Rick Rule: Weakness In Gold Equities Has Me Very Excited
The resource commodity sector has been strong in general, while mining equities and energy have been fairly weak. Last year investors pulled commodity equities up much further than was warranted by the move in the commodity price. The gold price went up 18% and equities went up 5 to 1. They did this without any regards to quality. The pullback was normal, rational and expected. He can’t see a better set of current circumstances for intelligent resource investors.
Rick discusses the uranium market, and how it is still in liquidation as the price remains way to low. It needs to rise in the coming years or mines will close. There are profits coming but you need to hold for the long term.
Rick sees sophisticated institutional capital and major mining companies both making strategic investments in the resource sector. They are looking for tier one assets with a view to harvest in several years.
He talks about when to exit the market and the strategies he deploys when assessing it.
Rick is excited about his new position as Chief Investment Officer at Sprott Resource Holdings. They look forward to partnering with the best of the best management teams. Mr. Rule says it’s a wonderful thing for him to do after being involved in the market for the last forty years.
The Pareto principal is discussed, and how he is looking for that small percent of talented individuals to accelerate their expertise and help them to identify opportunities. He had the fortune of working with top tier people early on and built his career around them and feels his job is to find those people in this generation.
Talking Points From This Week’s Episode:
• Last years market movement discussed.
• Uranium is still as disaster, but it is a long term play with lots of potential.
• The resource sector is attracting sophisticated strategic investment capital.
• Discusses optionality plays that performed well in 2016.
Rick Rule began his career in the securities business in 1974. He is a leading investor specializing in mining, energy, water, forest products and agriculture. Rick founded California-based Global Resource Investments, Ltd., which grew into a much larger organization with significant affiliated companies. As Director, President, and Chief Executive Officer of Sprott US Holdings, Inc., Mr. Rule leads a highly skilled team of earth science and finance professionals who enjoy a worldwide reputation for resource investment management.