I had bought SLW at 43 when silver was 39, sold for a loss at 41 few days ago
moved money to AGQ and some to GLD and made huge money on that trade
I believe here is what is going on
1) General people have finally realized miners have nothing to do with metal prices. Even if SLW beats by miles stock will go nowhere. SLW is like AAPL now, you see haw bad that stock is now in 2011, going nowhere, no one cares about SLW earnings
2) The general people have moved to SLV and AGQ to get true silver rice leverage, insulate from political issues, mining problems, oil costs etc, too many variables, even if all is favorable you are fighting the like of JPM and GS who drive these stocks down at will whatever may be the metal prices, that is why SLW will trade at 42 even if silver hits 60
3) stocks like SLW are now range bound between 39 to 43, when markets drop SLW heads back to 39, when silver rallies it back to 43, meanwhile silver keeps making higher highs where as SLW moves between 39 to 43, the constantly increasing silver prices are keeping it above 39, otherwise this stock would be at 30-32 even if silver drops to 40
4) HUI is officially dead index, all the fat miners are running out of resources, they acquire smaller guys and stocks tank hence HUI is dog..
5) the small miners like UXG, SVM, EXK have over rallied and no longer moving with silver prices, they are yet to produce any silver, speculators are bailing on those now, hence they are also topped out, you can see many of them are struggling at the top range. People bought them on buyout hype, that thing seem to be over for now
6) Meanwhile the ETF's are rocking, high volume on these says most are bailing out miner stocks due to their pathetic leverage, for whatever reason, shorting, high oil cost ..means really nothing. They are dogs and that is the truth. Look at KGC, AUY, NG, SVM - pretty much dead now..
Right now I think silver to rally to 55-60 range and then correct to 45-47 during summer and head back up during fall. SLW will be pretty much dead during this period. Don't think earnings will drive this up. SLW has too many questions going forward.
If I were you sell all miners and move money to SLV, GLD and for momo crowd 2-X AGQ, keep in mind you are missing out on big gains if you hold this crappy stock. The better plays are ANV and GORO - little erratic however they seem to attract less shorts..GORO is pure speculation, sell dogs like HL, SLW, KGC, AUY, NG, SVM, CDE, PAAS, AG..move to real metal otherwise you will miss the silver rally to 55 before correction starts, sadly SLW will go nowhere during this period. However when silver corrects from 55 to 45-47, SLW may head to 30. This is realty now. SLW glory days are over. It;'s like AAPL now..too many people owned this and there is really no upside left because new crowd has moved to ETF and bailed on miners
I believe you are correct BUT.....ETF's will ultimately collapse like housing prices. In between then and now they will skyrocket because it is playing the price of a commodity instead of the price of a stock. ETF's have insufficient financial controls to know what they really have and there is no way to know if the shares they issue are really going into the commodities they say they are tracking. It's this ability to issue unlimited shares that has me concerned. Also the potential and likely eventual collapse of the comex gold and silver exchanges, where leverage has been said to be as much as 100:1 (every 100 onces of paper contracts is backed up by a single ounce of the metal) makes me think I could buy AGQ at 350 one day and wake up the next day seeing it trading at twenty cents. That would be a portfolio hit from which I could not recover. At least with a company, you (supposedly) have financial controls and a company that cannot issue stock willy nilly. But, no company will give the kind of performance (up 600 percent in a year) that AGQ has given and probably will continue to give - my guess is up to 500 to 1000 dollars a share. But that's based on my gut. Good luck to you ETF guys. Me I'll keep selling Covered calls against SLW.
Think of this situation.
The miners may seem to have limitations vis a vi the ETF's right now. I can live with that. But what entities have the metal? The miners have the metal either in hand or in the ground.
Let's say the COMEX does crash. Miners can actually become the only entities outside of the scrapers and possibly governments that can deliver. There is nothing that says the miners can not begin to hoard metal and distribute it to employees and share holders. They can also sell it directly to industrial end users through refining agreements.
I am sure that the mining executives are not all clueless idiots. They see the game that is currently going on. I am sure they are talking all this out. Does anyone think they are going to allow themselves to be screwed out of their hard earned product? There is nothing stopping SLW from stock piling their silver and gold.
This topic need to be discussed more. Other thought are welcome.
This is a good thread and asks a lot of very important questions.
I think your right, and they've done this before. Gold and silver up huge miners go down. Gold and silver at all time high's and miners are at prices when silver was 1/4 price, as now. It's manipulation over options. Many buying call's and down she goes every month. imo
SLV and GLD may be better in the short term for tracking the metals but when JPM defaults on their short position this will kill COMEX/LBMA/SLV/GLD/OPTIONS/FUTURES and we will be left with the physical market for price discovery. All the money siphoned out or the metals into SLV and GLD will then rush to find real precious metals investments like the Sprott ETFS and SILVER WHEATON. That day is months away.
The government is trying to hoard everyone into these soon to be worthless ETF's SLV and GLD.
I have to agree with your assessment, that's the only explanation for the way these stocks have been trading. The biggest concern is that stocks like AGQ will fall 2x speed on the downside, need to watch them all day for volatility. I'm switching over. Rat, move your axx over and make room.
I have learn this thing hard way, if things don't work as you expect, they rarely work and there is no point in being stubborn and hoping one fine day SLW will rally 10 bucks and catch up with silver. She never will.
The miner leverage story is over , earlier there were not many options now ETF are the best, miners were great until 2009, now they are just horrible..especially the big dogs..NEM and ABX, GG trade at the same level for years..SLW is now like NEM of silver..all hype on streaming..yeah that's great, but this is over owned stock and smart folks are bailing out on rallies and rotating money else where..Additionally no one knows how streaming game will work out as miners say good bye to SLW with all these insane silver prices. There are enough external capital out there to invest in metals now..