Tuesday, 8 July 2014

Rick Rule - Do the Work - 3 investors with $3bn on the sidelines for juniors

Do Rule and the "bigmoney on the sidelines" get what they want?
"Market clearing prices like summer 2000"
Choose your strategy - "Do the work" or "Have a hunch, bet a bunch"

Also see more recent comments HERE
“I don’t know about the short term,” said Rick, “but ‘leveraged’ plays are looking pretty attractive to me because they are so hated.”
‘Leveraged’ plays on precious metals usually refer to mines or deposits that depend on higher metals prices in order to generate returns. Today, many investors prefer to focus on projects that may prove to be money-making at current metals prices. But Rick says the aversion to leverage makes these types of opportunities more attractive:
“In my view, precious resources and precious metals markets have an up-cycle that lasts around five years. To me this means we could see much higher metals prices within the next couple of years. Right now, nobody wants to own the leveraged juniors; everybody wants to own the smaller, high-grade deposits, which are less dependent on higher metals prices. What that means is that leveraged deposits are probably cheap. I’d warn that you may not get much pleasure from owning them in the next 12 months. In the 3 or 4-year timeframe though, you could be handsomely rewarded.

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