Uranium – Our “Trade of the Decade” Heats Up!

Profit Opportunities Continue

At the start of the year, your California editor dubbed uranium the “Trade of the Decade.”

Uranium may or may not be the Trade of the Decade, but it has been a pretty decent trade of the year. So far in 2010, the uranium price has soared 35% – triple the return of the S&P 500 Index.

The phrase, “Better lucky than good,” comes to mind…and your California editor never hesitates to give Lady Luck her due. But sometimes, good fortune germinates and blossoms from the seeds of timely analysis and insight.

Your financial market observers here at The Daily Reckoning did not simply toss their Trade of the Decade into the hat and walk away; they have continued to detail the bullish case for uranium – and for selected uranium mining companies – month after month.

Early in 2010, for example, Chris Mayer, the mind behind both Capital & Crisis and Mayer’s Special Situations, penned no less than five Daily Reckoning columns advocating investments in uranium. The last of these columns, “Cameco Corp. is a ‘Buy’”, extolled the virtues of North America’s largest uranium miner. The stock has soared to 53% since then.

Taking the baton from Chris in mid-summer, Byron King, editor of Outstanding Investments, sang uranium’s praises in two additional Daily Reckoning columns, while also suggesting specific ways to play the trend. All three of the stocks he recommended in his October 25 column, “More Nukes!”, have jumped spritely during the last two weeks.

….read much much more and view charts HERE

The chatter surrounding rare earth metals has reached fever pitch.

But with this once vanilla topic gaining notoriety so quickly, some of you are probably wondering what all the fuss is even about.

Here’s a quick list of things you need to know about the sector — including why it has investors and politicians so worked up.

1. Rare for a reason

First, a definition: Rare earths are a group of 17 elements with properties that make them attractive for use in a variety of modern electronics including cell phones, flat screen TVs, batteries, LEDs, wind turbines, solar panels, and even missile guidance systems.

But unlike coal, oil, and gas, which are produced by a variety of countries, rare earths are hard to find in amounts that are economically viable to extract.

Today, China mines about 95% of the rare earth metals used in industry. And since China is a major manufacturer of both electronics and green technology, it has reduced its export quotas in order to conserve resources for domestic use.

China temporarily cut exports of rare earths to Japan over a diplomatic dispute in September, and most argue it could hold the world hostage with rare earths much the way OPEC does with oil.

If China — which has a 95% lock on control — stops exporting, where will the world get the rare earths it needs to make its smart phones, Priuses, hi-def TVs, and laptops?

That’s exactly the question that has investors, politicians, and the price of rare earths in a tizzy.

2. The new oil?

With 95% of global production, the Chinese are to rare earths what the Saudis are to oil. And this is making some very powerful people and governments very worried.

Secretary of State Hillary Clinton, for example, is currently holding high-level talks with Australia about “China’s monopoly over minerals used in military systems.”

According to Bloomberg, Clinton said the prospect of a future slowdown “raised questions” in many nations about whether it is “wise to be dependent on a single source for elements that are critical to the most advanced civilian and military technology.”

There’s a witty “oil by any other name” quip in here somewhere.

3. New supply better than gold

Here’s the third point you need to know about rare earths: New supply could literally be worth its weight in gold — or better.

You see, there are only two rare earth mines outside of China: one in the United States and one in Australia.

One is owned by Molycorp Minerals (NYSE: MCP), which IPOed earlier this year; the other by Lynas (PK: LYSCF).

So what do you think the only two rare earth mines outside of China are worth, now that China is limiting supply?

Well, it looks like anywhere from two to three times your money in just three months:

Now, with new rare earth supply so valuable, you can bet other companies are looking to start up production…

And we’ve found one with a lock on 500 square miles of some of the best rare earth mines outside of the Middle Kingdom.

Here’s the thing… Hardly anyone knows about the stock because production hasn’t yet begun.

Which means you can own the next rare earth runner before the masses know about it — before it starts to run like Molycorp and Lynas.

To learn more about rare earths — and this tiny company about to bring on valuable new supply — take a few minutes to watch our new investment presentation.

You’ll learn more about rare earths and why they’re in for a sustained bull run…

As well as how you can get in on a $1.50 company before it even brings an ounce of metal out of the ground.

Call it like you see it,

Nick

…subscribe Free to Energy & Capital (top right side) HERE

also:

Van Eck Launches Rare Earth/Strategic Metals ETF (REMX)

Van Eck Global )Van Eck Global has launched Market Vectors Rare Earth/Strategic
Metals ETF (NYSE Arca: REMX), the first U.S.-listed exchange traded fund (ETF) which seeks to give investors pure play exposure to the equities of companies primarily engaged in the producing, refining, and recycling rare earth/strategic metals, it was announced today.

Rare earth/strategic metals are industrial metals that are typically mined as by-products in operations focused on precious metals and base metals. Compared to base metals, they have more specialized uses and are often more difficult to extract. Currently, approximately 49 elements in the
periodic table are considered rare earth/strategic metals. They include such elements as cerium, manganese, titanium and tungsten. Strategic metals are used in a variety of technologies including jet engines, hybrid cars, steel alloys, wind turbines, flat screen televisions and cellular phones. Rare earth
metals, a subset of strategic metals, are a collection of 17 chemical elements that are essential in many of today’s most advanced technologies, with particular applications in electronics.

REMX seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Rare Earth/Strategic Metals Index (ticker MVREMXTR), a rulesbased, modified-capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of publicly traded companies primarily engaged in the producing, refining, and recycling of rare earth/strategic metals. To be included in the index, a company must have the capacity to generate more than 50 percent of its revenue from rare earth/strategic metals-focused efforts.

by ETF.com