Rick Rule

Bullish on materials? Yes, for the longer term, though there are temporary headwinds that are market- and geopolitically- related. We're in the midst of two bull markets in the resources space. One is around precious metals, where politics will drive demand. The other is industrial materials, where geopolitical concerns around supply chains, demographic growth, plus 2.5 decades in under-investment will all lead to material shortages. The caveat to this second bull market is a global, synchronized recession or depression that would cut demand in the face of reduced supply.

Which materials in particular get the nod? For most Canadian investors, gold merits attention. Its tailwinds are pretty strong, and Canada has a nice endowment of companies to invest in. Easy money has been made in oil & gas, yet the sector continues to be very robust. That sector is underpriced given where he sees price of oil & gas over next 5 years. For investors who can take on more risk, look at the sectors out of favour. Coal deserves a look based on valuation. Five years out, in the absence of a recession, copper and nickel will be materially higher. Potash will continue strong as long as Russia-Ukraine concerns are in play. He's intrigued by uranium for the next 3-5 years.

Active in Northwestern Canada. Reasonably good results to date. More attractive companies in precious metals. Credible management team. No criticisms, it's just that he prefers others. See his Top Picks.

Very cheap for those who can take on a bit of risk. Stock's suffered due to underperformance in Argentina and African franchise expansion. These concerns are starting to turn around. Very good implementers.

Be cautious of very long timelines. Extremely high-grade copper deposit. Political winds are against it, as US government denied funding for access roads. First Nations are solidly in favour of the project. Own it for the extremely high potential value.

SIL vs. MAG Both world-class deposits. At current prices, he likes both. Complication around MAG is that there's only one obvious bidder. SIL seems to get better and better, as they get farther along the development curve. He owns both, and both are in Buy range today.

MAG vs. SIL Both world-class deposits. At current prices, he likes both. Complication around MAG is that there's only one obvious bidder. SIL seems to get better and better, as they get farther along the development curve. He owns both, and both are in Buy range today.

The whole uranium space will do well in a 2-5 year timeframe. DML's focus on the Athabasca Basin is smart. Headwinds include an extraordinary spend, so they'll need to raise capital sooner. If you can stand the volatility for the next couple of years, a solid pick.

Gold and inflation. Current gold malaise is due to investors knowing about incipient inflation, but not being bitten by it yet. Reminds him of 1968-72 when inflation was on the board, but investors ignored it based on two decades of benign inflation. But then it began to eat away at their living standards. We're in the same position today. It takes about 2-3 years of inflation's bite for people to lose that feeling of security of benign economic times. The decline in the price of gold and equities is a common feature of gold bull markets and, for him, represents a buying opportunity.

If you really like the company, the price decline is a good thing, as you can buy stock at a lower price. He welcomes the price decline, as he'd like to own more.

Gold price target? A better question is where could the USD or CAD go? Because, over time, gold is a constant. He sees the possibility of prices that are much, much higher. In 5 years, gold at 4-5 thousand USD would not surprise him. You'll see a response in gold equities when gold clears 2,000 USD. The efforts of the Canadian Parliament and US Congress almost guarantee that occurs.

Absent a global recession, Canadian energy sector is cheap. In US and Canada. For a 2-5 year timeframe, you'll do very well (absent the aforesaid recession). Substantial excess free cashflow. Plans dividend increases and share buybacks.

One of the highest quality mid-cap royalty stocks in the space. Closer to the lower end of the trading range. More of a buy than a sell. He's delighted to own it.

(A Top Pick Feb 28/22, Down 9%) Still attracted to it. Suffered because it's located in the former USSR, and people worry about challenges like those seen in Russia. Extraordinary cashflow, dividend yield, tailwinds in uranium.

(A Top Pick Feb 28/22, Down 7%) Large transaction required an increase of the issues outstanding. Good management. Increased liquidity because of increased size portends it will be a leader in the space. Price decline means he can buy more.