“Ben Graham once observed that in the very short-term markets are voting machines, and long-term they are weighing machines.  Meaning, in the short-term they measure people’s perceptions and prejudice, and in the long-term they measure value.

Ben Graham famously said, ‘Money was made arbitraging between the way people vote and the way things are.’  And I think paying attention to the gold price at today’s price makes about as much sense as sense as paying attention to it at $1,900 did.  The truth is that they are both short-term aberrations.

It is completely consistent with gold’s trading in the past that this has been a cyclical decline in a secular bull market.  Remember, from 1974 to 1976, in the midst of the most historic run in gold in my memory, where gold went from $35 to $850 an ounce, in the middle of that epic run there was a decline from $200 an ounce, to $100 an ounce.  People who didn’t have the courage or the cash to stay the trade in the 50% decline, missed an 850% 4-year run.  Investors can ignore that at their own peril.”

Rule added:  “Right now we are focused broadly on natural resources.  More specifically the public and private resource issuers in Canada and Australia, and probably more specifically than that on the precious metals side of the equation.

It’s been very rare in my 35-year career that attractive precious metals companies are priced at or below our estimate of fair market value.  The last time we saw this set of circumstances occur was in 1999/2000.  The last time before that was in 1991.

So this would seem to be a set of circumstances that occurs every 10 years.  When this set of circumstances occurs, it generally is in fairly bleak markets like the ones that we are in today.  My experience in the prior two periods like this has been that aggressive allocation to the best precious metals related explorers or developers in the junior sector, on a global basis, generate tremendous rewards in the ensuing 3-to-5-year time frame.

So we are focused on providing catalytic capital on a private placement basis, with warrants, to very high quality exploration and development stage juniors in the precious metals business.  But we also see great opportunities in many areas in resources including energy.  Sprott has recently secured a mandate to co-fund and co-manage a global catalytic capital mining fund with the largest of the Chinese state-controlled non-ferrous metals mining companies.  So we are very excited about that business.

It is beginning to feel like the big state-owned enterprises, the sovereign wealth funds, and the big private equity players, sense enough opportunity that it now appears funding will be available to the sector over the next 12 months.  We are very excited to be part of that process.” 

IMPORTANT – Due to recent market action, KWN will be releasing major interviews all day long today.

The audio interviews with Gerald Celente, David Stockman, Art Cashin, Dr. Stephen Leeb, John Hathaway, Bill Fleckenstein, James Turk, Andrew Maguire, William Kaye, Dr. Paul Craig Roberts, Eric Sprott and Jim Grant are available now. Other recent KWN interviews include Marc Faber and Felix Zulauf — to listen CLICK HERE.