Fishhead said:
Its pretty scary when people think they are bearish with a 5% higher call.
This inflation environment certainly has changed the way people think.
Saw quite a few for sale signs along Indian Rocks/Madeira/St Pete last month while there.
Only call I have for market is that gold and silver will again outpace any dow jones gains.
Alot of talk about dollar collapsing today, tomorrow, next week....not going to happen tomorrow as all countries are depreciating currencies. Eventually when dollar tanks too much other countries intervene and tank their own currencies to boost exports. This race to the bottom wont have a good ending for those not prepared.
Could get another great buying opportunity with precious metals as fed is again hinting about rate hikes (which could give dollar another uptick).
For past 5 years now, and forseeable future, this precious metals bull market is the long trade of a lifetime.
It wont last forever, nor do I care. If people can get out anywhere near or shortly after the top, they'll have more money than they can count.
Fish, was it just my eyes fooling me or are there alot more than usual # of condos for sale on mid-pinellas beaches?
Could get another great buying opportunity with precious metals as fed is again hinting about rate hikes (which could give dollar another uptick).
For past 5 years now, and forseeable future, this precious metals bull market is the long trade of a lifetime.
It wont last forever, nor do I care. If people can get out anywhere near or shortly after the top, they'll have more money than they can count.
Fish, was it just my eyes fooling me or are there alot more than usual # of condos for sale on mid-pinellas beaches?
DAWOOFDADDY said:
Dawoofdaddy,
What are your thoughts on ETFs? In particular SLV (I Shares Silver Trust) and GDX (Market Vectors Gold MIners and IAV (I Shares COMEX Gold Trust)?
I own 2 individual silver stocks (slw and ssri). Was looking into possibly some ETFs to lessen the risk associated with individual stocks.
Thanks for your thoughts.
Tamer
Its mind-boggling that the s/p hasnt had a single-day decline of more than 2% in a few years.
Dont believe thats ever happened until now.
Rate raising cycle, commodities went through the roof, wars, inflation, housing bubble showed signs of falling off a cliff, etc, but the market continues higher.
Nasdaq did have a 15-20% correction last summer, but throughout the fall the markets charged higher.
2006 other than Japan, the US was rose the least of all other major nation stock indexes.
Although I did finally read one main analyst from JP Morgan give a bearish call, every other major analyst is calling for stocks to increase 5-15% during 2007.
Something has to give.
Dont believe thats ever happened until now.
Rate raising cycle, commodities went through the roof, wars, inflation, housing bubble showed signs of falling off a cliff, etc, but the market continues higher.
Nasdaq did have a 15-20% correction last summer, but throughout the fall the markets charged higher.
2006 other than Japan, the US was rose the least of all other major nation stock indexes.
Although I did finally read one main analyst from JP Morgan give a bearish call, every other major analyst is calling for stocks to increase 5-15% during 2007.
Something has to give.
Linetamer, I prefer to own leaders within sectors I am bullish about. There is no point owning the gold etf when you can own actual metal and/or the leading stocks. If you are more comfortable owning the etf, buy them, but I prefer to avoid these etfs.
SSRI is the top silver play and slw is another leader.
Ive posted this to you before, if you dont own physical metal, you should put any new money to work owning actual metal. Focus your bullion ownership in gold and focus your mining stocks to silver companies.
Metals and commodities are now having a correction....this happens to shake weak hands out of their shares and metal. Weve had several 20+% declines since I began buying earlier this decade.
The fundamental reasons for owning precious metals have not changed.
SSRI is the top silver play and slw is another leader.
Ive posted this to you before, if you dont own physical metal, you should put any new money to work owning actual metal. Focus your bullion ownership in gold and focus your mining stocks to silver companies.
Metals and commodities are now having a correction....this happens to shake weak hands out of their shares and metal. Weve had several 20+% declines since I began buying earlier this decade.
The fundamental reasons for owning precious metals have not changed.
GoldMoney is the digital gold currency most leaning towards investing in gold vs. using gold as money. Recent restrictions on account use led me to quit using them but they are nothing if not reliable and reputable. They also offer direct funding to and from one's bank account (in several different fiats) and for many people this is a big selling point.
I am personally more fond of e-gold and Pecunix for various reasons, but each of the DGC providers offers a unique angle from the others.
Phaedrus
I am personally more fond of e-gold and Pecunix for various reasons, but each of the DGC providers offers a unique angle from the others.
Phaedrus
A Metal Stock With a Silver Lining<SCRIPT src="http://Ads1.msn.com/library/dap.js" type=text/javascript></SCRIPT>
If you're bullish about the outlook for silver prices and have a little mad money to throw around, I've got just the stock for you: Silver Wheaton (NYSE: SLW), the only company that derives 100% of its revenue from silver sales. I use the term "mad money" because investing in Silver Wheaton is essentially an unhedged bet that silver prices will rise in 2007, and that isn't exactly a risk-free gamble -- especially in light of the recent weakness in silver stocks.
The price of silver hit a 25-year high of $15.17 per ounce last May, and shares of silver plays such as Silver Wheaton, Hecla Mining (NYSE: HL), Pan American Silver (NASDAQ: PAAS), and Silver Standard Resources (Nasdaq: SSRI) gained an average 69% through the end of November. The sector then took a breather as the iShares Silver Trust (AMEX: SLV) fell more than 8% from the beginning of December through the end of last week.
<SCRIPT src="/relevance/js.asp" type=text/javascript></SCRIPT>Now, is this the beginning of a cyclical decline or merely a pit stop along the way toward higher silver prices in 2007 and beyond? In my Foolish opinion, silver should trend higher in 2007, and investors should position themselves accordingly. Simply put, silver prices will climb higher because of robust demand for jewelry from emerging-market nations such as China and India, with their burgeoning middle classes, increased industrial demand for the soft metal as a conductor for electricity, and the simple fact that current stockpiles stand at a 50-year low.
Here are just a few reasons for my bullishness:
I don't know about you, but this all seems to point to a strong showing for silver in 2007, and I believe that Silver Wheaton is uniquely positioned to benefit from this situation.
Vancouver-based Silver Wheaton is the only company in the world that derives 100% of its revenue from silver sales, all of which are unhedged. The company, 50%-owned by GoldCorp (NYSE: GG), doesn't own or operate any mines (which helps with low overhead) but rather enters into long-term silver-purchase contracts, through which it buys production from mines and resells that production on the open market. At present, Silver Wheaton purchases all of the silver production from GoldCorp's Luismin Mines in Mexico and Zinkgruvan Mine in Sweden, as well as silver from Glencore's Yauliyacu mine in Peru, at a set price of $3.90 per ounce, subject to inflationary adjustments.
This is a pretty powerful business model in an environment of rising silver prices, as evidenced by the company's results in the most recent quarter. In the three months ended Sept. 30, Silver Wheaton reported revenue of $41.7 million, an increase of 130% from the prior year's quarter, as the company sold 3.5 million ounces of silver at an average price of $11.86 per ounce, compared with sales of 2.5 million ounces at $7.13 an ounce last year. Net income came in at $22.5 million, a whopping 236% jump from last year, as Silver Wheaton was able to boast a net margin of close to 54%.
The company is also moving to ensure that it has adequate supply to meet demand. Silver Wheaton recently obtained the right of first refusal to silver production from GoldCorp's new mine in Penasquito, Mexico, and has also taken stakes in various mining companies such as Bear Creek Mining and Sabina Silver. Silver Wheaton has recently said that it expects to sell some 16 million ounces of silver in 2007 and roughly 20 million ounces by 2009.
It's a pretty impressive picture, but, of course, it still amounts to a gamble on the price of silver, especially given Silver Wheaton's current valuation.
At a recent price of $9.82 per share, Silver Wheaton trades at roughly 17 times fiscal 2007 estimates. That's a pretty rich valuation for the mining sector, but it represents a 68% discount to the company's five-year projected growth rate. Simply put, Silver Wheaton represents the ultimate feast-or-famine play among silver miners, and my guess is that it will provide a feast for investors willing to step up to the plate.
For related Foolishness:
Fool contributor Will Frankenhoff is enjoying his time writing for the Fool more than reading The Financial Times, rooting for the Jints, or taking a nap. He welcomes your feedback at elves1us@yahoo.com. He does not own shares in any of the companies mentioned above. The Fool has a disclosure policy.
Copyright 2007 Motley Fool
If you're bullish about the outlook for silver prices and have a little mad money to throw around, I've got just the stock for you: Silver Wheaton (NYSE: SLW), the only company that derives 100% of its revenue from silver sales. I use the term "mad money" because investing in Silver Wheaton is essentially an unhedged bet that silver prices will rise in 2007, and that isn't exactly a risk-free gamble -- especially in light of the recent weakness in silver stocks.
The price of silver hit a 25-year high of $15.17 per ounce last May, and shares of silver plays such as Silver Wheaton, Hecla Mining (NYSE: HL), Pan American Silver (NASDAQ: PAAS), and Silver Standard Resources (Nasdaq: SSRI) gained an average 69% through the end of November. The sector then took a breather as the iShares Silver Trust (AMEX: SLV) fell more than 8% from the beginning of December through the end of last week.
<SCRIPT src="/relevance/js.asp" type=text/javascript></SCRIPT>Now, is this the beginning of a cyclical decline or merely a pit stop along the way toward higher silver prices in 2007 and beyond? In my Foolish opinion, silver should trend higher in 2007, and investors should position themselves accordingly. Simply put, silver prices will climb higher because of robust demand for jewelry from emerging-market nations such as China and India, with their burgeoning middle classes, increased industrial demand for the soft metal as a conductor for electricity, and the simple fact that current stockpiles stand at a 50-year low.
Here are just a few reasons for my bullishness:
1. Jewelry demand: A spokesman for the World Jewelry Confederation recently said that China, India, and Russia "are expected to stand at the center of the expected double-digit [growth in] silver consumption in the coming years".
2. Industrial demand: According the Silver Institute, industrial demand for silver rose 11% in 2005 and represented 47% of total demand, up from 37% in 1995. As emerging-market nations continue to rapidly industrialize, demand for silver will keep pace.
3. Low stockpiles: According to CPM Group, a commodities-research firm, there are roughly 300 million ounces of silver in above-ground stockpiles, a 50-year low.
Lest we forget, there's also financial demand in terms of the iShares Silver Trust, which is required to actually hold silver to back its shares. iShares Silver Trust currently holds more than 100 million ounces and is expecting to add an additional 168 million ounces to back the issuance of new shares.2. Industrial demand: According the Silver Institute, industrial demand for silver rose 11% in 2005 and represented 47% of total demand, up from 37% in 1995. As emerging-market nations continue to rapidly industrialize, demand for silver will keep pace.
3. Low stockpiles: According to CPM Group, a commodities-research firm, there are roughly 300 million ounces of silver in above-ground stockpiles, a 50-year low.
I don't know about you, but this all seems to point to a strong showing for silver in 2007, and I believe that Silver Wheaton is uniquely positioned to benefit from this situation.
Vancouver-based Silver Wheaton is the only company in the world that derives 100% of its revenue from silver sales, all of which are unhedged. The company, 50%-owned by GoldCorp (NYSE: GG), doesn't own or operate any mines (which helps with low overhead) but rather enters into long-term silver-purchase contracts, through which it buys production from mines and resells that production on the open market. At present, Silver Wheaton purchases all of the silver production from GoldCorp's Luismin Mines in Mexico and Zinkgruvan Mine in Sweden, as well as silver from Glencore's Yauliyacu mine in Peru, at a set price of $3.90 per ounce, subject to inflationary adjustments.
This is a pretty powerful business model in an environment of rising silver prices, as evidenced by the company's results in the most recent quarter. In the three months ended Sept. 30, Silver Wheaton reported revenue of $41.7 million, an increase of 130% from the prior year's quarter, as the company sold 3.5 million ounces of silver at an average price of $11.86 per ounce, compared with sales of 2.5 million ounces at $7.13 an ounce last year. Net income came in at $22.5 million, a whopping 236% jump from last year, as Silver Wheaton was able to boast a net margin of close to 54%.
The company is also moving to ensure that it has adequate supply to meet demand. Silver Wheaton recently obtained the right of first refusal to silver production from GoldCorp's new mine in Penasquito, Mexico, and has also taken stakes in various mining companies such as Bear Creek Mining and Sabina Silver. Silver Wheaton has recently said that it expects to sell some 16 million ounces of silver in 2007 and roughly 20 million ounces by 2009.
It's a pretty impressive picture, but, of course, it still amounts to a gamble on the price of silver, especially given Silver Wheaton's current valuation.
At a recent price of $9.82 per share, Silver Wheaton trades at roughly 17 times fiscal 2007 estimates. That's a pretty rich valuation for the mining sector, but it represents a 68% discount to the company's five-year projected growth rate. Simply put, Silver Wheaton represents the ultimate feast-or-famine play among silver miners, and my guess is that it will provide a feast for investors willing to step up to the plate.
For related Foolishness:
- The Best Small Cap for 2007: Pan American Silver
- 7 More Surprising Stocks
Fool contributor Will Frankenhoff is enjoying his time writing for the Fool more than reading The Financial Times, rooting for the Jints, or taking a nap. He welcomes your feedback at elves1us@yahoo.com. He does not own shares in any of the companies mentioned above. The Fool has a disclosure policy.
Copyright 2007 Motley Fool
Levi, one thing to remember is that during times of inflation (increased money supply) markets sometimes take a mind of their own.
Weimar era in Germany the stock exchange went through the roof along with cost of everything else so stock gains meant nothing. Only people that got money out of germany and/or into precious metals had any wealth after inflation destroyed the country. Same thing is currently happening in US.
Govt does this to fool people into thinking nothing is wrong. If we still had honest monetary system dow and other indexes would be lower than they were in 2002 drop. However, they continue pouring dollars into the system and some of that money is destined to buy stocks.
I have no call about market other than relative to gold it is going to underperform.
Last year, all major markets worldwide nominally went higher...two worst among those markets was US and Japan.
Weimar era in Germany the stock exchange went through the roof along with cost of everything else so stock gains meant nothing. Only people that got money out of germany and/or into precious metals had any wealth after inflation destroyed the country. Same thing is currently happening in US.
Govt does this to fool people into thinking nothing is wrong. If we still had honest monetary system dow and other indexes would be lower than they were in 2002 drop. However, they continue pouring dollars into the system and some of that money is destined to buy stocks.
I have no call about market other than relative to gold it is going to underperform.
Last year, all major markets worldwide nominally went higher...two worst among those markets was US and Japan.
