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XMFSinchiruna (27.97)

The Unbelieveable Bargain of Silver

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November 25, 2009 – Comments (43)

I wish I had the time just now to lay down the full investment rationale for silver. Hopefully, those of you who have been here for a while have read my rationale before. In the few seconds that I do have, let me just point out something.

After a couple of weeks where silver had started to close the enormous relative gap between the valuations of gold vs. silver, it has again fallen behind gold's explosive trajectory, and today trades at a wholly unsustainable ratio of 63:1. 

Silver traded above $20 when gold first moved over $1,000 in March 2008, and at the time I touted the gold:silver ratio of 50:1 as itself entirely unsustainable and reflective of a relative bargain in silver. I was not wrong ... thbis is a long-term phenomenon, and the timing of when silver will move towards more reasonable ratios of 40:1 and eventually 30:1 are anyone's guess ... but it will happen.

Keep a close eye on the USD .. if it stays convincingly below 75, then we have significant continuation of this run in the works. The reason ... everyone knows there is no support for the USD here, and will rush to protect themselves from an accelerating decline. The USDX needs to take out 76 to have a chance of causing gold to pause, and at the moment that isn't looking very likely. I think we'll easily take out $1,200 or $1,250 in this move. Significantly higher prices are possible too before a pullback, but personally I'd rather see a pullback sooner rather than later to reduce volatility. If this carries on for much longer without interruption, volatility could creep in and discourage even more wary investors from protecting themselves with gold.

To sum up my original point, a natural price for silver corresponding to today's gold price would be well abive $25. The fact that silver remains below $20 is a market dislocation ... an anamoly that I encourage Fools to pounce upon. The downside risk for silver if gold pulls back is not as great as it has been during past gold breakouts, and the long-term prospects for silver are incredible. Remember, I'm targeting a $50 minimum for silver during this bull market, but can also conceive of the possibility that silver could reach triple digits.

If gold is feeling expensive to you, even though it is not, then consider the greater bargain: silver.

43 Comments – Post Your Own

#1) On November 25, 2009 at 8:10 AM, dudemonkey (40.73) wrote:

I totally agree with you.  I've been watching the price of silver, also, and have noticed that it's been sluggish compared to gold.  With any commodity or currency, it's always either a technical or a speculative call, but in this case I think we're looking at a higher-probability event.

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#2) On November 25, 2009 at 8:48 AM, DaretothREdux (49.28) wrote:

A+ for you!

I already had planned on buying some silver (tangible) with my next paycheck, but this makes me feel even better about it.

Dare

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#3) On November 25, 2009 at 8:48 AM, catoismymotor (38.90) wrote:

Sinchy,

Thanks for the blog. I always appreciate your input. I think if people are not inclined to buy precious metals I think it would be good to hold a mining company or two. I think right now we are seeing the wind up before the pitch. Should the pitch come I believe it will be in January after the retail numbers are reported. I expect bad news that will either drive down the markets and/or give a hefty boost to precious metals. Either way I will be well positioned come January 1, 2010 to take full advantage of either senario. I leaned well from November 2008.

On a side note: I've always liked silver more than gold. My preference goes back to my first 128 count box of Crayola crayons. How many countries can you think of named platinum or gold? I can't think of any either. But I can think of one for silver. :)

Cato

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#4) On November 25, 2009 at 9:04 AM, galtline (31.27) wrote:

Any silver miners that you have an eye on right now?

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#5) On November 25, 2009 at 9:08 AM, selfdestruct2 (50.61) wrote:

Any silver stocks, ETFs you you guys could recommend ?

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#6) On November 25, 2009 at 9:25 AM, stargold (< 20) wrote:

Silver has been lagging, and for some reason right now the premium you have to pay as a small scale holder on a silver bar is unusually low also. As little as three months back the premium on a silver bar as compared through BullionSupermarket.com http://bullionsupermarket.com/default.aspx?cri_sym=SILVER&cri_country=US

Was around 50% on a 10 ounce (a small bar), now premiums are 10% or below.

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#7) On November 25, 2009 at 9:32 AM, globalsailor (39.51) wrote:

cato: While I can think of a country that means silver (Argentina) I can also think of a country that means gold: Ghana.

On a more relevant note: I think silver is awesome and undervalued too.

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#8) On November 25, 2009 at 9:35 AM, catoismymotor (38.90) wrote:

# 5 - SLW and CEF are my suggestions. I would not go for an ETF. Please don't take my word as gospel. Do the homework and see if they right for you.

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#9) On November 25, 2009 at 9:35 AM, chk999 (99.98) wrote:

Suppose the gap closes by gold moving down?

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#10) On November 25, 2009 at 9:36 AM, catoismymotor (38.90) wrote:

#7 - Ghana means gold? Well, I stand corrected. Thanks, GS.

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#11) On November 25, 2009 at 10:00 AM, dragonLZ (99.69) wrote:

Cato, maybe you should start investing in Elephants...

p.s. There is a country in Africa that has Ivory in its name... :)

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#12) On November 25, 2009 at 10:05 AM, XMFSinchiruna (27.97) wrote:

catoismymotor

I second those suggestions, but the enormous bargains right now are in the juniors that I can't talk much about at the moment because I'm buying shares. Mexico is the place for silver... mines there yield the highest quality ore.

I believe SLW will hit par before this is all said and done. Any share price beneath 1.2 times the spot price for silver remains in drastically undervalued territory, so despite the fact that it has increased 6.5X since I begged Fools to buy it last November, it is still a steal for the long-term investor ... IMO.

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#13) On November 25, 2009 at 10:12 AM, XMFSinchiruna (27.97) wrote:

As a side note, the natural ratio between gold and silver as measured by ther relative scarcity in the Earth's crust is 16:1, and that relationship shaped the long-term ratio of 20:1 which held for many centuries before some of the bi-metallic currencies were terminated.

Also ... look at my recent articles on CDE ... somewhere in there there is a very telling quote from the CEO about emerging industrial demand for silver relating to handsets, etc. BULLISH.

 

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#14) On November 25, 2009 at 10:26 AM, PeteysTired (< 20) wrote:

TMFSinchiruna

For those smaller scale investors would you buy US silver coins or any country in particular or would you rather just own the silver?

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#15) On November 25, 2009 at 11:00 AM, XMFSinchiruna (27.97) wrote:

PeteysTired

If you're talking physical, go for straight up bullion ... numismatics add unnecessary premiums and compexity to the equation.

Try APMEX.com's self-branded silver rounds (5 and 10-ounce).

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#16) On November 25, 2009 at 2:57 PM, galtline (31.27) wrote:

Thanks Sinch.  Yes, I had gotten into SLW in October (I believe after I had read one of your articles about it).  I suppose I could always buy more...

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#17) On November 25, 2009 at 3:25 PM, silverminer (31.38) wrote:

galtline

That would have been this one, most likely:

http://www.fool.com/investing/value/2008/11/25/silver-selling-for-1-per-ounce.aspx

But if you're sure it was october it could have been this one:

http://www.fool.com/investing/dividends-income/2008/10/07/make-silver-streams-your-golden-parachute.aspx

SLW is 15% of my personal portfolio, having grown to surpass my CEF stake by quite a margin. I'm not looking to trim it down until it hits 20% or more. I still consider SLW the best equity in the world. :)

Happy Thanksgiving!

 

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#18) On November 25, 2009 at 5:38 PM, kadosas (< 20) wrote:

Any opinions about Great Panther Rescources? I own it myself, and it has done pretty well lately.

 

 

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#19) On November 25, 2009 at 5:53 PM, silverminer (31.38) wrote:

kadosas

Shhhh ... that one's my secret. OK, well... not really:

Great Panther Moves to Positive Cash Flow

Don't Forget About the Junior Silver Miners

A Painful Blip on the Screen for us Commodity Longs ... An Incredible Opportunity for Fools Sitting on Cash July 2008

FWIW, it's my 4th largest equity holding by % allocation ... more if based on my cost basis (I am deep underwater on it).

 

 

 

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#20) On November 25, 2009 at 6:04 PM, kadosas (< 20) wrote:

Silverminer

Ok thanks, looks like I´m on the right track :-)

 

 

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#21) On November 25, 2009 at 9:49 PM, ChrisGraley (30.25) wrote:

Sinch, I've been reccin your posts, but you have literally been taking words out of my mouth lately! It's been hard for me to comment, so I thought I would post just to let you know that the choir is still listening to the preacher.

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#22) On November 26, 2009 at 1:14 AM, jesusfreakinco (29.12) wrote:

Sinchy,

Thanks again for your expertise.  We all owe you a great deal.  I wish there was some way we could repay you for your insight.

JFC

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#23) On November 26, 2009 at 2:10 AM, ATH001 (< 20) wrote:

JFC, Amen to your comment, indeed we are very much in debt to Sinch.

 Thank you once again Sinch.

Luis

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#24) On November 27, 2009 at 3:59 AM, DarthMaul09 (29.89) wrote:

It looks like gold, silver and copper all sold off on Thursday, potentially setting up a better buy in price for SLW on Friday or Monday.

 http://www.bloomberg.com/markets/commodities/cfutures.html

COPPER FUTURE (USd/lb.)

304.700

-15.000

-4.6903:28  

Precious Metals


PRICE  CHANGE  %CHANGE  TIME

GOLD 100 OZ FUTR (USD/t oz.)

1147.300

-41.300

-3.47

03:29  

SILVER FUTURE (USD/t oz.)

17.805

-0.995

-5.290

3:29

 

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#25) On November 30, 2009 at 1:11 PM, ease1 (82.16) wrote:

So besides SLW and CEF, anyone have any insight into Jr silver minors that would be worth looking into?  Are jr minors more risky?

 

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#26) On December 02, 2009 at 5:25 PM, silverminer (31.38) wrote:

ease1

Junior miners are very risky. If you are just looking at the sub-sector fot the first time, you may wish to spread your risk a little with a small starter position in the GDXJ (the new junior gold and silver miners ETF) until you gain a complete grasp of the highest quality operators and the large number of complex factors diferentiating the various options out there.

SLW is not considered a junior, and in any event doesn't do any mining. Check beck through my articles on the company for more detail. CEF is a bullion proxy that is unrivaled in terms of having the trust of the investment community over the newer ETF vehicles, but it carries a bit of a premium over NAV as a result.

Tread carefully this late into the breakout ... at the first hint of a correction the juniors could dive mercilessly. Of course, they could continue higher too ... I'm just saying please tread carefully. Perhaps stop losses are a nice idea at this stage. :)

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#27) On December 03, 2009 at 6:25 PM, XMFSinchiruna (27.97) wrote:

The ideas expressed in this blog post have been presented to a broader public here:

http://www.fool.com/investing/general/2009/12/03/dont-miss-this-great-bargain.aspx

 

 

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#28) On December 03, 2009 at 8:53 PM, XMFSinchiruna (27.97) wrote:

This man is seriously dialed into the precious metals market and how it operates. His assessment is right on the money!

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#29) On December 06, 2009 at 12:56 AM, LiveOakGrey (< 20) wrote:

Hi Sinch,

There were quite a few things in this blog that caught my attention, plus a bunch more that have been rattling around in my head for a while, so I'll let 'em all rip.  Hopefully, you don't burn out on these 'data-dumps,' before I learn enough to become a self-reliant information-gatherer.  It would be like something out of Gary Larson's Far Side, where the nerd scientists burst into guffaws about the third scientist 'bursting his cerebral cortex!"

You mentioned SLW might hit 'par,' before this is all said and done.  I've seen definitions for 'par' before, and thought it was an antiquated term that didn't apply much any longer.  Something to do with the initial IPO stock price, or something?

You also mentioned that any share price beneath 1.2 times the spot price for silver remains in drastically undervalued country.  How does this work?  I'm sure I'm missing something obvious, but I thought that share price was irrelevant as long as the number of shares outstanding could be increased through public offerings or decreased through buy backs.  A single pie could sell for ten dollars with four slices or one hundred.  The total value is still only ten dollars.  I know you've got a logic here, I just haven't seen all the pieces (no pun intended), yet.

Further, why 1.2 times spot price?  Is that some kind of technical analysis holy grail?  If 1.2 is wildly underpriced, why not pick 1.1 or 1.3 times below the long term price? Again, I'm trying to see the underlying logic here, and if there are any worthwhile sources of introductory ideas, sites, books, etc. that would be great to know.

Technical analysis looks interesting, but I remember Motley bashing the hell out of it as reading tea leaves in articles for years.  Think Tom Gardner or Dave, made jokes about the hocus pocus of 'support,' 'resistance,' etc, in their small Motley Fool Guide to Investing on, from years back.  Are there any reliable studies that show any predictive value to technical analysis that goes beyond self-fulfilling prophesies?  As in, the analysts with clout use it to predict something, and based on their reputations, people then make the analyst's prediction come to pass.  How about studies of unknown small caps, using technical analysis, that nobody bothers to listen to, but it turns out to have predictive powers, anyways?  Any statistics on something like that? That would be nicely convincing!  If nothing else, I could see technical analysis having some predictive power, precisely because so many people DO follow it's directives.  It's probably worth learning.

For the Apmex bullion rounds, do they have 5 or 10 ounce gold, that you'd recommend?  What is a reasonable price above spot to pay for gold and silver rounds?  Someone mentioned 10 percent for silver is cheap, right now.

A few blogs ago you mentioned that you were closely watching the indicators and you'd jump out of the PM markets when things changed.  I'm guessing you were referring to trends pointing to long term bull markets for securities instead of commodities?  What indicators would you watch, the USD/gold, Dow/gold, or some other ratio, maybe involving HUI or GDX?

What about measures like EV/ current net asset value, and others.  Where can you find the 'cost of mining' for a given stock?  I seem to find data is sketchy for quarterly reports and the yearly reports are usually most of the current year... out of date.  

Another point about reserve ratios, how valuable are they if the reserves for SSRI, etc, are so large that you'd need a 25 year depression before they are likely to actually run out?  Seems like lots of times you might overvalue a company on reserves that won't ever be brought to market in even a long recession/depression, since you'll end up dumping those stocks 10 years later (or whatever time till you have a non-imaginary hyped recovery).

By the way, that Ted Butler has some interesting comments, I'm going to go seek out his interviews!

Thanks again for all your efforts,

Grey 

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#30) On December 07, 2009 at 5:51 PM, XMFSinchiruna (27.97) wrote:

I'll divide my response into segments, since each comment = $0.10 for charity.  :)

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#31) On December 07, 2009 at 5:52 PM, XMFSinchiruna (27.97) wrote:

par = $100

I'm saying SLW shares will hit $100 before this bull market has finished running its course.

This has been my contention for more than three years now.

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#32) On December 07, 2009 at 6:00 PM, XMFSinchiruna (27.97) wrote:

You also mentioned that any share price beneath 1.2 times the spot price for silver remains in drastically undervalued country.  How does this work?  I'm sure I'm missing something obvious, but I thought that share price was irrelevant as long as the number of shares outstanding could be increased through public offerings or decreased through buy backs.  A single pie could sell for ten dollars with four slices or one hundred.  The total value is still only ten dollars.  I know you've got a logic here, I just haven't seen all the pieces (no pun intended), yet.

True, material changes in share count would alter that equation, but at the present share count SLW beneath 1.2X spot silver is the kind of bargain that only comes around so many times in a lifetime.

During SLW's recent run-up, before the correction that took hold Friday, we saw shares inching up towards parity (being equal to) with the spot price for silver. Aside from the previous run-up before the March 2008 correction, that is about the only time I can recal SLW getting that close to a sane valuation. Amazingly, this company has been drastically undervalued for years, and despite the incredible ease with which one can calculate fair value for this company, the market continues to fail to settle near a sane share price for SLW.

I use the 1.2X multiplier as an extremely conservative guide. In fact, since the company's acquisition of Silverstone Resources earlier this year, a multiplier of 1.4X the price of silver would remain well within the realm of a reasonable valuation.

The reason you can use a simple multiplier as a guide for SLW and not for mining companies relates to SLW's unique fixed-cost business model (and therefore highly predictable cash flows).

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#33) On December 07, 2009 at 6:06 PM, elboxeo (< 20) wrote:

hey tmfsinciruna... awesome info in this blog

 

i had a quick question regarding your previous statement on silver coins...

you recommended purchasing apmex own branded silver coins... i was just wondering is it that much of difference between those coins and other coins issued by govt mints in the long run??? 

basically my nephew who is 1 year old will be getting a birthday and christmas presents consisting of silver coins FOR THE REST OF HIS LIFE..lol...  beats some dumb video game system or some dumb trendy toy... but me being new to the purchasing of silver coins just wanted to know a bit more of what you mentioned...

also i decided to by my nephew 1grand worth 5oz and10 oz apmex silver branded coins to see how the process works ...  but just wondering cause i did notice the price differnce

 

 

also does anybody know about buy silver coins in mexico or how that would work.. i live in souther cali and tj is a stones throw away and i was just wondering if its a better deal to go to the banks over there considering our dollar is stronger than their peso...lol....wonder how much longer that will last...smh

 

thanks for the info

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#34) On December 07, 2009 at 6:25 PM, XMFSinchiruna (27.97) wrote:

As for how I arrived at my 1.2-times multiple, it is conservative downsizing of the massive valley of valuation disconnect between where SLW would approach fair value and its still-heavily-discounted share price.

Here is my valuation analysis conducted before the Silverstone acquisition.

http://www.fool.com/investing/value/2008/11/25/silver-selling-for-1-per-ounce.aspx

In this article, you'll see that in April I estimated that SLW shares were like buying an ounce of silver for $3.30, which was equivalent to implying a $37 per share fair value for SLW shares at the silver price of that time!!

And finally, anyone looking to caluculate fair value on SLW needs to check out speedybure's excellent valuation work posted here. As you'll see in my comments to speedybure's post, I have independently vetted and given my Sinchi seal of approval to the metrics speedy employed in that analysis. Since his analysis was conducted post-acquisition (although before the transformational barrick deal), it is the most up-to-date thorough valuation analysis on SLW that I can point you to.

Since I know this company better than I know any company on the planet, and since I dare say I have spent more time scrutinizing SLW than anyone I know, let me simply lay it down like this. Fair value for SLW is most heavily impacted by the silver price than any other metric. Before the Silverstone deal, I placed fair value at 1.2X silver. After the Silverstone deal, I both speedy and I arrived independently at a valuation multiple of 1.4X silver (long-term average price). The Barrick deal takes the company to a new level entirely, and renders a multiple of 1.6X entirely reasonable as a crude guide to value over time. The choice of presenting 1.2X today as a conservative multiplier was entirely subjective, representing what I consider to be an extremely conservative margin of error from my full fair value calculation (which would place SLW shares at today's silver price near $29 per share). Until the market comes to its senses and values SLW at something even remotely approximating a fair valuation, Fools can hardly go wrong using a 1.2 multipler upon silver. That would yield a price of just under $22 today, while SLW trades a full $6 below that point today. 

next to Taseko, SLW is the coziest valuation moat I can identify within the universe of metal producers.

Does that help to clarify my thinking on the topic?

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#35) On December 07, 2009 at 6:29 PM, catoismymotor (38.90) wrote:

Farting Bunny holds SLW.

 

$0.10 for the cause!

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#36) On December 07, 2009 at 6:31 PM, XMFSinchiruna (27.97) wrote:

elboxeo

I recommended those items because they carried the lowest premiums over the spot price for silver that I had seen in a while.

When it comes to bullion, no frills and low premium are the name of the game. If you enjoy collecting coins for their numismatic value or because they are familiar to a broader audience, then I would not seek to discourage anyone from investing in bullion coins. 

SAEs (Silver American Eagles), for example, are very popular, but routunely carry hefty price premiums over spot silver relative to more generic bullion. Any brand of bullion is fine as long as you are buying from a trusted source (like APMEX), so I don't want Fools thi think that is the only kind of bullion to buy. It was merely a recommendation based upon the relatively low premiums i had spotted on their website at the time.

Congrats on selecting a very nice present for your relatives that I'm sure they will treasure for many years.

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#37) On December 07, 2009 at 6:46 PM, XMFSinchiruna (27.97) wrote:

Technical analysis looks interesting, but I remember Motley bashing the hell out of it as reading tea leaves in articles for years.  Think Tom Gardner or Dave, made jokes about the hocus pocus of 'support,' 'resistance,' etc, in their small Motley Fool Guide to Investing on, from years back.  Are there any reliable studies that show any predictive value to technical analysis that goes beyond self-fulfilling prophesies?  As in, the analysts with clout use it to predict something, and based on their reputations, people then make the analyst's prediction come to pass.  How about studies of unknown small caps, using technical analysis, that nobody bothers to listen to, but it turns out to have predictive powers, anyways?  Any statistics on something like that? That would be nicely convincing!  If nothing else, I could see technical analysis having some predictive power, precisely because so many people DO follow it's directives.  It's probably worth learning.

Well.... you've posed a monster of a question here. :) You're quite right to be skeptical of technical analysis, as it is often presented as a predictive tool that negates the need for any other sorts of analytical tools.

For individual inverstors, basing investment decisions on technical analysis alone is akin to financial suicide. Period.

However, since we know that massive amounts of capital exchange hands each day on purely technical bases (often called "black box trading or algorithm-based trading), technical analysis does have a rightful role to play in a well balanced approach to understanding price action as it occurs. It's when investors try to treat technical analysis as predictive that they run into trouble. I tried to explain this to one CAPS member (see comment #38) some time back, but he didn't want to hear it. Within the precious metals market, savvy investors pay close attention to the technicals because the bullion banks shift vast sums of money in and out of long and short positions on the basis thereof, but they also never lose sight of the fact that the fundamental analysis one conducts will always carry greater significance as a predictor of long-term price trends than any technical factors of any kind.

Technical analysis can provide a clue about timing of major channel shifts within a broader bull market like the one we're in, but the disciplined investor places strict constraints upon the decisions that are based thereupon. This recent article on gold should fill in the remainder of my outlook on that topic. let me know if you have any questions.

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#38) On December 07, 2009 at 6:51 PM, XMFSinchiruna (27.97) wrote:

A few blogs ago you mentioned that you were closely watching the indicators and you'd jump out of the PM markets when things changed.  I'm guessing you were referring to trends pointing to long term bull markets for securities instead of commodities?  What indicators would you watch, the USD/gold, Dow/gold, or some other ratio, maybe involving HUI or GDX?

I don't often say this, but that is just too huge a question for me to be able to field at this time. There are hundreds of factors that contribute to my comprehensive fundamental analysis. You have listed some key metrics, but at the simplest level the change that would have to occur to point to an end to the precious metals bull market would have to be some measure U.S. fiscal solvency, a sustainable recovery in the U.S. industrial base to make the U.S. a producer of goods, and an orderly deleveraging of the multi-trillion dollar market for derivatives. We are nowhere near turning those kinds of corners, so there remains ample time discuss the analysis going forward. :)

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#39) On December 07, 2009 at 6:54 PM, XMFSinchiruna (27.97) wrote:

What about measures like EV/ current net asset value, and others.  Where can you find the 'cost of mining' for a given stock?  I seem to find data is sketchy for quarterly reports and the yearly reports are usually most of the current year... out of date.

I access cost metrics on a company by company basis by pouring over their quarterly reports and conference calls. Unfortunately, I have no shortcuts I can point you to there. :)

Remember, EV/MVPPR is best utilized as a tool for relative valuation between peers, and not so much as an outright metric for calculating fair value.

All-in costs are even harder to come by, since most companies don't publish the datum. I often get it by contacting the company directly.

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#40) On December 07, 2009 at 7:00 PM, XMFSinchiruna (27.97) wrote:

Another point about reserve ratios, how valuable are they if the reserves for SSRI, etc, are so large that you'd need a 25 year depression before they are likely to actually run out?  Seems like lots of times you might overvalue a company on reserves that won't ever be brought to market in even a long recession/depression, since you'll end up dumping those stocks 10 years later (or whatever time till you have a non-imaginary hyped recovery).

See my comment above. reserve ratio calculations are best conceived as measures of relative valuation among peers, rather than indicators of outright valuation. When those ratios move into extreme disconnects from market norms, as I recently noted for Taseko for example, then the ratio becomes a reliable basis for action (when accompanied by exhaustive DD of course).

Since you sound like you're quite interested in silver, be sure to add my silverminer CAPS profile to your favorites.

I hope the above ramblings are useful to you and others!

See you at $50 silver. ;)

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#41) On December 18, 2009 at 12:15 PM, LiveOakGrey (< 20) wrote:

Sinch,

Thankyou for all that data!  I switched from one DSL provider, to another and have only just gotten this computer able to begin catching up on posts I've been missing for a few weeks.  The other location I log online to, isn't hooked up, yet, so it's lots more frustrating calls to AT&T to get them to fix the problems.

I'll be studying all these links you've provided, and adding the data to my notebooks.  This stuff is fascinating, and frustrating.  So many factors to account for, and many of those factors are tough to determine priorities for. Your information is vital stuff and really appreciated.  At some point, I would like to think that evaluations are under my belt and it's not just rough guestimating the comparative values of miners.  I'll get there, it'll just take some more eye-strain and filled notebooks. :)

-Grey 

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#42) On December 18, 2009 at 12:46 PM, Melaschasm (65.13) wrote:

I suspect that using options to profit from the gold/silver ratio's return to its historical norm of 20:1 is a safer play than just buying silver directly. 

I need to do a little more research, because this ratio could stay outside of its historical norms for longer than the duration of the options to which I have access.

I would love to hear other people's opinions about this strategy.

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#43) On January 16, 2010 at 1:19 PM, BillyTG (29.75) wrote:

Good stuff Sinch!

How are you investing in your MExican juniors? Are they traded on American exchanges? Surely those junior miners have some serious leverage and upward potential as the silver spot price rises, right? I mean, compared to SLW, that is. Of all your silver positions, where would you rank SLW?

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