Kyle Johnson
Lobo often repeats an important lesson from Rick Rule: “Never mistake the inevitable for the imminent.” But he takes things a step further, adding, “I want something that is happening now.”
Uranium meets Lobo’s critical qualification better than any other metal today.
Uranium’s inevitability is rooted in basic supply and demand.
Modern societies require significant baseload power. Globally, demand for energy grows with little interference. At present, uranium is the most energy-dense—and commercially proven—option.
Interestingly, our analysts cannot find a single source that projects a significant uranium oversupply in the coming years.
Increasing demand…
Shortage of supply…
You don’t need me to explain what this means for uranium prices.
Inevitability is fine, but generally too distant to have investment implications. Imminence brings a prospective investment into a more actionable time frame.
A possibly imminent buying opportunity in uranium comes from the tech sector. Not even AI will manage to create an exception to one of the few certainties in financial markets: nothing goes up in a straight line forever.
Many software and hardware companies have generated impressive returns of late. But perceived “bombshell” news can send them into free-fall.
The public release of DeepSeek’s AI models in early 2025 triggered a sell-off in its competitors, hardware manufacturers (like NVIDIA), and even the energy sector. Alleged revolutionary efficiency created a sudden but short-lived irresistible buying opportunity in uranium stocks.
Are we to believe this cannot or will not happen again?
Seems like it could happen on any given day.
Other factors seem destined to cause rapid sell-offs.
A recent report published by Nikkei (a Japan-based financial outlet) claims that off-balance sheet debt held by Alphabet, Amazon, Meta, Microsoft, and Oracle has grown to $1.65 trillion (an eightfold increase since 2022).
There are also issues with on-balance sheet transactions.
So-called “circular financing” runs rampant in AI, as many software and hardware companies lend money to their own customers so they may return the funds as payment for goods and services. Some analysts claim that incestuous financing schemes have added over $1 trillion to the market capitalizations of the biggest companies.
On the surface, this might seem rather silly. But circular financing helps ensure that the failure of one key company threatens the survival of many others. This smells like a bailout strategy among cartel members.
It’s often difficult to differentiate between inevitable and imminent in the present. I’m not promising that AI and tech stocks will flash-crash today, tomorrow, or this month. But when have clever accounting and financing schemes resulted in profits happily ever after?
History shows that markets eventually expose dubious accounting and financial arrangements, even if legal. And if markets can tumble because an exciting AI model is released, then it seems reasonable to believe they might also because of news and events relating to:
I can’t predict the who, what, when, where, and why… but there will be scandals and controversies.
The interconnectedness between key players means none will be immune to the fallout. The accounting shenanigans seem destined to make the fallout severe.
Lobo calls nuclear energy an “idea whose time has come again.” Make no mistake: the nuclear renaissance is on.
The World Nuclear Association (WNA) reports that China leads the way with nearly 38 reactors currently under construction. It estimates that roughly 80 reactors are under construction worldwide, with another 120 at some stage of planning—and remember, fuel must be secured long before a reactor goes online.
Japan has restarted 15 out of a potential 33 reactors since the 2011 Fukushima disaster.
In recent years, legislatures in many “green energy” strongholds like Belgium, Denmark, and Sweden have changed laws to facilitate nuclear energy production.
By now, I’m sure you’re tired of hearing about the war in Iran and the Strait of Hormuz. But the disruptions in oil forced Ursula von der Leyen, of all people, to admit that abandoning nuclear energy was a “strategic mistake.”
Even politicians and bureaucrats understand that genuine energy shortages would likely cause civil unrest. The nuclear renaissance is happening today in part because it is no longer politically taboo.
Barring a nuclear accident, access to capital will continue to improve. Last year, the World Bank lifted its ban on financing nuclear energy projects.
This while the necessary financial commitment seems destined to plummet. The WNA reports there are currently two operational small modular reactors (SMRs) and estimates that over 100 SMR designs are in development.
On X, hardly a day goes by without Lobo posting positive uranium news (and that’s not because he’s ignoring or hiding anything negative).
The new nuclear boom is very much “happening now.”
Yes, AI companies prefer nuclear energy. But that’s icing on the proverbial yellowcake. When times are good, the AI buildout boosts uranium. That turmoil in the tech sector can cause uranium stocks to temporarily nosedive should make a savvy speculator salivate.
It’s great to see uranium’s profitable path forward. But who wants to watch from the sidelines?
Being unprepared to participate in uranium’s upside will cause pain.
Seeking redemption for such a mistake, Lobo went to 80% cash earlier this year. He recently bought an oil stock, but he’s still sitting on an abnormally large pile of cash, patiently waiting for an attractive buying opportunity.
And that day might be rapidly approaching. In the July edition of our flagship service, Lobo writes, “Meanwhile, there are what look like legitimate opportunities to buy low in Plan U.”
In preparation, seasoned speculators might want to free up some cash by selling their losers (or reducing their exposure to tech). For newcomers, uranium stocks are the only thing Lobo says he would buy today if he didn’t own any mining stocks (even before a particularly juicy buying opportunity presents itself).
This is particularly timely because spot uranium prices have been lagging a steady rise in long-term contract (LTC) prices—the “real” uranium market. Spot always catches up with LTC, if not overshoots it. What’s happening now here is like a spring coiling ever tighter. We can’t say when it will be triggered—hopefully not until after another silly AI scare creates a great buying opportunity in the best uranium stocks—but Lobo is confident there’s a big move upward coming.
That is not, however, an excuse for acting recklessly—@DueDiligenceGuy would never recommend skipping his namesake activity.
If you already have a particular stock in mind, you can compare your analysis to our own (which includes a claws-up or claws-down recommendation) by trying a sample of our My Take service.
Regardless of where you are in your speculating journey, we are happy to help.
KJ
P.S. Stay up to date with Lobo’s decisions about deploying cash in uranium and other resource stocks by subscribing to our free, no-hype, no-spam newsletter: The Digest.
