Legendary investor and CEO of Sprott U.S. Holdings Rick Rule has laid out the one key factor he considers when investing in gold mining stocks.
Rick Rule, CEO of Sprott U.S. Holdings, 2017
On May 28, he joined a panel of experts in a webcast titled "Will Gold Trump Politics in 2017?" to discuss growing trends in the gold mining industry.
Of course, investors should focus on the financials, past performance, and geological issues.
But one thing stands out to Rule as the most important for investors to review: management.
You see, assets, geology, and financing aside, a bad management team can ruin an otherwise solid gold miner.
"Companies are really collections of individuals," said Rule. "What you need to do is look at the resumes of the individuals in place and figure out whether those resumes are actually suited to the task at hand."
In other words, relying solely on the past success of a CEO or manager isn't enough to determine if he or she will lead the company well. What investors really need to focus on is if the management team's pasts are aligned with the project(s) they are undertaking.
"Understanding the quality and alignment of a management team is an essential part of making any good equity investment, but in the area of gold mining - because of the major impact sound management can have on the inherent risks - it has even greater weight," said the host of the webcast and CEO of Sprott U.S. Media, Albert Lu.
What's more, you can hear how Rule implements this principle in a Money Morning exclusive interview only available to our readers. For the very first time, Rule is sharing seven lucrative, money-spinning deals from his own personal portfolio - the first of which is a company whose management team he trusts and whose experience aligns perfectly with the current opportunity.
Imagine being granted access to the personal portfolio of one of the wealthiest, most successful investors in modern history...
Watch the time-sensitive, private Money Morning interview here.
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