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Rick Rule - What He is Buying With His Own Money & Why
With gold and silver prices under attack, today King World News interviewed one of the most street smart pros in the resource sector, Rick Rule, Founder of Global Resource Investments, which is now part of the $10 billion strong Sprott Asset Management. When asked how investors should be handling these price swings, Rule responded, “Eric, money is made by buying low and selling high and the opportunity to buy low shouldn’t be regarded as a bad thing. The truth is opportunity comes gift wrapped, you just have to understand when it’s gift wrapped. We talked in prior interviews about volatility, that’s what this is.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
September 22, 2011
Rick Rule continues:
“People need to manage their emotions. You either use volatility or you get used by volatility. A stock that three weeks ago, when you were feeling ebullient, you thought was a great buy at $5.00, must be a really good buy at $3.50, unless your presupposition was wrong.
So let’s take a look at what’s happened around the world. It would seem as though France and Germany have agreed to lend Greece a little more money. Will it improve the outlook of Greece when they couldn’t service debts at 150% of GDP, if they go to 160% of GDP?
In the course of all of these things, one bankrupt fiat currency, the US dollar, has proven to be the least bad of a bunch of bankrupt currencies. On the strength of that we have a so called risk off trade into US Treasuries, the unsecured obligation of the biggest creditor of all.
The idea that people allow their emotions to be whipsawed by events in fiction like this would be comical, except it’s so tragic to individual portfolios. As I have said before, I think we will continue to see volatility on steroids and downside volatility has to be met by buying and upside volatility has to be met by selling....
Continue reading the Rick Rule interview below...
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“When the markets are down big time, you need to step in and buy some and when the markets are up big time and you are feeling ebullient about stuff, you need to remember to sell some. These are absolutely wonderful conditions, Eric, it couldn’t get better than this.”
When asked about gold specifically Rule stated, “Could gold go lower? Absolutely, does it matter over two or three years? Absolutely not. Think about where the value is, that shiny stuff which has more or less held value for 6,000 years or a dream printed on a piece of paper, backed by the honor, integrity and good will of Congress? This is a simple trade (fiat for gold).
It doesn’t mean it’s a trade that is going to work in the next month or two, but assuming your readers are going to live longer than one or two months, it’s a trade that they have to be involved in. While I think the physical is attractive, the stocks are relatively more attractive than the metal. In a risk off trade you have some people going into the metal to shelter cash.”
When asked what he is doing with his own money, Rule remarked, “Because everyone is avoiding risk, I’m looking to take some on, so I consider the equities to be relatively more attractive than the bullion right now. Maybe that’s because I’ve been a fairy consistent bullion buyer and I already have enough, but I really think the (mining) equities are the better place to be for speculators who can afford some risk, so that is what I am buying now.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
