Rick Rule: This Consolidation for Gold Tells me this Market is Extremely Healthy
Rick feels the current pattern for gold, one of climbing the wall of fear, and then slowly lurching higher and backfilling is an excellent sign for this market. We have been in an M&A cycle for the past 12 to 18 months, with another 18 to 24 months more to go. This industry is plagued with too many names and too much general administrative expenses. Acquisitions permit the disposing of marginal assets and allow companies to focus their best core assets. Money in this market will currently be spent on companies that should be acquired.
Rick learned patience in his thirties, but today he is even more so. When you are younger, you believe that what you think or prefer matters. Cycles take five, six, or seven years, and although you would prefer they were faster eventually, you learn that your opinion doesn’t matter.
Rick comments that he must like to be punished because he is regularly very early and often alone in markets. He talks about his difficulty that seems to involve confusing the words inevitable with imminent.
Rick is fascinated with the ideas surrounding risk, if he could restart his career, he would consider insurance. The turning point for his career was when he stopped worrying about making money and just focused on what he did to deliver value to others. Find a vocation that you would do for free and focus on making money for other people. The money will inevitably follow, and it will be larger than you could imagine.
Time Stamp References:
0:40 – Why the current market is very healthy.
1:40 – The M&A cycle is in progress and will continue.
3:40 – Patience with investing and age.
5:10 – Intuition and finding good people.
7:10 – Issues with being too early in a market.
8:30 – Lessons and why Rick likes the concept of risk.
9:15 – Delivering utility to others.
11:00 – Eric Sprott and his long-term vision.
12:00 – Sprott USA and his offer.
Talking Points From This Week’s Episode:
• Gold’s current consolidation is very healthy.
• M&A cycle is helping dispose of marginal assets.
• Learning patience and being too early in markets.
• Rick’s fascination with risk and bringing utility to others.
Rick Rule has dedicated his entire adult life to many aspects of natural resources securities investing. In addition to 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 interviewed often 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 and participated in hundreds of debt and equity transactions with private, pre-public, and public companies.
Sprott US is now growing once more, and Rick says they are having a spectacularly good time. Rick offers his no-obligation portfolio review if you want to email him your tickers (no attachments) to firstname.lastname@example.org