The best bets in commodities right now

If you’re feeling financially repressed and need income, you need to snap up some junior oil and gas stocks, says Rick Rule of Sprott Global.

We've long been interested in the thinking of Rick Rule, a founder of US-based Sprott Global, and something of an expert on the resource sector Sprott runs $10bn worth of resource investments. Given the huge declines in commodity equities in recent months, I was keen to talk to Rick myself. However, as our schedules didn't match up (and I loathe phone interviews), we contracted out the talk to Henry Bonner (if you guessed a connection here to Bill, you guessed right). What follows here is my summary of Rick's answers to the questions Henry put to him.

The key questions were about where we are in the cycle for commodity stocks. Are we perhaps at the capitulation stage the bit in every bear market that marks the point at which investors throw in the towel and sell at any price? Rule thinks that, in the junior resource sector at least, we are. "This is my fourth major market cycle and in every previous bear market, the bear market ended in a sort of a crescendo, capitulation downdraft." This tends to be followed by "nine to 18 months of sideways, choppy movement on very low volumes" with a recovery that just doesn't feel like a recovery to anyone "except to stock-pickers".

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.