Bitcoin Is A Distraction, Focus On Gold - Rick Rule
(Kitco News) - Even though bitcoin seems like a more exciting option than gold this year, precious metal expert Rick Rule advises investors not to get distracted by things that “don’t matter.”
Bitcoin versus gold debate has been an advantage for people like Rick Rule, president and CEO of Sprott U.S. Holdings, who chooses gold every time.
Hopefully people will continue to compare gold to bitcoin in 2018, he told Kitco News on the sidelines of Silver and Gold Summit in San Francisco.
“The more people pay attention to stuff that doesn’t matter, the better the chance some old guy like me has to compete,” Rule said. “So, the fact that people get distracted by things that don’t matter is very useful to me. Do I get tired of it? No, I never get tired of durable competitive advantage.”
Gold is not a speculative play, which means that it is always a more dull investment, but it is that characteristic in particular that makes the yellow metal so attractive, Rule explained.
“If I were a speculator, I wouldn’t be chasing gold because it is not exciting from a speculative point of view. From an investment point of view, or owning physical gold the way I own it, as insurance, it has done its job and preserved its purchasing power,” he noted. “But, more importantly, gold stocks are set up to do quite well too.”
Rule admits that lately people have been choosing equities or bitcoin over the yellow metal, which might have hurt gold. But, according to the well-known investor, potential buyers should be focusing on something else.
“It probably has [had a negative impact on gold], but my belief is that you pay attention to more important things like the business’ ability to generate cash as well as performance that exceeds expectation,” he said. “And what people are missing about gold right now is that its expectations are so low in 2018 that [it] almost can’t escape surprising people to the upside.”
Gold prices saw significant gains on Wednesday, with key event being the release of the FOMC minutes. December Comex gold briefly rose above $1,294 and was last seen at $1,292.20, up 0.82% on the day. Meanwhile, bitcoin last traded at $8,243.60, up 1.81% on the day, after hitting an all-time high of $8,380 on Tuesday.