By Justin Spittler, editor, Casey Daily Dispatch
Donald Trump has been pledging this since the campaign trail. And unlike some of his promises, Trump’s stayed true to these words.
He’s already put America first when it comes to trade, national security, immigration, and most recently outer space.
Now, you might not agree with these policies. But the Dispatch isn’t about politics. It’s about making money.
And you can’t deny that Trump’s “America First” approach has helped spark some huge market moves.
Just look at this chart. It shows the performance of the VanEck Vectors Coal ETF (KOL) compared to the S&P 500 since Trump’s inauguration.
You can see that KOL rose up to 49% at its peak after Trump’s inauguration… compared to a 27% peak gain for the S&P 500.
• These stocks soared because Trump made it his mission to revive the U.S. coal industry…
Trump did this for a couple of reasons. Number one, he wants to bring back coal mining jobs. He also believes that a strong domestic coal industry “protects our national security, public safety, and economy from intentional attacks and natural disasters.”
But don’t worry if you missed out on this big move in coal stocks.
That’s because Trump could soon spark another big rally in energy stocks… and this one could blow the move we saw in coal stocks out of the water.
I’ll show you how to position yourself for this in a minute. But first, let me tell you what Trump’s up to…
• On June 1, Trump issued a controversial directive…
He told Energy Secretary Rick Perry to take “immediate steps” to ensure that coal-fired and nuclear power plants stay open.
I say “controversial” because many people don’t think Trump should be supporting coal over cleaner energy sources. Other critics warned that the move could raise energy prices.
Still, I expect Trump to follow through on this.
That’s because the White House has already instructed the Department of Energy (DOE) to place a two-year moratorium on nuclear power plant closures. The Trump administration is also considering a plan that would direct regional transmission companies to buy power from coal and nuclear plants.
Trump’s calling for these measures because he wants to ensure a reliable energy source and to “promote the national defense and maximize domestic energy supplies.”
If this goes through, it would be an unprecedented intervention by the federal government into the domestic energy market. It would also likely have massive implications for one commodity. And no, not coal.
• I’m talking about uranium…
The primary fuel used in nuclear power plants.
It’s also one of the world’s most dependable energy sources. Unlike many renewable energies, it’s a form of base power. It provides power around the clock. It doesn’t matter if the wind’s blowing or if the sun’s shining.
Uranium is also one of the world’s cheapest sources of energy.
• Because of these advantages, uranium accounts for about 20% of America’s power needs…
But get this… The United States only produces about 7% of the uranium it uses.
The rest comes from abroad. And about one-third comes from Russia, Kazakhstan, and Uzbekistan, which is problematic for obvious reasons.
In short, America’s uranium supply is incredibly fragile. This is why Trump’s putting U.S. nuclear energy “first.”
In his eyes, it’s a matter of economic and national security.
And I expect Trump to do a lot more for the nuclear energy industry in the coming years.
• Energy Fuels and Ur-Energy are calling for major reforms to America’s uranium industry…
Energy Fuels and Ur-Energy are two of America’s biggest uranium producers.
Recently, they asked the U.S. Commerce Department to radically rethink its uranium policies. Specifically, they requested that 25% of all U.S. uranium be purchased from U.S. producers for national security reasons. That’s about three times more uranium than U.S. producers currently provide.
They also think that U.S. agencies should be required to buy all uranium from domestic sources.
• Now, companies lobby for changes like this all the time…
Often their requests fall on deaf ears.
But I think Trump will take this request seriously. After all, he’s already shown a serious commitment to reviving the country’s nuclear power.
And here’s the thing…
• Trump won’t have to do much for uranium to skyrocket…
Again, that’s because uranium is already dirt cheap.
It’s down 83% since 2007. And it’s down about 34% over the past three years. That makes it the worst-performing major commodity, according to Palisade Research.
More importantly, the uranium price is now below the industry-wide cost of production. This means the typical uranium producer is losing money.
This isn’t sustainable. Sooner or later, the price of uranium will rise. And when it does, watch out. We could have a “rip your face off” rally on our hands.
But don’t just take my word it…
• Doug Casey’s extremely bullish on uranium, too…
A few days ago, Doug said in an interview that “uranium may be my single favorite commodity.”
Doug also said that now’s a better time to buy uranium than it was before the last major bull market.
Keep in mind, the price of uranium soared from $10 to $140 during the last bull market. The best uranium stocks went 20-to-1 or 50-to-1. Some even went 100-to-1.
So, consider speculating on uranium stocks if you haven’t yet.
The safest way to do this is with the Global X Uranium ETF (URA). It allows you to bet on a basket of uranium stocks, which is less risky than buying individual stocks.
Just understand that uranium stocks are extremely volatile.
Blue-chip uranium stocks can swing 5% or more in day. Junior uranium stocks can move 20% or more.
If you can’t handle that volatility, you should stay on the sidelines. And if you’re willing to speculate, don’t bet more money than you can afford to lose. Use stop losses. And take profits when you get them.
June 20, 2018
P.S. Crisis Investing editor Nick Giambruno is also bullish on uranium. He’s dedicated a section of his portfolio to the best uranium plays he’s found. And all are still buys today. You can access these names—and all of Nick’s research on the sector—with a subscription to Crisis Investing.
Are you planning on investing in uranium? Let us know your thoughts on this idea—and any questions or suggestions you have for the Dispatch—right here.