Today one of the wealthiest people in the financial world spoke with King World News about what he described as the most extraordinary contrarian indicator he has ever seen in his life. Rick Rule, who is business partners with billionaire Eric Sprott and the CEO of Sprott USA, also shares with KWN readers how they can make fortunes going forward in these turbulent markets. Below is what Rule had to say in this tremendous interview.
Rule: “I listen to Bernanke and people of his ilk mostly for amusement. I’m not trying to suggest that what they say isn’t important, but the idea that Bernanke has managed to convince markets, investors, and intermediaries, that liquidity or cash in the system is a substitute for solvency is a very interesting achievement.
But the reality is that fortunes are made by betting against widely held premises such as the one I just mentioned, and that’s what I am doing with my own money.”
Eric King: “Rick, you have seen the chart from the Richard Russell KWN piece which showed the number of bulls in the Gold Miners Bullish Percent Index which stands at a remarkable 0%.”
Rule: “I think that’s hilarious. I have never in my life seen a sentiment index like that….
And if the number of people polled that were bearish or neutral on gold mining shares was 100% of the subset, that would suggest, at least in terms of the audience they polled, that the selling has already taken place. In other words people always talk their book. If you felt bearish about gold and gold mining shares, why on Earth would you hold gold or gold mining shares?
So it’s interesting to note that if the sentiment is 100% bearish or neutral, that would suggest that virtually all of the potential liquidation has occurred. That’s a very interesting indicator to me.”