Yes, I like uranium as well, I think is a good pick to be in the energy game. I have that problem with commodities that I see them too volatile, too prone to technical improvements that presses prices down... but I think we are now in the lows of the commodity cycle.
Demand for nuclear fell because of Fukushima way back in 2011 and as of now only 10 of the 54 reactors the Japanese shut down are back to operating, so the demand is still being suppressed.
In the meantime there has been more demand for LNG to offset the loss of nuclear power generation, so uranium + LNG is a good pairing for energy sector balance.
After checking out RIOT, I want to get some. I put in an order for some shares last night, then canceled it because I wasn't sure if right now was a good time, with election results and whatnot. It's going up a lot so far today. I wish I had more investing experience, it's hard for me to tell what to look for. Ultimately if my plan is to hold on and wait for company growth in the medium-term or long-term, it probably doesn't greatly matter when I buy in, right? But if we're going to have a big correction soon, it would make sense to buy in then, and not now. I guess that's why it's gambling.
I like
Porter's Five Forces as a method for analyzing a company's potential, because it's simple but effective.
If we take pot companies, for example, a company that doesn't have a strategy to overcome the
threat of new entrants is likely to fail Five Forces analysis. The barrier to entry in this industry is virtually nothing, so defense against upstart competitors is vital for survival.
Companies producing (or trading) common goods can fail due to the
threat of substitutes, so the core business model has to come with a built-in defense against that.
One example of that is McDonald's, which is actually a real estate company, even though the cash flow comes from slinging fast food. Another example is Dollar General, which likewise sells crap anyone could sell, but in locations where nobody else can do it profitably.
Five Forces analysis is also relevant for companies dealing in intangible goods (i.e. software), where you wouldn't expect to have to deal with the
bargaining power of suppliers.
Did you hear about how Google workers formed a union?
Unions are a form of bargaining power of suppliers, where labour forms a large part of the input that the company turns into profit.
Software is also an industry with virtually no barrier to entry, which is why the major tech companies are all domiciled in the U.S. where strong patent protection defends them against the threat of new entrants.
In conclusion, Five Forces analysis is a good, simple way to suss out what the major threats to a company's profitability are, and whether the core business model has a defense baked in to handle those threats.
