Beware of Mining Stock Value Traps with Rick Rule & Brian Leni, Released on 8/27/21

In this interview a semi-retired Rick Rule offers mining stock wisdom via a 40-minute discussion with MSE host Bill Powers and Brian Leni of Rick warns investors to not fall for mining stock value traps. He speaks to how he values development companies and determines discounts to NPV and valuation relative to peers. Rick discusses resource assets that go into receivership and why most investors do not profit from such a scenario. He explains why understanding balance sheets is far more important than assessing human behavior and how that affects share price. Rick elaborates on why he “loves circumstances where the shorts are against me.” Finally, Rick shares how he is able to legally conclude that a mining company has imminent good news coming without being explicitly told such. Enjoy this discipleship session with one of the best resource stock speculators of the past fifty years.

0:00 Introduction
1:20 Mining stock value traps
6:36 How to sort through the macro-economic “noise”
10:53 Rules for discounting NPV of a project/company?
14:46 Assessing developers relative to peers
18:40 Finding value in assets in receivership
20:55 How much could you make in 5yrs with $1M invested today?
23:09 “Life is about probabilities”
26:36 What’s more important to understand: human behavior or balance sheets?
28:33 Deploying cash in top-rated companies whose share price keeps falling
32:30 “I love circumstances where the shorts are against me”
37:55 Explorecos with share prices that trends up before positive news

Rick Rule, founder and chairman of Sprott Global Resource Investments Ltd., began his career in the securities business in 1974. He is a leading American retail broker specializing in mining, energy, water utilities, forest products and agriculture. His company has built a national reputation on taking advantage of global opportunities in the oil and gas, mining, alternative energy, agriculture, forestry and water industries. He is also the founder of Rule Investment Media.

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