Russia, China and the U.S. are in a battle for currency dominance and natural resource stocks have been buffeted as a result. When the dust settles, smart natural resource investors could be the big winners as long as they have taken the right protective measures. In this interview with The Gold Report, Sprott USA Holdings CEO Rick Rule and Stansberry & Associates Investment Research founder Porter Stansberry—the men behind the upcoming Sprott-Stansberry Vancouver Natural Resource Symposium—share their strategies for picking good companies no matter what happens on the political front.
Sprott’s Rick Rule joins The Doc & Eric Dubin this week for a special show discussing:
- Why Rick believes the Bear market appears to be over in junior mining equities: We are now in the early stages of recovery– We have all of the hallmarks of a market that wants to go higher!
- Rule explains why Markets Work: The cure for low prices is low prices!
- One Final Gift From Mr. Market to Mr. Rule? Rick discusses the potential for a historic opportunity to invest in the oil resource sector come Q4
- Does China Believe it is Game On For Resource Materials Acquisition? Rule Provides Anecdotal Evidence Why the Answer is Yes!
- Rick explains why In the circumstance of a liquidity driven market collapse, you don’t want to own an indirect proxy for gold (shares), you want to own gold– Selling will be driven by the margin clerk, not the client
- Finally, The Doc asks Rick to discuss the proposed tender for the assets in Sprott’s Central Gold & Silver trusts
The SD Weekly Metals & Markets With The Doc, Eric Dubin, & Sprott’s Rick Rule is below:
Sprott’s Rick Rule took at a stance in January that went against many investors’ contrarian instincts.
He said to stay away from oil and gas for the time being.
However, Rick has been discussing oil and gas drilling lately in internal broker meetings, as well as conferences.
Does he now think there’s an opportunity in oil and gas?
As Rick Rule puts it, “There are over 2,000 junior exploration companies around the world and most of them are destined to fail for geological reasons alone. The idea of investing passively in a basket of small and micro-cap companies and weighting them based on their size is problematic in the gold sector.”
Rick said this is why this new ETF is so significant.
Until now, there hasn’t been a way to own a junior gold mining ETF that favors some companies over others based on qualitative factors. “I want to own companies based on their track record of creating value, not on how big they are.”
With blood running in the streets for gold & silver miners, Eric Sprott, Rick Rule, and Keith Neumeyer just demonstrated once again why they manage BILLIONS in assets…
Over the last few years, gold has simply been losing the war against the US dollar, says Rick Rule.
Now gold’s price is stabilizing, but Rick noted in his recent call that gold’s struggle against the US dollar is uphill, and that the dollar still has a strong upper hand:
“The dollar remains the predominant world currency, and I think it will remain so for many years to come. It’s just that over the last 12 months, gold has been losing less badly against the dollar.”
“A ‘perfect storm’ of global events is coming together soon” -Rick Rule
Legendary investor Rick Rule asks: Should we steer clear of the oil sector or look for ways to profit?
During a time in which sentiment towards natural resources is bordering on doom, Rick Rule, Chairman of Sprott U.S. Holdings was kind enough to share a few comments.
Speaking first toward the phenomenon of market capitulation Rick noted that, “Capitulation is a very dramatic event. It’s when most participants in the market give up completely and simultaneously. They are two or three week periods [of] extraordinary [share price] violence. They’re emotionally driven rather than arithmetically driven events.”
One of the more important utilities of a capitulation according to Rick, is that, “In my experience they have marked definitively the end of long bear markets.”
When asked for a prediction on the gold price, Rick concluded that, “[The fight] is between gold and the U.S. 10 yr. treasury—and I don’t see how over 5 years we can possibly lose that fight.”
Now is the time to re-examine our premises on gold.
Are the worst of times yet to come?
At the Cambridge House Canadian Investment Conference in June, The Gold Report Publisher Jason Mallin asked a panel of experts picking a portfolio of stocks with upside potential for the 2014 Streetwise Reports Natural Resources Watchlist what they wanted to see in an equity. As always, Sprott US Holdings Inc. CEO Rick Rule, summed up the ideal beautifully. “We like reality at a discount,” he said. Now that three months have passed, we decided to check in with Rick and co-panelists Joe Mazumdar from Canaccord Genuity and Keith Schaefer from Oil & Gas Investments Bulletin to see how that reality is playing out.
“The market itself is very healthy. You are seeing a transition…a transition that doesn’t suggest, but rather screams that [junior resource issues are] under accumulation—which is a very, very bullish sign.”
For those unable to make the trip to Vancouver last weekend for the Sprott Natural Resource Symposium, you won’t want to miss the summary and recap of keynote speakers from the event, including Rick Rule, Adrian Day, & reclusive billionaire Robert Friedland.
Full recap of the Sprott Natural Resource Symposium from Vancouver is below:
On July 13, gold was still around $1,340 per ounce. Since last Monday, gold has suffered a big drop, falling as low as $1,293 in a few days. Many blame the decline on hawkish comments from the Fed’s Janet Yellen, who recently suggested the Fed could raise interest rates. “Higher interest rates would encourage investors to switch to assets that, unlike gold, pay interest,” said the news service Reuters1.
Following Thursday’s news from the Ukraine, gold has rebounded from its low, but remains under $1,320 as of July 22.
Rick Rule, Chairman of Sprott US Holdings Inc., recently said gold could fall back another 10% as a normal event in this market.
I asked him whether last week’s step down had altered his views on gold for 2014:
Rick Rule, Chairman of Sprott US Holdings Ltd. said in early March that the market looked overheated and was due for a pullback.
Gold and silver had just delivered double-digit gains in a few months. Sure enough, from mid-March until early June, the precious metals gave up much of their gains.
Since early June, resource stocks have surged higher once again.2 So the question on my mind was: Where is gold headed for the remainder of the year? Will this rally pull back?
Rick recently gave me his answer:
Few business leaders are as candid about their strategies to create wealth as Rick Rule, the charismatic chairman of Sprott US Holdings, one of the world’s largest investors in natural resources.
I called up the 61-year-old Carlsbad, California, based executive recently to discuss speculation, Sprott’s due diligence process, Rick’s outlook for the junior resource sector, and the conference he’s hosting in Vancouver next month.
“Most of the junior mining sector’s injuries were self-inflicted,” Mr. Rule said.
A recent internal study by Sprott of 75 sub-$10 million market cap junior mining companies showed that 57-58% of the capital raised went to general and administrative expenses over a 5 year period. Meanwhile, major mining companies, such as Teck Resources, typically allocate 12-15% of project expenditures to G&A, according to Mr. Rule.
The delta between what the industry allows and what the capital markets allow is a full 40%, which goes a long way to explain the chronic underperformance of the junior mining industry.”
I wanted to pick Rick’s brain about Sprott’s due diligence process.
- Platinum & palladium- is the run over, or is the real move to the upside yet to come?
- Rick discusses the “ugly set of circumstances” facing mining in South Africa, and the implications on the supply side for gold, silver, platinum, and palladium over the next few years
- Why water will be the investment story of the next decade
- Rule discusses the pernicious devaluation of the dollar over the past 30 years, and predicts that the impact of the shift in global trade settlement & savings from dollars even slightly (1%) into gold will result in a 100% move in the valuation of gold.
- Rick also provides his outlook for precious metals in the face of continued manipulation, and states: “In my 30 years of experience in the markets, I’ve seen alot of manipulations, and the markets always, ALWAYS win.”
The MUST LISTEN SD Weekly Metals & Markets with Sprott Global Resources Chairman Rick Rule is below:
In this excellent interview with Finance & Liberty, Rick Rule lays out how the end of the London fix in August is likely to affect the silver market, whether we just witnessed another bottom in the PM sector, why platinum and palladium are currently outperforming gold & silver, and why the Fed’s counterfeiting is bullish for gold.
Rick Rule’s full interview is below:
Gold has made its way down again, to around 1,300 per ounce this month. Rick Rule, Chairman of Sprott Global Resource Investments Ltd. says that a few years out, you will be happy you stuck with gold.
For context to today’s downturn, look back at the great bull market for gold in the 1970s’.
During that time, gold rose from $35 per ounce to around $200, and then came crashing down to around $100 per ounce. Weak hands, who lacked the courage or the financial strength to hold on, sold their gold. It was a disaster for them, but a great opportunity for investors who believed in the metal. They were able to enjoy an 850% gain over the following five years. The ‘anti-gold’ investors watched as gold soared.
The next time gold soars, anti-gold watchers may not simply watch…they “will be destroyed.”