Today one of the wealthiest street smart pros in the business shared with King World News one of the greatest investment opportunities ever.
Rick Rule: “The GDXJ gold index is the first index I’ve ever seen where the ETF got so big that the tail began wagging the dog. Meaning, that so many people participated in the ETF that the direction of the ETF itself distorted the underlying market, which is a very interesting (opportunistic) set of circumstances (for investors)…
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Rick Rule continues: “I think the opportunity associated with this, Eric, that we will all be able to take advantage of in the next 18 months will be to look at the GDXJ constituents, the ones that will be overpriced compared to the ones who aren’t in the index, and look at the ones who are not in the GDXJ that the ones who are in the GDXJ will want to buy. This sets up over the next 18 months a very interesting opportunity to figure out what the strategic takeover targets will be. That will be the most attractive opportunity for us over this summer.”
Majors Buying Stakes Ahead Of Buyouts
Eric King: “Rick, you talked about takeover targets and two companies just had (significant) stakes bought in them by majors. One of them was Continental Gold (which surged 33% on the news today), where today Newmont Mining and another company bought a (substantial) stake. And then Auryn Resources had Goldcorp recently by a large stake in that one. Are you talking about the high-quality companies like those?”
“The Most Healthy Of All Buying”
Rick Rule: “Yes. Absolutely. That says something else about the market that we’re in right now, Eric. There has been a nervousness from retail investors to participate in the sector, and if they have, they’ve tended to do it through the ETFs. And what you are seeing is the most healthy of all buying. You are seeing buying from the industry coming in. You are seeing buying coming in that is substantiated by technical staffs within the (major) company that are hundreds of people strong. The due diligence that would have been done by the Goldcorp exploration team on Auryn Resources, or the due diligence done by the Newmont Mining exploration team on Continental Gold is an order of magnitude more sophisticated than the due diligence that would have been done by stock brokerage firms as agents. That’s another very relevant statistic and I want to thank you for bringing it up.”
A Big Acquisition This Week
Eric King: “Rick, as you know, one of the uranium companies that sponsors King World News made a big acquisition this week. Your thoughts on Uranium Energy Corp. and that takeover.”
Rick Rule: “You are talking about our young friend, Amir Adnani. This guy is, at risk of building his head up, he is just an absolutely superb young entrepreneur. And if you want to see the poster boy for buying reserves and resources out of the money, and making the necessary investments to build the shareholder constituency and lower his cost of capital over time, and also talk to older more sophisticated investors — guys like me at Sprott, and guys like Li Ka-Shing (the richest man in China) — to build cornerstone constituencies that will allow him to not just survive but thrive before the rest of the uranium market turns, (you are talking about Amir Adnani).”
Eric King: “If the price of uranium starts to turn and go into a bull market, those (uranium bull markets) tend to be pretty wild. Is that stock, Uranium Energy Corp. (symbol UEC in the U.S.) one that’s going to go on a tear to the upside?”
22 Times Your Money!
Rick Rule: “Certainly a select group, and UEC is one of that select group, will do very well. It’s instructive, Eric, to remember the last bull market. Going into the last bull market in uranium, there were 5 uranium juniors that had survived a 20-year bear market. Nobody cared about uranium. In fact, people hated uranium. When the uranium bull market go underway, the worst of those 5 (surviving) companies, over 5 years, generated 22:1 returns. Now, the…To continue listening Rick Rule discuss stock picks for gold, silver, and uranium, as well as talk about the big picture for the gold and silver markets CLICK HERE OR ON THE IMAGE BELOW.
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