• Rick Rule on the Mining Market Today
  • The Coming Fiat Devaluation Will Send Gold and Other Commodities Higher
  • Rick Outlines the Metals and Markets He Believes Will Outperform

In the latest pod, Aaron sits down with legendary mining investor Rick Rule. Rick goes into the details of his first two major mining stock wins in Vancouver’s junior mining market…

From pouring drinks for the biggest mining players in town, to finding 15-baggers and more, Rick shares his personal story of making a fortune as a young man betting on speculative mining stocks.

The 1970s Were Good for Natural Resources and Mining Stocks

Rick explains that in the inflationary decade of the 1970s, he found it easy to make money with mining stocks. Too easy, in fact. As the gold price continued higher throughout the 70s, the street, as they say, was lured into gold and gold stocks, and a ‘melt-up’ took place. This made Rick Rule a very rich young man…

However, all good things must come to an end. Rick admits that this was his first real lesson, as he went on to give back all his gains and then some in the 1980s… he learnt that markets work. Painful as it was having a negative net worth in the 80s after making a fortune in the 1970s, he is grateful for the tough lessons he learned, which ultimately benefited him and his clients tremendously in the following decades.

Rick’s Criteria for a High-Quality Junior Mining Stock

Rick outlines his top three metrics for a ‘high-quality’ junior mining stock. But before even considering betting on a junior, investors must be willing to accept risk and volatility. Most, he contends, do not have the risk tolerance required.

He explains that most speculators work off the mantra of ‘got a hunch, bet a bunch,’ which does not work.

Rick’s first rule is to follow and bet on the best management teams.

“A very small group of people generate all of the utility in junior mining.”

Targeting world-class exploration and production regions is his second key component.

The target must have suitable geology. But, to understand that correctly, one must have access to a geologist.

Finally, Rick reiterates the importance of prospectivity, size, grade, and expertise. And that, concerning silver mines, low-grade and high-tonnage may sound good, but,

“The rock has to pay.”

Rick Rule’s Thoughts on Copper As It Trades to Multi-Year High

Rick Rule warns investors that copper could trade sideways if the U.S. slips into recession. However, he is a copper bull and explains exactly why in the pod…

“We need to replace one Bingham Canyon, the largest copper mine in the United States, every year to maintain current production, not to add new production.”

Gold Does Well When Fiat Instruments Falter

Rick Rule believes Americans are complacent because they have lived through 40 years of a relatively benign economic environment; however, the seriousness of the situation (inflation) may take another few years to become apparent to the masses…

Rule remembers the 1970s when things like hamburgers more than tripled in cost. For the working class, inflation is biting, but not to the point that people are taking serious action… yet.

Aaron cites the record buying of gold bars at Costco as a sign the average American is waking up. But Rule reminds him that retail holders have been net sellers of gold over the past three years, up until at least late March 2024. He re-emphasizes the main demand case for gold, which is central bank buyers.

Finally, Rick Rule discloses that he owns gold because it has returned about 8.5% compounded for the past 24 years.

“I’m afraid that those people who want a more dramatic move [in gold] are gonna get what they want.”

Rick continues,

“I don’t think that a move to 7,000 dollars to 8,000 dollars to 9,000 dollars is out of the question. I don’t think it’s going to happen, but I remember in the period 2000 to 2010 the gold price moved from $256 an ounce to $1,900 an ounce. A seven-fold move. If you view the current gold market in that lens, then a more dramatic move is probably in the cards.”

Devaluation of Fiat Will Move Gold & Mining Markets Higher

Finally, Rick reminds investors that a massive devaluation of the U.S. dollar spurred gold and precious metals in the 1970s. According to Rule, the U.S. entered that decade with unsustainable debts and dealt with this by depreciating the currency in which the debt was denominated.

He believes it ultimately reduced the purchasing power of the U.S. dollar and its citizens by about 85% – an astounding amount. Sadly, Rule believes politicians will choose inflation again, and we are in for a rough ride with a deterioration in the standard of living.

What Rick Rule Likes Today in May of 2024

Rule elaborates on his case for natural gas, why most investors hate it, and why he is a long-term bull. He also believes lithium will sell at a discount to what it costs to produce for a couple years. That environment, combined with technological advances in the battery market, will give birth to a new bull market.

In the current economic climate, investors have much to ponder… Rule believes the perniciousness of inflation will draw them to the mining market as they look to protect purchasing power, the most defining investing issue of the 2020s.