I'd like to read updated info on silver's
doesn't involve an economic crash
or quoting the Bible. The more I read such
stuff, the less credible I find this as an
investment. Anybody got any good info on
the buildup of pressures behind leasing?
You've said multiple times in your last few posts that all the facts are fuzzy, which I agree with completely..
That's why I think it's valid to be a little critical of self-appointed experts who actually pretend to predict what month silver will run out..
The problem with those types of predictions is that especially newbies may take them very seriously and maybe decide to put a lot of money on the line based on the idea that silver's going to run out in a certain month because some expert said it would..
Then it doesn't happen, and they become disillusioned and cynical and may even bail out just before the big move up does take place..
I think all of us appreciate honesty and a little humility rather than bogus predictions that aren't even supported with facts..
If someone actually has the facts to support a specific prediction, I'm sure we'll all line up to listen..
<<how do you know that there is a deficit that is going to guarantee that we will run out?>>
I don't know for certain. That's why I say we will not know until it happens.
I read the same annual survey you do. Everybody has the same data. We know that documented consumption exceeds documented production, and has for more than a decade. We know that the United States has acknowledged depleting to zero its strategic reserve. We know that an unknown, undocumentable quantity of silver exists above ground, but we don't know exactly who owns it or at what price it will come to market. We don't know how much of his 128 Moz Warren Buffet still holds, and whether or at what price he intends to sell.
Analysing silver fundamentals is different from analysing a stock. We don't know how many shares are outstanding. We don't have any SEC filings or "guidance" from management.
<<why did this VERY IMPRESSIVE short squeeze not cause a very impressive price increase >>
It did. If you were leasing silver into the market at that time you received about TWENTY TIMES the normal price. That is a very impressive price increase! It's like buying Qualcomm early in 1999 for 35 (split adjusted) and selling it in December 1999 for 700.
You have to keep in in that there are two parallel markets for silver: the one that prices silver in dollars and cents, and the one that prices it in %. For industrial consumers of silver -- the ones who will IMHO have to keep buying through a short squeeze, if one occurs, because silver is essential to their proceses and products -- buy their silver at least in part in the leasing market. They assume that the leased material will never have to be returned to its lessor, or, if it does, it will be cheap. This is analagous to the guy who shorted Qualcomm at 35 because it had traded in the same range for three years. This is the stuff that short squeezes are made of!
But I cannot guarantee to you with absolute certainty whether or when a short squeeze will occur, any more than I could have told you in January of 1999 that Qualcomm would end the year at 800. Maybe the Chicoms have a gazillion ounces and they can't wait to sell it all for 4 dollars. Maybe the world will end tommorrow.
I think that silver is the new Qualcomm. But I could be wrong.
Aparantly PAAS missed the boat on a good deal, SSRI got there first and are flipping the property. Guess they got more smarts than I gave them credit.
Not much diff than buying a stock on the cheap then selling 1/2 when it doubles in a week. You end up with 1/2 the stock at no cost.
I've been thinking about some of the possibilties in the silver market and how they would affect our investments. The whole future price explosion thing hinges around the existence of the deficit and its size. I can think of 3 potential scenarios:
1) The deficit is large relative to the overhang of sellable or leasable silver. This obviously would result in great profits to both physical holders and PAAS junkies like us in fairly short time.
2) The deficit exists but is not very large relative to existing leasable/sellable stocks. (Either high deficit/high overhang or low deficit/low overhang scenarios may qualify here too.) The result are as follows. Physical holders with patience make good money in the long run. Unfortunately, patient shareholders like us may lose as miners slowly go under due to persistent low prices until the overhang is depleted.
3) There is no significant deficit at all. If this were true then as you know, we are all in a lot of trouble. But as I said yesterday, at these prices, a deficit will be forced to develop!!! This is because production costs for zinc, copper, and silver are above market prices and this cannot persist forever. This would guarantee some prize (not nearly as big as scenario 1 above) for the physical holders in the long run but only for the shareholders of the few mines that can borrow enough to stay afloat during the "loss years".
Please feel free to add your own opinions and comments to this very basic analysis. I have been laughed at for investing in silver and silver stocks, I hope there will be a day of reckoning for myself and all of you who have experienced the same "deer in the headlights...you're nuts" stares from the K-mart and Enron investors. Good luck.
I trust PAAS management also..
However, I'd have to say it was a bit of a faux pas to not anticipate that investors would be scratching their heads over the basics of the deal released so far, which of course look, with the little we know so far, like a better deal for SSRI than PAAS..
They should issue a their own clarifying press release..
Anyone talk to PAAS IR about it yet?
continue to leak. Perhaps during the recent short-squeeze, someone big realized that someone big was in big silver trouble and some deal was worked-out to prevent a sharp rise in price of silver. Just speculation, but we may be witnessing a managed very slow process of unwinding a big short position. It is hard to explain the abrupt end of the leasing short-squeeze without much movement of silver, and now a slow, but steady drain of inventories with silver's price back "under control."
I don't think anyone here can adequately explain this deal, yet. There needs to be more details. It is clearly more than SSRI buys for $2 mil and sells half of that to PAAS for $2 mil. In the agreement there will be all sorts of issues, such as who pays for what when. This is one of those situations where, IMO, you either trust the management of your company or you don't. I trust them, so I will refrain from passing any further judgement at this time. My guess is the deal is probably pretty fair.