Rick Rule With A WARNING: Liquidity Matters More Than Ever
Summary
Liquidity Defense: He highlights private credit stresses and potential high-yield ETF redemptions, advocating elevated cash, short-term Treasuries, and gold as liquidity to capitalize on any dislocation.
Gold: Strong long-term bullish view based on expected US dollar purchasing power erosion; uses gold as savings and portfolio insurance despite near-term volatility.
Silver Equities: Shifted from physical silver into higher-quality silver stocks due to better valuation versus NPV and downside protection, holding for multi-year upside.
Oil & Gas: Entered when the sector was hated and capex was deferred; sees potential price rationing and is maintaining positions, particularly small Canadian E&Ps, while monitoring Middle East risk.
Copper: Believes decades of underinvestment will force rationing by price late this decade, favoring high-quality producers and rare, high-grade new discoveries.
Saudi Arabia: Bullish on Arabian Shield geology post legal reforms; backing early-stage explorers and prospect generators to spread risk and leverage third-party funding.
Gold M&A: Notes favorable conditions as larger miners enjoy lower capital costs, driving accretive takeovers of single-asset producers (e.g., G2 acquired by G Mining) and improving sector efficiency.
Key Names: Examples in silver exposure include Wheaton Precious Metals and Pan American Silver, while caution remains due to geopolitical shocks and liquidity risks.
Transcript
There are real stresses in the private credit market. Uh and there is higher near-term interest rate which impacts the ability of businesses to access credit at any price but particularly at a price they're comfortable with affording. The only thing that saves you from a liquidity crash is liquidity. Ironically, as I get older and I have less time on Earth, I've become much more patient. It isn't because I wouldn't like to be paid in a week or in a month. It's because I've learned in 50 years of investing >> the market is absolutely confusing. I have to admit gold gold is up, oil is up and the dollar is down. Bonds are holding steady and we need to make sense of it all and we want to learn how we can invest during these difficult times as well. What should we be doing? Should we be selling? Should we be buying? Should we be adding to positions? We'll have to find out. And uh I've invited back Rick Rule, legendary investor. He's been a frequent guest on this channel. I don't think he needs any further introduction, but he's also the host of the Rule Symposium down in Boca Raton, which we'll be attending, and I'm really really looking forward to. And of course, he's also the the brain behind Rule Investment Media. Puts on fantastic conferences, mini workshops, and and other things that will help you just become a better investor. But before I switch over to my guest and uh let let him share his insights, I want you to hit that like and subscribe button because it helps us out tremendously. We really appreciate it. So now Rick, it's great pleasure to have you back. Uh good to see you again. Thanks so much for joining us. >> Pleasure to be back with you, Kai. Uh thank you for having me. >> Yeah, really looking forward to the conversation. We have lots to discuss. Um I I want to start maybe perhaps with a bit of a recap as well, Rick. Um we spoke in January. who spoke at the Vancouver Resource Investment Conference and you had some interesting insights to share. one one of which really riled the market like meaning it riled it up and I'm sure you've gotten a ton of emails about it and we've talked about it at the conference but you sold about 75 80% of your physical silver position not not silver you didn't dismiss silver just your physical part the question is of course now that I have you back was that the right decision >> for me it was and I think it's important to differentiate that you know all all investment considerations need to be personal for me silver was in the speculative part of my portfolio. I save in gold. I maintain liquidity in US dollars and I decided to speculate in silver. I speculated in silver during a period of time when the metal was hated. Uh was below $20 an ounce. All of the internet comment that you saw about it was negative. And I figured that all silver had to do to advance in price was to become less ls hated. It didn't need to be loved. I also figured that with the level of vituprative hate that I saw that uh anybody who wanted to sell had already sold uh and that any type of buying at all uh would break the back of the few remaining sellers. Well, that turned out to be true. When it happened when silver crusted through 50, it was very clear it was no longer hated. So I began to get an itchy trigger finger when I saw the parabolic up move in silver. Uh and you'll recall in midappril, pardon me, mid January, there was a parabolic up move. That's what prompted me to s to pull a trigger. Those parabolic moves, what the Canadians call hockey stick charts, are almost always good times to sell. Uh the backside of that hockey stick is just as steep, but it's a lot less fun for the longs. Uh and so that's what happened. uh specifically uh I looked at my silver in the context of my speculative uh portfolio and I did a little s simple arithmetic. If I first of all noticed that the silver stocks relative to the silver price itself were undervalued. The silver stocks were valued as though silver was trading at $45 an ounce when silver was in fact trading uh at more like $85 an ounce. So, it occurred to me if the silver price went up, the silver stocks would go up, too. If the silver physical silver traded sideways, by definition, I wouldn't make any silver. And paradoxically, if silver traded down, the discounted price on the silver equity price assumption meant that I had better protection to the downside in the silver equities than I had in silver. So of the money that I received for uh selling my physical silver uh 50% of that went to silver stocks, 25% of it went uh in an error of great timing to oil stocks and 25 uh went to physical gold, which is to say into my savings account. For me, given the way I organized my speculative portfolio, it was and is a great trade. Uh, notice Kai in fairness that if a financial planner looked at my own accounts, he would tell me that I was crazy to own either physical gold or physical silver. I'm the largest shareholder in SPAT Inc., which is in effect a financial brand name for gold and silver. To the extent that gold does well or silver does well, SPAT will do well. I own them uh in the case of gold because I save in gold. It is to me the ultimate liquidity and the ultimate portfolio insurance and from time to time I buy silver when silver is hated but clearly it's no longer hated. Uh we we can discuss that because right now silver is trading around I think where you exited around $75 if I'm not not mistaken. So uh your your timing was fantastic. Silver is a nice roller coaster ride. Um but you you said you shifted into silver equities and that that worked out well for about five weeks I would assume. But what did you do since then? Did you did you sell following that period? >> No, you know, I I don't trade much, Kai. Uh there was a time in my early 20s when I had the time and the lack of money and trading made sense for me, but I take a very long-term perspective on things. I I'm also not interested in small moves. Uh I'm interested in much larger moves. I'm holding my silver equities because I think that we're going to be in a primary bull market in natural resources for as long as a decade, but certainly for 5 years. I think that the gold price will go higher. I think that the silver price will go higher, too. And I think as a consequence of that that the silver equities will go materially higher. Maybe not in the near term. Maybe not for 6 months, maybe not for 12 months, but that doesn't matter to me. Kai, you and I have talked on your show before about the fact that uh ironically, as I get older and I have less time on Earth, I've become much more patient. It isn't because I wouldn't like to be paid in a week or in a month. It's because I've learned in 50 years of investing that if I think in five-year time frames, I make money and if I don't, sometimes I don't. Um, so I think in very long terms the, you know, the the move in a stock from, you know, a buck to a buck 20 is of no interest to me. Uh, I'm in the game. Taking the risk that you take in small mining stocks because I want the move from a buck to $10. That move doesn't happen quickly and the move from a dollar to a$120 is of no interest to me. Similarly, the perturbations in the silver price have no interest to me at all. The fact that silver went from $18 to $75, that was of considerable interest to me. But remember, it took four or four and a half years. >> Absolutely. Maybe just to follow up on something you said because I remember you telling me some names that you've shifted uh your money into and you just mentioned smaller silver explorers and I don't recall any smaller silver explorers that you've mentioned to me in January. So maybe just to re refresh my memory, Rick, where did you put your money? >> Well, I was in two of them. uh one turned out to be a horrible mistake. Uh I was in Visa Silver which of course uh suffered that tragic kidnapping and range of murders in Sinoa something that I couldn't foresee. The other was Abra uh which has and continues to treat me well. But most of the money went into bigger silver names. One of them a silver name in drag uh Weaten precious metals which is only about 45% silver but still has a very strong silver component a very strong silver constituency pan-American silver which has lagged uh but a stock I still like and a couple of what I would describe as politically challenged silver producers uh uh ples uh and uh buenura. I also uh subscribed in a rather major way to uh private placement using some of the money and some money from elsewhere uh in what is now called aluminum metals uh which is Ross Bey's latest pre-public entry. Uh it is both a copper stock and a silver stock having the exploration continuation of the famous Cooper Schaefer district in Poland. uh and of course fronted uh by my longtime friend uh Ross Bey. Uh that deposit at present uh in terms of uh indicated and inferred controls over a billion ounces of silver uh in a wonderful copper wrapper. >> Wow. Wow. I didn't know it was that much. I knew he was really excited about aluminum metals. Do we have an IPO date or a listing date yet? >> Apparently, uh it's proceeding to IPO now. uh the market is treating that uh very kindly uh given the size and the grade of the deposit uh overlooking the fact that there are some challenges with regards to mining law and mining tax in Poland. But you know the quip quippers has been an important copper silver producer since the 1700s. Uh and Ross was the first guy to look for the deep extensions of that deposit and found them in spades. Yeah, it's about 1,200 meters deep, I believe. So, it's that's one of one of the challenges. But, uh, you know, let's just hope Poland doesn't expropriate. >> They got a history of that. So, >> absolutely. Um, but just coming back to silver real quick before we, uh, you know, continue in the conversation because, um, would you buy back physical silver at any point in time? What do you need to see? Um, you know, hate is a strong word, but what does that look like again in this current environment? >> Hate is what would be required. Um, when I bought silver, uh, it was after that first sort of retail silver squeeze and the silver apes had failed and the internet comment on silver was literally 10 or 20 to one negative. Uh, people who had had silver as part of their internet moniker were ruing the fact that they had ever learned to spell silver. Uh, I don't see that level of hate returning for quite some time. So, I think it's unlikely that I would buy physical silver. And I continue to believe that the higher quality silver stocks are selling at a substantial discount to their net present value at today's silver price that they're discounting 40 or 50% price declines in the metal. Uh my life is all about hate or love. Buy hate, sell love. And it's all about arithmetic. Uh I'm not a momentum guy. I'm not a trading guy. I'm all about the gap between uh enterprise value which is to say the market capitalization plus debt uh and net present value and that juxtaposition uh that delta is much more solidly on the side of silver stocks than it is in silver itself. May maybe just to follow up. It seems like an obvious question and maybe an very obvious answer, but it's not about price because if I were to come to you, but Rick, silver's going to $300 in a year and a half, like at $75 sounds like a bargain. Um, it's it's not a function of price for you, per se. Just just to clarify. >> Well, how do you know? >> You know, people give me all kinds of price projections all the time. I probably get called from five investment bankers or investment salesmen a day. uh and they tell me that I should buy, you know, amalgamated moose pasture or consolidated orangutang or something like that because it's selling for a dollar today, it's going to be selling for $3 tomorrow. How do they know? >> Uh if they would instead tell me it's selling for a dollar today, but it's worth $3 a day for the following reasons, I might listen. But price projections are really I mean, I'm not sure if they're more boring or more insulting. Um, but that's a bad combination. >> Yeah, I I don't I can't stand people that base their investment thesis on future prices, not current prices. I struggle with that personally, right? Um, let's zoom in on on or hone in on the buy hate, sell love, right, thesis. Uh, because we I need to ask you, Rick, like I'd get crucified if I don't, but where do you see hate right now? Where do you see love? >> Well, hate is something that's missing in the market. uh the first two or three years that you and I conducted these uh fund discussions, there was always something that was hated. There was always something that was out of favor. Uh if you go far enough back in our discussion, Kai, uh the gold stocks and even gold itself was out of favor. Uh uranium was decidedly out of favor. Uh I guess you could still say that sulfide nickel >> uh is out of favor. There are some regional places that are out of favor. Right now, the Middle East is decidedly out of favor. And so, I'm beginning to look at speculating in Turkey again. Uh I have written some checks for Saudi Arabian exploration. Certainly, you know, there there are regions that are out of favor. So, I'm I'm attracted to that sort of hate. I'm attracted to political risk in the same way that I am to out of favor commodities. But the truth is in the sector that you and I focus on uh which is commoditiescentric stocks there's a real shortage of hate out there. >> There still is. Yeah. No, despite the macro backdrop or geopolitical backdrop which allow me a quick followup on Saudi Arabia before we talk about perhaps what you love as well right now. What are you selling perhaps? But Saudi Arabia like how attractive as an exploration area is it right now given especially the geopolitical backdrop? >> I think it's quite attractive. Uh, I've always been attracted to the geology of the Arabian Shield. I had some very good luck on the west side of the shield. Uh, I was early in the sentiment discovery. Uh, I was very early uh, five years early on. Uh, I was early with Rick Clark uh, in Sudan. So, I've been very lucky on the Western part uh, of the Arabian Shield, the so-called Nubian Shield. uh and I always had an interest in the Saudi side, but until there was reforms in the Saudi mining law and also in terms of the licensing procedures by which foreigners might participate in Saudi Arabia. Uh I was unable uh to turn that affection into investment. That all began to change two years ago. Uh two things attracted me. One was the evident seriousness with regards to the way that the Saudis went about changing the foreign investment pro protocol and the extraordinarily high caliber of the investors that were drawn to uh investing in Saudi Arabia. Uh it it's early on. My own experience, Kai, and your listeners are going to hate this. Uh my own experience is that when the industry begins to get begins to get involved grassroots in district-wide exploration, uh it's usually as much as 10 years uh before they make profound economic discoveries. And as a 73y old, that's somewhat challenging for me. Uh what my hope is is that by contributing in the seed round to three different exploration companies that I will get something resembling uh a discovery in a substantial shorter period of time. I'm also backing the prospect generators in Saudi. So, what I'm hoping is that uh the companies that I'm backing uh end up with eight or 10 concessions that they do the preliminary work on them and they farm most of them out so that the heavy lifting uh in exploration is done on other people's dimes, not mine. >> Absolutely. I'm invested in Saudi Arabia as well, but it sounds like you're not really concerned about what's happening in the Middle East right now in general. rockets flying and all of that that's not impacting is just maybe timelines perhaps perhaps. >> Uh I I think right now I'd probably for a whole bunch of reasons have trouble investing in Iran. >> Uh on the other hand, I don't know that my government would let me invest in Iran. I would love by the way to invest in Iran. Uh I would love to invest uh in silver exploration in Iran. I'd love to invest uh exploring for copper pureries. I'd love to invest in Zarovan, the wonderful zinc deposit uh in Iran, but the circumstance may not be right even for the rest of my life. I'm really attracted to good geology, even if that involves not so good politics. >> That that's exactly the point. Uh like what are you going to do with that? Like Iran is really difficult, but the opportunity is insane because it's so untouched, right? So maybe that's where the hate is right now, but you might get sanctioned. >> You know, who knows? It might be five years from now that the circumstance is very very different. If the circumstance is different and the attitude of the mining and investment community hasn't changed, maybe this old man will get a chance to uh invest in Iran. Uh I would love for that to happen. You know, I've I've invested successfully in a lot of jurisdictions that were considered to be extremely politically challenged. Uh, I've made money twice in Sudan, a lot of money. Uh, and the best country in the world for me in terms of money in, money out has been Democratic Rep Republic of Congo. >> Uh, no easy place. Um, I was in Peru literally as soon as the Shining Path were kicked out. Uh, long before the currency was convertible, about the same time that the flat jackets came off. And I need to say I had 24 very good years investing investing in Russia before I had one catastrophic year. Uh so I need to say taking what are perceived to be political risks where I believe the risks are less serious at least less serious relative to other countries than they are has treated me very well. Conversely, uh I've experienced a lot of uh the negative result of political risk investing in countries that weren't perceived to be risky at all. My worst experience with political risk came in the People's Republic of California in 1980. Uh I've also experienced real firsthand political risk in British Columbia and in the province of Alberta where 15 years ago when the natural gas price went up, the provincial government responded by doubling the royalties. Uh that's nationalization. It's just nationalization done in English by white people >> which makes it absolutely okay of course. So absolutely normal. Um I was going to ask you like we we've seen a bit of less let's say less love in the mining space over the last was it five weeks now ever since the beginning of March. I'm not even willing to call it the PETA curse because there are other reasons for the for the drop. So I'm curious like is is there less love out there now? Is that maybe a little opportunity? Is that a little bit of hate in the markets? I'm looking at gold price, sorry, not gold price, gold stocks and silver stocks. >> If I felt better about liquidity in the US market, I would be buying the high quality small cap gold miners. >> The they have cooled off substantially. Uh the gold quote has of course pulled off from what 5,500 to 4700. >> By the way, that's irrelevant. Um, I've experienced so many 25% declines in my life that I I I think of a 10% decline as gold inhaling or exhaling rather than anything else. I feel very good about the gold price over the five or six year time frame. The consequence of that is that this this hiccup is inconsequential to me. uh and I notice that the gold mining industry is sequencing in terms of uh market capital uh not not market capitalization but rather multiples by size which is to say that the biggest companies are enjoying the strongest trading volumes hence higher share prices hence a lower cost of capital um that traditionally is a very good M&A environment single asset producers are rightly regarded as riskier than multi multiasset producers. That discount goes away if a multiasset producer takes over a single asset producer. And there's a lot of takeovers that are going to take place for synergistic reasons. The very recent takeover of G2 uh by G mining uh an amazing transaction done at a 70% premium accretive to both C companies and even the acquirer shares went up in the aftermath of it. That tells you something about the opportunity that is present in gold equities markets now for participants uh who are rational and hardworking. I'm both rational and hardworking. My problem is I own a lot of this stuff. If you want to see a portfolio that is really strangely overweight gold, all you have to do is look at mine. Um, I may not be able to resist, but right at this very moment, Kai, I'm actually adding to my liquidity, which as recently as three months ago, I would have told you was excessive. >> I was going to follow up on that because we briefly chatted before hitting the record button. And you you gave me an opening to ask that question about uh the the US market and the the private credit and the equity situ private credit quality situation here. Um, it sound it sounds like he's giving you a lot of reason for concern here. I'm not normally a near-term guy, but I don't like the near-term here. Uh I think that this conflict in the Middle East, first of all, is of course damaged confidence, but you and I talked three or four months ago about the fact that I thought that we might be on the verge of a recession. I think we're in one now. Uh I think we have to pay for this war. And I think if the war doesn't end fairly soon, like two or three weeks from now, that we're going to have a much stronger oil price shock than we already have. Simultaneously with that, there are real stresses in the private credit market. uh and there is higher near-term interest rate which impacts the ability of businesses to access credit at any price but particularly at a price they're comfortable with affording specifically Kai if credit concerns extend uh and if the ma and paw investors who own high yield ETFs which is a polite way of saying junk bond ETFs begin to redeem I think that there's a possibility, I'm not saying a probability, but there's a possibility of a real liquidity collapse, a real credit collapse, uh something on the order of 2008. I don't want the headline to say Rick Rule forecast 2008 style collapse. But even though I don't believe that there is a probability of this, which is to say I think it's a it's a possibility, the consequences of it are severe enough that I'm taking precaution. Uh the worst thing that happens is I go through this next six months with too much cash. Uh I've committed worse sins than that in my life. Uh I've been in the business long enough to know that the only thing that saves you from a liquidity crash is liquidity. If you have cash when those about you don't or don't have the courage to use it, you can take advantage of the circumstance as opposed to being taken advantage of by the circumstance. This takes me back to the immediate aftermath of 2008, which was of course 2009, the single best investing year of my care of my career. I had the cash and because of my education, I had the courage to take advantage of that circumstance rather than being taken advantage of. And my building liquidity has everything to do with my nervousness about credit quality and my desire to take advantage of that circumstance as opposed to being taken advantage of by it. >> When you say cash rate, just to follow up, do you mean cash cash like hard dollar bills or do you talk about bonds, bills? >> No. Uh cash to me is certificates of deposit, money market funds, very short-term uh US government treasury obligations and gold. >> Okay. >> Uh I proved to myself in 2010 that gold was liquidity for me because there were a range of asset classes 2009 and 2010 that I thought were cheaper than gold and I was able to convince myself to part with it and buy those. It was tough. It was absolutely tough. But I proved to myself that my gold was in fact liquidity. Many people that I know who have the same philosophical predisposition to gold that I have have a problem with it as liquidity because they refuse to sell. Uh and I do not suffer from that sin. >> No. Fantastic. Um Rick, I want to touch on oil and gas real quick. We got about like 5 minutes left in the conversation and uh you know it was a tremendous conversation so far but I want to talk oil and gas cuz you got in at at the right time. The question is of course what's your scenario now? Like what's your exit strategy? When are you selling? >> I don't have one Kai and I should um I came into the resource business and the oil and gas business. So I've been around it for a very very long time and I'm actually more comfortable in oil and gas than I am in mining. Uh I came into the oil businesses or I I came in It increased my positions in oil and gas. Uh because oil and gas once again was hated because uh $60 a barrel was an unsustainably low price and because the oil and gas industry was deferring uh about a billion dollars a day in sustaining capital investment. And I knew from past experience that the deferral of $365 billion in sustaining capital a year meant that two or three years out production would decline and oil and gas would have to be rationed by price. I had no idea that the world would be stupid enough to go to war again. But the world was that stupid. And the consequence is that the oil prices that I thought I would see in 2029, I saw in 206 uh pardon me, 2026. Uh which leads me to today. What should I do? The rational part of Rick Rule, most of him suggests that my more recent purchases in oil and gas should be sold because my three-year objectives were reached in three months. The greedy part of Rick Rule uh that part which seldom surfaces is however fairly close to the surface both because any price decline that I see I think will be temporary which is to say I think we'll see these prices again uh in 2029 2030 but also because the price increases that we've seen and your audience will have to look listen closely to this the price in increases that we have seen thus far are not price signals that come due to absence of oil but rather to the anticipation of the absence of oil. The world has been living for the last three or four weeks on floating inventory and strategic stockpiles. If this war goes on for another two or three weeks, we will be experiencing in many parts of the world real not anticipatory shocks. And the oil price there will be a function of the fact that oil will have to be rationed by price. Repeat uh the oil price that we're seeing now the $102 indication on WTI is predictive. It's based on the uh eminence of shortage. The price disparities in real shortage will be higher. An example would would be right now Omani crude loaded on a tanker south of the straits of Hormuse that could be sold is selling at WTI plus $40 premium. So, while the futures market shows a dollar too, the FOB price for real inventory, not paper inventory, remember, you can't you can't burn computer blips, uh, but rather real oil uh, is selling for closer to 142 than 102. If this circumstance continues for not too much longer, you'll see a real oil shock. Uh, so I haven't been as aggressive selling my oil equities, particularly the basket of small Canadian equities that I bought six months ago, uh, as I normally would be ju >> just to showcase how volatile the market is. As we're speaking, oil is down 7%. We're down to 91 94 on on a barrel, right? So just to showcase Exactly. Um, because Iran apparently signaled more interest in chatting again. which is >> well I hope for all kinds of reasons uh none of them having anything to do whatsoever with my portfolio uh that the two sides or rather the three sides get serious about talking uh there's no particular point in killing each other uh there's no particular point in risking a broader schism between Shia and Sunni Islam for all kinds of reasons that are much bigger than any of our portfol folios. Uh, these morons need to talk. >> Well, well said. I fully agree. So, and I think it looks like it's going to happen. So, let's let's just have our fingers crossed and that everybody's happy with the outcome, right? Um, Rick, we're about three months away from your conference or pretty much exactly three months away from your conference and I'm really looking forward to attending again. I missed last year unfortunately, but uh what would be the main themes this year? What do you expect people to talk about the most? about the Must >> I think the most popular theme will be what I see is the inevitability of higher nominal gold prices. You and I have talked Kai, but we will demonstrate it with big picture thinkers much smarter than I uh the purchasing power of the world's reserve currency, the US dollar, will decline substantially over 10 years. I've been saying 75%. My belief is if the US dollar declines 75% in purchasing power that gold will maintain its purchasing power. So at least in the nominal context uh I expect the next 10 years to be very good for the gold price. That isn't to say that there won't be cyclical declines that there won't be fluctuations in the price but I believe roughly that gold will hold its purchasing power. Will a dollar will lose 75% of its is of its for speculators. I think over time silver and the silver stocks will do better. I also believe for reasons that we'll go into that copper will need to be rationed by price. uh beginning sometime around the end of this decade uh we will show at the conference that the world has underinvested in copper uh exploration, construction, production for 30 years and there is literally nothing that we can do over the next five years that will change that picture. There is nothing I can see uh on the horizon save a synchronized global depression, not recession, that will balance copper supply and demand other than rationing copper by price. What that means is that the highquality long live copper deposits already in production, ones that don't need need to be discovered, they don't need to be permitted, they don't need to be financed, are worth a lot more than the market thinks it is. It also means that highquality discoveries, we haven't discovered much copper, by the way, because we haven't spent much money looking. But now that we're spending money looking for copper, we're going to find some. And those odd high quality discoveries that are made are going to be sold for absolutely eyepopping premiums. Uh and we'll learn about that. Uh we will learn about three or four tier one deposits in less well-known commodities in parts of the world that the market hates. Uh which I'm very attracted to as you know. uh and we will talk about one unsung sector of the oil and gas business uh which is small market cap companies doing conventional nonshalebased exploration generally offshore and generally in frontier markets uh the last unloved sector of the energy business. Importantly, Kai uh we have a a progression of education, educational values. At the conference, we begin by wonderful big picture macro people telling you the way the world is, not the way the CBC or the BBC or Fox would like you to believe it is. We go from there to analysts and portfolio managers who have made money in precious metals and natural resources for 40 years. Uh not people who've made their reputation the last 12 months of a bull market but pro but people who have made and defended profits through good markets and bad for 40 years. That's critically important. You know, Kai, from past attendance that every public company exhibitor at our conference has been vetted. They must be owned in the organizer's accounts or they're not permitted on the floor. At most conferences, the qualification for admission is a check that cashes. Our qualifications are much much stiffer. All of that comes together in two ways. The first is whether you attend live. I shouldn't offer that anymore. the conference is sold out live. Uh but if you decide to attend uh either live or online, uh first of all, we'll give you much more content in 4 days than you can absorb. So you'll have access to the recordings for a full year and you'll need them. And in addition to that, uh anybody who pays to attend my conference that doesn't think that they got more than their money's worth can get their money back. All you have to do is email me. For 30 years of selling investor education uh products, I have always offered a money back guarantee. And I'm very proud to say that the content has been high enough quality that we've had to refund less than onetenth of 1% of the tuition that we've charged. But it's still your guarantee. Absolutely positively your guarantee that if for any reason whatsoever you're unhappy with the outcome, you don't pay. >> No. Fantastic. Uh no, Rick, I'm really looking forward to being in Bocar with you again in uh in in July. But um you know, since I have you, you got a copper boot camp coming up and uh I think you have one very special guest in attendance uh that the audience would really love to hear from. >> This copper boot camp is going to be fun. I'm bullish copper Kai as you know. Uh the copper business historically has made me a lot of money and I kind of feel like I ain't seen nothing yet. Uh that boot camp comes up this Saturday. The special guest you refer to is Robert Freedelland. Uh the most serially successful mine discoverer and mine builder in the last 50 years. He is the most successful mining person of my generation that exists. The single most. I'm proud to say I've done business with him for 40 of those 50 years. Uh for a very long time to his benefit and mine or to mine. Uh Robert was among other things the finance year of the effort that led the discovery of Oo Togoy currently the fifth largest copper mine in the world. Uh and Kamoa Cakula the most important new copper mine in the world. He is exploring for copper uh on his own account in central Africa uh in Saudi Arabia uh in the South American cordieran and in the metallogenic belt. Uh he is truly a superb human being. We have an hourlong fireside chat where I attempt to discipline and corral that massive brain keeping it focused on copper. Uh, Robert Robert's presentation if you listen will be the worth the price of admission by itself. >> But another guest I'd really like to to highlight to you is uh Steve >> Enders, >> uh, Dina Meredus of exploration at the Colorado School of Mines. uh but probably more important for this discover for this discussion former exploration manager worldwide for Phelps Dodge than the largest copper company in the United States and also former exploration manager worldwide for Newmont Mining Company. >> Uh the kind of person that you don't get at a normal uh retail investment conference uh a guy with 50 years experience in the trenches in the copper business did mining uh private equity uh copper mining private equity. I mean, a really, really, really well-rounded guide. Generally, we propose to teach you enough in eight hours that when those lessons are used in conjunction with the 300 hours of free lessons at the rule classroom, uh it should be able to enable the applied investor to understand enough about the copper business that they can confidently manage their own uh investment and speculative portfolio in copper. That's certainly the the desired outcome from our viewpoint like the conference. Uh if you pay the admission uh by the way this is online only uh no no in person. If you pay the admission you think for any reason that we haven't earned our money. Uh we'll give you your money back. Absolute money back guarantee. >> Fantastic Rick. Always a pleasure to catch up with you. Can't wait to do this again in person. We'll definitely have to get you in front of a microphone in Boca Raton the latest. So, we're looking forward to that already. Rick, much appreciate your time. Always great to catch up and we'll talk soon. Stay on for a second. I'll be right back. Uh, everybody else, thank you so much for tuning in. What a wonderful conversation with Rick Ru. I think we managed to to bridge the conversation that we had in January with what is happening today. And I think we left you with some actionable advice as well, not investment advice. You still have to do your own homework. You still have to do your own due diligence. attend a few of those classrooms and the boot camp to to actually get up to speed on what is really happening and how to pick the best stocks in the space. So, please do that. And uh if you haven't done so, hit that like and subscribe button as well cuz uh we we try to educate you on what's happening on the macro side as well. We don't give you stock recommendations, but we'll try to tell you where the puck is going in the future and what to expect in the current macroeconomic environment. So, really appreciate you tuning in. Thanks so much for watching. Take care and don't let your emotions run your investment for you. Take care.
Rick Rule With A WARNING: Liquidity Matters More Than Ever
Summary
Transcript
There are real stresses in the private credit market. Uh and there is higher near-term interest rate which impacts the ability of businesses to access credit at any price but particularly at a price they're comfortable with affording. The only thing that saves you from a liquidity crash is liquidity. Ironically, as I get older and I have less time on Earth, I've become much more patient. It isn't because I wouldn't like to be paid in a week or in a month. It's because I've learned in 50 years of investing >> the market is absolutely confusing. I have to admit gold gold is up, oil is up and the dollar is down. Bonds are holding steady and we need to make sense of it all and we want to learn how we can invest during these difficult times as well. What should we be doing? Should we be selling? Should we be buying? Should we be adding to positions? We'll have to find out. And uh I've invited back Rick Rule, legendary investor. He's been a frequent guest on this channel. I don't think he needs any further introduction, but he's also the host of the Rule Symposium down in Boca Raton, which we'll be attending, and I'm really really looking forward to. And of course, he's also the the brain behind Rule Investment Media. Puts on fantastic conferences, mini workshops, and and other things that will help you just become a better investor. But before I switch over to my guest and uh let let him share his insights, I want you to hit that like and subscribe button because it helps us out tremendously. We really appreciate it. So now Rick, it's great pleasure to have you back. Uh good to see you again. Thanks so much for joining us. >> Pleasure to be back with you, Kai. Uh thank you for having me. >> Yeah, really looking forward to the conversation. We have lots to discuss. Um I I want to start maybe perhaps with a bit of a recap as well, Rick. Um we spoke in January. who spoke at the Vancouver Resource Investment Conference and you had some interesting insights to share. one one of which really riled the market like meaning it riled it up and I'm sure you've gotten a ton of emails about it and we've talked about it at the conference but you sold about 75 80% of your physical silver position not not silver you didn't dismiss silver just your physical part the question is of course now that I have you back was that the right decision >> for me it was and I think it's important to differentiate that you know all all investment considerations need to be personal for me silver was in the speculative part of my portfolio. I save in gold. I maintain liquidity in US dollars and I decided to speculate in silver. I speculated in silver during a period of time when the metal was hated. Uh was below $20 an ounce. All of the internet comment that you saw about it was negative. And I figured that all silver had to do to advance in price was to become less ls hated. It didn't need to be loved. I also figured that with the level of vituprative hate that I saw that uh anybody who wanted to sell had already sold uh and that any type of buying at all uh would break the back of the few remaining sellers. Well, that turned out to be true. When it happened when silver crusted through 50, it was very clear it was no longer hated. So I began to get an itchy trigger finger when I saw the parabolic up move in silver. Uh and you'll recall in midappril, pardon me, mid January, there was a parabolic up move. That's what prompted me to s to pull a trigger. Those parabolic moves, what the Canadians call hockey stick charts, are almost always good times to sell. Uh the backside of that hockey stick is just as steep, but it's a lot less fun for the longs. Uh and so that's what happened. uh specifically uh I looked at my silver in the context of my speculative uh portfolio and I did a little s simple arithmetic. If I first of all noticed that the silver stocks relative to the silver price itself were undervalued. The silver stocks were valued as though silver was trading at $45 an ounce when silver was in fact trading uh at more like $85 an ounce. So, it occurred to me if the silver price went up, the silver stocks would go up, too. If the silver physical silver traded sideways, by definition, I wouldn't make any silver. And paradoxically, if silver traded down, the discounted price on the silver equity price assumption meant that I had better protection to the downside in the silver equities than I had in silver. So of the money that I received for uh selling my physical silver uh 50% of that went to silver stocks, 25% of it went uh in an error of great timing to oil stocks and 25 uh went to physical gold, which is to say into my savings account. For me, given the way I organized my speculative portfolio, it was and is a great trade. Uh, notice Kai in fairness that if a financial planner looked at my own accounts, he would tell me that I was crazy to own either physical gold or physical silver. I'm the largest shareholder in SPAT Inc., which is in effect a financial brand name for gold and silver. To the extent that gold does well or silver does well, SPAT will do well. I own them uh in the case of gold because I save in gold. It is to me the ultimate liquidity and the ultimate portfolio insurance and from time to time I buy silver when silver is hated but clearly it's no longer hated. Uh we we can discuss that because right now silver is trading around I think where you exited around $75 if I'm not not mistaken. So uh your your timing was fantastic. Silver is a nice roller coaster ride. Um but you you said you shifted into silver equities and that that worked out well for about five weeks I would assume. But what did you do since then? Did you did you sell following that period? >> No, you know, I I don't trade much, Kai. Uh there was a time in my early 20s when I had the time and the lack of money and trading made sense for me, but I take a very long-term perspective on things. I I'm also not interested in small moves. Uh I'm interested in much larger moves. I'm holding my silver equities because I think that we're going to be in a primary bull market in natural resources for as long as a decade, but certainly for 5 years. I think that the gold price will go higher. I think that the silver price will go higher, too. And I think as a consequence of that that the silver equities will go materially higher. Maybe not in the near term. Maybe not for 6 months, maybe not for 12 months, but that doesn't matter to me. Kai, you and I have talked on your show before about the fact that uh ironically, as I get older and I have less time on Earth, I've become much more patient. It isn't because I wouldn't like to be paid in a week or in a month. It's because I've learned in 50 years of investing that if I think in five-year time frames, I make money and if I don't, sometimes I don't. Um, so I think in very long terms the, you know, the the move in a stock from, you know, a buck to a buck 20 is of no interest to me. Uh, I'm in the game. Taking the risk that you take in small mining stocks because I want the move from a buck to $10. That move doesn't happen quickly and the move from a dollar to a$120 is of no interest to me. Similarly, the perturbations in the silver price have no interest to me at all. The fact that silver went from $18 to $75, that was of considerable interest to me. But remember, it took four or four and a half years. >> Absolutely. Maybe just to follow up on something you said because I remember you telling me some names that you've shifted uh your money into and you just mentioned smaller silver explorers and I don't recall any smaller silver explorers that you've mentioned to me in January. So maybe just to re refresh my memory, Rick, where did you put your money? >> Well, I was in two of them. uh one turned out to be a horrible mistake. Uh I was in Visa Silver which of course uh suffered that tragic kidnapping and range of murders in Sinoa something that I couldn't foresee. The other was Abra uh which has and continues to treat me well. But most of the money went into bigger silver names. One of them a silver name in drag uh Weaten precious metals which is only about 45% silver but still has a very strong silver component a very strong silver constituency pan-American silver which has lagged uh but a stock I still like and a couple of what I would describe as politically challenged silver producers uh uh ples uh and uh buenura. I also uh subscribed in a rather major way to uh private placement using some of the money and some money from elsewhere uh in what is now called aluminum metals uh which is Ross Bey's latest pre-public entry. Uh it is both a copper stock and a silver stock having the exploration continuation of the famous Cooper Schaefer district in Poland. uh and of course fronted uh by my longtime friend uh Ross Bey. Uh that deposit at present uh in terms of uh indicated and inferred controls over a billion ounces of silver uh in a wonderful copper wrapper. >> Wow. Wow. I didn't know it was that much. I knew he was really excited about aluminum metals. Do we have an IPO date or a listing date yet? >> Apparently, uh it's proceeding to IPO now. uh the market is treating that uh very kindly uh given the size and the grade of the deposit uh overlooking the fact that there are some challenges with regards to mining law and mining tax in Poland. But you know the quip quippers has been an important copper silver producer since the 1700s. Uh and Ross was the first guy to look for the deep extensions of that deposit and found them in spades. Yeah, it's about 1,200 meters deep, I believe. So, it's that's one of one of the challenges. But, uh, you know, let's just hope Poland doesn't expropriate. >> They got a history of that. So, >> absolutely. Um, but just coming back to silver real quick before we, uh, you know, continue in the conversation because, um, would you buy back physical silver at any point in time? What do you need to see? Um, you know, hate is a strong word, but what does that look like again in this current environment? >> Hate is what would be required. Um, when I bought silver, uh, it was after that first sort of retail silver squeeze and the silver apes had failed and the internet comment on silver was literally 10 or 20 to one negative. Uh, people who had had silver as part of their internet moniker were ruing the fact that they had ever learned to spell silver. Uh, I don't see that level of hate returning for quite some time. So, I think it's unlikely that I would buy physical silver. And I continue to believe that the higher quality silver stocks are selling at a substantial discount to their net present value at today's silver price that they're discounting 40 or 50% price declines in the metal. Uh my life is all about hate or love. Buy hate, sell love. And it's all about arithmetic. Uh I'm not a momentum guy. I'm not a trading guy. I'm all about the gap between uh enterprise value which is to say the market capitalization plus debt uh and net present value and that juxtaposition uh that delta is much more solidly on the side of silver stocks than it is in silver itself. May maybe just to follow up. It seems like an obvious question and maybe an very obvious answer, but it's not about price because if I were to come to you, but Rick, silver's going to $300 in a year and a half, like at $75 sounds like a bargain. Um, it's it's not a function of price for you, per se. Just just to clarify. >> Well, how do you know? >> You know, people give me all kinds of price projections all the time. I probably get called from five investment bankers or investment salesmen a day. uh and they tell me that I should buy, you know, amalgamated moose pasture or consolidated orangutang or something like that because it's selling for a dollar today, it's going to be selling for $3 tomorrow. How do they know? >> Uh if they would instead tell me it's selling for a dollar today, but it's worth $3 a day for the following reasons, I might listen. But price projections are really I mean, I'm not sure if they're more boring or more insulting. Um, but that's a bad combination. >> Yeah, I I don't I can't stand people that base their investment thesis on future prices, not current prices. I struggle with that personally, right? Um, let's zoom in on on or hone in on the buy hate, sell love, right, thesis. Uh, because we I need to ask you, Rick, like I'd get crucified if I don't, but where do you see hate right now? Where do you see love? >> Well, hate is something that's missing in the market. uh the first two or three years that you and I conducted these uh fund discussions, there was always something that was hated. There was always something that was out of favor. Uh if you go far enough back in our discussion, Kai, uh the gold stocks and even gold itself was out of favor. Uh uranium was decidedly out of favor. Uh I guess you could still say that sulfide nickel >> uh is out of favor. There are some regional places that are out of favor. Right now, the Middle East is decidedly out of favor. And so, I'm beginning to look at speculating in Turkey again. Uh I have written some checks for Saudi Arabian exploration. Certainly, you know, there there are regions that are out of favor. So, I'm I'm attracted to that sort of hate. I'm attracted to political risk in the same way that I am to out of favor commodities. But the truth is in the sector that you and I focus on uh which is commoditiescentric stocks there's a real shortage of hate out there. >> There still is. Yeah. No, despite the macro backdrop or geopolitical backdrop which allow me a quick followup on Saudi Arabia before we talk about perhaps what you love as well right now. What are you selling perhaps? But Saudi Arabia like how attractive as an exploration area is it right now given especially the geopolitical backdrop? >> I think it's quite attractive. Uh, I've always been attracted to the geology of the Arabian Shield. I had some very good luck on the west side of the shield. Uh, I was early in the sentiment discovery. Uh, I was very early uh, five years early on. Uh, I was early with Rick Clark uh, in Sudan. So, I've been very lucky on the Western part uh, of the Arabian Shield, the so-called Nubian Shield. uh and I always had an interest in the Saudi side, but until there was reforms in the Saudi mining law and also in terms of the licensing procedures by which foreigners might participate in Saudi Arabia. Uh I was unable uh to turn that affection into investment. That all began to change two years ago. Uh two things attracted me. One was the evident seriousness with regards to the way that the Saudis went about changing the foreign investment pro protocol and the extraordinarily high caliber of the investors that were drawn to uh investing in Saudi Arabia. Uh it it's early on. My own experience, Kai, and your listeners are going to hate this. Uh my own experience is that when the industry begins to get begins to get involved grassroots in district-wide exploration, uh it's usually as much as 10 years uh before they make profound economic discoveries. And as a 73y old, that's somewhat challenging for me. Uh what my hope is is that by contributing in the seed round to three different exploration companies that I will get something resembling uh a discovery in a substantial shorter period of time. I'm also backing the prospect generators in Saudi. So, what I'm hoping is that uh the companies that I'm backing uh end up with eight or 10 concessions that they do the preliminary work on them and they farm most of them out so that the heavy lifting uh in exploration is done on other people's dimes, not mine. >> Absolutely. I'm invested in Saudi Arabia as well, but it sounds like you're not really concerned about what's happening in the Middle East right now in general. rockets flying and all of that that's not impacting is just maybe timelines perhaps perhaps. >> Uh I I think right now I'd probably for a whole bunch of reasons have trouble investing in Iran. >> Uh on the other hand, I don't know that my government would let me invest in Iran. I would love by the way to invest in Iran. Uh I would love to invest uh in silver exploration in Iran. I'd love to invest uh exploring for copper pureries. I'd love to invest in Zarovan, the wonderful zinc deposit uh in Iran, but the circumstance may not be right even for the rest of my life. I'm really attracted to good geology, even if that involves not so good politics. >> That that's exactly the point. Uh like what are you going to do with that? Like Iran is really difficult, but the opportunity is insane because it's so untouched, right? So maybe that's where the hate is right now, but you might get sanctioned. >> You know, who knows? It might be five years from now that the circumstance is very very different. If the circumstance is different and the attitude of the mining and investment community hasn't changed, maybe this old man will get a chance to uh invest in Iran. Uh I would love for that to happen. You know, I've I've invested successfully in a lot of jurisdictions that were considered to be extremely politically challenged. Uh, I've made money twice in Sudan, a lot of money. Uh, and the best country in the world for me in terms of money in, money out has been Democratic Rep Republic of Congo. >> Uh, no easy place. Um, I was in Peru literally as soon as the Shining Path were kicked out. Uh, long before the currency was convertible, about the same time that the flat jackets came off. And I need to say I had 24 very good years investing investing in Russia before I had one catastrophic year. Uh so I need to say taking what are perceived to be political risks where I believe the risks are less serious at least less serious relative to other countries than they are has treated me very well. Conversely, uh I've experienced a lot of uh the negative result of political risk investing in countries that weren't perceived to be risky at all. My worst experience with political risk came in the People's Republic of California in 1980. Uh I've also experienced real firsthand political risk in British Columbia and in the province of Alberta where 15 years ago when the natural gas price went up, the provincial government responded by doubling the royalties. Uh that's nationalization. It's just nationalization done in English by white people >> which makes it absolutely okay of course. So absolutely normal. Um I was going to ask you like we we've seen a bit of less let's say less love in the mining space over the last was it five weeks now ever since the beginning of March. I'm not even willing to call it the PETA curse because there are other reasons for the for the drop. So I'm curious like is is there less love out there now? Is that maybe a little opportunity? Is that a little bit of hate in the markets? I'm looking at gold price, sorry, not gold price, gold stocks and silver stocks. >> If I felt better about liquidity in the US market, I would be buying the high quality small cap gold miners. >> The they have cooled off substantially. Uh the gold quote has of course pulled off from what 5,500 to 4700. >> By the way, that's irrelevant. Um, I've experienced so many 25% declines in my life that I I I think of a 10% decline as gold inhaling or exhaling rather than anything else. I feel very good about the gold price over the five or six year time frame. The consequence of that is that this this hiccup is inconsequential to me. uh and I notice that the gold mining industry is sequencing in terms of uh market capital uh not not market capitalization but rather multiples by size which is to say that the biggest companies are enjoying the strongest trading volumes hence higher share prices hence a lower cost of capital um that traditionally is a very good M&A environment single asset producers are rightly regarded as riskier than multi multiasset producers. That discount goes away if a multiasset producer takes over a single asset producer. And there's a lot of takeovers that are going to take place for synergistic reasons. The very recent takeover of G2 uh by G mining uh an amazing transaction done at a 70% premium accretive to both C companies and even the acquirer shares went up in the aftermath of it. That tells you something about the opportunity that is present in gold equities markets now for participants uh who are rational and hardworking. I'm both rational and hardworking. My problem is I own a lot of this stuff. If you want to see a portfolio that is really strangely overweight gold, all you have to do is look at mine. Um, I may not be able to resist, but right at this very moment, Kai, I'm actually adding to my liquidity, which as recently as three months ago, I would have told you was excessive. >> I was going to follow up on that because we briefly chatted before hitting the record button. And you you gave me an opening to ask that question about uh the the US market and the the private credit and the equity situ private credit quality situation here. Um, it sound it sounds like he's giving you a lot of reason for concern here. I'm not normally a near-term guy, but I don't like the near-term here. Uh I think that this conflict in the Middle East, first of all, is of course damaged confidence, but you and I talked three or four months ago about the fact that I thought that we might be on the verge of a recession. I think we're in one now. Uh I think we have to pay for this war. And I think if the war doesn't end fairly soon, like two or three weeks from now, that we're going to have a much stronger oil price shock than we already have. Simultaneously with that, there are real stresses in the private credit market. uh and there is higher near-term interest rate which impacts the ability of businesses to access credit at any price but particularly at a price they're comfortable with affording specifically Kai if credit concerns extend uh and if the ma and paw investors who own high yield ETFs which is a polite way of saying junk bond ETFs begin to redeem I think that there's a possibility, I'm not saying a probability, but there's a possibility of a real liquidity collapse, a real credit collapse, uh something on the order of 2008. I don't want the headline to say Rick Rule forecast 2008 style collapse. But even though I don't believe that there is a probability of this, which is to say I think it's a it's a possibility, the consequences of it are severe enough that I'm taking precaution. Uh the worst thing that happens is I go through this next six months with too much cash. Uh I've committed worse sins than that in my life. Uh I've been in the business long enough to know that the only thing that saves you from a liquidity crash is liquidity. If you have cash when those about you don't or don't have the courage to use it, you can take advantage of the circumstance as opposed to being taken advantage of by the circumstance. This takes me back to the immediate aftermath of 2008, which was of course 2009, the single best investing year of my care of my career. I had the cash and because of my education, I had the courage to take advantage of that circumstance rather than being taken advantage of. And my building liquidity has everything to do with my nervousness about credit quality and my desire to take advantage of that circumstance as opposed to being taken advantage of by it. >> When you say cash rate, just to follow up, do you mean cash cash like hard dollar bills or do you talk about bonds, bills? >> No. Uh cash to me is certificates of deposit, money market funds, very short-term uh US government treasury obligations and gold. >> Okay. >> Uh I proved to myself in 2010 that gold was liquidity for me because there were a range of asset classes 2009 and 2010 that I thought were cheaper than gold and I was able to convince myself to part with it and buy those. It was tough. It was absolutely tough. But I proved to myself that my gold was in fact liquidity. Many people that I know who have the same philosophical predisposition to gold that I have have a problem with it as liquidity because they refuse to sell. Uh and I do not suffer from that sin. >> No. Fantastic. Um Rick, I want to touch on oil and gas real quick. We got about like 5 minutes left in the conversation and uh you know it was a tremendous conversation so far but I want to talk oil and gas cuz you got in at at the right time. The question is of course what's your scenario now? Like what's your exit strategy? When are you selling? >> I don't have one Kai and I should um I came into the resource business and the oil and gas business. So I've been around it for a very very long time and I'm actually more comfortable in oil and gas than I am in mining. Uh I came into the oil businesses or I I came in It increased my positions in oil and gas. Uh because oil and gas once again was hated because uh $60 a barrel was an unsustainably low price and because the oil and gas industry was deferring uh about a billion dollars a day in sustaining capital investment. And I knew from past experience that the deferral of $365 billion in sustaining capital a year meant that two or three years out production would decline and oil and gas would have to be rationed by price. I had no idea that the world would be stupid enough to go to war again. But the world was that stupid. And the consequence is that the oil prices that I thought I would see in 2029, I saw in 206 uh pardon me, 2026. Uh which leads me to today. What should I do? The rational part of Rick Rule, most of him suggests that my more recent purchases in oil and gas should be sold because my three-year objectives were reached in three months. The greedy part of Rick Rule uh that part which seldom surfaces is however fairly close to the surface both because any price decline that I see I think will be temporary which is to say I think we'll see these prices again uh in 2029 2030 but also because the price increases that we've seen and your audience will have to look listen closely to this the price in increases that we have seen thus far are not price signals that come due to absence of oil but rather to the anticipation of the absence of oil. The world has been living for the last three or four weeks on floating inventory and strategic stockpiles. If this war goes on for another two or three weeks, we will be experiencing in many parts of the world real not anticipatory shocks. And the oil price there will be a function of the fact that oil will have to be rationed by price. Repeat uh the oil price that we're seeing now the $102 indication on WTI is predictive. It's based on the uh eminence of shortage. The price disparities in real shortage will be higher. An example would would be right now Omani crude loaded on a tanker south of the straits of Hormuse that could be sold is selling at WTI plus $40 premium. So, while the futures market shows a dollar too, the FOB price for real inventory, not paper inventory, remember, you can't you can't burn computer blips, uh, but rather real oil uh, is selling for closer to 142 than 102. If this circumstance continues for not too much longer, you'll see a real oil shock. Uh, so I haven't been as aggressive selling my oil equities, particularly the basket of small Canadian equities that I bought six months ago, uh, as I normally would be ju >> just to showcase how volatile the market is. As we're speaking, oil is down 7%. We're down to 91 94 on on a barrel, right? So just to showcase Exactly. Um, because Iran apparently signaled more interest in chatting again. which is >> well I hope for all kinds of reasons uh none of them having anything to do whatsoever with my portfolio uh that the two sides or rather the three sides get serious about talking uh there's no particular point in killing each other uh there's no particular point in risking a broader schism between Shia and Sunni Islam for all kinds of reasons that are much bigger than any of our portfol folios. Uh, these morons need to talk. >> Well, well said. I fully agree. So, and I think it looks like it's going to happen. So, let's let's just have our fingers crossed and that everybody's happy with the outcome, right? Um, Rick, we're about three months away from your conference or pretty much exactly three months away from your conference and I'm really looking forward to attending again. I missed last year unfortunately, but uh what would be the main themes this year? What do you expect people to talk about the most? about the Must >> I think the most popular theme will be what I see is the inevitability of higher nominal gold prices. You and I have talked Kai, but we will demonstrate it with big picture thinkers much smarter than I uh the purchasing power of the world's reserve currency, the US dollar, will decline substantially over 10 years. I've been saying 75%. My belief is if the US dollar declines 75% in purchasing power that gold will maintain its purchasing power. So at least in the nominal context uh I expect the next 10 years to be very good for the gold price. That isn't to say that there won't be cyclical declines that there won't be fluctuations in the price but I believe roughly that gold will hold its purchasing power. Will a dollar will lose 75% of its is of its for speculators. I think over time silver and the silver stocks will do better. I also believe for reasons that we'll go into that copper will need to be rationed by price. uh beginning sometime around the end of this decade uh we will show at the conference that the world has underinvested in copper uh exploration, construction, production for 30 years and there is literally nothing that we can do over the next five years that will change that picture. There is nothing I can see uh on the horizon save a synchronized global depression, not recession, that will balance copper supply and demand other than rationing copper by price. What that means is that the highquality long live copper deposits already in production, ones that don't need need to be discovered, they don't need to be permitted, they don't need to be financed, are worth a lot more than the market thinks it is. It also means that highquality discoveries, we haven't discovered much copper, by the way, because we haven't spent much money looking. But now that we're spending money looking for copper, we're going to find some. And those odd high quality discoveries that are made are going to be sold for absolutely eyepopping premiums. Uh and we'll learn about that. Uh we will learn about three or four tier one deposits in less well-known commodities in parts of the world that the market hates. Uh which I'm very attracted to as you know. uh and we will talk about one unsung sector of the oil and gas business uh which is small market cap companies doing conventional nonshalebased exploration generally offshore and generally in frontier markets uh the last unloved sector of the energy business. Importantly, Kai uh we have a a progression of education, educational values. At the conference, we begin by wonderful big picture macro people telling you the way the world is, not the way the CBC or the BBC or Fox would like you to believe it is. We go from there to analysts and portfolio managers who have made money in precious metals and natural resources for 40 years. Uh not people who've made their reputation the last 12 months of a bull market but pro but people who have made and defended profits through good markets and bad for 40 years. That's critically important. You know, Kai, from past attendance that every public company exhibitor at our conference has been vetted. They must be owned in the organizer's accounts or they're not permitted on the floor. At most conferences, the qualification for admission is a check that cashes. Our qualifications are much much stiffer. All of that comes together in two ways. The first is whether you attend live. I shouldn't offer that anymore. the conference is sold out live. Uh but if you decide to attend uh either live or online, uh first of all, we'll give you much more content in 4 days than you can absorb. So you'll have access to the recordings for a full year and you'll need them. And in addition to that, uh anybody who pays to attend my conference that doesn't think that they got more than their money's worth can get their money back. All you have to do is email me. For 30 years of selling investor education uh products, I have always offered a money back guarantee. And I'm very proud to say that the content has been high enough quality that we've had to refund less than onetenth of 1% of the tuition that we've charged. But it's still your guarantee. Absolutely positively your guarantee that if for any reason whatsoever you're unhappy with the outcome, you don't pay. >> No. Fantastic. Uh no, Rick, I'm really looking forward to being in Bocar with you again in uh in in July. But um you know, since I have you, you got a copper boot camp coming up and uh I think you have one very special guest in attendance uh that the audience would really love to hear from. >> This copper boot camp is going to be fun. I'm bullish copper Kai as you know. Uh the copper business historically has made me a lot of money and I kind of feel like I ain't seen nothing yet. Uh that boot camp comes up this Saturday. The special guest you refer to is Robert Freedelland. Uh the most serially successful mine discoverer and mine builder in the last 50 years. He is the most successful mining person of my generation that exists. The single most. I'm proud to say I've done business with him for 40 of those 50 years. Uh for a very long time to his benefit and mine or to mine. Uh Robert was among other things the finance year of the effort that led the discovery of Oo Togoy currently the fifth largest copper mine in the world. Uh and Kamoa Cakula the most important new copper mine in the world. He is exploring for copper uh on his own account in central Africa uh in Saudi Arabia uh in the South American cordieran and in the metallogenic belt. Uh he is truly a superb human being. We have an hourlong fireside chat where I attempt to discipline and corral that massive brain keeping it focused on copper. Uh, Robert Robert's presentation if you listen will be the worth the price of admission by itself. >> But another guest I'd really like to to highlight to you is uh Steve >> Enders, >> uh, Dina Meredus of exploration at the Colorado School of Mines. uh but probably more important for this discover for this discussion former exploration manager worldwide for Phelps Dodge than the largest copper company in the United States and also former exploration manager worldwide for Newmont Mining Company. >> Uh the kind of person that you don't get at a normal uh retail investment conference uh a guy with 50 years experience in the trenches in the copper business did mining uh private equity uh copper mining private equity. I mean, a really, really, really well-rounded guide. Generally, we propose to teach you enough in eight hours that when those lessons are used in conjunction with the 300 hours of free lessons at the rule classroom, uh it should be able to enable the applied investor to understand enough about the copper business that they can confidently manage their own uh investment and speculative portfolio in copper. That's certainly the the desired outcome from our viewpoint like the conference. Uh if you pay the admission uh by the way this is online only uh no no in person. If you pay the admission you think for any reason that we haven't earned our money. Uh we'll give you your money back. Absolute money back guarantee. >> Fantastic Rick. Always a pleasure to catch up with you. Can't wait to do this again in person. We'll definitely have to get you in front of a microphone in Boca Raton the latest. So, we're looking forward to that already. Rick, much appreciate your time. Always great to catch up and we'll talk soon. Stay on for a second. I'll be right back. Uh, everybody else, thank you so much for tuning in. What a wonderful conversation with Rick Ru. I think we managed to to bridge the conversation that we had in January with what is happening today. And I think we left you with some actionable advice as well, not investment advice. You still have to do your own homework. You still have to do your own due diligence. attend a few of those classrooms and the boot camp to to actually get up to speed on what is really happening and how to pick the best stocks in the space. So, please do that. And uh if you haven't done so, hit that like and subscribe button as well cuz uh we we try to educate you on what's happening on the macro side as well. We don't give you stock recommendations, but we'll try to tell you where the puck is going in the future and what to expect in the current macroeconomic environment. So, really appreciate you tuning in. Thanks so much for watching. Take care and don't let your emotions run your investment for you. Take care.