Monday, July 23, 2012

Rick Rule Sprott - Most Junior Gold Mining Stocks are Worthless

VisionVictory has a very interesting interview with Rick Rule of Sprott USA, where he discuses his outlook on gold and gold stocks, water, the stock market as a whole, the economy (US debt) and finally junior gold mining stocks.

This is that last part that is very important to investors. He explains that If you put together the 400 junior gold mining companies, in a good year they would lose 2 billion dollars, in a bad year 8 billions dollars. So he sees no value in this market, unless you are a very good stock picker as the top 10-15% will thrive, whereas 80% will go to their intrinsic value: 0. Rick expects this market (where you can be invested in via ETF such as GDXJ) will stay in a consolidation phase for around 18 months more, while the weaker players (the majority) go bankrupt.

FYI, Marc Faber has the same view on  junior gold mining stocks.

Watch the whole video, it's very informative.

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