Weekend Show – Rick Rule and Dan Steffens – Investing In Gold and Oil Stocks From 2 Market Veterans, Including Their Favorite Stocks!
Welcome to the KE Report Weekend Show! On this Weekend Show we focus on investing in gold and oil stocks. Featuring two veterans in each sector they share the stocks they think are offering the best value for investors and company specific fundamentals to watch for when doing your due diligence.
We are at a couple resource investing conferences this week in Vancouver so if there are any specific companies you would like us to meet us please email me and I will set that up.
- Segment 1 and 2 – Rick Rule, Founder of Rule Investment Media kicks off the show with an honest assessment of the gold stock sector. He shares his thoughts on the valuation of gold stocks compared to the gold price, some of this favorite gold stocks, the current financing environment and his view on the micro-cap juniors.
- Rick offered to share his thoughts on the stocks in your portfolio. Click here to visit the Rule Investment Media site and share the stocks in your portfolio.
- Segment 3 and 4 – Dan Steffens, President of the Energy Prospectus Group wrap sup the show with a focus on the oil and natural gas sectors. We recap the macro drivers behind prices then get into stocks. On the stock front we discuss the sustainability of dividends and 2 stocks he thinks are highly undervalued.
Jesse Felder @jessefelder – 6:44 AM · Jan 17, 2024 – X/Twitter:
“Non-dealer positioning in US index futures is at all-time highs. Systematic positioning (CTAs + Vol Control + Risk Parity) is near 1-year highs.”
@dailychartbook
Otavio (Tavi) Costa @TaviCosta – 5:44 PM · Jan 19, 2024 – X/Twitter:
“The S&P 500 just closed at record levels, yet only 1 out of 11 sectors made new highs today — Technology.”
“The disconnect becomes more evident when considering the 5-year performance across different sectors.”
“Tech Bubble 2.0”
Fed Won’t Start Rate Cuts Until May, Traders Now Bet
By Ann Saphir – Reuters – January 19, 2024
“The Federal Reserve won’t start easing policy until May, traders bet on Friday, capping a week during which stronger-than-expected economic data and commentary from central bankers chipped away at financial market confidence in the idea of an earlier start to interest-rate cuts.”
“On Friday, a widely watched measure of consumer sentiment rose to its highest level in 2-1/2 years, and Chicago Fed President Austan Goolsbee said the U.S. central bank won’t commit itself to rate cuts until it is surer that inflation is on track to a healthy 2%. Futures contracts that settle to the Fed’s policy rate fell, and now reflect about a 47% chance of a Fed rate cut by March, down from 55% earlier in the day.”
https://www.reuters.com/markets/us/traders-bet-fed-wont-start-rate-cuts-until-may-2024-01-19/
The Fed has a real dilemna in that their inflation data has been false, and they really can’t reduce rates. But if they don’t, the dollar will continue to be rejected by the rest of the World. One lie begets another until the Economy is trashed. Doesn’t stop the transfer of the Treasury under any scenario. Jail remains the answer.
+1 Lakedweller2. Real pricing inflation is far higher than being represented in CPI, PPI, or PCE reports.
It is going to be interesting to see if the Fed concedes that inflation will simply remain above their 2% or lower goal, and how they deal with shifting from tightening to loosening monetary policy.
http://tinyurl.com/4n5yhp79
NatGas Week: Crash
Prices Crater
Thanks for posting that chart BDC.
Looks like strong support at that $2.20 level for nat gas.
Yes, and that is for the CFD (Contract For Differences, UNG/USD) that I use for analysis, and may come close to the NG1 price at the low – https://www.tradingview.com/x/ahHhE0n9/ – which is unusual.
Much appreciated BDC.
Thanks for those additional charts and info on how you are seeing the set up in Nat Gas.
Longer Term NG1 : https://www.tradingview.com/x/aYZkb5fC/ (Actual 1.946).
Same date UNG/USD low was 2.113 – a turnabout.
Target Bogies
Calculated via recent lows,
NG1: 3.392 ~~ 2.235 = 1.920
UNG: 3.018 ~~ 2.198 = 1.975
(turnabout);
and penultimate lows,
NG1: 3.392 ~ 2.385 = 2.111
UNG: 3.018 ~ 2.288 = 2.089
(near turnabout).
“Russian energy giant Gazprom GAZP.MM said it would ship 40.5 million cubic metres (mcm) of gas to Europe via Ukraine on Friday, slightly lower volume than on Saturday.”
Another reason for LNG price declines.
Turn at 2.0810 (UNG/USD).
NG1 (February) vs NG2 (March) Red/Drop: https://www.tradingview.com/x/fCcEr4NS/
Really good interview with Rick Rule (“RR”) on this weekend’s show. I don’t follow RR, so it was nice to hear an extended conversation – as always, Cory and Shad asked really good questions.
Some interesting take-aways (for me):
1. RR is now starting to research the higher risk companies with low market caps in anticipation of gains over the next 5 years (regarding his 1975-1980 analog to 2024-2029-ish).
2. RR provided a grounded, 3-reasoned perspective on why the PRICE inflation reported by governments is dislocated from the world we actually live in each day (i.e., the 4% difference). (NOTE: I was simultaneously relieved/disappointed that RR did not mention MONETARY inflation, but this would probably have sent the interview off-the-rails discussing the hopeless US debt problem)
3. I thought the RR subscriber data was fascinating: From 5,000- 80,000 people, with the newest subscribers representing (perhaps?) the elusive generalist investor (i.e., younger people with diverse backgrounds) we have all been waiting for.
4. Deep admiration for going to conference(s) and telling people that 85% of the companies should just quietly go away.
Although I will not have RR review my companies, I think it is a great service: The fact that RR personally reviews each submission is extraordinary and shows that he actually cares. My portfolio is pretty much SET for the next 1-3 years. My own, personal investment thesis is to own the bookends of PM investing: Most of my money is in Au, Ag, Pt bullion and ETFs (PSLV, PHYS, OUNZ, SPPP) and old-fashioned cash getting 4% interest. Less than 10% was invested in 5 Explorers (SGD, BIG, FWZ, CC, TECT) that have met my own very strict and comprehensive checklist (plus I monitor them on a daily basis to make sure that there are no shenanigans)
Overall, I am net-positive on this Saturday morning after listening to the RR interview. Owning Gold/Silver bullion (Physical, ETF) and investing some capital in high Reward/Risk explorers is probably the best place (for me) to be over a 3-year time-frame. I admit to being a “catastrophe Investor”, but it makes sense every day after I spend 30 minutes reading the news of the world.
P.S. None of the above is advice. I am 100% responsible for my investment decisions (And so are you …)
Great post there BrianE, and we definitely appreciate that detailed feedback on the Rick Rule interview. Thanks for listening and we’re flattered it was a value. You raised some great points as well, and sharing your own personal investment thesis is very much appreciated.
Rick is an incredibly sharp man, and one of the most savvy resource investors of the last few decades, so it was wonderful having him on this weekend show as our guest. We plan on having him back more regularly, and next time may get into Silver and Uranium stocks as well… so stay tuned!
“85 % useless”…. as quoted by RR…. referring to the stocks juniors… 12 min mark…
Yes indeed OOTB. RR was spot on with that comment about Jr mining stocks. 85% need to go away…
However, like Cory mentioned, somehow those lifestyle companies will find a way to get financed and survive…
Not with my money… 🙂 I will just stick with the phyz.. 🙂
A wise strategy OOTB. 😉
Good point that there are still to many lifestyle explorers
I personally prefer the mid tier producers, because of this
I think many of the royalty companies are also lifestyle companies, because of massive options
Nomad Royalty was a good exception with management buying in the open market and the highest dividend under the royalties. I am missing companies like Nomad. I am really unhappy that I got into Sandstorm with my Nomad shares. For me the worst example – millions of options and management is only selling, even when the share price is at all time lows – I know Shad will disagree 🙂
Hi Thomas. Actually I agree with most of the points you made, including the one on Nomad. 🙂
Yes, there are too many lifestyle juniors (but they are mostly the explorers, developers, and prospect generator companies). The only point I’d differ on is that in general I don’t consider the royalty companies “lifestyle companies” because they aren’t perpetually raising money that dilutes down existing shareholders to fund their salaries and G&A…. because most of the dozen good royalty companies have enough royalty revenues coming in to fund all that.
As for the options in compensation, yeah I hear ya, but still like that better than what the small cap and micro-cap explorers do with endless capital raises that only sees a fraction of the money actually go into the ground to do meaningful work and value creation, due to excessive salaries or bloated board of directors, etc…
Yes, as for Nomad, that was a very well run company and I was sad to see it get scooped up by Sandstorm before it had a chance to spread it’s wings this cycle… It’s the same with Maverix, where that was my favorite royalty company before they got scooped up by Triple Flag.
In a sense I felt the same way about Ely Gold before they got nabbed by Gold Royalty Corp. In contrast, I was OK with the Golden Valley Mines takeover by Gold Royalty Corp, as it finally got it’s recognized value increase to fill the mismatch that had existed in it for years with it’s spinout Abitibi Royalties. I was also happy that Elemental did not get taken over during that hostile bidding process from Gold Royalty corp, and instead merged with Altus to form Elemental Altus.
I was a little disappointed though with some of the acquisitions in the royalty sector, because I thought the smaller companies would have had more torque in a bull market. Having said that, I was still alright with the Nomad and Maverix transactions in the sense that Sandstorm and Triple Flag were already in my portfolio and those acquisitions were accretive to both those companies respectively. However, I would have preferred Nomad and Maverix just let their pipeline of projects just keep going through the development process into production, or the expansion of production within existing producing royalties.
Liberals taxing Canadians into oblivion. DT
Better learn how to avoid the tax man…. legally… of course… 🙂
If they delete the useless 85% of junior mining stocks that are mining the speculators/investors it wouldn’t be a good idea, because it involves government intervention and if there is one area that the government doesn’t have complete control its mining. I don’t think the miners want more regulation they want less. When the government gets involved the end result is more rules and regulations and then you won’t get any mines built because the green movement will try to shut everything down.
They are working to close farming and fishing in The EU through the dictates of the WEF. They call it ecocide, it’s coming here. DT
RR is a smart man but he seems to have bought into the globalist messaging regarding the west (e.g., white man bad) and promotes it!
The trouble with a lot of speculators/investors is that they don’t realize how dangerous this game is and that 95% will lose money. Guys like Rick Rule are the exception not the rule! I like speculating because I want to beat the odds, but I understand that you shouldn’t be playing this game if you aren’t using money you can afford to lose. Like war it is easy to get in but very hard to stop and get out and even harder to be a winner. Even if you choose a financial professional to handle your money, the chances of you losing some or all of your portfolio are probably close to 90%. Not very good odds, real estate or buying phyz as Jerry suggests is a slam dunk compared to playing the markets. All investors/speculators should own some phyz as an insurance policy before playing the markets. Buyer Beware! DT
DT………. thanks for the mention..and comment….
And I think you are spot on with the comment concerning RR…
BTW…… usawatchdog… has a great guest this week, concerning the STOCK MARKET….,
and FED
The FCG, etf, is at recent all time lows..Actual producers ect..going down during this entire basing and pop rally period for the /NG futures…One of the most epic divergences I ever witnessed……Does this mean insider traders know that /NG will remain weak into the longer intermediate time and simply are pricing that into the producers margins?……eg, global XS cheap nat gas is the situation for a bit more?….any ideas based on fundamentals?….
Larry, being at the recent low, close 22.76, it could be in an ongoing trading range between 20- and 28+ (current target 22.30/22.06 – note my comments above). BDC
OK BDC- I will review your comments today…Thanks!
May have bottomed at 2.081 (UNG/USD).
This chart reveals it all why PM stocks are terrible as a long term hold.
https://www.tradingview.com/chart/ASA/oM9iF931-Gold-Silver-Miners-Priced-in-Gold/
Agreed CaliJoe, and good chart from Patrick showing there are plenty of rallies, but that they need to be traded. I’ve never understood why some people camped out in cyclical and volatile commodities stocks for decades and then were disappointed that overall they trended sideways to down.
It isn’t just PM stocks but Oil/Nat Gas stocks, or PGM stocks, or Copper stocks, etc… They all have their explosive rallies for a 6 months to 2-3 year periods of time and moment in the sun (like we just saw for a few years in Lithium stocks before they rolled over, and like we’ve seen the last few years in Uranium stocks through present).
The best approach is to make hay while the sun is shining, and then look to position in the resource area that is setting up to go through it’s cycle next. It does seem like technically and fundamentally that the next 2+ years in the Gold and Silver stocks are that period of time for them in the sun once again.
Microsoft hacked by Russian Group. That was the headline on CNBS. Did they check the New York Fed first?
The Big Red Scare has now been going on since 1917, that’s 107 years of blaming The Red Ruskes, and it shows no signs of dying. DT
GDX trades…The intraday charts are perfect to buy today…except that the daily MACD is still super wide with no curl up…Says still room for more downside first..that does not have to occur but i choose to watch…..imho
Thanks Cory……… for posting the info in the ORPHAN SECTION….