Transcription
One of the greatest long-term trades in energy is happening right now, and most investors aren't paying attention. Today, we're going to talk about legendary commodities investor Rick Rule and why he thinks uranium is the obvious winner from today's energy crisis. We're also going to talk about the two very simple ways Rick thinks most investors should invest in this story and why the long-term here could be so great.
We got to start by talking about the macro here because it's really simple. Uranium for many years was treated like most of the other commodities. There's been a long-term underinvestment means that in the long term that shortage leads to higher prices. But as soon as the Strait of Hormuz closed, that story got dramatically more exciting. Because not only have we seen a gradual ramp in uranium demand with the buildout of nuclear for AI with the electrification trade, but all of a sudden security of supply specifically for energy went right to the top of the list and price became much less important.
This has created a massive supercharging in the opportunity for these uranium stocks without really making the stocks move the way they probably should. And this isn't just my opinion here. Rick has been singing this story for the last two months. He thinks it's incredibly clear and I think most investors aren't listening. The thing is though, every single bullish catalyst for uranium is getting more and more intense. The story around AI is continuing to ramp. The security of supply story is continuing to ramp and the obvious winners haven't really moved. This has led people like Rick to buy in heavily, not to the junior miners, not to the most risky names that might have a lot of short-term upside, but into some of the easiest stock picks most investors will ever make.
And this is where we jump to the first name today and Rick's most obvious way to play the nuclear trade and the long-term uranium story, Cameco. The Canadian multinational, the name brand in nuclear energy, and the thing most generalist investors, at least here in Canada, will know of as a uranium or nuclear stock. Cameco currently is a $70 billion company. But more importantly than that, it is the leader in the space. When I talk about investing in name brands and commodities, people often think that they're losing out on real upside. They're missing that crazy moonshot 10x opportunity that you could get in the kinds of major bull runs we've seen in gold, silver, and even oil. But what you are doing is protecting the long-term compounding effect. Because while the short term might be great and getting the opportunity to have that perfect timing and an amazing multi-bagger is amazing, most investors miss. Most people that play the juniors don't play them as well as people like Rick. And so investing in something like Cameco makes a lot more sense for people like me because I'm looking not to get rich tomorrow, not to make a huge amount of money over the next 3 months. I'm looking to invest for the next 10, 15 years.
And Cameco has a couple unique things they do better than anyone. First, the long-term supply that they have available to them is fantastic. And their visibility on the long-term pricing of their product is incredible. Right now, these guys can look forwards 20 years into the future and lock in deals guaranteeing a certain price for their product. Talk about the absolute golden ticket as a mining stock, as a commodity stock. I mean, it's literally unheard of pricing power because the demand long-term is going parabolic and the long-term underinvestment in mining globally, but specifically in the West, has led to very little real competition in their kind of space.
But beyond that, Cameco also creates demand themselves because they are 50% owner of Westinghouse and they have gone out there and created opportunities for themselves like their $80 billion deal in the United States, like so many of their deals here in Canada, and of course, like so many of their deals in other nations that desperately need long-term safe supply of electricity. Think Europe, think East Asia. These are economies that today are much more willing to spend way more money than they were a couple months ago. And we've already seen deals coming through boosting the long-term for Cameco.
But beyond just their size and the Westinghouse division, they're also large enough that you are really spreading out your risk. When you think about operational risk, owning a mining stock, having a major company like Cameco gives you the opportunity for short-term downside to happen, like we saw today as I film this video, and for the company to still be okay, for the compounding effect to not get knocked and to end up way off track in the next 15 years. Cameco also points out that right now is probably the best environment they've seen for nuclear in decades. And I would expect that over the next couple of months, you are going to see huge moves in this company because most people have forgotten the fact that the current oil crisis is a massive boon for these guys over the next 10-15 years.
But here's why I want to give a warning to you guys because this is the current year-to-date chart for Cameco. They're up, they're up 20%. But if you look at what's actually happened since the Strait closed, they haven't moved at all. And that's where I think a lot of investors have the potential to make a bad decision here. And I'm not your financial advisor and I can't tell you what to invest in. But if you buy Cameco and you expect to get a multi-bag crazy return short-term, you expect the best days of '25, the best days of 2024 to repeat, you might be sorely disappointed because this isn't the get-rich quick move. This isn't the 18-month, two-year play. This is the next 5 to 10 years. Like Rick says, if you zoom out and you extend your time horizon, the opportunities for you to make a lot of money to have, you know, good short-term surprises are much higher. If you shrink your time horizon, if you play call options, or you make yourself sort of put yourself in a position where you cannot afford to lose the money, you massively increase the chance for negative short-term surprises. Personally, I'm a much bigger fan of the good. So is Rick. So I really think this is a long-term play and that's how I've moved. I've owned Cameco for the last two years. I've owned more of it over the last couple of months because I think when I combine it with my existing oil portfolio, when I consider what I've done in the sort of metals space, Cameco is a really good fit to be a winner over the long term, even if 2026 isn't its year. And if I make a huge amount of money in oil this year, maybe I will rotate some of those profits into Cameco.
But of course, Cameco isn't the only play, and it's not even the only one that Rick recommends. The other one is Sprott, the Physical Uranium Trust. And I think this is one of the most interesting ways to play a commodity story because the basic idea here is to just take away the operational risk entirely. Where Cameco offers you upside in the fact that they're going to continue to produce more and more, they also offer you the operational risk. And while it's more diversified than some of their junior peers, it's still there. What Sprott offers you here is the world's largest physical uranium fund. You're literally buying a piece of an actual supply of physical uranium. And it's from Sprott. Think about trusted names in the commodity space. These guys are, if not number one, at least on the Mount Rushmore. These guys also have low fees. They're incredibly transparent. The move here isn't, you know, again, I'm going to get rich quickly and I'm counting on uranium to boom this year and I'm going to gamble on this. The move here is basically as if you were buying gold or you were buying silver, but instead of betting on the long-term decline in fiat currency, you're betting on the long-term appreciation in uranium pricing.
Now, obviously, you could make a directional bet here and be wrong. But if you like so many investors, including Rick, think the long-term in uranium looks good and you don't want to take the risk of owning a mining stock and you just want exposure to the upside in the actual material, this is probably the smart move.
And so, as I round out this video, I want to ask you guys, what do you think about the opportunity in uranium right now? Are you a buyer? Are you a seller? Are you staying away? Are you waiting for an opportunity? Please let me know your thoughts in the comments down below. And of course, if you like Rick own one of these stocks, you've been buying into one of them and you want to see more videos on this kind of thing, please do let me know that as well. Now, if you enjoyed this video and you like what we do here on the channel, please do like and subscribe and I hope I see you in the next one.