Renowned investor Rick Rule, the CEO of Sprott US Holdings is of the opinion regarding speculative and forward-looking investment projections which are well backed by his great investment history. Gold is more like insurance, rather than a speculative asset, Rick Rule explained in a recent interview with Kitco News. He claimed on many occasion that he mother was his greatest teacher and he is absolutely sure without a shadow of a doubt that gold is going to see a bull market this year
Mr. Rule, further added that given one hundred thousand dollars to invest, half would go to senior miners, and the other half invested in speculative’ play in reference to the juniors in the same sector. He has recently noted that the shares have not kept up with Gold, and normally sectors’ prices appreciate when they surpass expectation. The expectation for gold stocks is so low that they cannot help but exceed expectation.
Hence expressing the conviction that 2018 is going to be a good year. On the Gold and Bitcoin tussle which was a major stock talking point in 2017, He admits that the digital currency has probably had a negative impact on gold but maintains the belief that if one pays attention to more important things like the ability of the businesses to generate cash and performance that beats all expectation. The more others pay attention to things that do not hold water, the bigger the chance someone like him has to compete.
Most speculative investors look to their upside instead of starting to their downside. Which is a true assertion as most speculators speculate in what is currently popular citing Bitcoin as a major example, which had actually moved from 400 USD to 2,000 USD without anyone caring, and then going into a tremendous period of steep gain due to popular attention, which Rule describes as normal.”
He, however, goes back to the early part of the last decade, marked by a gold price increase from $260 to $1,900 per ounce, Reminding investors that gold did not come to popular attention until it had gone past $1,000 an ounce. This hence directly infers the fact that the move from $260 to $1000 allowed people substantiate the narrative that its value had grown.
Rule expressed positivity on gold equities for 2018, ahead of his appearance at Mines and Money Asia, the CEO of Sprott Us Holdings remains bullish on precious metals’ equities especially gold equities adding that they are reasonably priced and within the same gold equities comparatively did not do well in 2017. However, he is expectant in 2018 gold equities are going to play catch up. Common sense, in Gold investment this year (2018) will be a key factor.
Rule pieces of advice all prospective and current investors to not fall for narratives but to remember that the pricing of a stock is only paramount if you hold an opinion as to its actual value. He attributes price to a floating abstraction adding that it is the delta between price and value that matters. Hence encouraging prospective investors that of any sector, that will do well this year, on the side of equities, gold tops his list.
Prospects for the pricing of gold in 2018, drawing largely from Rick rule’s school of thought, depends partly on the imminent bitcoin direction. If it can maintain holding its current value, or even yield further rises in price, that may (to some extent) happen at the expense of gold. Otherwise, if the bitcoin does not live up to the current expectations and its bubble pops, most investors might backtrack to gold as their safe-haven asset in 2018.
Another aspect to consider is the Federal Reserve Monetary policy and the resulting valuation of the dollar. Low-interest rates aid in appreciation of the gold price because there is a lesser amount of lost opportunity cost in holding non-yielding assets for instance gold. Low-interest rates too, generally, infer a weaker dollar which means gold and the dollar are inversely proportional.