Jim Dines rebuts van Eeden -- siempre lo mejor

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Date Posted: 16:57:42 09/07/05 Wed
Author: siempre33
Subject: Jim Dines rebuts van Eeden

We almost never comment on other newsletters, as everyone is entitled to her/his opinion and nobody knows the future for sure every time.
However, a number of you have specifically requested comment on a newsletter that has come out with a negative forecast for uranium, and are requesting our comment.

First of all, we have sloughed off bearish views all the way up (the public will never allow nuclear energy, too dangerous, windmills are better, price is too high, P/E Ratios too high, etc) as uranium has climbed the traditional "wall of worry."

Second, while the newsletter in question seems convincingly reasoned superficially, it contains fatal flaws in our view. The newsletter bases its pessimism on the uranium remaining in the fuel after it is used ("tails") that
is extra supply that nuclear facilities could later rework. Presumably this extra uranium left behind when uranium was used the first time, would increase the uranium supply by 15%, poof, no shortage and Canada's Uranium Participation
Company (UPC) would dump their uranium on their market causing a uranium crash that would cause all owners of uranium shares to commit suicide and the world would end.

Third, the newsletter in question makes its calculations like an accountant looking backward, rather than a visionary venture capitalist looking forward.
Specifically, he bases everything on "about 30 new reactors in twelve different countries with announced plans for 15 to 20 more," a total of around 45 to 50 nuclear plants. What a howler! This doesn't even countplans for plants
in the US, or every other nation in the world suddenly seeking (a new phrase) "energy security." That newsletter completely ignored Mass Psychology and speculative
hoarding bringing sharply accelerating demand. Looking backward, as does an accountant, can get a Security Analyst blindsided by new conditions; $70 oil, $12 natural gas, and fear of global warming (see Katrina) all of which make
this an entirely new game. The whole world will switch from fossil to mineral fuels in this century, a historic change, and TDL has already predicted China would need hundreds of nuclear reactors in the next 20 years, not to mention
India and nearly every other country in the world determined to replace oil.

Fourth, we were aware of the "tails" issue at much lower prices, and were told uranium had a "ceiling at $30," but judged that it did not merit our cashing out. Indeed, since then, uranium has risen from $20 to $32 (long-term
contract price), and even the newsletter in question acknowledged that "I own uranium companies." We have held an iron hand on the uranium tiller all the way up, and
see no reason to consider selling out, at least until the Uptrendlines get broken.

Fifth, as we go to press uranium has made a new high at $30.50 (spot). Let your profits run.

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