The Secret To How Eric Sprott & I Became Wealthy

Today one of the wealthiest people in the financial world spoke with King World News about how he and Eric Sprott became so wealthy. Rick Rule, who is business partners with billionaire Eric Sprott, also spoke about one of the greatest opportunities that he has seen in his entire career. Below is what Rule had to say in his interview.

Rule: “You know, Eric, it’s funny because right now I am up in Vancouver, and looking at the despair in the professional investment community and juxtaposing that with the strange elation that I feel has caused me to feel very contemplative.

One of the things that occurs to me is that this is my fourth major market cycle. The three previous down-cycles that I’ve been through previously were the cause of my personal wealth, and Eric Sprott’s personal wealth….

“It’s interesting that at age 60 I have a lot more patience than I did when I was age 30. And I think one of the things that’s happening right now is the fact that markets and conditions have caused me to be a 3-to-5-year thinker, and most of the people I compete with, who are 20 years younger than me, have a 2-to-3-week time frame.

And the idea that somebody who has a 2-to-3-week times frame can compete with somebody who has a 3-to-5-year time frame is very problematic. What Eric and I are trying to do in very crass terms is go from being quite wealthy, to being ludicrously wealthy.

But the reality is that we are competing with people who are trying to make payments on their 2nd house at Whistler. In other words we are competing with people who are trying to live rich as opposed to being rich, which constrains them to a very, very short time frame.

Certainly I feel bad about having paid $3 for some stock that is selling at 60 cents, but it’s not the first time I’ve ever done that, and it’s certainly not the last time I am going to do that. But what I can tell you is that the money I’ve made in my life has come about through the aggressive deployment of capital at times like these.


How Investors Can Make A Fortune In These Markets

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.”


The Financial System May Surprise You Going Forward

Today one of the wealthiest people in the financial world spoke with King World News about what they can expect from the financial system going forward, and it may surprise a great many readers around the world.  Here is what Rick Rule, who is business partners with billionaire Eric Sprott and the CEO of Sprott USA, had to say about Cyprus and what investors should expect going forward:

“We spoke last week about deposit guarantees which failed in Cyprus, and how this was symptomatic of social promises made to individuals by overreaching governments around the world.  People have to understand that those promises, while they may have been well-intentioned, were lies.

So we need to watch out for ourselves and that realization is going to come as hard news to people who believe the state can and should do that.  The coming market unrest and social unrest that is a consequence of people coming to realize they have to be self-reliant will be very troubling…

“On a forward-looking basis what you try to do is anticipate what happens next.  Where will the next shock come from?  When you look at the incredible success that Japan has had in depreciating the yen through their own quantitative easing, this is really the about the 20th shot fired in a global war to devalue currencies.

This is a shot that has to be answered by the United States, Western Europe, and China.  The Chinese clearly have an export oriented economy and they have also clearly grabbed market share from Japan.  The problem for the Japanese is they can’t afford to have that market share taken from them.

American investors need to take a look at what happened in Cyprus and they need to pay attention to the limits of deposit insurance.  They should have less than $250,000 in each bank account and maybe less than $100,000.  The bulk of people’s assets also need to be in things they can’t print.  So while I have very, very large cash holdings, my definition of cash includes bullion, and I have been increasingly shifting my cash holdings to physical bullion.

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