GOLD is the money of the KINGS, SILVER is the money of the GENTLEMEN, BARTER is the money of the PEASANTS, but DEBT is the money of the SLAVES!!!

Wednesday, October 30, 2013

Rick Rule Strategies for Making Money - Casey Summit Interivew

Rick Rule: A hundredfold gain. If you have intermediate success getting a 'yes answer', a hundred fold gain means that you've held the stock through several unanswered questions. A 'yes answer' has setup a second question. And the second 'yes answer' has setup another question, and you get another 'yes answer.' It's a series of yes answers. So as an example; Paladin Resources which was a great 100 bagger effect for me. In fact it was better; it was a penny to $10. That involved a series of 'yes answers'. I believed that the uranium price had to go up, and I believed it might take six or seven years for that to happen. So one great thing, so I began that sequence with a question that began with when, not if, because the uranium price had to go up. But there was a series of implementation challenges that the Paladin people had to meet to take advantage of that one situation. They believed, like I believed, that uranium projects that made no money at $10 but could make money at $25 would have value, because uranium would go through $25. So the unanswered question was, could they buy these deposits when the price was low, cheaply. And could they fund their working capital long enough, could they hang on to these deposits until the uranium price ran. The second unanswered question was: 'was there a way to discover more uranium in and about these deposits?, because these deposits hadn't been explored.' We took the point of view that the best indicator mineral for uranium was uranium and the fact that you had a uranium deposit meant that you were better off exploring for uranium in the head frame of a uranium mine than you would be other places. So we had three unanswered questions. Was I right, would uranium prices go up? The second unanswered question is can we take advantage of this market downturn and buy uranium deposits in anticipation that the increased uranium price would make the deposit more value. The third unanswered question is 'can we use the baseline discovery that has been made to increase the size of the deposit?', and the fourth unanswered question is 'Can we then finance these mines to production?' The consequence of four sequential 'yes answers' was to take a stock from a penny to ten dollars. Truly a spectacular set of circumstances. I'm not saying this merely in the context of Paladin, I'm saying it in the context of the answer to your question. Doubles or triples can be the consequence of one unanswered question and that can be 18 months to two years. But ten baggers, fifteen baggers, or a 100 baggers, are normally the consequence of a series of 'yes' unanswered questions. I have found true back testing in the exploration capital partnership series, which is where I have the most experience garnering 20 baggers, that the median holding period for me, for a 20 bagger is in excess of four years. Still a relatively short period of time to enjoy that type of appreciation.

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