USO - EXCLUSIVE: Oil And Gas Aren't Going Anywhere But Uranium Is Dead — Rick Rule's Keys For Understanding Mining | Benzinga
If there's one sector where contrarian investing should be the rule, it's the mining sector.
That's a lesson that Rick Rule, founder and president of Rule Investment Media, learned after being involved in natural resource investing for over 50 years.
"As an investor in resources, if you aren't a contrarian, you're going to be a victim. It's as simple as that," said Rule in an exclusive interview with Benzinga's Chief Content Officer Brad Olesen at the 2024 edition of the PDAC Convention in Toronto.
Rule highlighted the importance of going against market trends in a sector that's known for its volatility and fluctuating cycles.
"These businesses are capital intensive and cyclical, meaning that the cure for low prices is always low prices, and the cure for high prices is always high prices," said Rule.
Yet swimming against the current can be a real challenge for faint-hearted investors, as "easy money ends up being hard, psychologically."
This means that to be a true contrarian, one needs to invest in commodities that are so deeply out of favor that their selling price tends to be priced below the industry average cost of production.
"You have to have the guts to invest in industries in liquidation," said Rule.
The reason to do that is that some industries will continue to function even when their players are not meeting their sustaining ...