You have a 5-stock portfolio where the worst company goes 22:1
In an exclusive Q&A session for Sprott Private Wealth clients, Rick Rule shared his thoughts on the uranium market and explained why speculators shouldn't worry too much about being early.
Transcript (edited for readability)
Rick: Let’s begin with a general discussion of the resource market. Those of you—and I assume that most of the Canadian clients of Sprott have fairly broad backgrounds and resource equities. Those of you who do have that background will understand that these markets are extremely cyclical and extremely volatile. I don’t think I need to remind too many of you that the period 2011 through the end of 2015 featured a truly brutal bear markets in natural resource equities. The worst I recall since the beginning of the 1980s, the TSX-V index if my memory serves me correctly declined by 88% in nominal terms and more on real terms because the index gets gained.
Those of you who have been around for the long time know, however, that bear markets are the authors of bull markets, just as the spectacular bull market we enjoyed last decade was the author of the bear market that we just suffered. If past is prologue, this incredible decline sets the place for a very handsome recovery. And certainly 2016 saw the down payment on that recovery where the gold or precious metals sub-index of the TSX was up by at least 100%.
It’s important to know that you resolve commodities bear markets and commodities equities bear markets in one of two ways. One, the traditional way, is demand creation where simply the low prices associated with commodities in a decent economy leads to an increase in demand because the low price increases the utility of the commodity. This recovery appears to be different given a paucity of worldwide demand for anything.
there is certainly blood in streets so maybe its time to take a serious look and do some work....
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