“More often than not, a better entry point is obtained by being right when others are wrong, or when they just don’t care.”
It’s been a few months since I last interviewed Rick Rule, so I was lucky enough to catch up with him last week and we talked about Uranium, Benjamin Graham and Gold.
Hi Rick, welcome back to The Next Bull Market Move. I’d like to start with Uranium. We have talked many times in the past about Uranium and how you participated in the last bull market. So I’d like to ask, are the fundamentals even better this time around for a new bull market in Uranium?
The fundamentals are less good this time, simply due to the fact that last time we had suffered through a 20 year “bear market”, so supply destruction was much less pronounced, and there were many fewer competent players. The fact that this bull market is less attractive than one of the most pronounced bull markets in history is hardly damning!
We have talked in the past about your past mentors and some of the books you read early in your career. Do you think the average investor has a better advantage these days due to the amount of information on the internet and YouTube? Or is it the other way round-too much false information/noise and too many opinions for an investor to learn anything of real value?
I think the average investor is always stuffed, because the average investor does so little to improve his or her own lot. The plethora of information is only of use to those who use it, and their own common sense.
I have a few quotes from Benjamin Graham that I’d like your opinion on.
Please note that I’m pre disposed to fan boy reactions when it comes to Ben Graham.
“The intelligent investor is a realist who sells to optimists and buys from pessimists."
Perhaps a little cynical, albeit not wholly inaccurate. Graham himself focused on absolute value, and often bought companies that were so illiquid that there was seldom anyone to sell too.
"Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
This goes to investing discipline, and the triumph of process over emotion. Understanding your own durable competitive advantage, in the same way that you understand the value thesis offered up by the companies you invest in is the ultimate determinant of your success.
"The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.”
More often than not, a better entry point is obtained by being right when others are wrong, or when they just don’t care.
Your current thoughts on Gold and the junior Gold mining stocks?
Gold performed well in 2017, and importantly did so when confidence was high and volatility low. If those circumstances were to change, gold might reasonably expected to do very well. Looking a bit longer term, my thesis is that the US treasury market bull run has topped out, which could be very bullish for gold. The gold stocks under performed in 2017, mostly I believe, because they out performed the year before.
Most people forget that bull markets are the authors of bear markets, and vice versa. My belief is that gold equities will have a good year this year, both because the metal has done fairly well, and also because expectations surrounding the gold equities is so negative.
And finally, give our readers an update on what Sprott is up to and how Sprott can help investors with their investment decisions?
We have attempted to position Sprott as a leading provider of investment expertise in natural resources and precious metals. I would personally invite your readers to get to know us by receiving a complimentary, no obligation review of their natural resources by me, personally. Simply email me your natural resource portfolio, with company names and symbols in the text, not as attachments, and I will rank those companies, comment where appropriate, and email those rankings and comments back. My email address is firstname.lastname@example.org
Many thanks for your time Rick.
The Next Bull Market Move
Disclaimer - Interviews are conducted in the name of research and learning from the best. Only you can decide what makes a good speculation/investment.