Silver: The Last Great Thing - For Now 23 comments
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Silver, the most volatile substance on Earth aside from volcanos, is about to go parabolic. We've seen some nice gains so far, but silver is always the last horse out of the gate and it's always on steroids. Gold will continue to rise in US Dollar terms because it's the best barometer we have concerning credit/monetary inflation. Silver, however, is where the money will be made in March and April.
Silver has much to recommend it long term - several critical tech applications - and it remains one of the very few affordable hedges against inflation that we'll most certainly face for several years. But it is the short term you need to consider, in part because we are in an investment environment that is demanding and immediate on both the attention and reaction scale.
The two best, and simplest, ways to play silver are through an ETF and a silver developer and current producer. Physical silver is bulky, the markup is too great, and the resale is always - I repeat ALWAYS - marked below spot.
The ETF(s) are PowerShares DB Silver Fund (DBS) and iShares Silver Trust (SLV).
Each has something to recommend it, but either provides the practical investor with two advantages:
1. Either can be traded in seconds from any equity account.
2. Either charges a nominal management fee - much less than you would experience in either the physical buying or selling of silver.
The only - and by far the best - equity I'd suggest is Coeur D'Alene (CDE). It has the best of both worlds, a current productive capacity that is increasing in value as silver increases and development properties that are very near actual production. My minimum take on CDE's Net Asset Value [NAV] is $7.00 - and that is conservative.
Disclosure: Author holds positions in the above-mentioned securities
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This article has 23 comments:
Full disclosure, I own all three.
pax
t.f.
1. It has the rare mix of current net productive assets..this means that even if time is required to develop new properties they have the means to do so without incurring loads of debt..or diluting the share base
2. They have a truly impressive potential base of silver to exploit..
3. Silver is THE next thing.....this isn't a guess or hope on my part..it will happen within the next 6 weeks.
Are you just shooting from the hip with your prognostication about the next 6 weeks.
Or do you have some clairvoyant or inside knowledge regarding the price of silver??
Either way i hope you're right.
Also...anyone who thinks silver coins will ever be used in a truly chaotic economic situation has been reading too many old Howard Ruff newsletters..you'd be better off with cases of cigarettes and Jack Daniels..and a pistol.
Regarding silver, hold onto till $25. That was a major pivot in the early 1980s.
Cheers!
ratios of silver to gold keeps declining, currently
about 7, and historically it's been around 14-15.
Yet silver is still 50 times cheaper than gold. There's definitely something wrong with this
picture.
I'd definitely trade in my fiat dollars for silver
@ this point.
However I do not believe ETFs are the way to
go. It's best to take physically delivery. That way
you control the silver. To buy ETFs means giving
your money over to an entity which may or may not hold the silver. It's basically an unallocated pool account. IF these SLV truly have the silver they would have quite substantial storage fees. Yet SLV or GLD charge a fraction of 1% in fund fees, and the spread is very low. This obviously doesn't make sense. That's why I believe these ETFs should be completely avoided, and the smart money knows this.
You have any evidence to back this up? Or are you just guessing?
Physical silver is sort of a pain to deal with as 1000 ounces weighs around 80 pounds. A mix of both physical and ETF is nice, physical makes it easier to stay long since it is such a pain to sell. 100 ounce bars don't have much of a premium (7% round trip or so), the ETFs are extremely easy to deal with. I think Everbank has assigned physical if you are paranoid.
(1) I silver going to be much higher than 20 per oz?
(2) Does CDE present the lowest risk option taking Risk/Reward
into consideration.
I think most will agree that quetion number one is a yes.
CDE presents the highest risk reward ratio of the possible options for trading/owning silver. I think the arguement is about risk/reward comfort levels. If you are comfortable with the highest risk-BUY CDE. Obvioulsly futures might be more risky but that is only a timing risk, not a directional risk.
buy it now at .50 cents lol, how can anyone know anything in this world, day trading isthe way to go, quicker to lick you wounds with, than sitting there. Did all u people go back and read what you said in March and April?
Nevermind,, hope u are havin;' fun while I pick up your pieces soon.
Has hedged it's gold forward. It has a ton of debt, it prints shares and its silver mine in Mexico will be nationalized when Mexico implodes and silver goes thru the Milky Way on its way to Adramada.
Buy silver calls on the futures contract. It does not hold the silver but it does provide the quick profit without storage risk or equity risk. Just get put before the exchange defaults.
North