Private Briefing with Rick Rule

Wednesday, September 18th, 2024

Denver, Colorado

By Dan Denning

Greetings from the Mile High City (Let’s go Rockies!). I’m in transit, on my way to Dublin to meet up with Bill Bonner and Tom Dyson. I’ve swapped publishing deadlines with Tom this week, by the way. You will hear from him on Friday with an updated Official List, more reader mail, and his latest analysis.

In the meantime, I have a surprise for you!

The great Rick Rule joined me for a Private Briefing yesterday. I was able to ask some of your questions (and a question each from Tom and Bill). And through the wonders of the Internet, I got the transcript of the audio back this morning and have uploaded it for you below (lightly edited for clarity and accuracy).

Before you get tucked into the Private Briefing, though, take a look at the chart below. It’s from a paper published earlier this year called The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly. You can read the whole paper if you like. 

Or I can spare you the agony and give it to you quickly: Consumers ‘feel’ of inflation is higher than what expert economists expect because ordinary people consider a rise in the cost of money a rise in their cost of living. So what? Read on…

The pre-1983 methodology for calculating consumer price inflation (CPI) included the cost of money. Revisions to how CPI is calculated removed that cost. And later revisions removed ‘volatile’ expenses like food and energy. If inflation ‘felt’ like 22% to you in 2022, it’s because that’s what inflation WAS in 2022, using the old method of calculation.

Is the government lying to you about inflation? Almost certainly. Did you already know that? Highly likely, if you’re reading this.

But spread the word to the great unwashed: ordinary Americans live on price levels, not rates of change. The entire price level shifted higher by at least 20% beginning in 2020. The Fed did that. And nothing they do today will make it better (or lower the cost of living).

Now, let’s move on to things about money, oil, gold, Tier 1 mining assets, and private placements that you may NOT already know. I really enjoyed this talk with Rick. I hope you do too. Throughout the transcript, I’ve included links to some ways to follow up with Rick if you want to learn more.

Until next time,

Dan

PS If you’ve downloaded the Substack Reader App for Android or iPhone, keep your eyes peeled for a test of a new live video streaming feature this weekend or early next.  I learned a bit about it this morning before I left for the airport. And if Tom and Bill are game, I might try it out on Saturday when we meet. If not then, then definitely on Tuesday when I'm in London for a small conference for investors. Stay tuned. 

CLICK ON ARROW TO BEGIN PRIVATE BRIEFING

TRANSCRIPT BEGINS:

Dan Denning: Welcome back to Bonner Private Research. The Private Briefings with Bill's superstar Rolodex of friends continues today with none other than a familiar face to our longtime readers. He was actually the very first guest on our Private Briefing in December of 2021. It's my pleasure today to welcome Rick Rule from the Puget Sound in Washington. Rick, how are you?

Rick Rule: I'm fine. It's indeed a pleasure to be on your show. I've been a beneficiary of the work of Bonner et al in various incarnations for 40 years, so I'm delighted to be invited to appear.

Dan Denning: Well, it's always a pleasure to have you. We always learn something from you. And I should confess before we start, Rick is one of my mentors. Bill introduced me to him the first year I started working for Bill back in the late '90s, and I've been learning from him ever since, and you can as well. Rick is a sophisticated man of technology as well as being a natural resource expert. He can be found on Twitter with the following handle, @RealRickRule. That's you, right? @RealRickRule?

Rick Rule: That's correct.

Dan Denning: Okay. Well, that's where you can find him on Twitter. You can also find him as the president and CEO of Rule Investment Media. We're going to talk more about that in a bit because I've been fortunate enough to speak at Rick's conference in Boca Raton, Florida. He's going to have another one next year, but I want to ask him a little bit about what happened this year because unfortunately, I wasn't able to watch all of the presentations. Some of you will also know him as an outside director, but a key player in Battle Bank, along with our old friend Frank Trotter. And we have a few questions from readers about how the Battle Bank project is going on.

And Rick, of course, in a previous lifetime, before this current project, was the President and CEO of Sprott US Holdings. So, he's seen it all and he's done most of it. But I'm going to put you on the spot and I'm going to ask you a question that comes straight from Bill because I told him I'd be speaking with you today. And with the gold prices up 26% year-to-date in US dollar terms, 34% in the last 12 months, it's making Bill quite nervous. His question for you is, are we at a short-term high for gold right now?

Rick Rule: I suspect we may be at a short-time high. I need to say my trading track record is almost unblemished by success, so you need to be concerned about my answer to that. But I anticipate that some of the move in anticipation of the rate cut may mean that people buy the rumor, sell the news. 

Neither Bill nor I particularly care, I think about short-term moves. But Bill may have to service his subscribers who might care. For myself, when people ask me when gold is going to move, I answer, "The year 2000." It's moved from $250 to over $2,500 since then, 8.4%, 8.5% compounded for 24 years. It's done what I asked it to do.

But I understand that other people own gold for other reasons, and I share Bill's concern, if that's the right phrase, I don't care, but his concern about the fact that gold might in the very, very, very near-term be overbought. I think, Dan, that you would be conversant with my belief that the gold price hasn't really gone up that much. It is the denominator, the medium of exchange has gone down and I see that as being relentless, or perhaps overdone in the near-term.

Dan Denning: I would agree with that. I think it's a dollar story as much as it is a gold story. But I want to follow up with a question related to a comment I believe that you made or someone attributed to you. So, if this is not your comment, please correct me. You know you've arrived on Twitter when you have many imitators who don't often say that they're imitating you, they're impersonating you. But I think this Twitter account is called RickRuleRulez, and this is a quote they attributed to you. They said, "Bull markets are generally led by the metal itself, gold. The primary motivation for bull markets is fear, and the fear buyer doesn't buy penny stocks, that's the greed buyer." Is that something you said?

Rick Rule: It is. It is.

Dan Denning: I guess the question is, what everyone wants to know is, when can we expect the gold stocks to move? So, where are we between the fear and greed buying right now?

Rick Rule: I think we're still relatively early on. I would note two things, frankly. One is that the move in gold price until 15, 16 weeks ago was led by central banks. In fact, there was disintermediation at the retail level out of physical bullion, as evidenced by the ETFs. And central banks don't buy stocks. So, when people say, "Why did gold go up without the gold stocks going up?" That's really simple. The buyer buys gold and doesn't buy stocks. Next, right? We've answered that question.

Coming down, if you will, the quality trail to equities and then junior equities and then silver. That buyer is a greed buyer and the momentum has to be established by the fear buyer. I think now we're beginning to see real funds flows into the best of the best senior stocks, which traditionally are the first to move. And we're seeing at least neutral flows, slightly positive flows into the GDX, but not the GDXJ. This is the normal and natural progression that you see in a bull. You will see real movement in the bull market when the generalists adopt the narrative. They adopt the narrative after momentum has been established by the fear buyer. When exactly this will occur, I don't know. I just know that I've watched it occur five times before in my career, and it follows fairly predictable patterns.

The bull market and equities is led by the traditional gold bug who works up enough nerve to come back into the market because his or her narrative has been reestablished by pricing momentum in the physical market. They're the first. The second are the generalists. The generalists crowd into the biggest, the best, the most liquid names, and the move in those names brings in passive or index buying. That's just the way it works. How long it takes depends on a whole bunch of extraneous factors. As an example, if we didn't have an interest rate cut, I think that would scare the generalists out. If the interest rate cut was bigger than expected, I think that that would bring more generalists buying in. And at least this human mind can't comprehend all the variables well enough to give you a reliable estimate about the time involved in this transition.

Dan Denning: Yeah. Again, I don't want to sound like an echo chamber. I wouldn't disagree with any of that. And by the time this is published, we will have some indication of both what the Federal Reserve actually did and then we'll get the press conference from Jerome Powell, and we'll have some insight into whether this is the beginning of a rate cutting cycle, which would put the Fed in line with many other global central banks, and we'll see what the market reaction is.

I think one of the interesting reactions will be in the energy market, which has been very bearish lately. And that was Tom Dyson's question for you, and it was a little more complicated, so I want to read it and make sure I get it right. Tom published a chart today, and his question is, "An ounce of gold currently buys 38 barrels of oil, which is about the cheapest oil has been in terms of gold since 1860." So, not long after Edwin Drake discovered oil in Titusville. Tom continues, “What do you make of this? Why is oil so cheap in gold terms?” And this was a question several readers had: What's more interesting to you personally today, is it the gold industry or is it the oil and gas industry? And is it more oil or more gas?

Rick Rule: That's a very nuanced question. It's going to be, I'm afraid, a very long answer.

Dan Denning: Go for it.

Rick Rule: I believe that if I'm correct, that gold will grudgingly, slowly begin to reestablish its status as money and wealth. That oil will likely either hold steady or go down in gold terms, which means it will likely do extremely well in fiat terms. There are tremendous technological advances in the oil industry that people outside of the oil industry haven't paid much attention to. The production increases that we've seen in the United States, and less so in Canada, can be repeated around the world. And the consequence of that is that while peak oil is always a function of price, the barriers to production and exploration success are coming down as a consequence of technology. Oil is becoming more rather than less abundant.

The second part of the question is natural gas. Natural gas is stupidly cheap in any terms, at least North America Natural gas is stupidly cheap in any terms. Canadian natural gas is priced at about a buck and a half US per million BTU at the Alberta Gate. It's priced at about $2.20, I think right now at Henry Hub, but right now it's priced in Midland at effectively zero. It's a byproduct of producing oil. The same gas compressed is worth $8 a million BTU in Rotterdam, Shanghai or Tokyo. And for reference, it takes about a buck and a half to get it there. So, think about that arbitrage.

$3.75 cents landed versus $8 for billions and billions and billions of units. The oversupply that we have in gas is going to last for a while, but billions of dollars are being spent to gap the arbitrage. Storage facilities, transmission facilities, the reshoring of the European fertilizer and petrochemical industries to the Gulf Coast, away from Germany. Liquefaction facilities, deliquefaction facilities, ships.

This arbitrage will be eliminated in the five to 10-year timeframe and a commodity that's in a 10-year timeframe and a commodity that's in a tremendous oversupply, localized oversupply in North America right now will equalize. This isn't an if question; this is a when question. Is it going to occur two years from now? I don't know. Five years from now? I don't know. 

At 71 years of age, Dan, I love questions where the answers begins with ‘when’, not ‘if.’ This is one where the answer begins with when, not if. If you ask me about a commodity that I was, in US dollar terms, more bullish on, a commodity, not an industry, oil relative to gold, I would pick gold. I would pick gold.

If you ask me which industry I would rather invest in, the gold mining industry or the oil and gas industry? I would pick oil and gas. If you look at the best index in oil and gas, which is the Oil and Gas Journal 400, the largest publicly quoted oil and gas companies in the world, the best quartile of them are generating well over 50% operating margins, and they are generating returns on capital employed unlevered in the mid-20s on a project level. 

This is truly a superb business, a wonderful, wonderful, wonderful business. So a commodity investor likely wants to be invested in gold because the pathway is higher, unconstrained by technology. If one wants to invest as an investor rather than a speculator in high-quality extractive companies, one will always be in the oil industry.

Dan Denning: Let me follow that up because, as you know, being involved in the thinking behind it, the oil and gas industry was the basis of our latest, most recent Trade of the Decade, and it's been performing quite well. But I wanted to push back because we're constantly challenging the thesis to see if something important has changed or if we missed something. The two things that I keep coming back to are, one, political risk, which would interfere with some of what you described in terms of the reshoring of petrochemical industries in Europe, insistence on renewables, sustainable green technologies, subsidizing those. Then the second is technology. Is there a limit to how much can be recovered using new technology where you start to see precipitous declines in US oil and gas production? So political risk and technological limits. Where are we at with those two issues?

Rick Rule: Depending on the interest rate, I wouldn't be surprised if US production has peaked or is close to peaking. At today's prices, it's really a cost of capital game. At, call it $70, $65, we have probably drilled 75% of the class A locations in the United States. It may be that technology improves or it may be that we prove up more class A locations, but I'm inclined to believe, given that US production has doubled without much exploration but lots of drilling, that absent a great decline in a cost of capital, that using current technologies we are at or approaching peak US production. That isn't true in Canada.

Dan Denning: Right.

Rick Rule: It certainly isn't true in Argentina. It is only 1% true in the shale basins in Saudi Arabia. All that Saudi production is conventional production, and the underlying shales haven't been cracked at all. So I hope that answers part of the question.

Dan Denning: No, that's a great answer, and I think for us at least, it's cause to continue to be positive on the thesis and bullish on the expected performance. But obviously-

Rick Rule: One other thing I think you need to consider when you talk about alternative technologies in terms of power generation on a global basis, Dan; we have spent since 1982 about $5 trillion on alternative energies. I'm no critic of alternative energies. I've invested a little bit of that myself. But the point is, in terms of oil, we have reduced the market share of fossil fuels from a high of 82% in 1982 all the way down to 81% in 2024. So the predictions of those great energy physicists like Greta Thunberg that we are approaching peak oil consumption as a consequence of competition from allegedly more efficient energy sources is bunk.

The oil industry, which is what you're basing your call on, is priced as though it's effectively going to go to business in 2032 or 2033. The net present value calculations don't take into account a value tail. Technology suggests that peak oil demand is going to occur in 2065 or 2070. If you add 40 years tail to the net present value calculation, what you understand is that after the net present value of reserves discounted at 8% goes terminal in 10 years, you restart the clock at the same net present value number. That argues very well for your thesis.

Dan Denning: Yeah. Well, we'll keep an eye on it, but I think as what has happened with the climate change predictions, or at least like the melting of the polar ice caps and some of these predictions, the deadline that people set for net zero from fossil fuels and complete conversion to electric cars of battery powered cars, elimination of internal combustion engines etc. those deadlines will probably come and go and nothing will change and the oil demand will be at least 100 million barrels a day. So that's a great answer. Thank you.

I want to switch gears for just a second and get slightly biographical, partly because I know you do quite a few of these, and there's a mean-spirited part of me that wants to try and wrong-foot you to see if I can get you to say something that you haven't said before or haven't thought about. So let me ask you this question and feel free to decline it, but I recently asked Doug Casey if he could start his life over as a 20-year-old man, where would he go in the world, and what would he do to make his fame and fortune?

So I'll ask you the same question, but maybe with just a bit of a twist. Let's say it's 2024; you're a 20-year-old man. You just have your degree in natural resource finance from the University of British Columbia, which you in fact did get in 1970. It's tucked under your elbows. You could go anywhere and do anything. You could specialize in any industry, or you could be involved in any type of extractive business or any business; what would you do?

Rick Rule: Let me wrong-foot you. I got out of the University of British Columbia without a degree. I went to the University of British Columbia to get a degree in natural resource finance, but I didn't have any high motives. I wasn't there trying to be a better person or anything. I was trying to learn how to make money, and I very quickly learned how to make money to the extent that while I was still in university, I found I was making about three times what a tenured professor was. So I left university without a degree. So let's get that one done first.

Dan Denning:  Well, we're going to update your bio.

Rick Rule: Draft Dodger. Drop out. Anyway, let's move on from there and answer the question. If I could recast my life and go into any business I wanted, I likely would have still concentrated on natural resources, but I would have gone into property and casualty catastrophic and super catastrophic insurance underwriting and environmental bonding and remediation. I learned as a lender to extractive industries that even where I was senior secured, the guy with the environmental bond was ahead of me no matter what.

So if I had to redo my career because I'm fascinated, Dan, with risk, I would look to risk arbitrage on both sides of the balance sheet. I would look to be an insurance underwriter, and I would look to invest the premiums from insurance underwriting in natural resource-based businesses, which I understood. I think that makes me a really dull guy. Doug probably would've chosen to be like a rum runner or a mercenary or something like that, and I would look to be a green eye-shade actuary and value investor.

Dan Denning: Well, I don't think that's going to disappoint your fans, but it does lead me to my next question, which is you have started a new career in the last two years with Battle Bank, and it doesn't do all of the things you just described, but I think last time I spoke with you, I asked you a question from some readers who said, "Look, I have a bunch of gold or silver. Can I deposit it with the bank and then either earn interest on it or get a loan out of it, use it as collateral?" At the time, you said that's something you guys were working on, and you said there were a lot of things going on with the project. So now that you're starting a new career as a banker, can you tell us how Battle Bank is going and what people should do to find out more about it if they're interested?

Rick Rule: Well, I'll wrong-foot you again. This is my seventh deep exposure with a bank. So I've been involved in banking and also in lending for a very long time, and it's a business that I love. I really, really, really love it. Battle Bank is an outgrowth, as you know, of prior effort that Frank Trotter and I did that Agora was very involved in called EverBank, where we took a bank. We figured out a way to serve customers, particularly Agora subscribers, better than other people did, and we built a fairly big business. I think it was $28 billion in AUM by the time we sold it.

We sold it to TIAA-CREF. Their business is managing annuities for retired teachers. Their universe of customers is very different than our universe of customers. The consequence of that is that that bank drifted away from our customers. We had built 275,000 of them who were abandoned. So the customers really invited us back into the banking business, saying, "Start again and serve us." The answer as entrepreneurs to that question is always, yes, I will do that. What will make Battle Bank different? 

First of all, we will design deposit products that serve you. We will offer deposits, initially in 18 currencies. We will also offer deposits that are denominated in things like the S&P 500 or gold, if that's what you prefer. We'll do something really strange with your US dollar deposits too. Unlike other banks, we'll pay you interest. I noticed that one of the big box banks right now has 16 deposit products, five of which pay no interest. That's not what we're going to do. We're going to have one deposit product. We're not going to confuse you and we're going to pay you interest on it. In other words, we're going to treat you as a customer.

Well, the second thing that we're going to do is we're going to recognize that your IRA is your IRA. It's not Schwab's. It's not Fidelity's. It's yours. If you open a checkbook IRA with us, by the way, this is completely legal, it will form an LLC and that LLC can buy a duplex or buy a triplex. It can invest in private equity. It can buy bullion. It can buy crypto if it wants to. Your IRA is your IRA at Battle Bank. Yes, we will charge you a fee. By the way, if you buy a duplex or a triplex, we would like you to consider us for underwriting your mortgage. If you buy precious metals, we would love it if you bought the precious metals through us, but there's no requirement that you do that.

And on the asset side, the lending side, initially, the product that I'm most excited about is unlike any other bank in the United States, we consider your bullion holdings to be good securities. I'm not sure why banks don't consider gold to be good security, but we do. There is about $33 billion in bullion that we've identified held by private parties in the United States in segregated storage, and we will lend against that. We will also establish a credit facility so people have access to credit without having to borrow money that they don't need. You want to put a down payment on a second home. You want to put a down payment on a duplex. You want to buy more gold and silver. Accessing the capital that you have tied up in the gold and silver without having to sell the gold and silver is what we want to do initially, on the asset side. That's really what Battle Bank is about.

I'm a customer of two big box banks, one international and one in the United States, and I'm a pretty good banking customer. I pay back loans if I borrow. I have big deposits. I'm rich, I'm sophisticated, and my relationship with both of those banks is sullen. It should be ecstatic. The consequence of that is that I understood the market opportunity offered up by Battle Bank and I couldn't resist stepping in. Unlike EverBank, which by the way, we started in the year 2000, when we started that bank, we had zero customer backlog. Almost 15,000 people have gone to battlebank.com and signed up to become customers when we open. So we expect to open with a bang.

Dan Denning: Well, I can see why. It would be hard not to, given all the things that you described. And also, more importantly, if you can earn interest on your savings that you can borrow against the value of your bullion and you can own your own IRA, it's almost like you're trying to serve your customers.

Rick Rule: Particularly with regards to the IRA. When Frank Trotter first proposed that product to me, I thought he was making it up. I said, "Frank, I'm not going to jail for my depositors. I'm not doing that." And the Battle bank lawyers showed my lawyers how that product works, to my satisfaction, this is too good to be true. The idea that thousands of Americans could actually control their retirement and manage their retirement account as they saw fit. I almost took on, I don't know, a religious attraction to that product. I had no idea that was out there. It won't be our biggest earner, but I think it will be our biggest statement that we're acting for our customers.

Dan Denning:  I agree with that. So if they want to be notified when you guys are ready to take off and when you're open for business, they just go to battlebank.com? So do they give you their email address? What do they need to do?

Rick Rule: Absolutely. Go to battlebank.com. We will send you periodic notices every two or three weeks about our progress. We will ask you if you'd be willing to allow us to beta test some of our products on you.

Dan Denning: Right.

Rick Rule: And we'll keep you informed as to what's available and when it will be available.

Dan Denning: Okay, that's great. Well, I encourage people to do that. And they also have a chance to hear more from you on a couple of other subjects, so I want to ask you about those. First is a question we got from a reader and I know absolutely nothing about it, so I thought I'll ask someone who does. The question was, "Are private placements a superior way to invest in junior mining companies instead of buying publicly listed stocks?"

Rick Rule: Private placements are a tool for a sophisticated investor who is willing to do some work. They're not a place for a tourist. Understand that a private placement involves the issuance of restricted securities, and the restrictions can be longer for Americans, as an example, than for Canadians. So you have to understand them. If you are a sophisticated investor, private placements, particularly private placements that offer warrants or private secured convertible preferreds can often be a much better mechanism. 

You've given me actually the opportunity for a commercial, which is to say that we just did an eight-hour-long boot camp on private placements, a very, very, very deep dive. Given that the information is timeless, not restricted to the time that we did the bootcamp, because it's a technique, not a subject, we are offering those transcripts for sale for 99 US dollars at the ruleclassroom.com.

Note that that product, those transcripts, like any other educational product offered up by the Rule Classroom, including the Boca Raton Investment Symposium, comes with a gold-plated money-back guarantee. If you don't think that you received $99 worth of value for the $99 product, email us and we'll refund you the money.

Dan Denning:  Yeah, that could not be more fair, and I did not know that you'd done that on private placements. I actually was going to ask you about something you're preparing to do, and this is through Rule Investment Media, through the Rule classroom, these bootcamps, which are deep dives on subjects which can not only obviously improve your knowledge as an investor, but improve your returns by knowing more about what's available.

Your next one is scheduled for October 19th at 8:00 AM to 4:00 PM Pacific Time, and it's on what you're calling Tier One Assets. Can you explain to our readers at Bonner Private Research what you mean by Tier One Assets and what you're going to cover in that bootcamp?

Rick Rule: Well, I need to say, every 90 days we do an eight-hour-long deep dive on one subject or another. We've done silver, we've done uranium, we've done prospect generators, we've done royalty and screaming. We did private placements. This one we're doing on how to invest and speculate in existent or developing tier one deposits. I define arbitrarily a tier one deposit as a deposit in excess of 10 billion US dollars in recoverable reserves and resources at current commodity prices. I don't let the companies superimpose a price deck on the market.

Dan Denning: Right.

Rick Rule: We talk about how to identify them. We talk about all aspects of participating in tier one deposits. Usually tier one deposits that we believe are substantially undervalued are tier one deposits of commodities that are out of favor, and today is no exception. The tier one deposits that we've identified are in commodities like platinum group metals, deeply out of favor, nickel, deeply out of favor, lithium, becoming more deeply out of favor, rare earths, but we also have an identified emerging tier one deposit in the gold business. 

So the idea will be determining the relevance to the respective market of the deposit because you want a deposit that'll be in the lowest cost quartile of its commodity, and you want a deposit that will be in the best return on capital employed in its sector, but at least 25%. The devil is in the details. How do you determine that? What's the probability that you're right? How do you start a net present value calculation? Which is to say, will the deposit begin to come into production in 2030? In which case, at an 8% discount? Cheap might not be so cheap.

Suffice it to say, this is for real serious investors and speculators. These eight-hour-long courses are not for tourists. To the extent that there are people listening to us today who really truly care about natural resource investment and speculation, I think that these courses are invaluable, but for people who just have their interest tweaked, I would avoid them like the plague.

Dan Denning: Well, for the second category of people, I think I will probably join you on the 19th for this because that sounds fascinating to me, and I know that I would learn more. So I can pass on some of what I learned, but I would encourage the serious people to attend for themselves. 

I have to ask one question on this because when you were mentioning it, I have very little experience going to visit locations where people are extracting resources from the earth. But one place I did go many years ago was South Africa, near the Witwatersrand, to some of where the platinum and palladium mines are. And so as you know, they've got to go way down underneath the ground. They've got to cool the mines in the orebody or the seam that they were mining for. I think it was Implats or I can't remember who it was, to be honest, but it was like a meter's worth of ore that they were extracting, and it was very hard to get at.

Is that the case with this Tier 1 project? You don't have to name the asset you're talking about. But is it in South Africa or is it in Russia or is it in a place that's really hard to get to?

Rick RuLe: In a place that's hard to get to? Yes, it's in Brazil.

Dan Denning: Oh, interesting.

Rick Rule: I've wanted a platinum and palladium asset that wasn't confronted with the social and political challenges of South Africa and Brazil. South Africa in particular, where the social and political challenges are such that the mining industry isn't willing to make the capital investment because they aren't sure who's going to own the asset. And as a consequence of the fact that labor there employs very little capital, labor is underpaid. 

South Africa's in the weird place where the wages have to go up because the mine workers don't make enough to live and wages can't go up because the utility of the worker relative to the capital they employ won't allow for the wages to go up. That has to resolve itself.

And frequently when problems like that resolve themselves in South Africa, 50 or a hundred people die. And I don't want to be around that circumstance. Left to my own devices, I would love to invest in the platinum business in Russia at Norilsk. Right now as an American, particularly an American with a bank in front of the FDIC for charter, the Russian alternative, it isn't appropriate for me. A large well-defined platinum and palladium asset in Brazil, which of course has a different range of challenges, is much more attractive to me.

Dan Denning: Yeah, that's interesting that you say that. I'm interested in hearing more. My curiosity is piqued, partly because the only time I see Brazil in the headlines right now, other than what I'm assuming is just business as usual for many of its industries, is that their judges and politicians are doing stupid things to make people nervous about whether their money is safe.

Rick Rule: Sounds just like the U.S. I get it. I'm unsympathetic.

Dan Denning: Yeah, that's good. You have wrong footed me like three or four times now, so I'm going to give you one more chance to do so. Unfortunately, I was not able to make the natural resources symposium in Boca Raton. Fortunately, as with last year, I purchased the on-demand option where I could go back and at my leisure until the end of the year, I believe until December 31st, I could watch any of the presentations, any of the breakout sessions from the entire conference. 

And I know Tom did this when he recommended Seabridge to our readers, he went and watched that presentation and he was blown away. And then he went away and wrote his story and published it to our readers. You put the whole thing together, it's your baby. You vet all of the companies that present there, and you know everyone who's speaking there, and you probably know most of what they're going to say. 

Was there one presentation or one speaker this year who you thought ‘people can't afford to miss this’? If you pick one thing to watch from my conference, please watch this. What was that?

Rick Rule: I wish I could say Rick Rule. I really do, but I can't. My favorite presentation every year, every single year is also the audience's favorite presentation, it's The Living Legends panel. For those of your listeners who don't know what that is, I assemble a group of people who have built multi-billion dollar companies from scratch, often two or three times. And I ask them to describe the process by which they succeeded. And I ask them to explain to the listeners how that process has made them a better investor. I ask them too what mistakes they made on the way, what they got right, what they got wrong and what other investors might learn from that experience. 

I ask them finally, and they don't always answer, ‘tell me two or three companies that you've invested in with your own money that you don't run’. In other words, having the experience that you have of building multi-billion dollar companies over 30 years, who else is doing something that you think has the chance to do that? Who else is taking a company from a 50 million market cap to a billion dollar market cap?

That process every year ends up, to me, to be the most valuable thing I do. I'm delighted to say, by the way, at next year's Boca Raton conference, that we're expanding The Living Legends to a legendary investors panel as well, where we bring on investors who have deployed capital over 30 or 40 years and substantially beaten the industry average. And we're going to ask them to do the same thing, not just brag about what they've done, talk about how they've done it, and talk about how their experience has made them a better investor over time, but more importantly, how that can make you a better investor. 

So if we're looking backwards, my favorite presentation was The Living Legends. I suspect, looking forward, that my favorite might be the Investing Legends because I think that might be more applied information for our listeners.

Dan Denning: That's a great idea. I'm excited to hear that and I'm happy to commit to being there next year so we can finally share a meal. But we've shared a fantastic conversation today. Thank you for your time.

Rick Rule: Dan, if I might, any of your listeners who like what I have to say about natural resources and want to make it personal, can always visit my website, ruleinvestmentmedia.com, list your natural resource stocks for free, no obligation. I'll rank them one to 10, and I'll make comments on individual issues if I think my comments might have any value. Ruleinvestmentmedia.com. Please natural resource stocks only. No crypto, no tech stocks, no psilocybin stocks. Leave an old guy to do what he does well.

Dan Denning: Well you do it very well, Rick. So thanks again for your time. I'll say hello to Bill for you when I see him over in Dublin in a couple of days, and we'll catch up with you before the end of the year. So Rick Rule, thanks as always.

Rick Rule: Dan, thank you. And I really look forward to sharing that meal in Boca Raton. That'll be great.

Dan Denning: Me too.