Wall Street Unplugged
Episode: 1154July 3, 2024

Rick Rule: Precious metals are poised to explode

Inside this episode:
  • Welcome market legend Rick Rule [2:24]
  • Our frustrations with Washington bureaucracy [3:56]
  • A look at gold’s returns over the long term [6:52]
  • What’s behind the underperformance in gold stocks? [8:45]
  • How government debt and deficits impact individuals [11:58]
  • Why precious metals could explode higher [16:11]
  • Gold vs. gold stocks: Which is better? [18:24]
  • One simple rule for how many stocks to own [20:57]
  • How to attend the Rule Symposium [22:55]
  • A gold bug’s surprising take on Bitcoin [29:45]
  • Why investors must be picky in the resource space [34:45]
  • Did you catch our latest Dollar Stock Club pick? [48:28]
Transcript

Wall Street Unplugged | 1154

Rick Rule: Precious metals are poised to explode

This transcript was automatically generated.

0:00:02 – Announcer

Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on Main Street.

0:00:16 – Frank Curzio

How’s it going out there? It’s July 3rd. I’m Frank Curzio. This is Wall Street Unplugged. I’m here to break down the headlines and tell you what’s really moving these markets.

So I have a great interview for you today, and many describe this person as a legend in the resource space. I describe him as the legend. His name is Rick Rule, so Rick has been financing companies in the resource space for 50 years. He was CEO and founder of Sprott Global Resource Investments. He’s a world leader in precious metals close to 30 billion assets in the management one of the largest, I believe. He retired from Sprott in 2021, but still remains the company’s largest shareholder.

There is not one person in the resource industry that doesn’t know who Rick Rule is, and today Rick is more active than ever. He has his own media company it’s called Rick Rule Media, hosting one of the best resource conferences as well in the precious metals space called the Rule Symposium. And Rick’s a good friend who I’ve known for over 10 years, someone that’s educated me greatly, greatly, greatly in this space and, with the resource sector now in a bull market. I wanted to get him back on and he’s going to talk about where he thinks the price of gold is going, how to find the best opportunities in the junior mining space and how blockchain is going to play a huge role in a physical gold market. So sit back, relax, enjoy, and here’s my interview with Rick Rule. Rick Rule, thanks so much for joining us on Wall Street. Unplugged man, it’s been a long time. How are you doing?

0:01:52 – Rick Rule

Frank, it’s been way too long. I’m having a great day.

0:01:57 – Frank Curzio

The better for being able to speak to you, being too nice. So you’ve been in this business wow, 50 years 74, I read, and I was born in 1972. So I tell people I have 30 years of experience working with my late dad, stuff like that, but 50 years you’ve been doing this. I feel like you have more energy today. I see you everywhere. You’re doing video. Talk about some of the things that you’re doing now, because I’m seeing a lot more than I’ve ever seen. You’re supposed to slow down a little bit. It seems like you’re going a lot faster here to like you know slow down a little bit.

0:02:26 – Rick Rule

Seems like you want to allow faster here, frank, I completely failed retirement. What I did do is step away from overtly regulated businesses and from where businesses where a lot of people reported to me. Specifically, I ceased to be a licensed person and I backed out of any responsibility, including directorship at Sprott Inc, a public company. Although I backed out of any responsibility, including directorship at Sprott Inc, a public company, although I do remain their largest shareholder and cheerleader, I’m involved now, really, in a for-profit education venture, that being Rural Investment Media and the Rural Classroom. I’m involved, too, with your old friend Frank Trotter starting a new bank, battle Bank, and I’m involved in a range of philanthropies involving microcredit, loans to very small people and a global fight for individual liberty, through organizations like Students for Liberty and the Atlas Fund.

0:03:29 – Frank Curzio

Wow, that’s great. So how’s Battle Bank doing? So I know that that’s Frank Trotter and I mean wow, his track record is amazing. Everbank Field I mean Everbank everybody knows Everbank Field from Jacksonville, but just a huge success story. What a great guy too, right, frank Trotter. What a great guy, bill, but just a huge success story.

0:03:45 – Rick Rule

And what a great guy too, right, frank Tron? What a great guy, yeah, I mean. In terms of the things that are under our control. The bank is in very good shape. We have basically competed all of the architecture for an online bank. You’ll recall that we did that once before with EverBank. We have a backlog of 14,000 people more or less who would like to do business with us when the FDICC allows it. For reference, when we opened Everbank, we had a zero person waiting list and we were still able to grow that bank to $28 billion in deposits before selling it to TIA. Our holdup really is the FDIC. In fairness, although it’s no excuse for them, from my point of view, they are responsible for failed banks. They have a lot to handle right now. A de novo bank is not their first interest. A failed bank or a troubled bank is their first interest and, sadly, they have their hands full at present.

0:04:48 – Frank Curzio

Yeah, I didn’t want to go there, but this is such an interesting conversation when it comes to banks because, just so that they pass a stress test, and I’ve been arguing the amount of capital that these guys have more regulations almost benefiting them it’s one of the only industries where you can’t. A smaller mid-cap bank can never become one of the big four. They just did too many rules, too many requirements, too many capital ratios, and I guess you know. I know that you guys know the rules and hopefully you won’t do what Pia Schiff does. Once you get into that boys club it’s kind of hard, you know. Don’t talk crap against them because you know next thing, you know they can shut you down, but you guys know all the rules. I wish you luck. I mean, I mean, and I think it’s going to be great, hopefully, how long has it been with Battle Bank? I mean you think it’s, it’s coming soon or you’ve been in like a waiting list? I mean how long before this thing actually is launched?

0:05:31 – Rick Rule

We think it’s coming very soon, but we have fought that before. In fact, I think the speed with which our process is approved in Washington will really be a function of their competing obligations around other troubled banks. I believe that we are effectively through in our dealings with local FDIC officials, both in Denver and in Dallas. We are certainly through our process with the so-called tough regulator, the OCC, the Office of the Comptroller of Currency, who was our ultimate day-to-day regulator. Our process with them was very, very rapid, but this is what they do for a living. The FDIC has some other challenges, to the extent that you’d like sometime to have a broader discussion of banking and its implication for investors and savers. I’d love to do that, but that’s at least a half an hour long discussion.

0:06:31 – Frank Curzio

Oh, probably even longer. So let’s get to the cool stuff. That’s, for my personal interest, of what I want to know. Let’s go to the audiences now. So let’s talk about resources. We just went through one of the most brutal bear markets. What’s different with this market today? Where is it sustainable? Do you see gold prices going higher? Do you think that this is going to continue, Because this is like an underlying trend? I love what gold’s doing here. It’s not going, it’s not skyrocketing. You know you had these. You know this huge volatility. It’s the way it’s moving up and up slowly. It seems like there’s a lot of momentum behind it. What do you see different today? In previous bull markets that this sustainable, we could see gold going a lot higher. Well, you asked a lot of questions there. Yeah, I’m interested.

0:07:13 – Rick Rule

I’m going to pick your mind as much as I can in 50 years. I’ll attempt to address them sequentially, although my memory fails. Let’s talk about first the move in gold. When people ask me when gold’s going to move, I say 2000. Since the year 2000,. Gold has moved up at about 8.5% compounded, moving from $253 to 23 something or 24. That’s a pretty good move as far as I’m concerned. The move has picked up speed, certainly in the last couple of years, but gold has done precisely what people have asked it to do for 24 years, which is important to note.

The bear market that you refer to, particularly the bear market in gold equities, I think is part of the reason for the bull market, which is to say the cure for low prices is always and everywhere low prices. The first part of a bull market is always a dead cat bounce. When you’ve shaken out the sellers, when there’s nothing left to sell, the stocks move up. As a consequence of that, the dichotomy, I think, between the gold price move and the gold stocks price move is fairly easy to explain. The buyers of gold for the last two years have been foreign central banks, and foreign central banks are not gold stock buyers. There was not retail participation, at least in Europe and North America, as evidenced by inflows and outflows from physical gold ETFs until 11 weeks ago. Now that you are beginning to see the public in the gold trade, I think you’re going to begin to see the public in the gold equities trade. That’s fairly simple.

There are traditional investors in gold who are disappointed by the lack of margin increase, operating margin increase surrounding the increase in the gold price. That’s pretty easy to explain if you look at prior bear markets pardon me, prior bull markets. That is that during periods of time when the gold price increases, the price of inputs is also increasing. So, as an example, if you look at the last four years in the gold industry, energy prices have tripled. The price of skilled labor has gone up at 15% compounded.

It is estimated by the industry uh that the uh cost of social rent, which is to say offsite capital expenditures, uh taxes, royalties, stuff like that has been increasing at 20% compounded, has been increasing at 20% compounded. This is something that’s happened to us in prior bull markets. If we continue to see an increase in the gold price, you will begin to see in the most efficient producers fairly dramatic increases in margins. I would suggest that when Agnico Eagle, as an example, publishes for this quarter, that people will be surprised to the upside in terms of margin. The case for the rest of the natural resource business, which is to say industrial materials, is a different case, one that I’d be happy to go to if you’d like. But my suspicion around the gold price is simply that gold does well when investors have concern about the maintenance of their purchasing power in conventional fiat-denominated savings instruments. I think those concerns are evident to the market and I think that they’re real.

0:10:39 – Frank Curzio

Could those concerns be made over the past 10 years too? I mean we have deficits going through the roof. Do you feel like there’s more concerns now? Because now deficits are just wildly crazy? We’re looking at trillion-dollar payments more than the defense budget now. I mean it’s consistently getting worse, is it? People are like enough’s enough.

0:10:59 – Rick Rule

My sense is that we had a real shift in the direction of the economy in 2022. We need to remember back over 40 years we’ve probably been in the most benign economic climate in human history, declining real and nominal interest rates beginning in 1982 from, admittedly, a 17.5% prime US dollar hegemony on a global basis, so, as americans, we could export our problems to other people. Uh, the demographic benefit of the baby boomers, which is, of course, over. Uh, the good and peaceful part of globalization and free trade. Uh, we’re now in a much more mercantilistic economy. Uh, but I think of particular note has been what you describe, which is to say the increasing amount of debt and deficit relative to the private economy.

Let’s look at some arithmetic just for fun. Frank, if you measure the deterioration of the purchasing power of your dollar, which is to say your cost of living, by the CPI, you will believe that inflation is running at 2.6% a year. That varies pretty dramatically with what you’re experiencing at home the price of gasoline at the pump, the price of food Notice that the CPI doesn’t include food or fuel. When it’s inconvenient, an odd index for someone who either drives or eats. Notice, too, that the CPI doesn’t include tax. Now, a cost of living index that doesn’t include the largest component of most household expenses is fairly silly to me.

I did a thought experiment over the last four years and I attempted to measure, improperly and anecdotally, the loss of purchasing power for my own savings and investment in the purchase of goods and services necessary to maintain my life. By the way, I don’t describe taxes as a service, but that’s a different thing, and they certainly aren’t good. But let’s leave them aside. I have to pay for them and what I have discovered is that the purchasing power of my savings diminishes is about seven and a half percent compounded in US dollars. So that’s an anecdotal number for me, that is to say, the decline in the purchasing power of my savings, the yield I get on my savings, the real yield if you define them by the US 10-year treasury, the world’s benchmark savings instrument is 4.3. So I get paid 4.3 in a currency where my purchasing power is declining at 7.5. In other words, the value proposition associated with the world’s foremost fiat currency is that you lose about 2.5% of your purchasing power a year, perhaps three compounded over 10 years. If anything at all would make me concerned about the efficacy of fiat-denominated savings products, it’s a government-guaranteed loss.

There are, of course, other things. There are other things that concern me the predilection of the political class to deal with any economic circumstance through counterfeiting. They call it quantitative easing. From a saver’s perspective, the printing of more specious currency unit does not make every existing unit more valuable. It makes it less valuable. And then, of course, there’s the credit quality.

As you know, I’m an old credit analyst and I look at the on-balance sheet liabilities of the United States government exceeding $34 trillion, or $28 trillion net of the Fed’s own balance sheet, which is to say net of counterfeiting. And I look at the other side, at the net present value not nominal value, but rather net present value of entitlements Social Security, medicare, medicaid, federal pensions, military pensions, environmental trust funds, stuff like that exceeding by the estimate of the Congressional Budget Office $100 trillion. So I look at aggregate net debt at the federal level not state and local, not corporate, not individual at something like $130 trillion, and I look at their proposal to service this debt with an operating budget that is a trillion dollars bigger every hundred days. And, by the way, frank, that number doesn’t include accretion to the net present value of entitlements, nor does it include a demographic shift from more young, productive people relative to old, less productive people such as myself, to a circumstance like today where there’s more beneficiaries and fewer payers. So all of that I’m not just venting, by the way I’m suggesting to you that the set of circumstances that we are living in today, I think, will result in more concern among savers and investors as to the maintenance of their purchasing power in fiat-denominated instruments.

Traditionally that’s been very good for gold. One more statistic, Frank, while I’m at it, I love it, go ahead. Precious metals and precious metals-related securities are way under-owned in historic terms. 40 years of benign economic climate has made people forget why they might even own gold, made people forget why they might even own gold. The market share of precious metals and precious metals denominated assets is less than one half of 1% of the total value of all savings and investment assets. In the United States. The four decade mean is 2%. If the market share of precious metals and precious metals related securities merely reverts to mean, I think it’ll overshoot, but if it merely reverts to mean, demand for the stuff increases fourfold.

0:17:26 – Frank Curzio

And I love it, I love that you went there. So, okay, making a case, gold’s going to go a lot higher Numerous cases, so gold goes higher. Is it better for investors to own the underlying commodity or stock? Because one thing that you didn’t you mentioned high inflation costs. But also, if you take Barrick Gold you took Agnecote, which is one of the biggest let’s take Barrick Gold. We could even take Newmont, but Newmont had a lot of acquisitions.

When you look at 2012, you look at the stock and say, okay, this stock trading at 36, 37, 38, and now it’s 18. If you look at the market caps, they’re similar because there’s this massive dilution that took place because it was a billion shares and now it’s 1.7 billion shares, and we see that, especially with junior miners, it’s a generate revenue in a bear market. Right, they have to operate. Does that mean that your better investment is, hey, go with gold because you made the case. Even long term, gold has done its job. But you see a lot of people get caught up and they, you know, you know the difference, I know the difference. But gold means gold stock prices and gold stocks to people. Should they own the stock or is it better? Hey, you should own gold.

0:18:35 – Rick Rule

It’s very difficult for me to understand why people wouldn’t own physical gold unless they have access to investments that have built-in inflation hedges, which is to say, owner-operated, moderately leveraged real estate where the operator has the ability to out-compete other folks. I own gold personally, although a financial planner would tell me I didn’t need to, given my large shareholdings and Sprott. I own gold personally as insurance. I own it because it helps me sleep nights, which is a very good thing at 71 years of age. I don’t own gold as a trader. I don’t own gold because I think it’s going to go from $2,400 to $2,700. I couldn’t care less. I own gold because I think it’s going to go from 2,400 to 2,700. I couldn’t care less. I own gold because I’m afraid it’s going to go to 9,000 or $10,000. That’s why I own gold and, by the way, since beginning again to add to my physical stack in 1998, it’s treated me very well. Eight and change compounded for an unloved asset is pretty good. Eight and change compounded for an unloved asset is pretty good.

Investors in gold stocks or speculators in gold stocks two different breeds must look at something very differently. I remember that you have a talent for technical analysis beta or gold equities beta. When we come into a period of a gold bull market, the simple beta I would define beta as the delta between the performance of the gold equity sector and the broad equity sector is spectacular when we come into a gold bull market. For those speculators seeking alpha and I know you have a sense of humor for that too which is to say individual, small stocks where you take advantage of information asymmetry in the market, the alpha for those people willing to take the risk and do the work can be extraordinary. But I would argue that investors, when they seek to answer the question as to which asset class they might own, should look at themselves in the mirror. What type of investor are they? How much risk are they willing to assume and, most particularly, how much work are they willing to do? If their primary consideration is reading more books, doing more gardening, spending more time with their kids or grandchildren, then I think they need to own the physical gold. They need to own it as insurance. If they’re willing to do some work, if they want to balance their equity portfolio keeping in mind the beta in gold during a gold bull market, they should do some work. But you need to do just a little work and find the four or five or six best gold mining companies in the world. They have names, but I won’t share them yet.

For those people who are seeking alpha, for those people who are attracted to 10 baggers or 20 baggers, please understand that you have to subject yourself to a lot of volatility and a lot of risk, and in order to do that, you have to commit to doing a lot of work. Frank, you may know that anybody who wants to can go to ruleinvestmentmediacom and list their natural resource stocks. I personally will rank them one to 10, one being best, 10 being worst. As a consequence of that, I’ve ranked about 80,000 portfolios in the last decade and the one particular lesson I’ve gotten from that is that most speculators own way too many stocks and their technique for selecting them seems to have been got a hunch bet a bunch.

I would suggest that speculators limit the number of stocks they own to the number of hours per month that they want to work on their portfolio. And by working on portfolios I don’t mean listening to Rick Rule or Frank Curzio podcasts. I mean reading quarterly reports, reading balance sheets, reading resource statements, reading management information circulars, reading proxies, if you’re willing to work 10 hours a month, you should consider owning 10 stocks. If you’re willing to work 20 hours a month, you should consider owning 20 stocks. If you aren’t willing to work, you shouldn’t own any speculations whatsoever.

0:22:49 – Frank Curzio

Well said, well said and it’s going to be a great segue into the stocks that you do like. So you are holding the Rick Rules Symposium. This is July 7th to 11th on Boca Raton. What I found really interesting, which I learned about it, is that every single member that’s going to be there you have an investment in. Is that correct? That is correct.

0:23:12 – Rick Rule

Every single company on the exhibit floor is owned in portfolios, both owned and managed by the sponsors of the event, particularly me Now, frank, you’ve known me for many years. There’s no guarantee that because I own a stock it goes up, but there is a guarantee that the process is honest. At every other investment symposium I know around the world, the qualification to be an exhibitor is a check that cashes and a pulse in that order of importance. At our conference, attendees have told us for 28 years that the exhibitors are content too, and so the process is very honest. We know them well enough, we like them well enough that we own the stock physically in our own portfolios. Whether or not they’re suitable for our attendees is a very different matter. That’s for the attendees to ascertain. But, frank, we have interviewed every single exhibitor at the conference before the conference, so that our attendees can review the interviews and determine for themselves which exhibitors they want to pay attention to at the conference. That’s another feature of our conference. That’s great, you know, putting on a conference like ours, we have 60 hours of intense programming over four days. Nobody can absorb all the material that’s available for them in four days, so we begin doing pre-conference work three months before the conference and every attendee has access to that. In addition, whether attendees attend live or via live stream from the comfort and convenience of their own home, they’ll have access to recordings of the conference for the balance of 2024. This is valuable content and to get the most out of it, you have to use it.

The conference, as you suggest, is July 7th through 11th in Boca Raton. I would love to see people there physically, but I understand that’s not always possible. We had attendees last year from 30 countries via live stream from the comfort and convenience of their own home. Before I describe the features of the content, let me tell you something. Anybody who attends live or live stream enjoys a gold-plated money-back guarantee, unlike any other conference in the world. If, for any reason, you don’t think that I’ve lived up to the value proposition that I’ve offered you, simply email me and there’s a 100%, no questions asked, money-back guarantee. Now, how can I do this? Well, I’ll tell you why. Now, how can I do this? Well, I’ll tell you why. We’ve been doing the conference for 28 years. It’s gotten a little bit better every year If you know that in a conference of a bunch of aspirational, wealthy, smart people. Not all the knowledge in the room comes from the dais to the crowd.

0:26:28 – Frank Curzio

There’s a ton in the crowd and Go ahead, keep going.

0:26:31 – Rick Rule

Another benefit of our conference is we do a really good job of global macro. Jim Rickards talking about the financial structure how would he know? Well, he was counsel of long-term capital management. He was part of a group that almost brought down the world’s financial structure. I mean, talk about a guy from the belly of the beast right, nomi Prins talking about the belly of the beast. Right. Nomi Prince talking about the structure of Wall Street. She was a partner at Goldman Sachs, a Wall Street analyst. Again, somebody from the belly of the beast describing the beast Danielle DiMartino Booth talking about the Fed. She was a researcher for the Dallas Fed.

So we help people understand the way the world is not the way that CNBC or CBC wishes it was. We go from there to great analysts and portfolio managers, people who have made money in natural resource markets for 30 years not some failed jerk who didn’t do well at technology, didn’t do well at crypto, didn’t do well at pot stocks, who parachutes into resources, but people who’ve met the test of time. The most important feature, I think, is that we have a group called the Living Legends. We always bring people who have built multi-billion dollar natural resource companies from scratch. This is critical because they tell you how they did it and how it impacts how they invest and how you should invest, how you can use tools to spot the $5 million market cap that’s on its way to becoming a $5 billion market cap. You combine all that with vetted exhibitors and a gold-plated money-back guarantee and I got to say this is one of the very few investments on the planet an investment in yourself that is absolutely positively no risk.

0:28:25 – Frank Curzio

I take the risk, yeah, and I’ve been to this conference a lot guys, and you guys know me, I don’t talk about anything that is not going to benefit you. The one thing that I love that your conference is one you’re going to see Rick roaming the floors. He’s going to be everywhere. Another thing, too, is even places I spoke at places that I’ve been at a lot of times when you see guys they that I’ve been at A lot of times when you see guys they make their speeches and they’re gone, they’re out the back door, you’re not going to see that.

These are guys that actually go to their booths and you could talk directly to the CEO, the people in charge, and that’s what I always love, because you really get access, and that’s what everybody craves. I don’t care what level you are, I don’t care how wealthy you are, how poor you are, whatever. Everybody wants more access. This is a conference that you get more access, and that’s what I always loved about attending your conferences. So, you know, attending it in person or attending it through online, which is great, right, and it’s going to be live, right, live streaming. You said it’s going to be streaming.

0:29:13 – Rick Rule

Live and live stream. You will be able to watch the conference live. By the way, paul Harris from the Mining Journal will be our on-site reporter for the live stream audience, for the live stream audience. So the live stream audience will have behind the scenes access to executives, just like the live attendees will, through Paul Harris.

0:29:31 – Frank Curzio

Wow, that’s great. That’s great. So, the guys, if you’re interested in that, I’ll have a banner on my site. You guys could click it and yeah, but it’s looking forward to that. Really really great Boca Raton right July 7th to the 11th. But I’m not going to let you get away with one last thing here. You talked about Bitcoin, you talked about gold and I was going to ask you about Bitcoin Because, being in this industry for such a long time, the younger generation, I think, looks at Bitcoin as gold. Would you suggest it? Can people own both? Because I feel like, why can’t people own both? And yet you have this argument, especially when it comes to peer shifts, is you’re an idiot for owning one, not the other and back and forth? And even you get that from Bitcoin. What are your thoughts on it? Because not just Bitcoin, but tokenization is another subject on top of that. But what are your thoughts on Bitcoin? Because it seems like the younger generation really believe that that’s their gold.

0:30:19 – Rick Rule

I don’t own Bitcoin. I don’t own any asset class that I don’t feel that I know well enough to outcompete other investors. Myself, I invest in natural resources and in conventional financial services businesses because I understand them after 50 years. Well, I traded Bitcoin very, very, very early on in its existence. I got a fairly quick double. I got a double that was so quick that I told myself I wasn’t smart enough to own the asset and sadly sold way way too soon, proving to myself that I was unqualified to own the asset. In other words, proving to myself my crypto stupidity. I don’t own Bitcoin today.

I think they’re probably complementary assets in the sense that the case for Bitcoin is that there is value in the network as opposed to intrinsic value, value in anonymity and value in the possibility of effectively frictionless exchange. I get all that. I am an investor in distributed ledger and blockchain technologies around the tokenization of gold and other natural resources. I believe that blockchain technology will, over the next 20 years, revolutionize the financial services industry, both possession and exchange. I think that’s important and I’d like to be part of that, and I’d like to be part of that.

I don’t discourage anybody who is more familiar with crypto than I either speculating in it or, if they’re really courageous and really smart, denominating their lives in it. I am neither. Crypto and gold competing with each other directly relative to other classes of savings and investment is silly. In terms of their importance in the global economy, they are both effectively pimples on an elephant’s behind. There is something like $900 trillion in nominal value of savings and investment assets worldwide. Bitcoin at last look was sort of like a trillion two. Both crypto and gold, relative to all savings and investment assets worldwide, are in irrelevancy. They probably compete with each other for the favor of speculators. Probably compete with each other for the favor of speculators, but my suspicion is A there’s room for both and B somebody should pay attention to the asset class where their own knowledge enables them to out-compete other participants in the market.

0:32:59 – Frank Curzio

Great stuff and thank you so much about sharing the knowledge part and how you know how many hours you know you need to be researching before you know owning some of these stocks and stuff. People don’t talk about the portfolio management part and how important it is and speculation and not going all in and stuff like that. So I really appreciate that and my listeners are gonna appreciate that too, greg.

0:33:16 – Rick Rule

Well, you know, Frank, most people have lives. I wouldn’t discourage that, by the way. I would just tailor my portfolio to the allocation of time and effort that I was willing to put into it. That’s all.

0:33:30 – Frank Curzio

That’s great. Well, Rick, listen, I know you’re doing this interview for me. You’re on the way to London and then you’re going right to that conference in Boca, so hopefully a lot of people sign up. I know they believe in you. I’ve known you for a very, very long time. Looking forward to that conference. It’s going to be really good. So thanks so much for taking the time to join us.

0:33:46 – Rick Rule

Thank you for the opportunity and I want to say to your people again if you want to access my own thoughts about natural resources, I’ll personalize it. Go to ruralinvestmentmediacom. List your natural resource stocks no obligation, no cost. I’ll rank them. If, rather than that, you want to invest in yourself and your knowledge, then come to the symposium, either live or live stream. Gold-plated money-pack guarantee A riskless investment in your own education, Love it All right, buddy.

0:34:21 – Frank Curzio

So listen, safe travels. And you got to join me again soon.

0:34:24 – Rick Rule

It’s been too long I look forward to seeing you somewhere sometime you got it.

0:34:28 – Frank Curzio

Thanks, rick, appreciate it. Bye, hey, it’s great stuff from rick. Rick always gave me time. I remember he’s been in this industry for 50 years when I say he always gives me time.

I was at Stansberry. I believe I started there in 2009, 2010. And I knew about the resource sector, but I still didn’t know a lot. Like you know, within five years later, after I worked at Stansberry like three years, I was speaking at a lot of these conferences in Vancouver and you know, all over the world, basically, and really got in deep in this space because it’s a space that’s very dangerous. And basically and really got in deep in this space because it’s a space that’s very dangerous. And it’s dangerous because for individual investors, you can really get crushed. And I learned the ropes from people like Rick where, in 2010, when I met him Stan’s very important he used to have these conferences where we used to have several guest speakers and we used to speak at the conference as well as for the alliance membership and everything.

And I sat next to Rick a couple of times and, man, he was just talking to me about everything. I’d ask him questions. When I was younger, I always asked a lot of questions and I’d just shut up. It’s helped me tremendously. I can give young people advice Don’t think you know everything because you don’t. You’re supposed to think you know everything into your 20s, into your 30s, and then you realize, like just shut up and listen to people who are smarter than you, because a lot of people are smarter than you. And he gave me a lot of time and just explained the sector to me, along with marin katusa and also jeff phillips.

These guys have all financed so many companies and showed me the ropes, because a lot of times, some of these companies they’ll use newsletter writers and pitch their story. And let me tell you every junior mining company, every single one, they’re going to tell you a story. It’s a great story. They just got a property and early test results, a high-grade gold, and it’s right next to Newmont Mining, one of their biggest mines in Nevada, and you got to get in now and you believe this story when you’re younger and then all of a sudden it happened to me only once, but I’ve seen this happen so many times and sometimes you have to learn the hard way, but they’ll do that to prop up their stock price because you have a good following You’re going to talk about it, you really believe in it and then they’ll do a financing right in your freaking face.

And when you look at this industry one of the things I discussed with Rick is I more on this topic, because people are worrying and saying what’s the disconnect? How come gold price are at all-time highs? We’re not seeing the stocks at all-time highs, especially junior miners. If you look at junior mining companies and even some of the big companies, the producers, they’re at all-time highs with their market cap. And when I say all-time highs, this is from 2012, when gold was pretty much at 1,900, hit all-time high or close to an all-time high. Now it’s 2,300, wherever it is today, close to 2,400.

And people are wondering well, how come this hasn’t translated into stocks going higher? Because you’re looking at stock prices and the stock price is down 30%, 40%, even for the big companies. You can even look at some of the big companies, like Newmont and Barrick, like I discussed, agnico, eagle, and you’ll look. But look at the market caps. The market caps are higher, but the stock price is down 30%, 40%. You’re like, wait a minute, how could that be? Well, the market cap is a true value of the company. The share is outstanding right Times the stock price, and what these companies have done is they diluted the shit out of shareholders.

And when it comes to junior miners, you have to because you’re not generating revenue. So if you’re not generating revenue, how do you make money? You have to raise money. And when you raise money in a market where you have a bear market for 10 straight freaking years, you have to provide some kind of incentive. And what they did was provide three-year warrants, five-year warrants, and that’s like double the dilution. Okay. So example if I have a stock at $0.80 and I do a financing and the stock was trading at a dollar, I’m going to do the financing at 80 cents.

You have some of these big companies who come on and the financiers will come on and say, okay, we want warrants three, five years, or we’re not going to do it. They get five-year warrants and those warrants exercise at a dollar. Say, if the stock goes past a dollar, now you can exercise those warrants. You have to buy those warrants. Say, if it goes to $1.50, you have the right to exercise and you usually get one warrant for every share you own. So now when you exercise the warrants, you’re paying for them Say if you have 10,000 shares and you want to exercise the 10,000 warrants, you got to pay for them. You got to hand them a check for $10,000 because you got to buy them at $1. But they trade in $1.50.

You could turn around and boom right. And then you realize like holy shit, because you have all these conferences and people go to, I feel like there’s such a disadvantage unless you’re really getting in where a lot of these other people get in, like the financiers. And that’s why I made money, even though it’s been a bear market, in 10 years that I’ve done. Okay in this market where you know we had certain losers. It’s a bear market, but still you always have these periods where you’ll see a stock price go up 30%, 40%. You can excise those options.

But even better from the finance terms and what you learn behind the scenes is when these financiers they’ll fund the company. They have the shares, right. So say okay, we’ll give you a million dollars worth, right, we’re going to do five. They raise $5 million and say you know, you have Haywood Securities or whoever. Say, okay, I’ll take some of that deal for a million dollars.

Now they have the shares, they get the warrants. Now what they do is they go and short the stock immediately. They’re not naked shorting because they own the shares. Nobody’s going to touch them. They’re probably locked up for four months. They’re going to short the stock right out of the gate Because what happens when you do of the time, the stock’s going to go lower. So you’re like, wait a minute, they own the shares, the stock goes lower. This is where the warrants play in, because if the stock goes high, you can exercise the warrants. You cover your ass. If not, you’re going to make money on both sides. You’re going to make money when the stock goes, but this is how these companies stayed in business for such a long time and knowing the ins and outs of this industry because I got to tell you there’s an industry that is on par with early crypto in terms of being corrupt, where they’re going to tell you a story. They don’t sell Insiders usually almost never sell but they’re constantly raising money, raising money and you’ll see.

You know, one of the ones is GoVX that I ripped apart raising money. They’re going to have to raise a shitload more money for uranium. It’s a zero. The company’s a zero. I told everybody it was a zero a while ago and hopefully people listened. People got mad at me and said, no, you know what you’re talking about. I was like I know exactly what I’m talking about. You don’t need to develop like hundreds of millions of dollars. They’re going to have to raise even more money and they just consistently fuck their investors and they did it for such a long time. And if you look, you’d be like, well, they didn’t sell any shares, no. But when I looked at how much these guys make which I have access to, you know quick access to you can go to 10K. It’s taking a little bit longer, but now I’m looking at 10-year period, their investors. The stock was five, it’s 30 cents, it’s 20 cents, 10 cents.

These guys are paying themselves really, and it’s not their only company. They have five or six, seven companies that run the boards or their executive chairman. That’s the big title you call yourself. When you don’t want to be the CEO of several companies, that’s a red flag. You don’t want to see someone as a CEO of three, four, five different companies. Executive chairman’s allowed. So their executive chairman, they’ll be in the board whatever. They’ll help finance the company. But this is how the system works.

Now that the resource sector. I was in a lot of private placements, pretty much from 2011 to 2013, 14, maybe a couple in 2017. But for the last three, four years I completely avoided this industry. I’ve had over 50 companies easily come to me and I didn’t bring that to my investors at Curzio One or whatever, because I didn’t believe in the resource sector.

Now it’s changed. Now you’re going to see the cream of rice at the top. You’re going to see companies like I talk about Mir Nani, who, during a downturn, what do you do? Luke Norman, I had on, I just interviewed, during a downturn, us Gold. What do you do? That defines you as a company, because you’re going to have shitty times in your industry. You can’t control, but it’s what you do during those times when the business is bad is how you gain market share, how you innovate, how you improve your business right, and that’s why, even during the dot-com era, if you look at these companies, the survivors, you know how hard it was to survive. I mean, you saw the NASDAQ decline by 75, 80% over a three-year period. It wasn’t like today, when the market goes down 35%, the Fed immediately says, okay, let me flood whatever bank or whatever sector with money and everything’s fine. It was a three-year period, and then you see the Microsoft survive, you see the Amazon survive, right? You see the Pricelinecom survive. You see some of these companies survive and then they become these industry leaders and that’s where you’re going to see the cream rise to the top.

My point is we’re starting to see a lot of deals, and we’ll probably see some of them in Curzio One, which is our highest price membership for Curzio, where we’re going to get into private places. You’re a credit investor. If you’re interested, email me frankcurzioresearchcom. But now there’s certain deals that I could look at and be like okay, this is really good right now, because now you’re seeing gold prices up. Some companies have got permits. You could see we’ve in almost every sector.

I mean you look at copper, you look at uranium, look at gold and silver. You want to talk about being not so much silver but even gold, copper and uranium. You want to talk about no drilling, undersupplied. I mean no major discoveries in such a long time. That’s the area you want to be in, because you’re going to see prices explode, especially for uranium, and they did. You know they were 100, 105, and they’re in the 80s right now. But you’re going to see that take off tremendously. Right, there’s just a breather. Hey, we’re below 25, right, I mean, prices moved up so fast, so sharply, so fast. I think uranium is a great sector to invest in, but these are the deals that, if they’re raising money, that we want to be into, because now you have the underlying current behind the sector and raw materials are on fire right now and you know, going even we might be able to get into a couple oil deals, natural gas deals, different deals.

But this is a time to invest and that’s what creates great investors, because, even though you’re in a shitty market for 10 years on resources, it all matters. It doesn’t matter who the management team is. It doesn’t matter this, because everyone’s going to tell you we just hired the best geologist, this is the best project, we’re going to get permits, all this shit. They’re going to tell you the greatest story. You de-risk the situation by getting it at the best price. And not only are you getting in the best price when you’re a credit investor and and that significantly, significantly, significantly lowers your risk. And that’s how you invest in this industry, because it’s not that easy to just buy. You could buy in a bull market at the current price. But if you have access to that, which we do, I avoid it because I hated the industry for three, four years. It’s definitely come back.

Now’s a great time and you’ve seen the cream rides to the top the best companies, not all the companies. You’re going to see the companies that have really done it right over the past five, six, seven years to risk in their stock, creating value for their shareholders, not spending a lot of money, getting the right permits. Maybe, if they raise money, they didn’t raise money to pay salaries. They raised money to buy assets that were trading at 10 cents a dollar. These are the stocks that I’m looking at in the resource sector and we might be able to get into a few financings. But I’ll definitely keep you guys updated on that. But all that started with Rick. I mean again, I know for wow, since 2010,. Right, so almost 15 years. Great resource, along with Matt Gattuso, jeff Phillips.

But these guys have taught me an education that’s incredible in that industry. It’s an industry that I love. I have so many friends, so many good people in it, but you really have to be careful because there’s a lot of scumbags in that industry, I guess, just like every industry and my job is to avoid those. That’s the lessons I try to teach on this podcast is listen. The only way I could teach lessons is how I got screwed and then you teach it and hopefully you could avoid that. So there’s still risk in investing in some of this, but you want to remove a lot of the bullshit and being on top and understanding and talking to the best of the biggest Ross Beatty’s and helicopter ride.

I want to talk about legends. Another legend Marin myself. He invited me and we saw his hydro plants in Vancouver and what a beautiful experience. I mean we were driving, took the helicopters in Vancouver just over the mountains and I forgot what time it was. I think it was snow capped and the snow the way it came off the mountains and the minerals. It was like it turned all the lakes around the mountains turquoise. It was the most beautiful thing. I have so many pictures. I should post it for you. But just picking his mind, asking questions of how he built all this stuff and just hydro plan. I really learned so much about that and alternative energy and things. But it really is incredible when you’re actually in the room, when you’re going on these trips, when you’re meeting these people and being that connected in that industry, I’m glad I avoided it.

I didn’t want to give so many people deals that we would have lost money on. I don’t think that’s going to be the case. If you have a two, three-year outlook with a lot of these stocks, that we’ll get into. But we’ll get into good pricing and probably get some warrants on them. So look forward to that. If you’re a Curzio One member, but be very, very selective, like Rick said, in buying these stocks, because you have to do the research on them, you have to do the homework on them and there’s a lot of crap out there.

I think this is a stat that he came up with. One in 3,000 mines, so one in 3,000 companies, right? So these junior miners, when you put a stake in the ground, one of the 3,000 actually, from the time you put a stake in the ground, becomes a producing mine, one in 3,000. It’s not saying you can’t make money like in phase one, phase two of a biotech, you know, and maybe they fail in phase three, phase one, phase two, you know you’re going to make some money. It just goes to show you how crazy this industry is and the average mine. It takes 20 years, 20 years Think about the bureaucracy around the world 20 years to get a mine into production, but permitting and all this garbage it’s insane.

So the companies that are producing, the companies that are closer to producing, I mean they have a significant advantage. They get taken over, especially if they’re smaller names that have been at this for a while. But there is formulas to this that you want to see High insider ownership, good management team, of course, right jurisdictions. That’s why. Why the hell would you buy uranium in Africa right now when you could produce it right here? It’s going to start producing in the US like crazy pretty soon. Don’t take on that risk, because what happens is that stock’s going to zero now because shit’s going on in Africa.

That kind of was predictable. It wasn’t too hard to see, and now GoVX is done basically. So you know we want to be careful. There’s rules that we follow. We’re going to have some more definitely some more ideas for you guys and hopefully we’ll get into some really really cool financings and good stocks coming up. So something to look forward to. So that’s it for me.

Dan Line is going to be tomorrow, 4th of July. We’re obviously going to tape that a little bit early for you guys so you could watch it on 4th of July. You could watch it the next day. I know hopefully you guys are out with your family and joining yourself. Fly works, but if you’re a subscriber I’ll see you then. If not, you can go to wwwwsupremiumcom. So it’s wsupremium.

After Almost everyone that comes in for a dollar subscribes for the $10 and never leaves, because the value that you get and the amount of stock picks that you get from that paid podcast is incredible. And just our last pick happens to be a large cap company that’s a little depressed, one of the industry leaders in their sector, one of the best of breeds that’s about to announce its biggest buyback in its history and it’s not being reflected in the price because the last time they announced a buyback was 2018. So it’s not reflected. It’s something that we had to dig to find and this quarter they’re probably going to announce it, which they report in three weeks. If they do, the stock’s going to really pop here. It’s undervalued to. I think it’s easy 20%, 25% gain in a couple of weeks. These are the ideas that we have that we put in our weekly newsletter. It’s called Dollar Stock Club, so if you’re interested, you can try it out for a dollar and then cancel if you like. If not, let your subscription run. It’s $10 a month after that. But, daniel, I love doing that podcast really get into depth into different stocks, different ideas.

As for this podcast, we’re going to continue to do interviews for Wall Street Unplugged. Let me know it doesn’t have to be high profile, of course. You love the high profile. They got big followings everywhere and it’s great on social media. But I tend to find the best interviews are also from.

I would like a third, fourth, fifth person in charge of a company where imagine interviewing someone from OpenAI who I mean, how many executives so many executives have left that company? But interviewing one of those people who left who might be a name that’s not really out there. That’s that big. Why is there such a mass exodus of that company? And Sam Altman and people saying that he was a liar. I mean you’re a liar in AI. You’re lying to the board about AI. I mean, isn’t that an industry that’s scary as it is and you’re doing stuff on the side that people can’t trust you and know people leaving. Those are the interviews that are great, so it doesn’t always have to be someone that is, you know, an industry leader, a legend or whatever. Those interviews are always good, but you really get a lot of quality and some people have just been in industry for 20, 30 years, you know. So if you know anyone like that that you think would be a good interview frankersofresearchcom. They can be great.

Get more interviews on Wall Street Unplugged going forward and then we have a Wall Street Unplugged premium every single Thursday. Look forward to that and you can expect that tomorrow and I’ll see you guys then, take care, love this episode of Wall Street Unplugged. I think you’ll really love Wall Street Unplugged premium. The Wall Street Unplugged premium is my members only podcast, where I dive even deeper into this week’s events, where I’ll do even more than tell you what’s moving these markets. I’ll tell you specifically what moves you can make today. So this is going to be about trading. Put big money in your pocket right away due to the inconsistencies I see daily in the market.

I’m talking about specific investment ideas. I’m recommending and tracking each week that I believe will be impacted directly by everything I just talked about today. Plus, you’re going to get the chance to go even further down the rabbit hole with me and my co-host, daniel Creech, as we discuss which of these week’s trends could turn into massive windfalls. Massive windfalls, the big trends that we see lurking on the horizon. Also, the news we’re picking up from our network of insiders, which has gotten bigger and bigger thanks to you and so many people listening to this podcast in over 100 countries. And you’ll get a chance to talk to me directly in my special Ask Me Anything Q&A session. All that and a lot more like premium interviews with world leaders in finance, technology, industry and politics. This is all part of Wall Street Unplugged Premium, and becoming a member is super simple and super cheap, so head on over to WSUoffer.com to check it all out. Sign up today and you won’t miss a thing.

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0:52:19 – Announcer

Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money and your responsibility.

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