Episodes

Dan Ferris: Hello, and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and The Ferris Report, both published by Stansberry Research.

Corey McLaughlin: And I'm Corey McLaughlin, editor of the Stansberry Digest. Today, we'll talk with longtime friend of the show, Rick Rule of Rule Investment media. And remember, if you want to ask us a question or tell us what's on your mind, e-mail us at [email protected].

Dan Ferris: Rick, welcome back to the show. Always a pleasure. Thanks for coming back.

Rick Rule: Pleasure to be back with you. I enjoy the process.

Dan Ferris: Yeah. So I had this really evil thought before we hit the record button. And I thought, I think I'm going to ask Rick all the questions he hates the most. you know, stuff, like, "When's gold going to go to $10,000," and the like. But maybe I'll just leave it at that one horrible question. And then we can dispense with that, and move on. So you know, what do you tell people when they tell – when they ask you when gold's going to go to whatever price they want, five or 10 grand, or whatever?

Rick Rule: I usually explain to them that I've looked, looked into the track record of a lot of market forecasters in my life. And most of them have track records unblemished by success. And rather than disgraced myself in their company, I duck questions like that. I enjoy the question, "When is gold going to move?" And I tell people in response to that, that I began to add to my gold bullion holdings, in 1998, a bit early. But in the period 2000 to 2024, the gold price moved from 253, or $256 an ounce, to $2,000 an ounce, over an 8% compound gain.

So when people ask me when gold's going to move, I say 2000. Many people have an expectation of a gold move, and it's the type of hyperbolic gold move that occurred in the 1970s. But since people ask me a factual question, I tried to give him a factual answer.

Dan Ferris: That's a factual answer. Yes, you know, it's funny, I didn't notice at one point in my career, all the numbers that are facts are all in the past. So, you know, it's all, it's all guesswork, you know, in the future.

Rick Rule: How true, Dan.

Dan Ferris: Yeah. You know, that was – and one of the problems that I was facing, the reason why I came upon that insight was, I was, I was like, you know, I just can't seem to make heads or tails out of making a discounted cash flow method work, without being burdened with having to predict things accurately. I thought, you know, this is, this is driving me nuts, you know. We sort of worked it out, but...

Rick Rule: I think, it's important for your listeners to understand that a model is just that. And probably in terms of a model, you need to have two or three variables, which you disclose. And as an example, if somebody is doing a discounted cash flow on a gold mining company, I suspect that they should run a $1,500 model, a $2,000 model, and a $2,500 model, and understand the chances that they get it right are somewhere hovering around nil. The idea is to give you a range of outcomes that you have in mind. There's so many variables that go into a model.

The idea that you can get 10 or 12 variables right, over a five-year period of time, is nil. So you need to understand the value of models, I think for what they're worth. I construct them constantly. And they have use – I have used them to great effect, but I have never believed in their implicit accuracy. I've regarded them as guidelines. They're very useful in comparing apples-to-apples, different companies using the same variables in a model that you, rather than the investment banks construct.

Dan Ferris: Yeah, that last part is key. Who was it? I forget who it was that said, "All models are wrong, but some are useful." I can't recall.

Rick Rule: Rick.

Dan Ferris: Yeah. And you model, actually, I'm glad we got onto this topic, because it's one thing to model, you know, say a bond, a stream of cash flows that you know exactly what they're going to be, quite another to model a business that generates cash flow, and then another beyond that, to model how does one say it, companies that have no revenue, and have, you know, a claim to some amount of, you know, gold or copper or something that they believe is in the ground.

Rick Rule: Well, it's interesting what you just said, Dan. I think that's a backward-looking statement. The idea that you model a bond cash flow that you know you're going to get. I'm looking in, increasingly, in the high-yield market, where there's revenue streams, I'm not sure I'm going to get. They're easy to model...

Dan Ferris: Yeah, that's right.

Rick Rule: But when I look at their credit quality, I'm wondering how certain is this revenue stream, you know? So I understand your point. I'm curious on a going forward basis as to how secure some of those revenue streams are.

Dan Ferris: I am as well. But the other point, though, is, you know, what, what do you – how can you possibly model a, you know, exploration mining company that doesn't have any revenues?

Rick Rule: Here's what I do. I start by saying I'm going to get it wrong. I'm just going to get more right than somebody who didn't model it at all. And what I do, what I choose my price case is a variety of price cases. So – and the most accurate models turn out to be the ones with the most depressed commodity prices. As an example, and this is going to be pretty obscure, but you asked it, so you're going to get it.

Dan Ferris: All right.

Rick Rule: Two and a half years ago, you looked at the uranium price at 20 bucks a pound. And you knew that the incentive price to restart mothball production, not new production, but mothball production was around $60 a pound. So you knew within the five-year time frame, uranium was going to go to 60 bucks, or that the lights were going to go out because the industry wasn't going to be making any more uranium.

Dan Ferris: Right.

Rick Rule: What was most likely to occur, the price going up, or the lights going out? Now, in fact, I was wrong, of course, because the price didn't go from 60 bucks. It went to 100 bucks. But in terms of the failsafe nature of the model, that turns out to be a relatively good technique. I believe that your starting point is the industry's total cost of production, including social rents, which is to say tax and royalty.

And including their cost of capital, when many of my competitors, particularly the ones who have to generate fees from their models, construct pricing models, they look at something called "all-in" sustaining capital, which is just the mindsight cost. Absent, allocable G&A, absent social rents and tax, and absent the cost of capital, which I don't think is a good number.

Dan Ferris: ASIC, so-called. Yeah. So in other words, you create Rick Rule ASIC, and you add all those things in the model demand.

Rick Rule: If I have to pay them, I have to model them, don't I? I mean, there's nothing in the world that drives me crazier than pretax NPV. I guess if I didn't have to pay to pay the tax, I wouldn't b-tch quite so much about the model, but that's not an offer.

Dan Ferris: No, it's not. However, it is fairly standard practice, isn't it, in finance to focus on pretax operating earnings, isn't it?

Rick Rule: It is, because the standard, it's standard in financial practice to try and generate a fee.

Dan Ferris:

Rick Rule: And if you don't use a model that generates a positive return, you can't hoodwink the buyer into buying. And if you can't hoodwink the buyer into buying, you can't get a fee. And the idea that people are doing these feasibility stage models without factoring in the cost of capital astonishes me. But they do. And people buy them. I guess the third b-tch, since I'm allowed to b-tch here is people who are doing net present value calculations, using a 5% discount rate, when the issuer being modeled has a 13% cost of capital. Explain to me how that works. Well, I know how it works. It works into Chapter 11.

Dan Ferris: Yeah. It doesn't work. Well, you know, it may work – in some cases, you know, it may work to get somebody to cough up some money at some rate or another.

Rick Rule: Yep. Yep. It does that.

Dan Ferris: Down the road, it doesn't turn out well. OK, so I want to back-up to the uranium price.

Rick Rule: Great.

Dan Ferris: Because you said something interesting. You know, that incentivization price, 60 bucks a pound. Now, I've thought about this a little bit, and talked with some folks about a little bit. And it seems like we all agree that at the incentivization price, capital does not come screaming into the sector. You know, it's not like it hits 61, you know, bucks an ounce, and everybody's like, oh, turn on the uranium spigot. In fact, it takes substantially more than that. So it would seem to me that, that you – once you hit that incentivization price, and now you're up at 100 bucks, where we are, you have a different game to play, right? You're not playing that, you know, $20 a pound, or whatever it was game. You're now saying, you know, you're now – aren't you now looking for, you know, when the capital begins to sort of flow into the sector, and when the supply begins to respond to the price.

Rick Rule: Well, more importantly, this is a very lengthy topic, but we'll begin, and you can shut me off when you want to.

Dan Ferris: I might not want to.

Rick Rule: The incentive price in the near term doesn't impact production very much, because you have to permit the mind, which in the case of uranium is an interesting chore. You have to finance it, and then you have to build it. In the case of the uranium business, there is about 30 million pounds of production, which is in production hiatus, meaning that it could be turned on within a year and a half. This price of $100 a pound in the spot market is plenty enough to return that to production.

However, in the case of the two largest producers, potential producers of the shut-in production, both have said that they won't restart the production hiatus until they have sold enough future volume into secured term, long-term markets, that their shareholders are assured of a reasonable return on capital employed. It is interesting that the uranium market has a developed term market, unlike any other commodity on the planet. So it will be possible for Kazatomprom and Cameco to enter into three-year contracts, or five-year contracts, or seven-year contracts, or 10-year contracts.

And this makes the uranium industry unique among natural resource businesses that I'm aware of in the world. Most commodities around the world are sold at spot, or sold in the futures market, which means that a company's revenue line is determined second-by-second in public markets. Increasingly in the uranium market, the spot market is irrelevant. Transactions are being done in the term market. And that has profound implications, both for uranium investors, and also for securities analysts, like you and me.

Having the ability to predict the revenue line with regards to sales, as much as 10 years out, for any amount of material that's been contracted, means that we have price certainty, and hence revenue certainty in uranium, that we don't have an any other commodity on the planet. My suspicion is that in the five- to 10-year time frame, this lowers the cost of capital on the debt side, in particular. The people, who are, who are providing the senior-secured construction finance, with uranium, unlike any other substance on the planet, can look at the revenue line, and understand that enough has been sold forward, assuming the attainment of nameplate capacity, to amortize the loan, a luxury that I have never had in commodities lending for the rest of my life.

Secondly, securities analysts, who want to analyze the equity, have a better sense of the potential revenue line than they can with regards to any other commodity. So it's interesting that you got into this can of worms, because we're changing the structure of the uranium market as you and I speak. There are 68 reactors, as I understand it, under construction, and somewhere between 110 and 150 reactors in the planning and permitting phase. And as I say, there's an increasingly robust term market.

The lenders, around these new plants, increasingly are relying – or pardon me, requiring the plant promoter to secure access to enough uranium over a long enough period of time, that it's substantially amortizes the loan. Which is really, truly a wonderful state of affairs. It is highly likely that world consumption of uranium doubles over 15 years. And I think what you're going to see is the most of that demand, not some, but most of that demand, subject to term contract. Which means that in the uranium business, you're going to have a much more structured market than you have in any other natural resource business, which I think inures to the benefit of everybody.

Dan Ferris: Right. And on both sides of this, right, capital providers, and then issuers. They both have a...

Rick Rule: Correct.

Dan Ferris: There's a sort of discipline built in here that you don't find anywhere else.

Rick Rule: Now, the thing that's going to be challenging for you and me for the next two or three years is that the industry's reporting around these contracts is opaque at best. And so I've had to do such crude things as look at Cameco's quarter, look for pounds sold, and then look for price per pound. Look for variations from Spot, and try and figure out what their term book is. I think what's going to happen is that in the quest for capital, the companies who are more candid and forthright with regards to their term contracts are going to enjoy a lower cost of capital. Now, certainly, I, as a lender, if somebody is coming to me to build a $500 million uranium mine, is going to have a lower cost of capital, if I understand what they sell that uranium for.

Dan Ferris: Right. So yeah, that's right, whoever, you know, and whoever gets out there first with it, they're going to be, they're going to have a much more advantage than second, third, fourth, or whoever. Right? So, you know, if I were whoever –

Rick Rule: I'm not sure about that. I think that, I think that everybody will follow the lead dog pretty quick.

Dan Ferris: OK, all right.

Rick Rule: Remember that you really have to concern yourself right now with Cameco and Kazatomprom. They're the people that have the most near-term productive capacity. They are also the people who have the best development timelines. But when you look at some of the companies that have advanced projects that will be put in production the next 10 years, I'm thinking, in particular, NextGen, the ability that they might have had as an independent to build a $5 billion or $6 billion mine in western Saskatchewan is independence was nil.

The ability of them to finance a $5 billion or $6 billion build with purchase contracts in hand from investment grade counterparties is much different, particularly if they can get a fixed price contract on the build. So that the banks look at the arbitrage between construction cost, revenue and cost of goods sold. This really does change the nature of the game for the developers, potentially.

Dan Ferris: OK. Now, do you – you know all these people. Are they thinking this way? Are they thinking, you know, we should start telling the world all this information, so that we can beat down the cost of capital.

Rick Rule: You know the uranium business has operated according to the rules at hand, as opposed to the rules that were going to be for a very long time. Even uranium investors look at the spot market as being the price determine it. But about 70% of the current volume is taking place in the term market, not the spot market. And the spot market itself has become much more liquid, not just because the trades are elsewhere, but because of the overhang. The inventory overhang that depress the spot market is gone.

My former employer, Sprott, not to be confused with spot, Sprott bought 45 million pounds. So that's supply that went to supply heaven. And then the supplies that the Japanese reactors had, which when they were shut down, were regarded as goods for sale, at least by the international community, are now inventory for the restarts. It is interesting to note that the share volume in the Sprott physical uranium trust, on a daily basis, is very often higher than the daily volume in the spot market. So it could be off – it could be suggested that the Sprott market is the spot market, that in this circumstance, the tail wags the dog. And I think that's going to become increasingly apparent in the uranium business. And I think the realization of this among all actors is increasing.

Dan Ferris: What can you tell me about this differential between if you go to the Cameco website, just for the listeners benefit, the publish this chart that updates the uranium spot price, at about 100 bucks, and the long-term uranium price, which I assume is this this term price we're talking about, at $72 on the last tick here.

Rick Rule: Yep. The price that matters is the 72.

Dan Ferris: Right. So 72 is not nearly as high above 60 as 100. So...

Rick Rule: Remember that my 60 includes cost of capital. So my 60 – my 60 is not an AISC number. Seventy-two is a lot of money. And the $72 also refers to the floor price in the term contract. Most of these contracts have a minimum price, with escalators across a variety of features, depending on the term of the contract. So a $72 term contract is paying you 72 today, and some number that's marginally higher than that next year. It is plenty adequate. It doesn't set speculators' hearts racing the same way 100 does. But the $100 number is really a floating abstraction.

Dan Ferris: Who pays it, again?

Rick Rule: There is – there are lots of pounds currently transacted in the spot market. It's just becoming increasingly less important, and it's a quarter as important as it was three years ago. It is important, in speculators' minds, and in uninformed investors' minds because it was the pricing metric that mattered three or four years ago. Increasingly, it's a pricing matter that's really a reference point now.

Dan Ferris: I see. And it seems like the reference just kind of, you know, tells you where you are versus where you were. I mean, it's doesn't sound like it tells you –

Rick Rule: I'm not even sure it does that. It's maybe a factoid, something that's important only because it's believed to be important.

Dan Ferris: I see. So it's there that we have to pay attention.

Rick Rule: Or maybe it represents liquidity. It might represent liquidity, you know.

Dan Ferris: Mm-hmm. Wait a minute now. Liquidity how?

Rick Rule: In the sense that somebody who has access to 100,000 pounds in the term market, that needs another 15,000 pounds to fill out their refueling obligation, looks to the spot market...

Dan Ferris: I see.

Rick Rule:... merely for liquidity, for overage and underage, with regards to inventory.

Dan Ferris: Gotcha. All right.

Rick Rule: Certainly, it will be used by the traders to arbitrage. If Itochu as an example, contracts for 100,000 pounds a year for 10 years, and they find themselves in need of 120, maybe they find it 20 in the spot market. If they have 10,000 too much, maybe they lose it in the spot market. That makes perfect sense.

Dan Ferris: I see. So is it fair to say that if we are, if we if we are in a sort of long-term uranium bull market here, we're fairly early on still.

Rick Rule: Dan, I think the easy money has been made.

Dan Ferris: OK.

Rick Rule: The easy money is in the transition from the commodity being hated, and in liquidation, to the commodity being tolerated, and now liked. I wouldn't say the commodity is loved. So the easy money has been made, you know, a basket of juniors back at the time when you and I were talking about uranium in 2022, this basket is up 300%. The prudent speculator sells a third of his position, and as the other two-thirds for free. I call that the point of no concern, as opposed to the point of no return.

And I have done that, and I'm happy with that position. Unusually, and unlike any other commodity I know, I think the sure money is ahead of us. As I – in the sense that I've never seen a commodity before, where there's revenue certainty out as much as 15 years. And looking at the – at the enterprise value of a company, relative to the net present value of cashflows at prices that have been entered into with investment grade counterparties, there's a level of certainty, a level of sureness in that, that I've never seen before.

Corey McLaughlin: And Rick, where do you – this is Corey, where do you see – you mentioned, going back a little bit. You mentioned demand, you think, doubling in the next 15 years for uranium? What parts of the world are you seeing that happen from, in your view?

Rick Rule: Really, you're seeing two things. You're seeing a deferral of shutdowns in the West, reactors that were supposed to go to reactor heaven, that miraculously have been resurrected by the legislatures in various countries around the world. But most importantly, what you're seeing is an incredible pace of new build construction, mostly China, but also the UAE, also India. As I say, 68 or 69 plants under construction.

It's also important, Corey, as a sidebar, to know that when you look at the plants that are being built today, they are very large plants. If you look at the plants that were built in the 1970s, you know you're talking about a plant that has a quarter of the output, and a quarter the uranium consumption of the kind of plants that are being built today. The number that I can quoted to you is a World Nuclear Association number, that just extrapolates from the deferral of closure, and the construction of new plants that have been funded.

Dan Ferris: I can remember us talking on this show, not terribly long ago, and I said, Rick, is there one commodity out there that's really just beat down and compelling? And it was uranium.

Rick Rule: Yep.

Dan Ferris: I'm going to, I'm going to guess that's not what you would how you would answer that question today. So how would you?

Rick Rule: Two commodities, North America and natural gas, stupidly cheap. Stupidly cheap. But we could talk about that. And one that's getting cheaper that isn't cheap enough yet – well, two. Nickel, the markets in total disarray. The mining companies are shutting down sulfide nickel operations around the world. Investors who loved nickel three years ago, as a battery theme, are starting to hate it. There's no hate is sincere is the hate of a jilted lover. And you're seeing that around the battery metal speculators. And I would also say platinum and palladium, their sell-off has been important.

The narrative is from the big thinkers that the internal combustion engine is going the way of the dodo. And if that happens, the need for catalytic converters is going away. The big thinkers are as always, very, very, very wrong. The catalytic – the internal combustion engine isn't going away anytime soon. And the demand for catalytic converters, saying that the demand for catalytic converters is going away. It's like saying that the demand for smog is going up. It's a highly unlikely statement.

So I suspect that the market for both nickel, and platinum, and palladium continues to deteriorate, among other things, no mystery to your viewers, the Russians, for various reasons, need money. And when they need money, they sell what's on the shelf. And part of what they have on the shelf, that's at least fungible is nickel, platinum and palladium. We saw this in '90 and 1991. When does the selling end? When the Russians run out? That's fairly simple.

With nickel, the other problem has been the incredible increase in nickel production in laterites from Indonesia. I recently flew over those nickel operations in southern Sulawesi. And while I'm not best described as a bleeding heart, the environmental degradation that's occurring, in southern Sulawesi, is breathtaking, and is not sustainable. So my suspicion is that the rate of increase in production in the Philippines declines, perhaps absolute production declines, but much more importantly, the shutdown of sulfide-nickel operations around the world, which has been announced, will begin to bite just like the shutdown in uranium production 2022. Bit.

Meanwhile, the road the process of Russian dishoarding will end when the Russians have nothing left to hoard, which I suspect happens in 12 months. If you ask me, 18 months from now, what the commodities are that are roundly-hated, and that are priced well below the cost of production, the answer is going to be nickel, platinum and palladium. So I'm building a shopping list now, in anticipation of activating it when the hate is more extreme. Right now, North American natural gas, I think is uniquely cheap. It's in substantial oversupply, as a consequence, really of political opposition in both the United States and Canada, to new energy infrastructure, and it's in it in oversupply also because it's produced as a byproduct of shale drilling for oil, particularly United States in the Permian.

In the United States, we produce more natural gas as a byproduct right now, even than we can store. Never mind, gather, process and transport, natural gas is, as we speak, priced at about $2 and 50 million in BTU in West Texas. That same gas in Rotterdam or Shanghai is priced at eight or $9 a million BTU. It cost between a bucket a buck and a half to get it from Midland to Rotterdam. So you have a $4 cost against the $8.50 market. That arbitrage is too big to exist.

And the BTU differential between oil and natural gas is also too big to exist. Given that I personally don't expect to experience a decline at all, particularly not a precipitous decline, in the oil price, so I think that that arbitrage gets resolved higher. And until two weeks ago, Mr. Biden's announcement that he is snatching defeat from the jaws of victory, by considering the hiatus in U.S. liquefied natural gas construction, the industry was spending literally billions of dollars constructing gathering systems, transportation systems, processing systems, and liquification systems to address specifically that circumstance.

Meanwhile, energy users, particularly in Europe, particularly in Germany, are shutting down in mass, and relocating in the United States, where they have access to that gas. And incredibly, despite the fact that natural gas prices are pathetically cheap, some natural gas producers, both in the United States and Canada, are still generating good free cashflows, making good returns to shareholders, while reinvesting enough of their cashflows to maintain production, the idea that you can play a theme, which will resolve itself in four years with no discount for present value because the dividends are so high, is nothing that I've ever seen before in my career.

Dan Ferris: Wow. You got a name for us?

Rick Rule: Several. I don't think you need to get too tricky with this. You don't need to go too far down the quality trail. I think you can buy Devon, if you care about the midcontinent and the Anadarko Basin, and for that matter, the Permian Basin, and Equitable, if you care about the Marcellus, both of which I care about. If you're willing to take a tiny bit more risk, I think you'd go north of the border. I say a tiny bit more risk, because the guy who runs that country doesn't like the fact that they're able to produce oil and gas, and generate a surplus for him to waste.

Names up there would include ARC Energy, A-R-C, freehold royalty, those are the two more conservative names. Peyto Resources, Birchcliff resources, both pure plays on gas, and Tourmaline, a light oil producer, that's an important gas and condensate producer, too. It's important to note that that whole basket could be bought in a yield portfolio. It wouldn't need to be bought in a commodities portfolio.

Dan Ferris: I have to speak up here, Rick. I love this. The reason I love this is because you can basically buy cash gushers, well-managed fantastic assets, good balance sheets, generally speaking, right, and still, through the cycle, make five or even 10 times your money. That really turns me on. I mean, [crosstalk] –

Rick Rule: I'm not sure in these names, you're going to make 10 times your money.

Dan Ferris: OK, I mean, three or four –

Rick Rule: But five is – yeah, five. Here's what you got to look for, Dan. Your listeners are going to get so tempted by this theme, that they're going to come down the quality trail looking for dividends. It's important that your listeners pay attention to companies, that are maintaining enough sustaining capital investments that they will be able to produce in the same volumes three or four years from now, that they are today.

If you take the oil and gas industry, as a whole, they're not doing this. They're decapitalizing. The oil and gas industry, as a whole, if you add back state-owned firms, is underinvesting in sustaining capital to the extent of about a billion U.S. dollars a day. Which means while they may be generating cash, they're cannibalizing themselves. So you need to buy companies that a) reward the shareholders, but b) are making enough sustaining capital investments that they will continue to produce in the out years. That's an important consideration.

Dan Ferris: It is. And when you go farther down, you find people who enthusiastically just kind of constitutionally just love to pour money into the ground, no matter what.

Rick Rule: Right. Right.

Dan Ferris: There's this whole class of people in the natural resources world. But there are – there is this tier that understands it's a business, which just saying that shouldn't be remarkable, but it is.

Rick Rule: Right.

Dan Ferris: And I get very excited about those because I know you can make multiples of your capital over time in the cycle. And to me, that is really, really exciting. To me, that's what value investing is all about.

Rick Rule: You know, one of the things I have done wrong in my career, one of many, has been because I'm always early, I always have a cost-to-capital, or a discount of net present value consideration. The first time I was in the uranium space, I was six years early. And if you're six years early to 8% discount, it's arguable, you're not early, you're wrong. Now, the truth is that the basket of juniors that I – "invested" is the wrong phrase – speculated in at that period of time, the worst of the five juniors in that period went up 22 to one. And so you overcame the time value of money problem.

But in other commodities, I haven't been so lucky. The fact that you can play the North American natural gas game, with a sort of a 5 or 6% median yield, means that you don't have a time value of money consideration, if you're right about the theme, provided that the companies that are paying that 5 or 6% yield are reinvesting enough proceeds that they can maintain production.

Dan Ferris: All right. That's a critical point, folks. Listen to what Rick said, write it down, enough capital to maintain production. We've actually come to time for our final question. You've answered it before. I hope you don't remember it, because it's better – it works out better that way. But it's the same question for every guest. And no matter what the topic, even if it's a non-financial topic, same question, same final question. And that is, if you could leave our listeners with a single thought today, what would it be? And if you've already said it, feel free to repeat it.

Rick Rule: In terms of natural resource investing, you are either going to be a contrarian, or you're going to be a victim. There isn't very much by way of middle ground. Everybody wants to invest in commodities, where the price action has already justified the narrative. But the price action takes the value out of the narrative. You have to look for commodities that are in liquidation, where the price is so low, that the industry is liquidating. And where if the price of the commodity doesn't increase, the commodity will become unavailable to humankind. And finally, humankind needs to need that commodity.

Another way to put that phrase, in terms of the time value of money, is that you need to invest in things that are inevitable, even if they aren't eminent. And you need to know the difference between those two words.

Dan Ferris: Sure do. Thank you. Great answer. A classic answer. That's a classic Rick Rule answer. I'm glad you said all that. I can't even remember the first time I heard you say the victim or contrarian thing. We were probably both a lot younger and had more hair. But listen, Rick, thanks for, thanks for coming back and talking with us. And I hope it's not long again, before we do it again.

Rick Rule: Always a pleasure, Dan. If I might, I'd make like to make my traditional offer to your listeners.

Dan Ferris: Please do. Yes.

Rick Rule: Which is to say if you like the way I think and talk about natural resources, but you want to personalize it, go to my website, RuleInvestmentMedia.com. List your natural resource stocks. Please, no crypto. Please, no pot stocks. Please, no tech stocks. All rank them. No obligation. No cost. One to 10. One being best, 10 being worst. If I think my opinions have value on any specific company, I'll give them. I'll comment on issuers where I think my issues – my comments might have value. Once again, RuleInvestmentMedia.com. List your natural resource stocks. Natural resource stocks only, please.

Dan Ferris: All right. I hope you'll all take Rick up on that. Well, maybe not all right at the same time.

Rick Rule: It's all right. It's all right.

Dan Ferris: All right. Good. All right, Rick, thanks again, man.

Rick Rule: Always a pleasure. Thank you.

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