-- Posted Wednesday, 24 July 2013 | | Disqus
Vancouver’s favorite mining shares’ broker Rick Rule just delivered a stunning speech to the last-ever Agora Financial Investment Symposium on investment right now that effectively concluded that if this was not the market bottom or very close to it he was a pink elephant.
Mr. Rule reflected on his many years in the business and said this was his fourth or fifth bottom. He recalled 1991 as the worst with 20 or so companies going to ‘company heaven’ every day. It’s the same now with around 800 junior gold miners with less than the $200,000 required to stay listed.
Big clear-out
A big clear-out is looming. Investing in the survivors is a no-brainer says Mr. Rule whose made and lost many fortunes in his long career and now sees another capitulation phase in progress.
‘In the past I lost 30-40 per cent on the way down but lived to make 400-500 per cent on the way up,’ he told the audience of around 600 who fail to understand why Agora is calling it a day on this very popular event.
‘Going forward we have a situation where prices must rise or there will be no production. Gold producers have costs of $1,650 per ounce and the price is around $1,300 an ounce. Something just has to give and I doubt gold production will cease.
‘Always for investors when things feel worst is when the outlook is actually best. I don’t know when the cycle will change exactly but I can be 100 per cent sure that it will change.’
Mr. Rule recalled how the 1991 wipe out had given way to the euphoric 94-96 bull market. He flagged up the losses of 1998-2002 before the great years that followed until 2010.
Question of timing
‘The chances of a market recovery not happening are zero. I just can’t say exactly when,’ said the leading resources guru to his major customers.
‘But the more ugly the downturn, the more spectacular the recovery and what we are seeing now is really bad. I’ve seen this several times in my career and the upside is always far better than the downside.’
That’s quite a pitch to clients old and new but Mr. Rule commands attention here for good reason and his words should not be lightly discounted.
The next edition of the ArabianMoney investment newsletter will have reports from the Vancouver symposium and an exclusive interview with gold superbug Jim Sinclair (click here).
-- Posted Wednesday, 24 July 2013 | Digg This Article
| Source: GoldSeek.com
