Why do you like silver? I mean other than changes in the $/ozt? Who uses it and why would you expect annual consumption to exceed annual production for years to come?
My understanding is extremely superficial and I am sincerely looking forward to some enlightenment.
Working my way through college (1967 - 1971), at the end of my shift, I would buy the last of the silver coins (1964 and earlier) from the cash register and hoarded them. Still have them. If my memory is correct, at the time the coins were minted, silver had a fixed price of 1.29 $/ozt and a dollar's worth of coins contained slightly less than a dollar's worth of silver to discourage melting them down. Here we are 35 years later and the price is now about 7.06 $/ozt. That's a compounded annual growth rate of 5.0%. Not much of an investment was it? I should've bought berk.
I am under the impression that silver production is a by product of copper mining. That few, if any, specifically mine for silver. I would have figured with Kodak "throwing in the towel" on silver halide photography and shifting to digital imaging (doesn't Hewlett-Packard consider that their "turf"?) that that would have been a real downer for silver. (OK, maybe "throwing in the towel" is too strong ... de-emphasizing is better.)
If you were fascinated by Platinum or one of the other precious metals that has some real, unique industrial applications like catalysts or (rolling my eyes) fuel cells, I could share your enthusiasm.
But why silver?
Buffett must have shared your enthusiasm at one time. I'd just like to try and understand the rationale behind his purchase.
If you would have bought in 1971 when Nixon was flooding the system with money to get re-elected and OPEC was going crazy, and then sold when Volcker vowed to kill inflation with whatever means necessary in 1980, you would have made about 26% or so on you money (from less than $2 per oz to over $16) for nine years. That isn't too bad of a return given the stock market, bond market, real estate and money markets all returned nothing in that period (negative in real terms).
The silly part wasn't the buying of silver. Rather, it was the buying and holding - forever - thinking it would be a great long-term buy and hold investment. Why hold onto a store of wealth when inflation is in for a long-term battle with a determined Fed Chief and willing public to do whatever it takes to destroy it? We are at the polar opposite right now. Like in the '72 time frame IMO.
OH JAD OH JAD OH JAD. Some enlightenment on the board. Has God sent you to give me hope?
I will lay it out for you overtime. Yes you are on the right track by asking those questions. Give me time as I am exhausted. I will start posting some meaningful resources for you soon. Give me a day.