There are certain times in your life that you just want to capture and
come back to over and over again...
That was last night at the Playa Rosada clubhouse in the Rancho Santana
development on the Emerald Coast of Nicaragua.
The Pacific waves were crashing 40 yards from our feet while we sipped
cocktails and huddled around our guest speaker for the evening, Rick Rule.
Rick Rule is arguably one of the best speakers I've ever heard... He is a
magician with the turn of phrase, adding humor to issues that are too dark to
see without a little lightness, and making everyone feel like they are part
of something special.
And they are.
Because amidst the laughs and one liners, you actually learn something.
It's not just barstool statistics you can banter around with, either. Last
night we learned that most of us are investing wrong.
We've spent the past week on an investment whirlwind tour of development
properties on the Pacific coast of Nicaragua. By virtue of our presence, we
aren't conservative investors, even though we may think we are.
We are speculators.
And as speculators, most of our efforts have been engaged in taking on too
much risk without enough reward, dabbling in "possibility" rather
than "probability," and "if" rather than
"when."
When viewed in this context, a true speculator is actually seeking out
less risky opportunities, and seeing investments as they are, rather than as
he wants them to be.
This doesn't always mean he will be right. It should, however, mean that
the returns of his winnings far outweigh his losses.
Most of us also paint speculators with a very short time-frame brush. But
a good speculator will use time in his favor.
Let me give you an example. We talked about uranium. Spot
prices over the years have shot up from $8 to $130 before falling back to
$80, which was about at equilibrium. Then came the massive tsunami that put
Japan's Fukushima reactors out of operation. Japan as a whole suspended the
operation of all its nuclear power stations.
Immediately, 20 million pounds of uranium were taken out of the
supply-and-demand equation, and a further 15 million pounds slated to be
shipped to Japan were pushed back onto the market.
The disaster also caused other countries to question nuclear power and its
expansion, and that sent priced plummeting...
Uranium prices dropped to $40 a pound. It's currently trading for about
$42.
But countries still need power, and they're not going to get it from
another source in a fast and efficient manner.
Rick put it to us this way. Which is more likely: that governments will
let the lights go off, or that uranium prices would rise?
Now, it's not going to shoot back to $80 overnight, but the probability of
prices climbing is very high, and given an appropriate time frame, this is
the kind of opportunity a speculator should be seeking out.
Bear markets are the time to buy because
they induce bull markets, Rick tells us, and this is the 50%-off,
limited-time sale that folks like Rick get excited about...
This won't be the last time we hear from Rick on this trip. I'm staying
here at Rancho Santana for the rest of the week and into the weekend for a
special Bonner & Partners Family Wealth Investment Forum, at which Rick
is going to talk to us more about natural resource investing and frontier
markets.
We'll also hear from Bill Bonner and Mark Ford, Will Bonner and Rob Marstrand,
and a handful of other elite speakers with the experience to generate
lifetimes of wealth and help you and your family keep that wealth for
generations.
Tomorrow I'll give you a glimpse into the exclusive cocktail party that
I'll be attending here at Rancho Santana to kick off the Family Wealth
Investment Forum.
Stay tuned...
Sara
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