who’s running against the crowd. But it’s easier to say than it is to do. Because we’re all psychologically wired to be herd animals. We can recognize it intellectually, but emotionally it’s hard to put the theory into practice, and now is one of those times. It looks like uranium is never going to come back, but it will for all kinds of reasons. So now is when you buy.

Rick Rule: Doug and I have laughed about this over various spirits and beverages for years. The first comment is that everybody wants to be a contrarian when it’s popular, which is sort of a hard thing to do.

Uranium was really the perfect contrarian material in the late 1990s. In the first sense, for 20 years it had been in a bear market, so there was no performance support for the narrative. You know rising price expectations usually support a narrative, and so that’s why people try to be contrarians when it’s popular.

What’s really amazing about uranium is after you got through the investment case, when people got done being bored, as a consequence of Hiroshima, Nagasaki, Three Mile Island, and Chernobyl, people were angry. So it wasn’t just they were bored with it, which is what you look for as a contrarian. They actively hated it, which is how I knew that I was pretty lonely in this thesis and therefore likely would be rewarded if I were right.

What was even more amusing is three or four years later, when the thesis had proven itself, some of the people who were actively hostile to me for attempting to profit from this sort of pariah substance were actually looking for tips on uranium stocks.

The other thing that goes to your contrarian point, Nick, is that when the price of uranium was $8 a pound and the cost to produce it was $20 a pound, the investment thesis was either the price goes up or the lights go out; those were the only two choices.

At that point in time, when something had to happen, there were only five public companies and nobody cared. In other words, when the upside was inevitable and absolutely had to happen, nobody cared. After the uranium price had risen to $130 and the cost of production had risen to $45 or $50, in other words once the industry began enjoying 50–60% operating margins and the price did not have to go up anymore, the number of public companies looking for uranium increased from five to 500.

And public participation when the price didn’t have to rise anymore was incredible. It’s particularly interesting to note that when there were 500 companies in the uranium space and everybody cared about uranium, there were probably still only 15 or 20 management teams that were really truly able to spell uranium.

And so, at the peak, the statistical probability that your company was run by a competent team was really a function of the equation of taking the number of competent teams, 15, and dividing that by the number of aspiring companies, 500, which is statistically really bad odds.

So when the deck was stacked in people’s favor, nobody cared. When the deck was stacked solidly against them but the price action verified the narrative, people were dying to get in.

Justin’s note: I’ll be sharing part two of this interview tomorrow. In the meantime, if you’d like to get started investing in the top uranium stocks today, Nick currently has four “buys” in his Crisis Investing portfolio. They’re all quality companies and have enormous upside ahead. You can access these picks—and all of Nick’s research—with a subscription to Crisis Investing. Click here to get more details.

And don’t forget that both Nick and Doug will be speaking at our upcoming Legacy Investment Summit in Bermuda next month. We’d love for you to join us in what will be the most action-packed event we’ve ever held. Spots are still available, but they’re filling up quickly. If you’re interested, click here for more details.

Reader Mailbag

Today, readers flood our inbox with praise for Doug Casey’s recent interview on John McCain

Thorough, thoughtful, exacting. Perfectly stated, Casey. Needs to be entered into the Congressional record. Doubt will see this reprinted in The New York Times, but needs to be.

Thanks for taking the time to get this out.


One of the greatest articles I have ever read. Thank you!


Wow! Well-said, well-written, and absolutely truthful.


A lot of light had to come out eventually. Many people knew the truth but hesitated to raise a voice in the middle of all the red roses being tossed. Thanks for making it known.


Thank you. So glad you have the courage to speak up. You expressed my sentiments exactly.


I loved Doug Casey’s take on John McCain… most people don’t know his whole story.


This was a superb article (as usual), but I saw another that, while well-crafted and well-written, made this one look like an endorsement. I do not forward such items, but I agree with both Doug and the other author. McCain was certainly not an admirable person.


Another of my favorite investment gurus: Doug Casey. He’s so right on!


Doug has a good read on what a troll John McCain was. There is nothing exemplary about him. He was a total screwup at the Naval Academy, a lousy officer, and a sub-mediocre pilot at best. He was almost an ace for the N. Vietnamese Air Force if you count the number of aircraft he crashed. If you count the destruction on the USS Forrestal he was a multi-ace. As a Vietnam-era Navy A-4 pilot (233 combat missions), I had two squadron buddies who spent more time in captivity than McCain did. Almost all the POWs couldn’t stand “Songbird” because he betrayed them all.

I sat up in the middle of the night to watch the POWs board the transports in Hanoi and deplane in the Philippines… and then when they came back home to the U.S.A. McCain looked quite well-fed compared to the rest of the guys. Getting shot down and captured doesn’t make you a hero, that just means you got unlucky that time. All who flew over there and came home on time can tell you of numerous times when our good fortune got us through safely. The ever-loving grace of God is the real reason any of us came back.


This hits the McCain nail on the head.


You are correct about John McCain. I was in ‘Nam 1969. Americal Division, Chu Lai, Vietnam. Actually you were kind to McCain in your statements.


Hooray for Mr. Casey. As an 84-year-old Naval Officer’s wife, times two (one Naval Fighter Pilot who retired to die, the other a WWII shipboard Naval Officer reserve) I applaud your truth.


As always, you can send any questions or suggestions for the Dispatch right here.