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Smartstox Interview with Broker and Market Expert Rick Rule
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Rick Rule is the founder of Global Resource Investments Ltd., the only US firm dedicated to investments in the natural resource industry. We talked with Rick recently to get an idea of what his thoughts are on the resource markets looking forward.
On the decline of base metal prices over the past few months, Rick says that the pullback is healthy, but looking a bit down the line, he sees the outlook for increased supply for most metals is low, and therefore very encouraging for investors; because mining projects are capital intensive and take years to get to production there is not a lot of new supply in the pipeline. On the demand side there is more of a question - will a slow down in the US economy slow down the economies of China, India and the other suppliers? Rick doesn’t know, but he says he’s inclined to be bullish in the sector.
Rick observes that copper has gone from 60 cents to over 2 dollars per pound over several years, but that isn’t taking into account the actual value of the dollar over that time. If looked at with inflation-corrected numbers, then the rise in the price of copper (and other metals) isn’t so dramatic. Though Rick thinks the easy money in the sector has been made, he believes investors holding the best low cost producers, or speculators holding deposits that can readily be brought to market, will do very well.
On the precious metal front, Rick thinks it’s unlikely to see $1,000 for an ounce of gold this year, and thinks instead that there will be a bit of a rebound in the USD. Today’s lower USD should increase the competitiveness of US production over the next year, and what Rick thinks will really move the price of gold though, is a devaluation of other currencies in the world as countries move to remain competitive with the US. Rick believes this could be a reprise of what happened in 1979 when gold had its last huge run-up.
In our interview, Rick also talks about what he sees as ‘sleeper metals’ that nobody is paying much attention to; and that while he thinks the natural gas sector is pretty sick right now, he explains how that is going to make many investors, in his words, “stupidly large amounts of money.” Sounds good.
Click here to listen to our interview with Rick Rule.
Smartstox.com provides investors with informative investment-related content through video and audio interviews with the management of small cap companies discussing their organization’s activities and outlook, along with written profiles of the organizations. For these, along with more market comments from leading analysts, go to http://www.smartstox.com!
Stanlie Hunt
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"Smartstox Online-TV Talk Show" interview host, Stanlie Hunt, has spent over 25 years in the investment business. Mr. Hunt, President and founder of Dynamic Stock Market Analysis, has been a speaker at numerous investment conferences, has interviewed hundreds of domestic and international companies, and appeared on CBC’s Nightly Business News. He now actively researches emerging resource companies, which are featured on his "Smartstox Online Talk Show"
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