Speaker 1This is the Commodity Culture Podcast, where we interview prominent investors, fund managers, analysts, and company CEOs to give you an edge when it comes to investing in the commodity
Speaker 2space. Rick Rule, great to have you back on Commodity Culture. Now, it certainly is interesting times in financial markets and the commodity sector as well. I want to kick the conversation off with silver, because you've said you love to buy things that are hated. You sold a lot of your physical silver in the run-up to triple digits, to all-time highs. You rotated some of that into silver miners, which I want to get to later. But at these prices and with sentiment so low, are you looking at silver bullion as a potential buy again here?
Speaker 3No, no. In my speculative portfolios, I mean, the easy money is made on hate, and silver isn't hated. Some people who paid too much for it in January hate it, but the market as a whole doesn't hate it. When you and I first started talking, Jesse, I don't know, five or six years ago, both for your own channel and for VRIC, silver was legitimately hated. The stuff was trading for about 20 bucks an ounce. The youngsters who hurt themselves in the so-called silver squeeze were vituperative in their hatred for silver. You could look in any sort of social media discussion group, and if there were 20 comments about silver, 18 were people who were describing it as a four-letter word. That was hate. In commodity markets, buying hate and being patient is the surest way to make a fortune. Silver isn't hated yet. It's disappointed. But there's still hope in the market. I look for a market where the people who were hopeful now despise. I see some stocks that are arithmetically attractive, which is to say I see companies that are selling at discounts to my calculation of their net asset values, where they have sufficient development pipelines and they're generating sufficient cash that their net asset value will increase over the three to five year time frame without any help from the silver price.
Speaker 2the world have already been earning returns through Monetary Metals leasing program for almost a decade. So go to monetary-metals.com slash commodity to find out how to put your gold to work. The link is in the show notes below. And now back to the interview. Let's shift to the gold sector. You've already touched on it, but we're seeing, of course, a similar situation to silver, though far less volatility in both directions. Central banks are still buying. Government debt and deficit situation isn't going away. Currencies continue to depreciate. Trust in government institutions crumbling by the day, along with all the other tailwinds behind the sector also looking strong. Is this a time to be adding to the gold stack or perhaps establishing a position for those who don't yet have physical gold? If you were to enter the sector today, what are your thoughts?
Speaker 3Yeah, I think you have to. Your listeners may not have to because they have probably done it over the last four or five years. But the fact remains in the U.S. market, the market I understand best, that the market share of precious metals and precious metals-related investments, relative to all other savings and investment classes, is only one-half of 1%, which is to say in the U.S. market, precious metals and precious metals-related assets comprise less than one-half of 1% of total savings and investment assets. This is silly. I mean, this is truly silly. The four-decade mean of the U.S. market is less than one-half of 1% of total savings and investment assets. If you had reversion to mean you would quadruple demand for precious metals-related assets in an economy that's 24% of the world economy. This is truly wild. Now, I'm of the belief that gold, well, that precious metals likely trade sideways for the balance of 2026. Higher U.S. interest rates and more recently higher Japanese interest rates have meant that it's more expensive to own gold than it used to be. And it also increases the relative attractiveness of bonds, another traditional safe haven. I happen to believe that the long bond game is a mugs game for reasons that we've already discussed, but that doesn't matter. The bond market is much bigger than the gold market and right now seems to be doing better as a consequence of the interest rates. It wouldn't surprise me to see that circumstance continue through at least the balance of 2026. I certainly hope it's not. I'm not sure. I'm not sure. I'm not sure. That's the case. I save systematically in gold. And given that that's the case, I would rather pay less than more.
Speaker 2Are you seeing any attractive bargains when it comes to the biggest and the best gold producers at present? I mean, we saw Agnico Eagle, for example, report record Q1 earnings and proceed to drop, I don't know, 20% from there or something like that. The majors who are essentially printing cash in this gold price environment are all taking a hit. What are your thoughts there on those big producers and on the royalty streaming side of things as well?
Speaker 3Agnico, Franco and Wheaton have been crushed, which I think for most investors is a gift from God. I think the beta that we will enjoy in the gold sector over the five to 10 year time frame is so big that you don't need to chase alpha. I would define beta as the outperformance of the gold sector relative to the broad market. You could buy the best of the best and not take any single company risk or operation. You could buy the best of the best and not take any single company risk or operating risk whatsoever. And you can buy it at really, really, really attractive arithmetic multiples. I would be doing that myself hand over fist, except for I've been doing it hand over fist for five years. I've chosen now because we are with regards to mining stocks in a risk off environment, I've chosen to take more risk in my portfolio for various reasons. But I'm not suggesting that I'm going to take more risk in my portfolio. I'm not suggesting that I'm going to that you're listeners who are unwilling to do as much work as I am willing to do or unwilling to take as much risk. For most investors, buying yourself a package of Wheaton, Franco, and Agnico Eagle, and then reading books you like, looking after your garden, playing with your kids or your grandkids, it's the right course of action. It's only the freaks like you and I that, you know, need to come farther down the quality train and get in the way of,
Speaker 2well, to be clear, I don't go down that quality train. I stick to the big producers and the ETFs for the gold and silver space. Where I do get into the weeds is in the uranium sector. And I want to talk about that next, because this does appear by all sentiment indicators online to be somewhat of a hated sector. At the moment, we're seeing a significant sell off in the equities. X is filled once again, this seems to be a cycle that happens every few months. Uranium speculators be moaning the sector. And I think that's a good thing. I think that's a good thing. I think that's a good throwing in the towel, calling out newsletter writers, telling them it's your fault. Why did you tell us that uranium is a bullish setup? Now, obviously, uranium stocks are also extraordinarily volatile. You know, we can see, you mentioned the silver sector, uranium is very much the same. You can see high single digit to low double digit gains and losses within a single trading day. That's a normal occurrence in the uranium equity space. Wonder what your thoughts are right now on the miners and would you be entering the sector at these prices?
Speaker 3For the high quality miners, this is a no-brainer. It's a total no-brainer. Now, let's get this straight. The easy money has been made in uranium. The easy money was made when uranium was sub 20 bucks. Either the price of uranium went up or the lights went out, right? That was just a no-brainer. When you talk about capitulation in the sector, what you're really seeing, as a question of faith among the faithful, the investment in the uranium thesis is really confined to a fairly small group of people. With regards to sentiment, you and I are part of an extremely small population that cares about uranium juniors. So we're talking about an expression of sentiment in a community that worldwide probably numbers 30 or 40,000 people. For fun, I would say the most prominent uranium-oriented newsletter writer is Justin Hyun, a guy I have a lot of time for. And sentiment expressed in discussion groups about Justin right now is about 60% positive, 40% negative. Hate would be represented by 90%
Speaker 2negative. So we're not there quite yet, in your opinion?
Speaker 3No, not even close.
Speaker 2Wow. Not even close. Not even close.
Speaker 3But we do have a situation separate. You know, I'm not a trader. Yeah. You know, a 5% swing in a day to me is just amusement, unless I happen to be on the bid, in which case I'm delighted. But it's important to note that when people talk about uranium stocks, the universe of uranium stocks, probably 120 or 130, there's probably eight or nine that are worth considering. If you take that 130-stock universe, you need to understand that at least 90% of it will eventually return to their intrinsic value, which is zero. And so probably the first thing that you do, or maybe the second thing that you do, is you work very hard on paying attention in your portfolio to those companies that are viable at the current uranium price and that have a reasonable strategy for playing the game over the next five years. That makes it an awful lot easier. I'm not trying to say that you can't make money on some penny dreadful that is looking for uranium that exists in the same concentration as seawater. And if the uranium price goes up, the fact that they had uranium on the name of their share certificate doesn't mean that that thing won't go up, too. It just means that you're taking an existential risk with the stock, which is a mistake.
Speaker 2Yeah, I think a lot of people approach the sector that way, assuming there'd be a mania and a rising tide would lift all boats. And I think that's a big part of the moaning and crying that we're hearing. But when it comes to the uranium sector, how do you find those companies that are worth it? Because like you mentioned, there's so much uncertainty in terms of mining operation, and there's only really three pure play uranium companies in the world that are producing any commercial scale, Orano, Kazatomprom, and Cameco. And that you're kind of venturing into the developer space. And you're making a speculation on the expectation of potential future cash flows. And of course, that depends on the timeline for getting there, the hurdles in the way. How do you navigate through all that and separate the wheat from the chaff?
Speaker 3I benchmark every company in the sector by the company that I consider to be the best company in the sector. I consider the best company in the sector, in the uranium sector, to be Cameco. If I'm willing to come down the quality trail to next gen, I have to get a substantial premium in the delta between price and net present value before I'll take the risk. I've done that because I believe, despite their outrageous general and administrative expense, that that deposit is so superb that it will finance itself over time. So I've done that. But most of your listeners don't know how to do it. Or if they do know how to do it, are unwilling to do the work required to do it. And those people should buy the best of the best. Specifically, if you think the uranium prices going up the right thing to do is buy uranium now don't buy it in a cake and put it in your basement uh rather buy the spot physical uranium trust or something like that uh and buy cameco uh and then do nothing for a while could it fall 25 from here yeah absolutely positively could fall 25 from here if they are able to monetize their pipeline and if they are able to through westinghouse follow through on their game plan of selling watts as opposed to merely selling uranium this is a company that over the next 10 years could grow three or four or five fold in market capitalization so you have the juxtaposition between a potential 25 or 30 percent loss and a three or four hundred percent gain the catch for most people is that that occurs over five years or seven years or ten years which seems to be a time frame that many people are well are unwilling to assume despite the fact that they're gonna have to assume it whether they want to or not coming down into the smaller ones you need to look at uh first of all scale too many people make the mistake of investing in small mines and everything that can go wrong with a big mine can go wrong with a small mine but only a small mine can make you big money so you have to look for scale and then you have to look for economics in other words is the net present value of the deposit at this uranium price uh substantially greater than the combination of the capital cost to put the thing in production and the market cap in other words are you getting paid to take the price risk yes or no and what are the expected timelines to begin the cash flows and what are the challenges that the company faces eventually getting into production most people that i've met jesse are unwilling to undertake that calculation and further don't know how i think you know that over the last 35 years uh i have graded for free almost a hundred thousand portfolios i do that a lot of times i do that a lot of times i do that a lot to my website rural investment media and i've learned a lot about the mistakes that speculators make and i would say that the most egregious mistake that investors make is they don't work i urge people to own the number of speculative stocks which corresponds with a number of hours per month that they're willing to work understand their investments and by work i don't mean listening to uh jesse jesse day youtube videos although i encourage that activity too i mean reading 10ks reading 10qs reading resource statements reading insider filing statements i grade numerous portfolios that have 50 or 60 stocks in them and the people spend at most an hour or two a month understanding those stocks that doesn't work those people should buy the best and then do something sensible with their time you know play with their kids yeah that makes
Speaker 2a lot of sense i want to talk about the oil market for a moment because a lot of people are confused the war in iran is heating up both sides launching strikes the strait of hormuz is still essentially closed the strait of bal at bab el mandeb is now under threat of being closed energy infrastructure being struck and decimated not only in the middle east but in russia as well as a result of the russia ukraine conflict and yet oil is not skyrocketing into the triple digits as most were expecting we're also hearing reports that actual physical barrels of oil are selling for a far higher price than the ones we see in the futures markets why the disconnect and do you think patients will ultimately pay off for
Speaker 3those long oil uh in answer to the last question yes but having nothing to do with war having everything to do with the deferral of sustaining capital investments by the oil industry ironically the investors are paying companies which prioritize return to shareholders over sustaining capital investments in other words investors are looking for dividends even from companies that are cannibalizing themselves i'm not smart enough as a geopolitical analyst to know what's going to happen in the middle east i have no idea what i do know is that when you constrain supply uh you end up rationing at least for a while oil by price i don't know if the constraints that we have now are temporary or other than temporary i don't know and i don't even know how to know so i don't trade it what i do know is that the industry is under investing to the tune of over a billion u.s dollars a day in sustaining capital uh and it's worse now that the war is going on obviously iran iran isn't making sustaining capital investments they're buying bullets or whatever it is they're buying and uh far from reinvesting we're blowing up productive facilities as you point out i have no idea what that means in 26 but i have a really good idea what it means in 2030 and that means that the supply induced price increases that we're seeing become structural due to under investment rather than artificial due to war and they can't be cured by an armistice this is this is a really really really simple no-brainer and capital to the oil industry continues to be constrained because institutional investors seem to have been taking their thought leadership for 10 years from that noted energy physicist greta thornburg uh and angela merkel and justin trudeau and joe biden they seem to be lobbying under the misapprehension that peak oil demand occurs in 2030 my suspicion is it occurs in 2060 or 2065 they were not financing sustaining capital they're not financing it they're not financing it they're not financing it they're not financing it in a commodity that they thought was going into terminal decline with regards to demand the problem with that is they were wrong george soros once said that he made his fortune by finding uh popular popularly believed fallacies and betting against them and this is one such fallacy
Speaker 2and when it comes to the oil sector are we in a similar situation with gold miners that you can kind of go for the biggest and the best here because a lot of these companies are paying generous dividends they're buying back shares and if if the price of oil over the long run is to the upper right of the screen they'll also the share prices will also benefit tremendously what are
Speaker 3your thoughts there absolutely i i would de-emphasize dividend yields i would look for companies that were making sustaining capital investments or better yet doing both uh and your suggestion which is to say that most of your listeners would be better off buying the best of the best uh and leaving the rest of it to you and i is probably true uh i think for many investors having one stock portfolio exxon uh and then doing nothing for five years is a highly intelligent strategy i'm incapable of doing that i'm psychologically incapable of doing that i'm always looking for an edge i'm looking for the fact that for companies that haven't been as diligent with new capital and sustaining capital investments that the only way they're going to live is to acquire other companies and i look to buy the companies they're going to acquire over time that's given me a better outcome than people who just bought exxon on a time and risk adjusted basis i'm not so sure that my strategy is the right one um but i hope that this conversation steers your listeners towards the exxons and the franco nevadas of
Speaker 2the world yes i think that is an incredibly sound uh word and i think that's a really good point and i think that's a really good words of wisdom there are there any other areas of the markets right now commodities or otherwise that you think present an attractive value proposition for speculators i don't think
Speaker 3that we exhausted the uranium subject uh i think it's important that your listeners understand that one of the certain outcomes of the conflict in the gulf ironically is a better market for uranium the last period of major new plant construction that we had in the uranium business coincided with the end of the arab oil embargo 1973 was the last time that humankind expressed a concern about energy security on a geopolitical basis the war in the gulf has renewed interest in that if you look back to 1974 that saw the commencement of the japanese nuclear fleet the third largest nuclear fleet in the world it saw the commencement of the french nuclear fleet the fourth largest nuclear fleet in the world uranium is the only commodity that's dense enough that you could hold enough material in one small warehouse to to power japan for five years there is no other commodity that gives you the energy security that uranium does uranium is already having a boost as being dispatchable non-carbon generating base load fuel now it gets the boost of energy security will this matter in 2026 likely not Will this matter five years from now? Desperately. Probably more than small modular reactors, probably more than data centers, or at least it will exacerbate those trends. And so I think it's important in considering the length and breadth of natural resource investments, if you care about uranium, to think about the structural changes in the uranium market that will occur as a consequence of the new concern around energy security.
Speaker 2I want to switch and finish things off with a discussion on investor psychology, because we're seeing all this volatility in markets, capitulation on social media, insider trading and market manipulation by the political class and other insiders. Obviously, the war raging markets moving one way or the other, depending on what President Trump posts on Truth Social that day. I wonder if you could speak to how we can keep our heads on straight, ignoring. Ignore the noise and stay focused on what really matters as investors and speculators.
Speaker 3Well, I think, first of all, listen to what you just said. You look at the panoply of risks in the world. I mean, I hate to personalize it, but Trump, various ones. The greatest risk that you face, Jesse, is to the left of your right ear and to the right of your left ear. If you focus on that risk, you minimize all the other risks. And the way that you do that. Is that you declare war on the way you feel. It's important as an investor that you think as opposed to feel, it's important that for the most part, you ignore news, don't trade on news, unless you understand the news well enough that you're past the headline that you think about the implication. Because, Jesse, you can never know. When whatever the Iranian Ayatollah and the Israeli Ayatollah and the American Ayatollah decide to end hostilities, you never know. You can never know the outcome of that. The idea that you have the ability to trade the news in the Gulf is zero. But you feel the headline. You feel the fear. You look at the day-to-day price action. And you think there's information there. There's not. There's no information there. There's entertainment there. If you get beyond that, to think about the implications of the war in terms of, as an example, structural demand for uranium, that gets you into the realm of thinking, not feeling. The second thing is don't believe in the tooth fairy. Don't believe in something for nothing. Don't believe that you can engage in speculation. If you aren't willing to tolerate. Tolerate volatility and real risk. And if you aren't willing to do the work. And the third is that the greatest financial edge on history is compounding. It's simply time. Buffett said that he made most of his fortune by sitting, not thinking. He said in one of his missives to shareholders that he searched for investments that demanded of him sloth and lethargy. Buffett said that he searched for investments that demanded of him sloth and lethargy. Both of which he had in abundance. I think that's very, very important. I've graded, as you know, almost 100,000 portfolios in 35 years. And I've learned, if a portfolio really interests me, I reach out to the person who submitted it to me. And I ask them questions about it. How they came about assembling this portfolio. What were they thinking about? All that kind of stuff. A lot of people, a surprising number of people, have the strategy right. They're actually semi-contrarian. But they get the tactics wrong. If you believe that there's a five-year move in the copper price, but you have trauma holding stock over a long weekend, the dichotomy between your strategy, the five-year strategy, and your tactic, the two-month tactic, dooms you to failure. It just dooms you to failure. Too many people regard the market as a subject. And it's not. It's a facility for buying and selling fractional ownership of the business. Before you worry too much about the wrapper, the market, pay attention to the delta, if any, between the price and what you think the underlying company is worth, which is to say the value. If you do that, over time, you'll have good years and bad years, but you'll do well. There was this guy who preferred not to work hard as opposed to working hard. But he paid strict attention to value and to what he believed was structurally enhanced value. And beyond that, he did nothing. His name was Warren Buffett. And he did pretty well. You know, he did pretty well.
Speaker 2Great thoughts. Rick, tell us about BattleBank. Tell us about Rural Investment Media. Tell us where people can access the replay of the Rural Symposium.
Speaker 3Thank you for the opportunity. You have three commercials. That's attractive. Let's start with the low test one. If you go to my website, Rural Investment Media, and you list your natural resource stocks, I personally will rank them 1 to 10, 1 being best, 10 being worst. I'll comment on individual issues if I think my comment might have some value to you. And I'll do that absolutely for free. Be a little patient. I'm about 300 rankings behind, and I do them all personally. Go to Rural Investment Media. By the way, natural resource stocks only. No tech stocks. No pot stocks. No crypto. You know, leave an old guy to do what he does well. Moving on to the conference. We're coming off the best conference that we've given in 31 years of giving conferences. This is truly where everything I began trying to accomplish in 1995 I accomplished. We did that because of the interplay of the conference and the Rural Classroom, where conference attendees, and anybody else for that matter, can access 300, 350 hours of instructional material for free. We also did it by interviewing every exhibitor at the conference before the conference so that attendees arrived at the conference better able to allocate their time and attention. A lot of the advice at the conference was timeless, and the consequence of that is that we make the conference recording available to people who attended the conference and people who didn't attend the conference. We also did that because of the interplay of the conference. A lot of other conference promoters do that, but we do one other thing. We give you an ironclad money-back guarantee. If you buy the recordings and listen to them and you don't think that I gave you your money's worth, no problem. I'll give you your money back. The content's been good enough over 31 years that we've had to refund about one-tenth of 1% of the tuition that we've charged. But that tuition-back guarantee is your guarantee that we're confident our content can and will make you money. And then finally, BattleBank. This is easy. If you're happy with your current bank, and if you don't mind not getting paid interest on your checking account, you don't need to pay attention to BattleBank. But if you're interested in interest, or if you're experiencing service failures with their bank, then you might want to consider BattleBank. There's $3 trillion on deposit in the United States that doesn't earn interest. How stupid is that? You're taking a risk with your money, and you're not getting paid to take the risk. This is like felony dumb. People think Trump is a risk. Not getting paid interest, now that's a risk. What do we do at BattleBank that's different? Well, the first thing is we pay you interest. Sort of unique. We don't have 16 savings products to confuse you. We have one, a high-yield money market fund that you can write checks against. Or not. Your choice. We also allow you to save in 20 currencies, not just the U.S. dollar. Next 10 years, that's going to come in handy, just like it did the decade 2000 to 2010. Don't believe me? Just watch. The third thing we do on the lending side of the ledger is that we believe precious metals are good security. So we lend against them. Most banks can't spell gold. But at BattleBank, if you're a stacker, we think your gold is good collateral. I've learned something else lending to people who own gold for 25 years, which is to say that people who are prudent enough to save in gold are prudent enough to borrow money intelligently. In other words, they're good credit risks. So if you are interested in accessing the capital that you have tied up in your stack, maybe you want to take advantage of a distressed real estate bargain or something like that, talk to BattleBank. That's the business that we're in. But if for any reason you're unhappy with your current bank, check out BattleBank.com. It's named BattleBank because we want to battle for your banking business.
Speaker 2Excellent. I'm going to put links to everything discussed, the Rural Symposium replay, RuralInvestmentMedia.com. And BattleBank will be. In the description below. Rick, as always, incredible conversation.
Speaker 3Thank you for coming on the show. Pleasure, Jesse. If we don't talk, I look forward to seeing you at the VRIC or some other place at some point in time. Thanks for this conversation.
Speaker 2Thank you for joining us today on Commodity Culture. Earn up to a 4% annual yield on your physical gold paid in gold ounces through Monetary Metals. Go to Monetary-Metals.com slash commodity to find out how to put your gold to work for you. Link is in the show notes below.
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