Gold Bull Market: Rick Rule emphasizes that we are in a bonafide bull market for precious metals, driven by concerns over the purchasing power of fiat currencies, particularly the US dollar.
Investment Risks: Rule warns that bull markets can be dangerous as they often lead to overvaluation, with many junior mining companies being overvalued despite their market cap increases.
Valuation Insights: He highlights the importance of understanding relative valuations, noting that some companies like Agnico Eagle are cheaper today on a net present value basis despite price increases.
Market Dynamics: The bull market is progressing predictably, with capital flowing from major producers to junior miners, but Rule cautions that many of these juniors are not fundamentally valuable.
Investment Strategy: Rule advises focusing on companies with strong management teams and substantial in-situ resources, particularly in out-of-favor commodities, as a long-term strategy.
Potential Risks: He identifies potential risks such as an overcrowded anti-US dollar trade and the possibility of a synchronized global recession, which could impact commodity prices.
Key Takeaways: Rule stresses the importance of hard work, contrarian thinking, patience, and tenacity in investing, warning against following crowded trades without thorough analysis.
Actionable Advice: Investors are encouraged to conduct detailed research on their holdings and consider companies that are buying back shares, indicating confidence in their own valuation.
Transcript
We have liftoff. GDX is up 80%. GDXJ is up 80%. Gold is hovering around 3450 an ounce and or 3350 an ounce, sorry. And uh it seems like mining is really back and performance is looking great, but what are the pitfalls? We got to be a little careful with what we're doing here. Is everybody equal again? Are we all geniuses back? Are we geniuses again? Uh really really excited to discuss this with my upcoming guest here. It's Rick Rule. He's the founder, president of Rule Investment Media, also the founder of Battlebank. And I'm really looking forward to catching up with him. As you all know, he is the face of mining, junior mining in particular, and no better guest to ask those questions. But before I switch over to my guest, hit that like and subscribe button. It helps us out tremendously and we much much appreciate it. Did you know it's free to do that as well? So, thanks so much for doing that. Now, Rick, it is great to have you back on the program. It's good to see you again. >> Pleasure to be back with you, Kai. that I look forward to uh attending your upcoming conference later this summer. Thank you for inviting me. I look forward to being there. I look forward to uh being in your company and perhaps if you have time having either a beer or coffee. >> Absolutely. I promised I'll buy you a pork knuckle when you're in Frankfurt. So uh we'll definitely do that uh the day before the conference. Rick, really excited to have you as a keynote speaker November 14th and 15th in Frankfurt. We'll give some more details down below and we'll we'll start we'll talk about the conference in a minute here as well in a bit more detail, Rick. But before we get to the conference itself, like it seems like we have liftoff in the mining space. Stocks are marking all-time highs. Agniko Eagle trading at an all-time high. I mentioned in the intro GDX is up 80%. Numont one of the top three performing stocks uh in the S&P 500 right now. Are we all geniuses? Again, Rick, >> the answer to that, of course, is no. But I'm glad you asked me in that question. in that fashion, pardon me, I'm starting to see a lot of internet chatter uh and get asked a lot of questions at the rule classroom that are narrative oriented and rhetorical oriented. Uh, one thing that happens in a bull market is that a Canadian listed public company that is worth zero goes from a $5 million market cap to a $30 million market cap. other words, it goes from being $5 million overvalued to being $30 million overvalued. Bull markets are in many senses more dangerous than bare markets, particularly as you suggest because people come to believe that they're smart as a consequence of their performance over the past 12 months. uh bull markets are better than bare markets particularly this uh bull market at its earlier stage because if you employ your talents correctly if you do the work if you are patient if you are tenacious you don't have to wait two or three years for the market to turn and in the junior stocks if you are uh hardworking enough to see a company that's developing you can establish let's say a 20 or 25 cent base. And the company in a bull market, if they progress, may be able to finance again at 75 or 80 cents, which gives you the ability at 20 or 25 cents to leverage off the new money coming in at 70 or 75 or 80 cents. But, uh, if you are the person who buys into the narrative that's taken a worthless company from a $5 million market cap to a $30 million market cap, it's plenty easy to go broke in a bull market. >> Well, 5 million to 30 million doesn't even necessarily mean that the share price has increased, does it? You >> That's a really, really, really funny comment. A lot of folks in the gold business talk about uh the government pleading printing worthless certificates, worthless pieces of paper called dollars. The truth is that the private sector is always more efficient than the public sector. And I would suggest that the Canadian dealer network can outprint even the US government. What you say is very very very wise. You can go from a 5 million market cap to a $30 million market cap without the share price going up. >> What is it? The M2 paper supply out of Toronto, right? Um but uh no R Rick in terms of valuations I think that's an interesting topic. I thought about it actually earlier in the card today. Um we we've gotten used to maybe lower valuations in general. Let's say new exploration place came to market at a five million valuation. It was a bare market. People were happy with five. Maybe some said, "Oh, it should be three." Um are we starting to enter a new paradigm where we might have to get used to maybe 10 million entry valuations? And I'm I'm really oversimplifying things. Right. I'm not going to get used to that guy. Uh I can invest in companies at any segment of the market. And to the extent that a group of hustlers come together and option five or six properties, not pay for them, mind you, option them, uh and start the thing with a valuation of $10 million when the liquidation value of their efforts may be $250,000. I personally uh will either buy Bullion or Franco Nevada or Wheat and Precious or Agny Co Eagle if the cover charge if the price of admission is excessively high relative to both the risk and the probability of reward. Uh I personally will sit out. I have no fear of missing out in some POS stock that's worth nothing uh and goes from 20 cents to two bucks. I have absolutely no interest. You and I have talked before, Kai, about the fact that there's something like 3,000 public companies worldwide that purport to be in the mineral exploration or mining business. And 2500 of them, I would suggest are absolutely valueless. Uh there's no rational proposition for them any way, shape, or form that's arithmetic. Yes. Uh it is possible to trade promotion. Understand there that you're not a mining industry speculator. You're not an exploration speculator. You are speculating on the talent that the management team uh exhibits in defrauding subsequent investors. Uh it's a timehonored trading strategy. It's just not one that interests me. >> H me neither. But it's always fun to or entertaining to see massive marketing contracts being pulled. 1.6 6 million was a new record I've seen recently for just one marketing contract for some chap in Florida that apparently has a rolodex. So really really interesting. Um >> when it comes to that maybe let me let me go back one step before we get more granular yet again here Rick. But uh are we in a bull market? Are we in a bonafide bull market? >> Absolutely positively without a doubt. Uh and I think by the way that we're in for a bull market that has legs. Uh that is to say a fairly long duration. I say that because my observation over 50 years is that precious metals do well. And I should caveat that and say we're in a precious metals as opposed to a broad resources bull market so far. But precious metals do well uh when investors are concerned about the maintenance of their purchasing power in fiat denominated savings products. Uh I there is no doubt whatsoever in my mind that the world's preeminent savings product which is the US dollar 10ear treasury uh is really really really challenged. Uh I believe personally that in an absolute sense the purchasing power of the US dollar declines by 75% over 10 years. I'm not talking by the way about the relative value. I'm not talking about the US dollar relative to the euro or relative to the pound. I'm saying that in an absolute sense the purchasing power of the US dollar will likely decline by 75% over 10 years as a consequence of debt and deficits in the US society. That happened Kai once before in my life in the decade of the 70s 1970 to 1980 the purchasing power of the US dollar fell by 75%. It's no coincidence that in that same decade the price of gold rose 30fold. I'm not suggesting to you that the gold price rises 30fold from here. It's already risen 12fold from 2000 to 12 2025. But I think Kai, not as a certainty, but as a possibility that the nominal price of gold increases to a degree that reflects the decrease in the purchasing power of the US dollar. If that arithmetic symmetry holds uh it would not be unlikely to see the nominal price of gold increase three-fold or four-fold in the next 10 years. Meanwhile, in the period uh you know 2022 to 2025, we've seen a substantial increase in the gold price. And beginning in 2024, we saw that increase in the gold price outpace the increase in the cost of producing gold. The consequence of that is that the biggest and the best of the gold miners uh have seen free cash flows not increase but rather explode. Uh and you have seen the combination of that increase in free cash flow and the beginnings of the appreciation of the gold market narrative give us a legitimate gold bull market. It's acting just like prior markets. The market was led by gold. uh then when the margins began to increase it moved leadership when I say it leadership moved from the bullion to the best of the best it's now cascading down to the best of the rest and in very rapid fashion even to the juniors. Uh it's important to note however that the valuations for let's say qualitatively the best 15% of gold miners or uh explorers relative to their net present value at today's gold price are not excessive. I interviewed Amar Aljundi uh the CEO of Agneo Eagle at my conference in Boca Ratan and we made the case that despite the fact that over 18 months the price of Agniko Eagle has doubled uh if you look at the net present value of the cash margins that Agniko Eagle delivers at $3,400 gold relative to the cash margins that it delivered 18 months ago at $2,200 $100 gold. The truth is that the company on a net present value is cheaper today after doubling than it was 18 months ago at 50% the current price. People need to understand that value is relative and that's a very very important understanding. At the same time that you remember that valuation is relative remember my earlier admonition which is to say that 80 85% of the stocks aren't worth anything at all. So there's no particular point in valuing them. >> You you touched on something which was supposed to be my next question is like how evenly distributed is the bull market right now? Like as you said like gold moves first then the big the big companies the majors the producers but how far has it trickled down so far? >> I'm surprised at the strength of junior mining financings for the best of the best uh in the last 18 months I I would suggest I'm a reasonably well-known investor. I'm told by issuers that my presence on the roster by itself has promotional value value. So I would suggest that somebody like me should be treated well. Uh I wrote checks in bad times. I write checks in good times. I'm saying this not as a commercial for Rick Rule but rather to point out in the last 18 months that most of the financings that I've wanted to participate in in size uh I've been cut back. Uh the industry claims to be underfunded, but the high-quality companies are not underfunded at all. We've seen juniors go out to raise $30 million, uh stop soft circling the book at $50 million, upsize the offering to $40 million, and sell out over subscribed. This is not a market where deserving companies are wanting for money. This is not that market. Having said that, the valuations in this market are uneven as the valuations always are at the beginning of a gold bull market. The biggest and the the biggest and the best have moved first as they should and as they will. valuation discrepancies in a bull market begin to appear uh between the largest, finest and the most liquid companies uh and other companies and either valuation arbitrageers, people like me begin to allocate further down the space looking for absolute or relative margins or the big companies with high market caps take over the small companies. Cost of capital is a durable competitive advantage. So the progression goes from gold to the best of the best to the rest of the to the rest of the best or the best of the rest depending on how you call it to uh the more marginal producers that generate more leverage to the single asset producers who are viewed as being riskier to the highquality developers to the high quality explorers. the money cascades down the quality chain. Uh, and this one is following a predictable path. What seems to be happening perhaps as a consequence of social media, I don't know, but the money is cascading down the quality chain much more quickly than it used to. We're seeing extraordinary strength in the financing market, even in the high-quality explorers, never mind the project developers, which is where we would have expected the money to go. But this is acting very much despite that uh in the way that the prior four three pardon me precious metals bull markets in my career have unfolded. >> As you know uh we run or incure as part of the sore financial group as well. Last year uh our sector raised about $4.2 billion. That's companies $und00 million or sorry $ 1.5 billion in market cap are smaller and financings below $und00 million. all all equity financings, no debt, no no other shenanigans. Um, this year so far or as of mid August, we had $3.5 billion. >> So, um, which speaks exactly to what you're saying. There is a lot of cash available. Um, although I've been hearing and maybe challenge you just a little bit that the grassroots explorers are still having a harder time um or not not the easiest of times yet. Um, as you said, the snow line $80 million. I can only speak to the grassroots explorers that I'm trying to invest in, uh, which is a fairly select subset of that. Uh, the prospect generators, which is where I prefer to concentrate my grassroots exploration efforts, have been uniformly successful at raising money. Uh, the uh, grassroots explorers with recognized high-quality teams have been uniformly successful at raising money. companies with the third dimension, which is to say a good drill hole, uh, validating surface data, have been able to raise money. But I'm seeing increasingly the lame, the halt, and the blind, uh, with access to a good, uh, narrative, also raising money. There's a lot of bullishness in the United States as an example about the return of exploration and the return of production to the United States given a changed regulatory climate and the fact that the US government uh rather than standing in the way of mining perversely has decided to subsidize it. And what you're seeing now is, you know, the typical global scamster who sells narrative as opposed to reality, uh, staking a bunch of jack rabbit pasture somewhere in the American West, uh, claiming its perspective for gold or uranium or titanium or venadium or rare earths or whatever the flavored duour is, uh, saying that they're coming to market with only $3.5 billion pre- money valuation. when the truth is they're worth nothing. Uh you are seeing those guys getting financed >> which is too bad. >> Yeah, you forgot to list antimony in uh in the commodities there. So um but Rick like I'm trying to give our audience a bit of actionable advice here like um the tide lift all lifts all boats is a famous saying of course question is like how do we still identify bargains and how do we frontr run you? >> That's pretty easy. Uh actually, you know, if you look at the fact that there's probably 500 mineral exploration or mining companies in the world, uh I can't follow all of them. >> Uh so going where I'm not uh is not a very difficult thing to do. I am I mean I I'll give you my favorite junior methodology. My favorite junior methodology, and most of your subscribers won't have the guts to do this, but my favorite methodology is to find a good experience team in a commodity out of favor where there is strong data to suggest that their target is tier one. Tier one meaning over 10 billion and hopefully over$20 billion in in sichu recoverable reserves and resources at today's commodity price. that usually happens in an out-of- favor commodity and it usually happens in an out-of- favor space. Uh when uh I'm fortunate enough to see all of those things in one wrapper, uh particularly where it's out of favor enough that the market cap is sort of sub$und00 million, which suggests to me that I can over five years or six years enjoy a 20 bagger. I can't resist that. I absolutely can't resist that. Mercifully for me, most of your subscribers uh can resist it, will resist it, that do resist it. They want a hot story. They want momentum and they aren't willing to wait five or six years to get paid. The easiest way to frontr run me uh is to find something that has the same type of warts that I prefer. boring, out of favor country, out of favor commodity. Uh right now however uh it is likely I I don't know that you can frontr run me on this but you could right now probably continue to buy the gold optionality stories particularly the stories that are producing uh that aren't efficient producers but will enjoy expanded margins at today's gold price. Uh I think you can do the same thing in the midcap copper companies. Here's why. uh if the purchasing power of the US dollar as I suspect declines uh by 75% over the next 10 years uh building new productive capacity building what is today a billion dollar gold mine uh becomes building a $2.5 billion dollar gold mine and the replacement cost of today's assets is going to rise. Meanwhile, uh predicting what the gold price is going to be in the future, which is to say putting money into an advanced exploration play or a development play that's going to pay you four years from now, is going to miss four years of net present value uh at expanding margins. The place where my uh portfolio is weak uh is in gold companies which have uh uh all unsustaining costs uh in the worst half of the cost curve because I've always focused on companies in the best 25% of the cost curve. uh people who are willing to do the analytical work that can find companies that are substantially undervalued at a $3,200 gold price >> that are already producing that will generate like Oiana Gold as an example 14 or 15% free cash margins where they have decent balance sheets in their production is occurring. That's the part of the market that I'm not in. Uh that's the part of the market where you can beat me. >> Interesting. I appreciate you uh giving us an example as well so we can hang our head on it and maybe do our do our maths around it um as as well. Um but in general like if you look at this market like are there still bargains to be had besides the optionality plays is there still opportunity? >> I mean you know one that I think will be exhibiting at your conference EMX royalty. uh when I look at EMX uh I think the value of the sum of the parts chopped up and sold at auction is twice the market cap. Uh the idea that you are in a precious metals bull market with a company that has the ability to generate value over and above the market selling at a 50% discount to replacement cost. Uh that seems like an extremely attractive uh proposition to me. Uh it's worthy to note, you know, most companies in our universe, Kai, uh are actively seeking financing. They're selling their shares for your money. That suggests that they think your money is more valuable than their shares. EMX royalty, by contrast, is generating a lot of free cash flow, and they're using that to buy in shares. In other words, they think their shares are worth more than your money. If you have a choice between buying a company who thinks your money is worth more than their shares and a company where they think their money is worth less than your shares, which should you prefer? This is not rocket science. Uh I would direct people also towards Altius uh another company with a very high quality royalty portfolio. uh a a very high quality term team in terms of uh asset allocation deciding that for them uh the best way to enhance per share valuations is to buy back rather than issue shares. Uh my friend Doug Casey uh has described uh the return of capital to shareholders either via buybacks or dividends uh as quote outward manifestations of inward grace. And I've come to appreciate that quote. >> It's an interesting quote. Absolutely. Out outward manifestation of inward grace. Interesting. >> The ability to buy in shares and the willingness to do it. Yep, >> absolutely. Um Rick, before we come to talk about the dodge goat mess and what you want investors to take away from your keynote address in particular, just maybe one last question because we we got to build a quick bear case uh as well like what is something that could derail the mining train that is about to leave the station here >> in the very near term? Uh I would say the anti-US dollar trade is crowded. >> Uh I think the dollar's oversold. uh if you look at the volatility index the VIX uh it looks like the electroc cardiogram of a dead person there's not much fear in the market and in a market without much fear the only class that seems to be generating fear is the US dollar and I think in the very very very near term uh a case can be made that the US dollar bear case is overbought that comes apart uh if the Fed meaningfully lowers the interest rate on the US dollar. If the Fed meaningfully manipulates the interest rate down, that'll be a symbol to savers and investors in the world that the US society cares nothing about the integrity of the US dollar and then it's off to the races. But in the absence of that, the US dollar trade is overcrowded. The second risk that we have in the broader resource market is the very real risk of a synchronized global recession, an economic slowdown. Uh you can have declining supplies and over five years we're going to have declining supplies of a whole host of industrial commodities. You can have declining supplies if you have de declining demand and you don't get price increases. the weakness that we see as an example in seaborn natural gas uh irrespective of the cut off Russian supplies uh or uh the lack of increase in domestic natural gas in the United States after I will say a profound increase uh the muted response to um cresting oil supplies the the muted market response tells me that uh the market is either afraid of or experiencing the early stages of a recession. Uh and while a recession doesn't end the market for commodities probably suspends it for two or three years, I'm not saying that's going to occur, Kai. I'm not an economist, a lender. But you asked me uh what could derail this market. And I would suggest in the first instance, absent a cut in US rates, that the anti-US dollar trade is overcrowded in the near term. And secondly, I think that the the threat of uh recession on a global basis is very real. I'm not saying it's going to happen. I'm not an economist. That's not what I do. But it certainly makes me nervous. >> No, I appreciate your cander there. And maybe world peace is the only other thing I can imagine that might fix the high the safe safe haven demand for gold at least. Uh I I I actually believe that world peace wouldn't derail the gold market because I think that the fear that really moves gold isn't fear of war. On a localized basis, certainly it is. Uh people who live in countries that are about to experience cataclysm often buy gold. Uh it's portable. Uh but in the bull markets that I've lived through, Kai, uh what has really been the determinant is savers fear about the deterioration of their purchasing power in fiat instruments. And it makes perfect sense arithmetically, Kai. If you get paid 4.5% to own a US 10-year Treasury, if you believe that the deterioration of the US dollar is measured by the CPI, which is to say it's only 2.6 2.7%. You feel okay, you're getting 170 basis points real yield. If you believe, like I believe, that the real rate of deterioration of the US dollar is more like 8%. Uh you're getting paid 4 and a.5% in a currency where your purchasing power is declining by 8%. It means that really you're losing 3.5% a year. I saw that realization dawn on Americans in the period 1968 to 1971, 1972. It took 5 years for the realization of the deterioration the purchasing power of the US dollar to hit home to American wage earners. But when the lesson hit home, it was front and center in their mind for eight or nine years. And I would suspect in that regard past this prologue, uh, most people around the world have been trained to believe that the US dollar for all its warts is quote the prettiest may at the slaughterhouse. Uh, and they've come to believe that sheltering their wealth in US 10ear treasuries is a very good thing to do. Americans have come to believe that, too. Uh I would argue that the next 10 years won't be unduly unkind to the US dollar relative to other currencies, but I think in an absolute sense that the US dollar will lose a lot of purchasing power and I think that's what will move gold. Uh I think a resolution of the dispute between Russia and the Ukraine as an example which I hope with every fiber in my body occurs uh might reduce the gold quote by 10 bucks, 15 bucks, 20 bucks for 3 months or four months. uh it will be the arithmetic around the deterioration in purchasing power of a whole range of currencies including the US dollar that will take gold materially higher. >> No, I appreciate that Rick. I think it is really interesting because now that sort of is the segue also is like is that something you want our audience at the do go message to take away as well that we're in here for the long haul? Like what is one of the key messages uh of your of your of your speech here in November? I know we're a few months away from it, but what do you want to leave the German audience with? >> Ty, there's three things that have made me money. One, I work hard. I study. My investment technique is not got a hunch, bet a bunch. Uh I believe that every investor and speculator on the planet needs to spend one hour per month studying in detail each of their holdings, reading the 10K and the 10 Q's. And I know from 50 years experience that isn't the case. So if you aren't going to do the work, get out of the way or buy the best of the best or an ETF or something like that. The second thing I want to say is that you need to be a contrarian. You need to examine the arithmetic of your investment and you need to decide whether or not the trade is crowded and whether or not the trade deserves to be crowded. Everybody seems to want to buy into something after the horse has already left the barn, which is to say the price appreciation of an asset justifies the narrative. I'm not arguing that gold hasn't appreciated, but when I look at gold and its future relative to the dollar, I feel less concerned about the trade. The third thing that I want to leave people with is that they have to be very, very, very patient. uh a bunch of my own net worth has come about simply as a consequence of compounding owning things for a very long time. Even among the speculative juniors, you make money by answering unanswered questions. Usually it takes three or four or sometimes five unanswered questions to take a stock up tfold or 20fold. I learned uh in my life we did a we did a back test with a couple of interns about the possession about the positions over the last 40 or 50 years that have made me tfold or 20fold or 30fold returns and the average holding period of those multibaggers was five or six years. Many speculators Kai uh have long-term strategies but they have short-term tactics. They have trauma holding stock over a long weekend. uh you can't expect uh a circumstance that should take 5 years to transpire to occur over two months. And the fourth trait that your speculators need to exhibit is tenacity. That same basket of 10baggers when back tested expose me to at least one and often two 50% declines in the share prices during the period of time that I hold them. So, not only did I have to hold them for five or six years, but I had to experience a 50% price decline in my holdings. So, you have to be patient, you have to be persistent, you have to be tenacious, and you have to work hard. If you aren't prepared to do that, go do something sensible with your money. >> Yeah. No, I fully agree. One of my core holdings just went green after two years in the red. So, and I've been holding on. I should have bought more. Of course, always the case if I never owned enough, of course, and I never did what I was supposed to do, but uh that's a different story. Um Rick, if investors come up to you in Frankfurt and they say like, "What what is a question you want to be asked? What's one that you're very happy to answer?" >> You know, I like questions that are involved. So, if an attendee came up to me and said, "Um, Rick, I want you to tell me about two stocks in my portfolio. I own them. This is my favorite one and this is my least favorite one. Don't just give me a ranking. Tell me why. Tell me what I need to know about these companies and tell me the investment lessons that I can learn as a consequence of the question that I just asked you which is to say don't say what do you think of headwater gold say uh why do you like it if you like it? what are the risks and how do I come to know what I need to know? In other words, use use the company uh that's in your portfolio because you will be interested in the answer to the question, but use the question to increase your knowledge uh increase your confidence in the company, but increase your ability to draw your own conclusions going forward. I like focused questions that are an opportunity for me to teach securities analysis to the questioner. >> Awesome, Rick. That's all we have time for today. I'm really looking forward to hosting you in Frankfurt. Can't wait to buy you a pork knuckle, apple wine, and perhaps a beer. Depends on the the apple wine restaurant we go to because not every everyone or not every restaurant there serves beer. So, very specific, very peculiar. Happy to introduce you to it. I'm really excited. I think you know me well enough to know Kai to know that I'm um uh very tolerant uh in terms of my food and beverage selection. >> Then you'll love Frankfurt. Great. >> It's fantastic. No Rick, really appreciate you coming on. Really insightful. A bit different conversation. Really a junior mining focus today. Usually we discuss the macro to understand the micro. Today we discussed the micro Rick and I really appreciate that. Anywhere we can send our audience anything. Uh you still do the ratings of course. >> Absolutely. Uh any of your listeners who care uh about my natural resource investing lessons can personalize them. Go to my website ruleinvestmentmedia.com. List your natural resource stocks and for no obligation, for no charge, I personally will rate them. I will also comment on individual issues if I think my comments might have value. That's ruleinvestmentmedia.com. Please, by the way, no crypto. Please, no pot stocks. Please, no tech stocks. Please no bonds, naturalresource stocks only. ruleinvestmentmedia.com. >> Fantastic, Rick. Really appreciate it. It's good to see you again. Can't wait to host you in Frankfurt. And uh everybody else, thanks so much for tuning in to Soore Financially. Much appreciate you watching. I hope you're participating in this mining bull run. Really excited and as Rig said, it's got legs and we'll see where it goes. Just be smart out there. Do your homework. Do your due diligence. Don't just blindly buy something that somebody mentioned to you uh across the fence or at some conference. Really be careful. Do your homework. Uh much appreciate you watching. By the way, if you have any comments, leave them down below. Let us know what you think. What questions are you going to ask Rick and Frankfurt? Let us know. Maybe we can sneak him a couple Q cards and he can prepare for them. So, thanks so much for tuning in. We'll be back with lots more here on Sore Financially. [Music]
Gold Bull Market Has JUST Begun | Rick Rule
Summary
Transcript
We have liftoff. GDX is up 80%. GDXJ is up 80%. Gold is hovering around 3450 an ounce and or 3350 an ounce, sorry. And uh it seems like mining is really back and performance is looking great, but what are the pitfalls? We got to be a little careful with what we're doing here. Is everybody equal again? Are we all geniuses back? Are we geniuses again? Uh really really excited to discuss this with my upcoming guest here. It's Rick Rule. He's the founder, president of Rule Investment Media, also the founder of Battlebank. And I'm really looking forward to catching up with him. As you all know, he is the face of mining, junior mining in particular, and no better guest to ask those questions. But before I switch over to my guest, hit that like and subscribe button. It helps us out tremendously and we much much appreciate it. Did you know it's free to do that as well? So, thanks so much for doing that. Now, Rick, it is great to have you back on the program. It's good to see you again. >> Pleasure to be back with you, Kai. that I look forward to uh attending your upcoming conference later this summer. Thank you for inviting me. I look forward to being there. I look forward to uh being in your company and perhaps if you have time having either a beer or coffee. >> Absolutely. I promised I'll buy you a pork knuckle when you're in Frankfurt. So uh we'll definitely do that uh the day before the conference. Rick, really excited to have you as a keynote speaker November 14th and 15th in Frankfurt. We'll give some more details down below and we'll we'll start we'll talk about the conference in a minute here as well in a bit more detail, Rick. But before we get to the conference itself, like it seems like we have liftoff in the mining space. Stocks are marking all-time highs. Agniko Eagle trading at an all-time high. I mentioned in the intro GDX is up 80%. Numont one of the top three performing stocks uh in the S&P 500 right now. Are we all geniuses? Again, Rick, >> the answer to that, of course, is no. But I'm glad you asked me in that question. in that fashion, pardon me, I'm starting to see a lot of internet chatter uh and get asked a lot of questions at the rule classroom that are narrative oriented and rhetorical oriented. Uh, one thing that happens in a bull market is that a Canadian listed public company that is worth zero goes from a $5 million market cap to a $30 million market cap. other words, it goes from being $5 million overvalued to being $30 million overvalued. Bull markets are in many senses more dangerous than bare markets, particularly as you suggest because people come to believe that they're smart as a consequence of their performance over the past 12 months. uh bull markets are better than bare markets particularly this uh bull market at its earlier stage because if you employ your talents correctly if you do the work if you are patient if you are tenacious you don't have to wait two or three years for the market to turn and in the junior stocks if you are uh hardworking enough to see a company that's developing you can establish let's say a 20 or 25 cent base. And the company in a bull market, if they progress, may be able to finance again at 75 or 80 cents, which gives you the ability at 20 or 25 cents to leverage off the new money coming in at 70 or 75 or 80 cents. But, uh, if you are the person who buys into the narrative that's taken a worthless company from a $5 million market cap to a $30 million market cap, it's plenty easy to go broke in a bull market. >> Well, 5 million to 30 million doesn't even necessarily mean that the share price has increased, does it? You >> That's a really, really, really funny comment. A lot of folks in the gold business talk about uh the government pleading printing worthless certificates, worthless pieces of paper called dollars. The truth is that the private sector is always more efficient than the public sector. And I would suggest that the Canadian dealer network can outprint even the US government. What you say is very very very wise. You can go from a 5 million market cap to a $30 million market cap without the share price going up. >> What is it? The M2 paper supply out of Toronto, right? Um but uh no R Rick in terms of valuations I think that's an interesting topic. I thought about it actually earlier in the card today. Um we we've gotten used to maybe lower valuations in general. Let's say new exploration place came to market at a five million valuation. It was a bare market. People were happy with five. Maybe some said, "Oh, it should be three." Um are we starting to enter a new paradigm where we might have to get used to maybe 10 million entry valuations? And I'm I'm really oversimplifying things. Right. I'm not going to get used to that guy. Uh I can invest in companies at any segment of the market. And to the extent that a group of hustlers come together and option five or six properties, not pay for them, mind you, option them, uh and start the thing with a valuation of $10 million when the liquidation value of their efforts may be $250,000. I personally uh will either buy Bullion or Franco Nevada or Wheat and Precious or Agny Co Eagle if the cover charge if the price of admission is excessively high relative to both the risk and the probability of reward. Uh I personally will sit out. I have no fear of missing out in some POS stock that's worth nothing uh and goes from 20 cents to two bucks. I have absolutely no interest. You and I have talked before, Kai, about the fact that there's something like 3,000 public companies worldwide that purport to be in the mineral exploration or mining business. And 2500 of them, I would suggest are absolutely valueless. Uh there's no rational proposition for them any way, shape, or form that's arithmetic. Yes. Uh it is possible to trade promotion. Understand there that you're not a mining industry speculator. You're not an exploration speculator. You are speculating on the talent that the management team uh exhibits in defrauding subsequent investors. Uh it's a timehonored trading strategy. It's just not one that interests me. >> H me neither. But it's always fun to or entertaining to see massive marketing contracts being pulled. 1.6 6 million was a new record I've seen recently for just one marketing contract for some chap in Florida that apparently has a rolodex. So really really interesting. Um >> when it comes to that maybe let me let me go back one step before we get more granular yet again here Rick. But uh are we in a bull market? Are we in a bonafide bull market? >> Absolutely positively without a doubt. Uh and I think by the way that we're in for a bull market that has legs. Uh that is to say a fairly long duration. I say that because my observation over 50 years is that precious metals do well. And I should caveat that and say we're in a precious metals as opposed to a broad resources bull market so far. But precious metals do well uh when investors are concerned about the maintenance of their purchasing power in fiat denominated savings products. Uh I there is no doubt whatsoever in my mind that the world's preeminent savings product which is the US dollar 10ear treasury uh is really really really challenged. Uh I believe personally that in an absolute sense the purchasing power of the US dollar declines by 75% over 10 years. I'm not talking by the way about the relative value. I'm not talking about the US dollar relative to the euro or relative to the pound. I'm saying that in an absolute sense the purchasing power of the US dollar will likely decline by 75% over 10 years as a consequence of debt and deficits in the US society. That happened Kai once before in my life in the decade of the 70s 1970 to 1980 the purchasing power of the US dollar fell by 75%. It's no coincidence that in that same decade the price of gold rose 30fold. I'm not suggesting to you that the gold price rises 30fold from here. It's already risen 12fold from 2000 to 12 2025. But I think Kai, not as a certainty, but as a possibility that the nominal price of gold increases to a degree that reflects the decrease in the purchasing power of the US dollar. If that arithmetic symmetry holds uh it would not be unlikely to see the nominal price of gold increase three-fold or four-fold in the next 10 years. Meanwhile, in the period uh you know 2022 to 2025, we've seen a substantial increase in the gold price. And beginning in 2024, we saw that increase in the gold price outpace the increase in the cost of producing gold. The consequence of that is that the biggest and the best of the gold miners uh have seen free cash flows not increase but rather explode. Uh and you have seen the combination of that increase in free cash flow and the beginnings of the appreciation of the gold market narrative give us a legitimate gold bull market. It's acting just like prior markets. The market was led by gold. uh then when the margins began to increase it moved leadership when I say it leadership moved from the bullion to the best of the best it's now cascading down to the best of the rest and in very rapid fashion even to the juniors. Uh it's important to note however that the valuations for let's say qualitatively the best 15% of gold miners or uh explorers relative to their net present value at today's gold price are not excessive. I interviewed Amar Aljundi uh the CEO of Agneo Eagle at my conference in Boca Ratan and we made the case that despite the fact that over 18 months the price of Agniko Eagle has doubled uh if you look at the net present value of the cash margins that Agniko Eagle delivers at $3,400 gold relative to the cash margins that it delivered 18 months ago at $2,200 $100 gold. The truth is that the company on a net present value is cheaper today after doubling than it was 18 months ago at 50% the current price. People need to understand that value is relative and that's a very very important understanding. At the same time that you remember that valuation is relative remember my earlier admonition which is to say that 80 85% of the stocks aren't worth anything at all. So there's no particular point in valuing them. >> You you touched on something which was supposed to be my next question is like how evenly distributed is the bull market right now? Like as you said like gold moves first then the big the big companies the majors the producers but how far has it trickled down so far? >> I'm surprised at the strength of junior mining financings for the best of the best uh in the last 18 months I I would suggest I'm a reasonably well-known investor. I'm told by issuers that my presence on the roster by itself has promotional value value. So I would suggest that somebody like me should be treated well. Uh I wrote checks in bad times. I write checks in good times. I'm saying this not as a commercial for Rick Rule but rather to point out in the last 18 months that most of the financings that I've wanted to participate in in size uh I've been cut back. Uh the industry claims to be underfunded, but the high-quality companies are not underfunded at all. We've seen juniors go out to raise $30 million, uh stop soft circling the book at $50 million, upsize the offering to $40 million, and sell out over subscribed. This is not a market where deserving companies are wanting for money. This is not that market. Having said that, the valuations in this market are uneven as the valuations always are at the beginning of a gold bull market. The biggest and the the biggest and the best have moved first as they should and as they will. valuation discrepancies in a bull market begin to appear uh between the largest, finest and the most liquid companies uh and other companies and either valuation arbitrageers, people like me begin to allocate further down the space looking for absolute or relative margins or the big companies with high market caps take over the small companies. Cost of capital is a durable competitive advantage. So the progression goes from gold to the best of the best to the rest of the to the rest of the best or the best of the rest depending on how you call it to uh the more marginal producers that generate more leverage to the single asset producers who are viewed as being riskier to the highquality developers to the high quality explorers. the money cascades down the quality chain. Uh, and this one is following a predictable path. What seems to be happening perhaps as a consequence of social media, I don't know, but the money is cascading down the quality chain much more quickly than it used to. We're seeing extraordinary strength in the financing market, even in the high-quality explorers, never mind the project developers, which is where we would have expected the money to go. But this is acting very much despite that uh in the way that the prior four three pardon me precious metals bull markets in my career have unfolded. >> As you know uh we run or incure as part of the sore financial group as well. Last year uh our sector raised about $4.2 billion. That's companies $und00 million or sorry $ 1.5 billion in market cap are smaller and financings below $und00 million. all all equity financings, no debt, no no other shenanigans. Um, this year so far or as of mid August, we had $3.5 billion. >> So, um, which speaks exactly to what you're saying. There is a lot of cash available. Um, although I've been hearing and maybe challenge you just a little bit that the grassroots explorers are still having a harder time um or not not the easiest of times yet. Um, as you said, the snow line $80 million. I can only speak to the grassroots explorers that I'm trying to invest in, uh, which is a fairly select subset of that. Uh, the prospect generators, which is where I prefer to concentrate my grassroots exploration efforts, have been uniformly successful at raising money. Uh, the uh, grassroots explorers with recognized high-quality teams have been uniformly successful at raising money. companies with the third dimension, which is to say a good drill hole, uh, validating surface data, have been able to raise money. But I'm seeing increasingly the lame, the halt, and the blind, uh, with access to a good, uh, narrative, also raising money. There's a lot of bullishness in the United States as an example about the return of exploration and the return of production to the United States given a changed regulatory climate and the fact that the US government uh rather than standing in the way of mining perversely has decided to subsidize it. And what you're seeing now is, you know, the typical global scamster who sells narrative as opposed to reality, uh, staking a bunch of jack rabbit pasture somewhere in the American West, uh, claiming its perspective for gold or uranium or titanium or venadium or rare earths or whatever the flavored duour is, uh, saying that they're coming to market with only $3.5 billion pre- money valuation. when the truth is they're worth nothing. Uh you are seeing those guys getting financed >> which is too bad. >> Yeah, you forgot to list antimony in uh in the commodities there. So um but Rick like I'm trying to give our audience a bit of actionable advice here like um the tide lift all lifts all boats is a famous saying of course question is like how do we still identify bargains and how do we frontr run you? >> That's pretty easy. Uh actually, you know, if you look at the fact that there's probably 500 mineral exploration or mining companies in the world, uh I can't follow all of them. >> Uh so going where I'm not uh is not a very difficult thing to do. I am I mean I I'll give you my favorite junior methodology. My favorite junior methodology, and most of your subscribers won't have the guts to do this, but my favorite methodology is to find a good experience team in a commodity out of favor where there is strong data to suggest that their target is tier one. Tier one meaning over 10 billion and hopefully over$20 billion in in sichu recoverable reserves and resources at today's commodity price. that usually happens in an out-of- favor commodity and it usually happens in an out-of- favor space. Uh when uh I'm fortunate enough to see all of those things in one wrapper, uh particularly where it's out of favor enough that the market cap is sort of sub$und00 million, which suggests to me that I can over five years or six years enjoy a 20 bagger. I can't resist that. I absolutely can't resist that. Mercifully for me, most of your subscribers uh can resist it, will resist it, that do resist it. They want a hot story. They want momentum and they aren't willing to wait five or six years to get paid. The easiest way to frontr run me uh is to find something that has the same type of warts that I prefer. boring, out of favor country, out of favor commodity. Uh right now however uh it is likely I I don't know that you can frontr run me on this but you could right now probably continue to buy the gold optionality stories particularly the stories that are producing uh that aren't efficient producers but will enjoy expanded margins at today's gold price. Uh I think you can do the same thing in the midcap copper companies. Here's why. uh if the purchasing power of the US dollar as I suspect declines uh by 75% over the next 10 years uh building new productive capacity building what is today a billion dollar gold mine uh becomes building a $2.5 billion dollar gold mine and the replacement cost of today's assets is going to rise. Meanwhile, uh predicting what the gold price is going to be in the future, which is to say putting money into an advanced exploration play or a development play that's going to pay you four years from now, is going to miss four years of net present value uh at expanding margins. The place where my uh portfolio is weak uh is in gold companies which have uh uh all unsustaining costs uh in the worst half of the cost curve because I've always focused on companies in the best 25% of the cost curve. uh people who are willing to do the analytical work that can find companies that are substantially undervalued at a $3,200 gold price >> that are already producing that will generate like Oiana Gold as an example 14 or 15% free cash margins where they have decent balance sheets in their production is occurring. That's the part of the market that I'm not in. Uh that's the part of the market where you can beat me. >> Interesting. I appreciate you uh giving us an example as well so we can hang our head on it and maybe do our do our maths around it um as as well. Um but in general like if you look at this market like are there still bargains to be had besides the optionality plays is there still opportunity? >> I mean you know one that I think will be exhibiting at your conference EMX royalty. uh when I look at EMX uh I think the value of the sum of the parts chopped up and sold at auction is twice the market cap. Uh the idea that you are in a precious metals bull market with a company that has the ability to generate value over and above the market selling at a 50% discount to replacement cost. Uh that seems like an extremely attractive uh proposition to me. Uh it's worthy to note, you know, most companies in our universe, Kai, uh are actively seeking financing. They're selling their shares for your money. That suggests that they think your money is more valuable than their shares. EMX royalty, by contrast, is generating a lot of free cash flow, and they're using that to buy in shares. In other words, they think their shares are worth more than your money. If you have a choice between buying a company who thinks your money is worth more than their shares and a company where they think their money is worth less than your shares, which should you prefer? This is not rocket science. Uh I would direct people also towards Altius uh another company with a very high quality royalty portfolio. uh a a very high quality term team in terms of uh asset allocation deciding that for them uh the best way to enhance per share valuations is to buy back rather than issue shares. Uh my friend Doug Casey uh has described uh the return of capital to shareholders either via buybacks or dividends uh as quote outward manifestations of inward grace. And I've come to appreciate that quote. >> It's an interesting quote. Absolutely. Out outward manifestation of inward grace. Interesting. >> The ability to buy in shares and the willingness to do it. Yep, >> absolutely. Um Rick, before we come to talk about the dodge goat mess and what you want investors to take away from your keynote address in particular, just maybe one last question because we we got to build a quick bear case uh as well like what is something that could derail the mining train that is about to leave the station here >> in the very near term? Uh I would say the anti-US dollar trade is crowded. >> Uh I think the dollar's oversold. uh if you look at the volatility index the VIX uh it looks like the electroc cardiogram of a dead person there's not much fear in the market and in a market without much fear the only class that seems to be generating fear is the US dollar and I think in the very very very near term uh a case can be made that the US dollar bear case is overbought that comes apart uh if the Fed meaningfully lowers the interest rate on the US dollar. If the Fed meaningfully manipulates the interest rate down, that'll be a symbol to savers and investors in the world that the US society cares nothing about the integrity of the US dollar and then it's off to the races. But in the absence of that, the US dollar trade is overcrowded. The second risk that we have in the broader resource market is the very real risk of a synchronized global recession, an economic slowdown. Uh you can have declining supplies and over five years we're going to have declining supplies of a whole host of industrial commodities. You can have declining supplies if you have de declining demand and you don't get price increases. the weakness that we see as an example in seaborn natural gas uh irrespective of the cut off Russian supplies uh or uh the lack of increase in domestic natural gas in the United States after I will say a profound increase uh the muted response to um cresting oil supplies the the muted market response tells me that uh the market is either afraid of or experiencing the early stages of a recession. Uh and while a recession doesn't end the market for commodities probably suspends it for two or three years, I'm not saying that's going to occur, Kai. I'm not an economist, a lender. But you asked me uh what could derail this market. And I would suggest in the first instance, absent a cut in US rates, that the anti-US dollar trade is overcrowded in the near term. And secondly, I think that the the threat of uh recession on a global basis is very real. I'm not saying it's going to happen. I'm not an economist. That's not what I do. But it certainly makes me nervous. >> No, I appreciate your cander there. And maybe world peace is the only other thing I can imagine that might fix the high the safe safe haven demand for gold at least. Uh I I I actually believe that world peace wouldn't derail the gold market because I think that the fear that really moves gold isn't fear of war. On a localized basis, certainly it is. Uh people who live in countries that are about to experience cataclysm often buy gold. Uh it's portable. Uh but in the bull markets that I've lived through, Kai, uh what has really been the determinant is savers fear about the deterioration of their purchasing power in fiat instruments. And it makes perfect sense arithmetically, Kai. If you get paid 4.5% to own a US 10-year Treasury, if you believe that the deterioration of the US dollar is measured by the CPI, which is to say it's only 2.6 2.7%. You feel okay, you're getting 170 basis points real yield. If you believe, like I believe, that the real rate of deterioration of the US dollar is more like 8%. Uh you're getting paid 4 and a.5% in a currency where your purchasing power is declining by 8%. It means that really you're losing 3.5% a year. I saw that realization dawn on Americans in the period 1968 to 1971, 1972. It took 5 years for the realization of the deterioration the purchasing power of the US dollar to hit home to American wage earners. But when the lesson hit home, it was front and center in their mind for eight or nine years. And I would suspect in that regard past this prologue, uh, most people around the world have been trained to believe that the US dollar for all its warts is quote the prettiest may at the slaughterhouse. Uh, and they've come to believe that sheltering their wealth in US 10ear treasuries is a very good thing to do. Americans have come to believe that, too. Uh I would argue that the next 10 years won't be unduly unkind to the US dollar relative to other currencies, but I think in an absolute sense that the US dollar will lose a lot of purchasing power and I think that's what will move gold. Uh I think a resolution of the dispute between Russia and the Ukraine as an example which I hope with every fiber in my body occurs uh might reduce the gold quote by 10 bucks, 15 bucks, 20 bucks for 3 months or four months. uh it will be the arithmetic around the deterioration in purchasing power of a whole range of currencies including the US dollar that will take gold materially higher. >> No, I appreciate that Rick. I think it is really interesting because now that sort of is the segue also is like is that something you want our audience at the do go message to take away as well that we're in here for the long haul? Like what is one of the key messages uh of your of your of your speech here in November? I know we're a few months away from it, but what do you want to leave the German audience with? >> Ty, there's three things that have made me money. One, I work hard. I study. My investment technique is not got a hunch, bet a bunch. Uh I believe that every investor and speculator on the planet needs to spend one hour per month studying in detail each of their holdings, reading the 10K and the 10 Q's. And I know from 50 years experience that isn't the case. So if you aren't going to do the work, get out of the way or buy the best of the best or an ETF or something like that. The second thing I want to say is that you need to be a contrarian. You need to examine the arithmetic of your investment and you need to decide whether or not the trade is crowded and whether or not the trade deserves to be crowded. Everybody seems to want to buy into something after the horse has already left the barn, which is to say the price appreciation of an asset justifies the narrative. I'm not arguing that gold hasn't appreciated, but when I look at gold and its future relative to the dollar, I feel less concerned about the trade. The third thing that I want to leave people with is that they have to be very, very, very patient. uh a bunch of my own net worth has come about simply as a consequence of compounding owning things for a very long time. Even among the speculative juniors, you make money by answering unanswered questions. Usually it takes three or four or sometimes five unanswered questions to take a stock up tfold or 20fold. I learned uh in my life we did a we did a back test with a couple of interns about the possession about the positions over the last 40 or 50 years that have made me tfold or 20fold or 30fold returns and the average holding period of those multibaggers was five or six years. Many speculators Kai uh have long-term strategies but they have short-term tactics. They have trauma holding stock over a long weekend. uh you can't expect uh a circumstance that should take 5 years to transpire to occur over two months. And the fourth trait that your speculators need to exhibit is tenacity. That same basket of 10baggers when back tested expose me to at least one and often two 50% declines in the share prices during the period of time that I hold them. So, not only did I have to hold them for five or six years, but I had to experience a 50% price decline in my holdings. So, you have to be patient, you have to be persistent, you have to be tenacious, and you have to work hard. If you aren't prepared to do that, go do something sensible with your money. >> Yeah. No, I fully agree. One of my core holdings just went green after two years in the red. So, and I've been holding on. I should have bought more. Of course, always the case if I never owned enough, of course, and I never did what I was supposed to do, but uh that's a different story. Um Rick, if investors come up to you in Frankfurt and they say like, "What what is a question you want to be asked? What's one that you're very happy to answer?" >> You know, I like questions that are involved. So, if an attendee came up to me and said, "Um, Rick, I want you to tell me about two stocks in my portfolio. I own them. This is my favorite one and this is my least favorite one. Don't just give me a ranking. Tell me why. Tell me what I need to know about these companies and tell me the investment lessons that I can learn as a consequence of the question that I just asked you which is to say don't say what do you think of headwater gold say uh why do you like it if you like it? what are the risks and how do I come to know what I need to know? In other words, use use the company uh that's in your portfolio because you will be interested in the answer to the question, but use the question to increase your knowledge uh increase your confidence in the company, but increase your ability to draw your own conclusions going forward. I like focused questions that are an opportunity for me to teach securities analysis to the questioner. >> Awesome, Rick. That's all we have time for today. I'm really looking forward to hosting you in Frankfurt. Can't wait to buy you a pork knuckle, apple wine, and perhaps a beer. Depends on the the apple wine restaurant we go to because not every everyone or not every restaurant there serves beer. So, very specific, very peculiar. Happy to introduce you to it. I'm really excited. I think you know me well enough to know Kai to know that I'm um uh very tolerant uh in terms of my food and beverage selection. >> Then you'll love Frankfurt. Great. >> It's fantastic. No Rick, really appreciate you coming on. Really insightful. A bit different conversation. Really a junior mining focus today. Usually we discuss the macro to understand the micro. Today we discussed the micro Rick and I really appreciate that. Anywhere we can send our audience anything. Uh you still do the ratings of course. >> Absolutely. Uh any of your listeners who care uh about my natural resource investing lessons can personalize them. Go to my website ruleinvestmentmedia.com. List your natural resource stocks and for no obligation, for no charge, I personally will rate them. I will also comment on individual issues if I think my comments might have value. That's ruleinvestmentmedia.com. Please, by the way, no crypto. Please, no pot stocks. Please, no tech stocks. Please no bonds, naturalresource stocks only. ruleinvestmentmedia.com. >> Fantastic, Rick. Really appreciate it. It's good to see you again. Can't wait to host you in Frankfurt. And uh everybody else, thanks so much for tuning in to Soore Financially. Much appreciate you watching. I hope you're participating in this mining bull run. Really excited and as Rig said, it's got legs and we'll see where it goes. Just be smart out there. Do your homework. Do your due diligence. Don't just blindly buy something that somebody mentioned to you uh across the fence or at some conference. Really be careful. Do your homework. Uh much appreciate you watching. By the way, if you have any comments, leave them down below. Let us know what you think. What questions are you going to ask Rick and Frankfurt? Let us know. Maybe we can sneak him a couple Q cards and he can prepare for them. So, thanks so much for tuning in. We'll be back with lots more here on Sore Financially. [Music]