Rick Rule, president and CEO, Rule Investment Media LLC

FOCUS: Natural resource stocks 

MARKET OUTLOOK:

Resource markets are soft, as the Chinese economy continues to underperform expectations and inflation fears loom. Higher interest rates have decimated the long-term debt market and are impacting both equity markers and overall economic activity negatively. The ongoing war in Ukraine and more recent hostilities in Israel and Palestine continue to concern markets.

We continue to believe that government fiscal policies in response to declining economic strength will lead to more persistent inflation than the market expects, and that the continued deterioration of global credit markets will continue, perhaps triggering liquidity events in the market. We believe that precious metals markets will strengthen substantially, and we believe that precious metals equities are attractive for both investors and speculators, who have reasonable time horizons.

While the near-term outlook for industrial materials such as base metals, battery metals and conventional energy is challenged by emergent economic weakness, the longer-term outlook is, in our view, very attractive. Decades-long underinvestment in exploration, development and sustaining capital, combined with increased regulation is very likely to cause widespread shortages in these sectors over the next five years, and in the case of oil and gas, much more quickly.

Uranium, a long-time focus of ours, is now firmly in bull market territory and we believe this will continue.

Both investors and speculators should brace for and welcome volatility, which will likely be a hallmark of resource equity markets. Resource markets will exhibit good beta relative to general equities markets, and the current malaise in junior markets is setting the stage for a massive re-rate amongst the top-tier juniors.

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TOP PICKS:

Rick Rule’s Top Picks

Rick Rule, president and CEO of Rule Investment Media LLC, discusses his top picks: Centaurus Metals, G Mining, and Equinox Gold.

Centaurus Metals (CTM ASX) 

G Mining (GMIN CVE) 

Equinox Gold (EQX TSX) 

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
CTM ASX Y Y Y
GMIN CVE  Y Y Y
EQX TSX Y Y Y

 

 PAST PICKS: May 8, 2023

Rick Rule’s Past Picks

Rick Rule, president and CEO of Rule Investment Media LLC, discusses his past picks: Largo, Orogen Royalties, and Reunion Gold.

Largo (LGO TSX)

  • Then: $6.27
  • Now: $3.89
  • Return: -38%
  • Total Return: -38%

Orogen Royalties (OGN CVE)

  • Then: $0.60
  • Now: $0.67
  • Return: 12%
  • Total Return: 12%

Reunion Gold (RGD CVE)

  • Then: $0.48
  • Now: $0.42
  • Return: -12%
  • Total Return: -12%

Total Return Average: -13%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
LGO TSX Y Y Y
OGN CVE Y Y Y
RGD CVE Y Y Y