Rick Rule: Five Things Gold Investors Must Know
Tom welcomes back the legendary investor, President, and CEO of Sprott U.S. Holdings Rick Rule. Rick explains the usefulness of Baron’s Gold Mining Index since it’s the longest-running gold index, and it shows the volatility and cyclicality of this market. Rick says, “If you are going to participate in this sector, you need to buckle your seatbelts for what will be an extraordinarily wild ride.”
There are five factors (Federal liabilities, credit risks, money printing, negative interest rates, dollar confidence) that cause Mr. Rule to believe that we are in a new gold bull market. The gold market will likely be over when these factors begin to reverse.
Rick documents the risks around sentiment and why investors tend to absorb information that supports their existing beliefs. He explains his specific investing strategies around answering unanswered questions and methods of avoiding catastrophic loss.
He discusses why peak consumption in fossil fuels will not decline until 2035 and why modern eco-ideas around this are just wrong.
He argues the widely held belief that collective solutions and faith in government will solve our problems is false. Rick believes that advances in living standards worldwide are due to saving, individual creativity, and initiative. He says, “Thru this, we have been able to afford our collective stupidity.”
Rick remains bearish on uranium for the near term because of Japanese energy consumption trends and inventory. He discusses the previous bull market and the extremes that were reached.
Time Stamp References:
0:40 – Baron’s Gold Mining Index chart
7:30 – Five factors demonstrating a new gold bull market.
17:10 – Sentiment risk and price versus value.
25:20 – Determining when to sell juniors.
30:20 – Broadly held premises that are wrong.
36:30 – Uranium, where are we at in this market.
42:00 – How this gold market may play out.
45:45 – Testing your own assumptions.
47:35 – Book recommendations.
Talking Points From This Episode
- Baron’s Gold Mining Index
- The drivers of the gold bull market.
- Sentiment and investing risks.
- Ricks investing methodology.
- Uranium and fossil fuels.
Rick Rule has dedicated his entire adult life to many aspects of natural resources securities investing. Besides the knowledge and experience gained in a long and focused career, he has a global network of contacts in the natural resources and finance sectors. As President and Chief Executive Officer of Sprott U.S. Holdings Inc., Mr. Rule leads a highly skilled team of earth science and finance professionals who enjoy a worldwide reputation for resources investment management.
Mr. Rule is a frequent speaker at industry conferences and is regularly interviewed for radio, television, print, and online media outlets concerning natural resources investment and industry topics. He is frequently quoted by prominent natural resources oriented newsletters and advisories. Mr. Rule and his team have expertise in many resources sectors, including agriculture, alternative energy, forestry, oil and gas, mining, and water. Mr. Rule is particularly active in private placement markets, having originated in hundreds of debt and equity transactions with private, pre-public, and public companies.
Rick offers a free portfolio review if you visit https://sprottusa.com/rankings
Economics in One Lesson by Henry Hazlitt
The Intelligent Investor by Benjamin Graham
Security Analysis by Benjamin Graham and David Dodd
Human Action by Ludwig von Mises.
Margin of Safety by Seth A. Klarman