Returning to cyberspace for one of his popular webcasts last week, Rick Rule, founder of Global Resource Investments, warned of extreme volatility ahead, in the broad economy generally and in the natural resource market in particular. Girding for the violent roller-coaster ride he foresees calls for both emotional fortitude and financial preparation, he says, suggesting that investors make up their minds now to stay on the sidelines if they don't have the stomach and the cash to climb aboard.
"The bottom line is that your own financial and psychological preparedness for dealing with volatility will determine whether you come out of the next year or two substantially better off-or substantially worse," Rick says. "It's your responsibility to determine your response and hence your own financial future."
On the psychological side, as he has pointed out in the past, Rick believes that the nature of profiting from volatility lies in being "on the other side of the trade."
And as he says, count on "incredible turbulence and incredible variability" as the commodities supercycle, fed by the developing nations, comes up against the secular bull market enveloping the Western economies. "Both the risks and the rewards will come much more frequently and with much more urgency," he predicts. "This market will give you extraordinary opportunities to either make or lose money. Your response will determine whether the next two years are extremely pleasant or unpleasant for you." It could turn out otherwise, he says, but he hopes that in 10 to 15 years "we can look back on this as an exhilarating and profitable experience."
"In the context of the Chinese curse," Rick concludes, "these are very interesting times, times that will favor the prepared and the bold, and be catastrophic for those who are neither prepared nor bold."
EU-Digest
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