VelocitySharesTM 3x Long Silver ETN (NASDAQ:USLV)

CAPS Rating: 1 out of 5


Player Avatar TerryHogan (99.94) Submitted: 8/11/2012 12:30:22 AM : Underperform Start Price: $225.10 USLV Score: +61.80

I remember an old Trivial Pusuit question that asked who was the largest user of Silver in the world, answer- Kodak. I'm not sure what the answer is today, but I don't see where sustainable demand is coming from, and I just don't like triple leveraged ETFs, as they degrade with any volatility.

Report this Post 2 Replies
Member Avatar EricTheRon (< 20) Submitted: 10/11/2012 3:33:54 PM
Recs: 0

I'm not defending this ETN--I think all 2X and 3X ETFs and ETNs are unnecessarily speculative. And I'm not a Gold Bug or a "Silver Bug" (is there such a thing?). But that comment about silver demand is hopelessly outdated, and could (should!) have been easily updated with a simple google search about the subject.

The fact is that silver demand is outstripping the supply from mines and scrap by 25% to 33%, and has nothing to do with photography. Even if there was a depression and the economy (and silver demand) contracted 33%, the silver supply would also contract because most silver is mined along with base metals. And base metal mining would certainly be cut back during a depression.

Member Avatar TerryHogan (99.94) Submitted: 10/11/2012 11:52:52 PM
Recs: 0

Sorry for my ignorance Eric, where is the demand coming from today? I couldn't find reliable numbers on specific applications other than the decline in Photography applications. I'm obviously not killing it with my pick here.

In my defence, I did say it was an old Trivial Pursuit question.

Featured Broker Partners