I'd like to issue a mea culpa. Back in January, I thought the stars were aligned for a big upward move in the price of uranium and all of the uranium-related stocks. The radioactive metal had slumped badly in 2011, but after a solid start to 2012, it looked as if it was finally time to buy.
"A bottoming process appears to have ended, and with many shares far from their 52-week highs, these beaten-down names could offer material upside in 2012," I wrote back then.
That's wasn't a timely call. The price spike was just a head-fake and uranium prices dipped even lower, as the chart for this uranium-focused ETF shows.
I'd normally be willing to simply close the book on this losing investment idea and move on. But I remain convinced investors need to track uranium, because at some point -- perhaps soon -- investors could revisit this out-of-favor investment.
In recent weeks, a pair of news items could help underscore the investment thesis I laid out back in January: In coming years, demand for uranium will likely be higher than many anticipate. And to understand this thesis, you need to look at Asia.
First, much has been written about Japan's desire to shut down all nuclear power plants. The country is heading into summer with plans to sharply curtail energy usage to make up for all of that lost power. Japanese industry is up in arms, predicting the country could lose many jobs as factories close.
In response, Japan has begun to restart a pair of reactors in the Ohi region. It's a small step, but Japan's Prime Minister Yoshihiko Noda has made it clear the country needs more plants because it simply can't afford to be truly nuclear-free. The country has just announced plans to invest heavily in solar power, and is also sucking in massive amounts of natural gas and crude oil.
But that won't be enough.