Bass, seems like shorts are getting desperate. I'm looking at $26/ounce silver in the first quarter of 2015... and I put my money where my mouth is. Take a peak at ABX.. as a sling-shot.. and GDXJ as a safe way to get ahead of the game. I'm stick'n with Pan American because I am a silver fanatic who really likes this Canadian management team and the current projects mined and under development. dcp
Simple, we got to open the borders and get more Mexicans, Guatemalans, Nicaraguans, Hondurans, Ecuadorans.. and ANYONE else to come here, work.. pay taxes and NOT collect social services or entitlements.... you do that.. and I'll talk to you about cancelling Social Security. Do we have a deal?
Rateman, your take is always entertaining. I'm fond of your optimistic bent and loyalty to Pan American.. I suspect that at some point you will be able to congratulate your persistence and cycle reasoning is as good or better than a lot of theories that are afloat.. and especially within the miners. Good luck to all hard-core metals traders. We have a lot going for us when you consider that the interest on $20 Trillion will keep government printing presses working 24/7 for years to come. IF interest rates begin to climb.. this is what will drive investor sentiment in the metals as the double whammy of a bear market combined with the prospects of rising inflation will set the tone of PM markets for an extended period of time. I tend to believe that things are cheap .. especially when priced in terms of dollars.
Jack, I should be so broke.. maybe you should trade some grocery money for a share or two.. now would guarantee that you've not bought at the top!
Sakhaneft, some days you get a gift... I guess you have to be looking for it and waiting to climb on board the train. Nice to see your patience put you in a position to ride. I'm ready and I know you are, too!
Your words hold 'IRON' Pale-face.. numbers were known by the players at least 24 hours previous and the reaction in stock prices seemed to indicate a 'non-event' for traders. For investors, the quarter produced further validation of management commitment to under-promise and over deliver. Nothing to see here, folks.. STEADY AS SHE GOES!
Looks as though 150,000 short share scramble indicates where underlying market strength may lie.
What Is Driving Pan American Silver Stock Up in Stagnant Markets?
NEW YORK (TheStreet) -- Pan American Silver (PAAS_) keeps recovering in the stock market, despite the stagnation in the silver market in recent months. What is driving higher the demand for this $2.2 billion precious metals producer?
For one, even though the price of silver remained close to the $20 to $21 range in the past few months, the company's profit margin slightly improved in the first quarter compared to the preceding quarters on account of lowered production costs. During the first quarter, the company's cash cost per ounce of silver, which includes all direct costs related to production but doesn't include depreciation provision, fell to $8.33 per ounce or 27% lower than in the same quarter a year earlier.
This lower production costs curbs down the adverse impact from the lower precious metals prices compared to the first half of 2013. The company mostly produces silver (nearly 70% of its precious metals yield come from silver). So while most other precious metals producers focus of gold, this company's exposure to silver is high.
Pan American Silver continues to show sizable profit margins compared to other precious metals producers. In the first quarter, the company's operating profit was at 15%. In comparison, other small cap precious metals producers such as Hecla Mining (HL_) recorded only a profit margin of 6.3%.
Adam Hamilton of ZEAL seems optimistic about the balance of 2014 and beyond: With GLD's holdings set to surge again in a massive mean reversion, investors and speculators should be throwing heavily long the entire precious-metals sector. As gold's new upleg accelerates and the resulting bullish sentiment starts feeding on itself, silver and the stocks of the precious-metals miners will amplify the yellow metal's gains. The undervalued elite gold and silver stocks should at least quadruple! (dcp sez: And, I thought I WAS BULLISH!)
Hourly, I believe you've made some reasonable assumptions regarding 'accumulation' in silver miners. If we are to believe that $1330-50 is a gold target (prior to lows retest) we could expect similar weakness in silver during this august-september time-frame (along with the real potential of the long-overdue and anticipated 20% general stock market correction in Sept-Oct. If things can be read this easily, we are obviously going to get a monkey-wrench thrown into the equation somewhere along the way.. but what do I know?
Argentina has not attempted to address it's long-term problems and ignoring debt is not likely to help on even the shortest of near term solutions. I know that there are a lot of Kirshner Socialist fans out there, but even the most devout of our socialist/marxist cousins are seeing the truth in the understanding that socialism works only so long as you don't run out of Other People's Money. That's when the poop hits the fan.. Oh, easy to point to Argentina and Venezuela and Bolivia among many others who devoutly believe that Communism is the inevitable wave of the future. I believe THAT BOAT has sailed MANY YEARS AGO. Of course, I could be wrong.. but haven't seen evidence to the contrary.
Sakhaneft, you'd think all things precious would track a logical track but I've come to learn that even when a trend is in place, short and medium term gyrations are not the exception, but rather the norm. Let's get everyone thoroughly disgusted, disinterested, and disheartened and then you get the herds attention and the run begins anew. I've given up trying to second guess this market. Keeping the faith has kept us primarily value investors.
Sakhaneft, we've come to expect the July-August period to be seasonally the weakest for metals and this year seems to be a repeat. Volume reversal really does need to occur before a solid turn should materialize. The next weeks should prove to be revealing as to a confluence of world events, dollar direction and general stock market direction. The DOW continues to suck the energy out of EVERY other market and the metals prove to be no exception. The brave are buying this thrust into uncharted territory and I feel more content to maintain silver longs and sit on the sidelines.. awaiting the impending fall.. September/October always seems to be interesting.
Sakhaneft, Vincente would seem to be a micro event for PanAm and i would expect that Pan American is well positioned, to cash in on rising silver prices with it continuing to boost precious metals production over-all. In the first quarter of 2014, silver production grew a healthy 5% compared to first quarter 2013 and gold production spiked a massive 43% for the same period. Bolivia was purchased with the thought that it was 'the little train that could'.. and it keeps chugging along without major capex and so I don't worry about it too much. But, that's just me. Let's see how close they can get to meeting full year production forecasts and I'll be gratified if they come within 85% of expectations.
The Motley Fool - Today
Bet Like George Soros and Cash in on a Silver Rally
There are growing signs that now is the time for investors to take the plunge and make a bet on silver. Already the top end of town is making some big bets on silver with Wall Street investment managers and institutional investors leading the charge.
Billionaire investor George Soros has already made some big bets on precious metals and silver miners in particular. He invested $9.4 million in precious metals streamer Silver Wheaton (TSX: SLW)(NYSE: SLW) and $10.7 million on miner Pan American Silver (TSX: PAA)(Nasdaq: PAAS).
Why will silver rally?
Indicators are pointing out that silver is undervalued particularly in comparison to gold, which has rallied this year, while silver prices have remained relatively flat. This becomes apparent when taking a closer look at the gold-to-silver ratio, which measures how many ounces of silver buy an ounce of gold.
At the height of the gold bull market, 43 ounces of silver bought one ounce of gold, but since then the ratio has widened, now needing 63 ounces of silver. Silver has failed to keep pace with gold despite the historically close correlation between the prices of the two precious metals.
When coupled with signs of diminishing supply as well as growing demand for use in industrial processes and the manufacture of jewelry, it is clear a sustained rally is imminent... Pan American is well positioned to cash in on rising silver prices with it continuing to boost precious metals production. In the first quarter of 2014, silver production grew a healthy 5% compared to first quarter 2013 and gold production spiked a massive 43% for the same period.
The company continues to control costs with all-in sustaining costs for the first quarter 2014 down a massive 20% compared to the equivalent quarter in the previous year to $15.54, and are expected to fall further. This tight cost control and low all-in sustaining costs allow PAAS to generate profits
Leeb, following your assertion that PAAS and SLV track one-another I went back to the three-year time-line charts and did the overlay of PAAS vs. SLV and can see a tracking with what appears to be expanding and contracting pricing variations of between roughly 10 and 30 percent with 10-20% seeming to be a fairly normal premium average for PAAS above the SLV ETF. With present valuation of PAAS nearing a 30% premium I do see where you derive your concern as it does seem as if one of three things will occur; ONE: That PAAS will shrink in valuation as compared to SLV or that; TWO: SLV will either appreciate in price vs. PAAS.. or that: THREE: PAAS as a more leveraged equity will slow or fall in appreciation v. SLV while SLV does rise more significantly to reflect a more stable longer term pricing relationship. I do know that EQUITIES have always preceeded price moves in underlying commodity markets and therefore must keep this in mind when attempting to guess at what should be true market differential between these two different yet similar animals. dcp
Sakeneft, From Kitco EOD Round-up
Price action Tuesday saw follow-through selling pressure that begins to suggest near-term price up-trends are finished and that prices will now work sideways to lower in the coming weeks—barring a geopolitical flare-up. Lack of fresh concerns about the geopolitical front have led to better risk appetite in the market place early this week, at the expense of safe-haven gold. However, four situations remain simmering on low heat on the back burner of the market place: the European Union sovereign debt crisis, the Iraqi civil war, the latest flare-up between Israel and Hamas, and the Russia-Ukraine tensions. Any one, or more, of these conflicts could quickly move to the front burner--and gold would likely see good safe-haven demand quickly develop.
Sakhaneft, thank you for the update. If you err, it generally seems to be on the side of conservatism. I can't fault you for that. Prudent, means you've lived long enough and wisdom comes from application of experience and and plan implementation. Well played.. again. dcp
Sak, wasn't being critical of your market decisions and support your long term bullish out-look. I always am appreciative of your sharing your thinking with the rest of us and especially find of value, your objective research which is a valuable form of discipline in purchase and sales, especially over the near-term. Thanks again. dcp