Issue link: http://resourceworld.uberflip.com/i/832998
6 www.resourceworld.com J U N E / J U L Y 2 0 1 7 A s attendees of resource investor confer- ences know, Rick Rule, President and CEO of Sprott U.S. Holdings Inc., often speaks to standing room only crowds. His dynamic presentations usually go against the grain of the usual ways of looking at mining stocks. Resource World was fortunate to catch him for this interview as he is often on the road. RESOURCE WORLD: When you were attend- ing the University of British Columbia, did you have a plan laid out for your career? RICK RULE: Yes – but I didn't follow it. I wanted to become a taxation lawyer focused on natural resources. RW: Weren't you studying mineral economics there? RR: My interest was natural resource finance in mineral economics but I was in the faculty of com- merce. My view was that UBC had a compound degree that gave you a Bachelor of Commerce and a law degree and so my initial idea was to become a lawyer specializing in international natural resource taxation. RW: What was your first job related to the resource sector? RR: I had substantial success as a speculator. Owning a bar in the financial district of down- town Vancouver gave me unparalleled access to information. Building on that success, I became securities licensed. RW: I've heard you say to your audiences at presentations: "Be a contrarian or a victim." Can you outline your contrarian philosophy and how investors can make it work for them? RR: Absolutely! There's no business that I know of that is as cyclical as natural resources. Anybody who's been in the business for 20 years will understand this boom and bust nature; first of all – commodity prices and then, the prices of equities that are tied to commodities. Commodities go from boom to bust in fairly pre- dictable cycles. When a commodity is in favour, i.e., it is expensive, two things happen. Users of the commodity find ways to conserve. They find alternatives and find more intelligent fabrication techniques. At the same time, producers, which are enjoying spectacular cash flows and have low cost of capital, find ways to expand produc- tion. Declining demand and increasing supply, of course, crash prices. At the bottom of the cycle, the opposite thing Profit with MINING STOCKS Contrarian investor Rick Rule shares his winning strategies by Ellsworth Dickson Rick Rule, Chief Investment Ocer, Sprott Resource Holdings. Photo courtesy Sprott U.S. Holdings Inc.