Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

Sprott's Thoughts: The Next Bull Market Move Interview - Rick Rule from London

The Next Bull Market Move Interview - Rick Rule from London​

Sprott's Thoughts: 

I was extremely lucky to meet and interview Rick Rule while he was in London last week. We talked about investing, the uranium market, and why you should follow your passion. I believe that if you want to learn something, you should try and learn from the best, and Rick Rule has a career as an investor that is among the best on the planet. He’s also a really nice guy. Enjoy.

Okay. Joining me today is the legend that is Rick Rule, President and CEO of Sprott US Holdings. How are you today, Rick?

Life is great, thank you very much.

Very good. We’re here in London at the Mines and Money Conference. I think it’s going to be a very interesting conversation we’re going to have. Recently, with the miners and gold and silver becoming very oversold in this correction, how do you think the play out will continue for over the next few years? Are we in a bull market?

I don’t mean to be fractious, but would dispute the fact that they’re oversold. I would suggest that they have been overbought in the summer. I would suggest that the correction that you’re seeing is normal and natural in a market like this. I believe in American parlance, and pardon me for doing that here, but in American parlance , we’re in the third inning of a nine inning ballgame with regard to the gold stocks. There is certainly renewed confidence in the system, and there’s also an age-old alternative to gold which is re-surging which is the US ten year treasury. At a 1.3% treasury yield, it was an unattractive instrument, but at 2% treasury yield, it’s a somewhat more attractive instrument, our elections notwithstanding.

Rick, how did you get involved in investing when you first started, particularly in the resource sector as well. How did you fall into that?

I have always been interested in business and always been interested in making money, at least as long as I’ve been cognizant. My early ambitions, my early university ambitions were to be a natural resource taxation lawyer. Don’t ask me how an eighteen year old set about to do that. I don’t actually remember, but that was my goal.

I was redirected by an early mentor, a very well-known tax lawyer away from law and into commerce. I had the extraordinary good fortune to meet a legendary value investor when I was still an undergrad in university. His name was Peter Cundill, and he’s legend among value investors. He was actually the one that set me on the course that became my career.

Fantastic. If you could go back in time and talk to a 30 or 20 year old Rick Rule, what would you advise him about money habits, investing, career guidance, things like that?

Really three things I guess in reverse order: Career guidance. Follow your passion. Do something that you can’t wait to get out of bed in the morning to do and you sort of resent having to go home at night from. If you are passionate about something, you will work easily. You’ll work longer, and you’ll create utility for other people without really being cognizant of what you’re doing. In other words, it won’t be work. It’ll be a calling.

If it is your calling and you are competing with people for whom it is not their calling, they won’t stand a chance. With regards to making money, you make money by adding utility for other people. It’s a fairly simple circumstance, actually. If you create value, you get to keep some of it. If you want to be rich, then in addition to you working, your capital has to work. In order to be a capitalist, you have to have capital, which means you have to save or in economic terms, you have to produce more utility than you consume.

You really do find that savings and investing become cumulative and compounding, meaning that the accretion of wealth when you’re younger is slow, but it becomes rapid if you continue to be disciplined and continue to work hard. What I’m tempted to say is at an alarming rate. It really surprises you later in life.

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