Sure Uranium stocks could have a steep correction, but I think the uptrend has much longer to go. Anyone investing in one non-producing uranium stock IMO is taking more risk than I personally would. A couple of producers like DNN, PDN.TO. Then a few more speculative ones like EMU, URZ I think would make a good mix. Plus, coming from another angle, USU would appear to have more upside, allowing of course for some give-back along the way. It is important to have people feel the uranium stocks are ready to crash. When I start seeing that everyone is bullish and they bring out the Yellow Cake Party hats on CNBC, then of course I would agree that we are at or near the top.
During the 2000 dot.com crash there was an extreme over-supply of dot.coms relative to demand. Uranium is in a totally different situation. Only 55% of uranium demand is met through actual production. The rest of the demand is met through dismantled cold war nuclear weapons stockpiles, which are close to being used up. Also, it takes roughly 5 to 8 years for uranium mine to come online. With China building 2 nuclear power plants every year for the next twenty years and with 20 nuclear plants under construction now there is no time. The world needs uranium now. Once the stockpiles of dismantled nuclear weapons are close to being used up it is possible that the price of U308 will hit $500 to $1000. The fact that there is not enough uranium enrichment facilities around the world to meet the demand also support this price.
No doubt that the world needs Uranium and there is an undersupply. However, URZ hasn't produced a single gram of U and probbaly won't until 2009 if it even does. When you buy this stock you are making a very long bet that they will actually be able to profitably mine Uranium with the ISR technique. Who knows? Certainly not me and not you either. There are dozens of these small companies stock selling and none of them guarantee actual production. Speculate on it if you like but don't fool yourself that this is a sure bet.