Markets and Commodities with Rick Rule
Coffee with Samso Episode 37 with Rick Rule, CEO, Senior Managing Director, Sprott Inc.; President & CEO, Sprott U.S. Holdings
This episode of Coffee with Samso with Rick Rule is an update to my previous conversation with Rick in March which unfortunately was dogged by technical issues.
I was eagerly looking forward to speaking with him again, as there had been many changes in the intervening four weeks and I wanted to hear Rick’s opinions on them.
Rick Rule began his career in the securities business in 1974 and has been principally involved in natural resource security investments ever since. He’s a leading resource investor specialising in mining, energy, water utilities, forest products and agriculture, and has originated and participated in hundreds of debt and equity transactions with private, pre-public and public companies.
Rick is also the Founder of Global Resource Investments, President and CEO of Sprott U.S. Holdings, Inc. and a member of the Sprott Inc. Board of Directors. He’s a frequent speaker at industry conferences and has been interviewed for numerous radio, television, print and online media outlets concerning natural resource investment and industry topics. He’s also frequently quoted by prominent natural resource-oriented newsletters and advisories.
Some highlights of Rick’s views were:
We believe this decline in sales will lead to decline in margins and will lead to a decline in the ability to service debt at all levels of society. But for right now the market is very bullish, very buoyant and we expect precious metals markets, while volatile, will also continue to be buoyant
There's plenty of liquidity in the market now and I’m afraid that investors that don't have a credit background are confusing liquidity that is cash in the system with solvency; and those are actually very different words
There are no certainties in life, I've learned that after 67 years, but there are probabilities and the probability is that the policy response to an economic slowdown will be continued quantitative easing, which is to say counterfeiting, continued low or in fact negative real interest rates, and a continued deterioration of central government balance sheets
I'm concerned about the fact that a lot of the valuation that occurred in the tech sector, like in the mineral exploration sector, was highly speculative and if we have a circumstance where a business is growing very rapidly but on low margins, the idea that it’s capital intensive, that it requires cheap capital and its margins are under pressure really scares me
Because the ethos in Australia is more geared towards making money and also because of this wonderful combination of a low and declining Australian dollar in the face of rapidly increasing gold prices in Australian dollars, there’s wonderful combination hard to screw it up, even I couldn't screw it
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