In short: A poor hedge for real juniors: macro-fund inflows can lift GDXJ while a forgotten junior is sold down by an indifferent mutual-fund manager — "your short leg go up, and the long leg might actually go down." Host's figures: down 41% from its January peak, now ~15% off the highs. Hedges are instead index shorts, the metal, and option structures.
GDXJ is a fund that holds a basket of smaller gold-mining shares. A natural idea is to protect a portfolio of junior miners by betting against (shorting) this fund, so that if the whole sector falls, the short gains offset the losses. Brick explains why that often fails for the kind of tiny companies he owns: money pours into GDXJ when gold rises, pushing it up, while an obscure stock can keep falling because a new fund manager who inherited it is quietly selling it every day. You then lose on both sides. So Muddy Waters hedges with a mix of index shorts, the metal itself, and options that pay off if metal prices collapse — and relies mainly on buying cheap enough that permanent losses are unlikely.
45:07I'm just going to sell this every single day because it went up and it's not my position. I literally couldn't care less what this thing does," the stock is going to be held down. Well, if you're hedged with the GDXJ, which might be getting tons of inflows because gold's gone up, and that's the easiest way for a macro fund to express it with some leverage, well, you're going to have your short leg go up, and the long leg might actually go down.
In short: The other half of the ETF hub, named alongside GDX and silver as "our top holdings" — "we have a huge position in GDX and GDXJ. Those are our hub." Up over 150% in 2025 with GDX. It is also how he holds First Majestic rather than owning the stock outright.
GDXJ is the same idea one rung down the size ladder: a basket of smaller, earlier-stage gold miners. Smaller miners move further than the metal in both directions, so it is the higher-octane half of what Feneck calls his "hub" — the core holdings he sizes large and does not trade around.
He owns it for the same reason as GDX, and it also solves a specific problem for him. He rates First Majestic's CEO highly but thinks the stock is expensive relative to alternatives, so rather than skip the exposure he takes it indirectly: "I own Keith's stock through GDX and GDXJ."
Both ETFs rose over 150% in 2025 and then gave a large part of it back in the March–August drawdown — which is the pattern he is asking investors to expect and to buy into, not to be surprised by.
20:56We have a huge position in GDX and GDXJ. Those are our top holdings, right? And those are our hub. And then we take positions in critical minerals, in gold equities, and in silver equities. Those are our three major buckets. And we use those as spokes. What creates a hub position in there, Jeremy, versus a spoke position is (a) our conviction in the name and (b) whether or not we have any relationship with the company whatsoever.
In short: His own bucket, named explicitly: "For Rick Rule, somebody who is willing to work hard and has the psychological durability to be a speculator, I probably like the GDXJ." He is simultaneously taking money off the table inside it: "I have a couple of speculative positions that are up in 3 months over 100%. And I have the ability myself to sell half those positions and get the rest for free. Because, make no mistake, other than the gold price, nothing much materially changed with those companies… I will be trimming a couple of my speculative positions, which I added only very recently." The structural caution on the junior space: only "10 or 15% of the listings are capable of" deploying newly-raised capital productively — "the vast majority of them, when they raise money, will spend it on G&A and waste it."
GDXJ holds the smaller, earlier-stage gold companies — many of which don't yet produce anything. This is Rule's own bucket, and he says so plainly: "For Rick Rule, somebody who is willing to work hard and has the psychological durability to be a speculator, I probably like the GDXJ." The phrase "psychological durability" is doing real work there: these shares fall 60% routinely, and the reason most people lose money in them is that they sell at the bottom of those moves.
Notice what he is doing while calling this his favourite category — trimming. A couple of positions he bought only recently are up more than 100% in three months, and he intends to sell half of each. His reasoning is a piece of arithmetic worth internalising: "if nothing has changed in a company and the company stock has gone from $1 to $2, it's precisely half as attractive as it was before the price doubled." The business didn't improve; only the gold price did. Selling half returns your original money and leaves you holding the rest at zero cost.
The structural warning attached to the whole space: a rising share price does hand juniors cheap capital to drill and grow, but "only 10 or 15% of the listings are capable of doing that. The vast majority of them, when they raise money, will spend it on G&A and waste it." An index like GDXJ owns both kinds indiscriminately — which is exactly why he picks individual names rather than buying the basket himself.
20:13So, when you're asking me the question, you need to ask me the question on behalf of whom? For Rick Rule, somebody who is willing to work hard and has the psychological durability to be a speculator, I probably like the GDXJ. For investors, people who are willing to take company risk and endure more volatility, they probably like the GDX. For savers, they should like gold.
In short: The vehicle he used to object to, now qualified. The objection: volume weighting "is not necessarily a measure of value," and "there was something inelegant… buying as an example the GDXJ and paying a fee to somebody where 60% of the stocks in the ETF I wouldn't buy with a straight face." The concession: "there's a whole bunch of people out there who won't do the work themselves. And if they want to express their preference for a theme, buying an ETF is a lot better than doing nothing." His own preferred alternative is owning the manager.
GDXJ holds a basket of smaller gold-mining companies, weighted largely by size and trading volume. Rick's long-standing objection is that this is not a measure of value — the fund buys more of whatever is biggest and most traded, regardless of whether it's any good. His verdict on the holdings was blunt: "60% of the stocks in the ETF I wouldn't buy with a straight face," and paying a fee for that struck him as absurd.
He has softened, not reversed. For someone who won't read 10-Ks and simply wants exposure to a theme, "buying an ETF is a lot better than doing nothing" — and there is nothing wrong with spending your time on your grandchildren instead. His own preferred alternative is to own the fund manager and collect the fees rather than pay them.
16:58Well, I think you have to use it. I think you need to get in the way of the money. There was a point in time in my life when I was a little critical of the ETFs, even a couple of my own construction, because if they're as an example volume weighted, that's not necessarily a measure of value, and I thought there was something inelegant for myself buying as an example the GDXJ and paying a fee to somebody where 60% of the stocks in the ETF I wouldn't buy with a straight face. The idea that
In short: The junior-miner leg of the same apathy chart ("GDXJ is the junior gold miner ETF") — record outflows despite the miners' banner year, which on his contrarian read is why the group "looks pretty interesting." Same fundamental kicker: rising margins plus incoming capital discipline.
GDXJ is the same idea as GDX but with smaller mining companies — "juniors." Smaller miners are riskier and swing harder, so they usually fall further in a downturn and rise further in an upturn.
It appears on the same fund-flow chart, showing the same record outflows in a year when the miners actually made good money. Hay's read applies to both: the money leaving is apathy, not information, and "the gold miners and silver miners look pretty interesting" as a result.
1:20:58So GDX is the senior gold miner ETF. GDXJ is the junior gold miner ETF. And you would think that after the tremendous returns that they've had for the last few years until this year, the inflows would have been off the charts, which is usually a big warning sign like it was back in 2016. — Yeah. — Instead, this indicates a lot of investor apathy.
In short: Cited (with GDX) for the gold-miner sentiment washout from the January highs — the setup behind his contrarian gold-miner buy.
GDXJ holds smaller, "junior" gold miners — generally more volatile than the big ones in GDX. He cites it (alongside GDX) to show how far gold-miner sentiment has fallen from its January highs.
That extreme washout is the backdrop for his contrarian gold-miner buying. He references GDXJ as evidence of the mood rather than singling it out as his preferred buy (he bought GDX).
23:26The gold and gold mining sentiment are now near historic lows. They were historic highs in January when gold was near 5600. GDX and GDXJ had flown up to highs for this period not seen in a while, but there's been an absolute extreme sentiment washout over the last couple of months. Um, really since the day that Trump announced that he sent that Armada over to the Persian Gulf.
In short: What he WANTS to buy — single-asset mid-tier gold producers underpriced vs the seniors ("the smaller end of the gold sector is cheap"): they either re-rate or get taken over. But he's building cash instead for now.
GDXJ is an ETF that holds smaller and mid-sized gold miners (the "juniors") rather than the giant producers. This is the thing Rule says he most wants to buy: he thinks the smaller end of the gold sector is genuinely cheap relative to the big seniors, and that those smaller companies either get repriced upward on their own or get bought out by a larger miner — both good outcomes for a shareholder.
The catch: he isn't buying right now. He's deliberately holding cash instead, because he's more worried about a market scare in the near term than he is eager to chase the bargain. So this is a "what I'd buy if I weren't busy raising cash" pick — conviction on the value, restraint on the timing.
14:08What I want to be doing is buying the single asset mid-tier gold producers because I think that the market is under pricing them relative to the seniors. I think the gold price will do well. Uh I think that either those companies will re-rate or the big ones will take over the little ones. But that's not what I'm doing. I'm building cash.
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