Having survived four mining downturns, and having thrived in four mining upturns, Rick Rule is one of the best known and most influential people in the mining business. Mines and Money caught up with him to ask him about his investment outlook for 2018 as well as get an insight in some of the lessons he has learnt in 5 decades in the business.
Losing all my money was the best thing that ever happened to me”
Rick Rule, Chairman and Founder, Sprott U.S. Holdings Join Rick Rule at Mines and Money London this November, where he will be taking the stage to participate in a fun but educational debate “Should mining promoters be more praised or damned?” Download the brochure for the latest agenda and full speaker line-up.
Mines and Money: Is gold still your number one commodity you are bullish about? What are your thoughts about gold equities in 2018? Rick Rule: It’s not so much that I am bullish on gold. Its more the case that I am bullish on precious metals equities and specifically gold equities. Precious metals equities are reasonably priced and within this gold equities relatively under performed in 2017. In 2018 I expect gold equities to play catch up. Mines and Money: Can you tell us a little bit more about the gold backed crypto-product you are doing? Rick Rule: It’s a gold back crypto product that we developed a few years ago. I’ve always been interested in the blockchain / distributed ledger technology as a method of settling transactions. Therefore, I co-operated with the IEX and set up Tradewinds to originate a token backed by physical commodities such as gold. The product has been backed by the Canadian Royal Mint. Goldcorp is one of the shareholders. Mines and Money: Any commodities to avoid? In the past you’ve often been cautious on battery metals (i.e. lithium, cobalt, graphite etc) – with the Electric Vehicle Revolution continuing apace are your thoughts in investing into this space changing? Rick Rule: I’m still wary of lithium. There isn’t a supply shortage of lithium. However, on cobalt I am cautiously optimistic. If you can overcome the political (i.e. DRC and Russia is of course where cobalt is mined currently) and social challenges of cobalt than it’s definitely an opportunity. Cobalt is the only commodity I am aware of that when supply increases so does price. Perhaps this is due to the increase in applications and fabrication technologies associated with cobalt. 10 years done the line, I can see there being more surface laterites that could be minded. Mines and Money: : You’re a great believe in investing in great people. Are there any new ‘7-footer CEOs’ that have caught your eye? Rick Rule: Amir Adnani (Uranium Energy Corp), Dan Betts (Hummingbird Resources) and Nolan Watson (Sandstorm Gold) are some of the great CEOs around. I also rate our London analyst Brock Salier – an overnight success who has been 20 years in the making. Mines and Money: What is the book (or books) you’ve given most as a gift, and why? Or what are one to three books that have greatly influenced your life? Rick Rule: The Intelligent Investor by Benjamin Graham – easy to read and still the best investment book very written. Human Action by Von Mises, an excellent book on how economics works and how humans act and interact. Thirdly, something completely different – The Art of Happiness by the Dalai Lama. Mines and Money: How has a failure, or apparent failure, set you up for later success? Do you have a “favourite failure” of yours? Rick Rule: The 1970’s was the greatest bull market. As a young man I made the mistake of confusing being successful in a bull market with having brains. When the 1980s and the ensuing bear market hit, my net worth went below zero. Losing all my money was the best thing that ever happened to me – there is no better way of learning how the markets work than experiencing it viscerally.