Intervju med Rick Rule

Lite längre intervju med Rick Rule.  Han börjar prata om juniorer och hur dålig sektor de är om man ser de som ett stort bolag.

Daily Bell: Junior mining stocks have been lacerated. What's going on? 

Rick Rule: They are getting what they had coming to them. These junior miners acted like small governments for many years. They spent way more than they took in and they over-promised and under-delivered. If you merged every public junior mining company in the world into one company –Junior ExploreCo – that company would lose in a very good year $2 billion. And when I say lose I mean it would spend more on G&A and exploration than it generated by way of property sales, product sales or takeovers. In a bad year it would lose $8 billion. So if you look at the industry as a whole, an industry which year after year loses between $2 billion and $8 billion, you're stuck with how to value it. Do you value it at 5x losses, 10x losses? What's the correct price loss ratio? You get my point. 

Därför är med andra ord en ETF som klumpar samman bolagen ingen bra investering..

 if you design an ETF around a business that is consistently consuming more capital than it generates, that ETF over time will of course go to its intrinsic value, which is zero. The fact that an ETF exists to contribute liquidity to a sector in which I profit is wonderful for me but I think it's a disaster for people who invest in it.

På frågan av vilka länder som är bäst för miningbolagern verkar han gilla Chile mest. 

Daily Bell: What countries are most hospitable to mining today? 

Rick Rule: Oh, boy. That's a short list. I am tempted to say the list reads Chile, Chile and Chile. I could perhaps broaden the list to include Brazil. Certainly Nevada, in the US, is a mining-friendly state but politically on a global basis there is a sense that since the resource industry is finally generating some spare cash the collective should steal it. That tendency seems to be resisted only in Chile, on a global basis.

Någon som läst Ben Graham "the intelligent investor"? Economic in One lesson kan jag också jag rekommendera.

Daily Bell: What are the most important – seminal – articles of yours that you would encourage everyone to read? What are some new ones you want to point to? Where can they be found? 

Rick Rule: Almost everybody should read The Intelligent Investor by Ben Graham, in the context of investing. It's critical. If you haven't also read Economics in One Lesson by Henry Hazlitt it is a must-read. Those are both good homework assignments for everyone. Read those – people will be successful.