SILVER: The Best Performing Asset Since Lehman

According to Deutsche Bank, the total return performance of Major Global Financial Assets shows that Silver had the highest percentage gain.  If we look at the chart below, we can see that both gold and silver take the number 1 & 2 spot amongst these global financial assets.

Gold & Silver Best Performing Assets Since Lehman

Here we can see that silver has outperformed all of the financial assets as well as the major commodities such as copper, Brent Crude, corn and wheat.  What is even more amazing is that silver has still taken the number one position even though its price has fallen 56% since its high in May of 2011.

Furthermore, the gains by some of the silver mining stocks have actually surpassed the price of silver by several factors since 2008.  While the S & P 500 has risen 45% since the collapse of Lehman, silver is up 80%.  However, we can see that Endeavour is up 120%, Fortuna 280% and First Majestic, a staggering 410%.

The reason why First Majestic’s stock price has held its own even as the price of silver has declined, is due to the fact that it is by far the cheapest and most profitable company in my top 12 primary silver mining group.

Silver & Stocks Outperfrom S&P 500

I believe the silver mining stocks will outperform the primary gold miners once the global financial system succumbs to the weight of gravity on $100’s of trillions in worthless derivatives.

Not only is silver a store of “Economic Energy” like gold, it takes a great deal less energy to mine an ounce of silver than gold which makes it a safer investment in the future peak energy environment.

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24 Comments on "SILVER: The Best Performing Asset Since Lehman"

  1. When will your report be available for purchase Steve?

    I have to say, after this weeks take down of the gold/silver prices I am beginning to wonder if the prices will ever go up again! Let alone past their old all time highs!! Is there a chance the bull market in PMs is actually over?

    • Bob… the silver miners & market report is in the works. I believe this last take-down will not be a trend. Furthermore, Andrew Maguire stated on King World News today that there are 2 JP Morgan whistleblowers that came to him about proof on gold and silver market rigging. You will notice that gold and silver moved up substantially Friday after the close of the broader stock markets.

      There is no chance the precious metals bull market is over. Again, the Comex registered gold inventories fell from 3 million oz in JAN 2013 to 670,000 oz today. Same with the GLD. I highly doubt physical gold will be heading back into these institutions.

      steve

      • Big-time whistle blowers who embarrass powerful people, threaten their power base or profit margins, tend to become silent. There is a growing list of those that are permanently silent.. I hope they and their families stay safe.

  2. stay calm, haven’t we been thru much worse bear raids?
    the correction is over. gold/silver both retraced 50% of their advance from June 28 bottom to Aug. 28 interim top. the depth of this correction caught many ppl by surprise.

    brighter days are ahead!

  3. Bob. If you are trading in and out of dollars from gold and silver then the daily price certainly does affect you but if you hold gold and silver as a currency then the daily movements mean nothing. Review Prof Albert Bartletts famous lecture on exponential growth for some insight into how basic commodities have lost value in dollar terms over the past 60 years ( I like his example of the cost of Gall Bladder surgery in 1950 compared to the same in the year 2000 but thats my warped sense of humour) whereas we know that for the past 2500 years gold has maintained its purchasing power.

    • so far, gold has lost a lot of purchasing power against other assets too. but it will catch up in the future when whoever is suppressing the POG stops doing it.

  4. Hi Steve,

    Can you comment on the pro’s and cons of investing in smaller cap silver miners as opposed to the big boys like SLW and AG?

    As a rule, small companies are more volatile and grow quicker than larger companies.

    As I see it, silver is leveraged to gold, silver miners and leveraged to silver, and small cap silver mining shares will likely be on steroids even compared to their bigger cousins.

    • JL…. that is a loaded question. This is the sort of thing I will be explaining in the PAID REPORTS. However, it depends on the company. As you know, SLW is not a miner, but rather a company that provides funding in exchange for silver at very low cost… $4 an ounce for instance. So, SLW does not have to deal with the problems associated with mining like everyone else.

      Then we have the larger Cap miners. While the larger miners don’t have the leverage to say double of triple their stock price as easy as a smaller cap… you also don’t have to worry about losing a greater amount of value.

      For example, Alexco Resources, which is the highest grade small cap silver producer in the world, has seen it stock price fall from $10 in may 2011 to a low of $0.90 this year. So, if you bought near the top, you would have lost 90% of its value. Again, volatility goes both ways.

      On the other hand, if you had purchased First Majestic back in May of 2011, it went from $24 down to $10. So, the losses are much less. Furthermore, you actually did better buying First Majestic than silver in May 2011. First Majestic’s stock price outperformed the fall in the price of silver, while Alexco actually underperformed silver by a factor of 3. That is, if you purchased silver at $49 and Alexco at $10… you would have lost three times the investment in Alexco than buying silver bullion.

      This is the important issue that most fail to understand. The reason in purchasing mining shares is to make gains in stocks that outperform the metal.

      Lastly, First Majestic is the lowest cost producer in my top 12 group. It doesn’t mean they have the lowest CASH COST, but lowest cost overall when we figure in everything. Alexco is one of the highest cost producers at $30 +/-.

      So, right now First Majestic is still making profits at $20, while Alexco is getting ready to put their mine on care and maintenance for the winter, hoping for better prices in 2014. Also, if Alexco produces say 1.5 million oz and First Majestic is producing 10 million oz in 2013, at $30 an ounce First Majestic is making $10+ on every ounce X 10 million oz = $100 million in net income during the year, while Alexco is just breaking even.

      Steve

  5. Can you guys explain why you believe that mining operations will NOT be nationalized? Or if this does occur, how will your skyrocketing paper profits remain unmolested?

    I understand the argument for the fundamentals of mining shares, its just this other thing that seems to get much less analysis.

    • Webster,

      Good questions. I see those as very strong possibilities by desperate governments.

      David Morgan, who does not sell physical PM’s, but does sell advice on investing in mining equities, has stated one should acquire the physical first — before investing in mining equities.

      His friend Mike Maloney http://www.goldsilver.com owns NO minings equities according to videos available only to his insiders [membership grandfathered in by customer orders in the past or more recently by paid membership].

    • webster… you bring up questions and concerns that are quite impossible to address. That is why I believe owning the physical bullion outright is the safest and best investment. Now, can the U.S. Govt or other countries confiscate gold and silver? Sure… but what else can one invest in? I don’t see much STORE OF VALUE in most of the assets that people are currently invested. Real Estate will turn out to be a big loser as well as most of the paper assets.

      Even after FDR confiscated gold in 1933, only 25% turned in their metal. Furthermore, the U.S. Govt did not take over the gold mines did they? Now, can foreign countries nationalize their gold and silver mines…. YOU BET CHA.

      That is why it may be wise to concentrate those located in safer countries such as U.S, Canada, Australia and Mexico. These countries are not guarantees, but at least you have a much better chance.

      This is what I believe an individual should concentrate their wealth.

      INVESTMENT CHECK LIST

      1) small modest home in country on a few acres paid in full
      2) 6-12 months worth of food. Doesn’t have to be high quality, but rather grains and etc.
      3) physical bullion of gold and silver
      4) weapons to protect oneself including the four most important:
      a) hand gun
      b) AR rifle standard caliber which can be used for hunting
      c) shot-gun 12 gauge
      d) 22 rife good for small game and inexpensive rounds
      5) mining stocks.

      That is what I believe should be the prioritized investments from top down. Mining stocks are at the end and should only be invested in if you have surplus capital that you can afford to lose.

      So you see, even if mining companies are nationalized, we won’t have to worry if we have invested our wealth in the items above. Mining companies are just ICING on the CAKE.

      One more thing many investors are not considering. I do realize many out there such as JIM WILLIE and etc don’t believe in the mining stocks. While I do realize there is greater risk associtated with mining stocks, what happens when the public can’t get PHYSICAL BULLION when the fiat monetary system collapses? They will be forced into buying the next best thing…. THE MINING COMPANIES.

      steve

      • “…when the fiat monetary system collapses?”

        This collapse will be global in scope, since ALL currencies are fiat and are so closely inter-connected, as is the entire globes financial markets, backed by their respective governments and central banks.

        The manipulation of the precious metals by the LBMA, bullion banks, mints, central banks, and governments is all pervasive. So, any collapse of the present financial system will entail a global, all governmental response. ANYTHING can and will occur.

        Proof of manipulation? See linked short video of Christian Garcia’s report.
        http://www.youtube.com/watch?v=p1tCtGoqqKo

  6. “According to Deutsche Bank, the total return performance of Major Global Financial Assets shows that Silver had the highest percentage gain”.

    Can anyone help me find this English edition article or from Deutsche Bank? A search engine effort doesn’t locate it.

  7. what’s the risk of SLW losing its contracted silver streams from its counterparties? when silver goes to 100, why would anybody still honor a contract that sell it at 4 to SLW?

  8. I would add one more item for investment purposes. Invest in your neighbor. Buy the local farmer a new chickenhouse or tools in exchange for future food. Help your unemployed buddy set up a home business like ammunition reloading or something in exchange for ammunition. …

  9. So the poor guy who bought some rounds 2.5 years ago for $27 apiece and now he’s unemployed and broke. Lucky for him, he can turn in his best performing asset for $22 and go buy some Alpo and high fructose corn syrup ketchup to eat a few more days. sarc)

  10. Steve, have you got any research on the gold scrap? According to the World Gold Survey, there has been a sudden increase in gold scraps supply since 2009. It is believed that the sudden increase in scrap supply is mainly from North America and Western Europe. However, this doesn’t seem the case to me. I don’t see many people eagerly selling their gold. Do you know why the sudden increase?

    • Adolf… I am putting together an article out tomorrow including scrap figures. Let me say this… gold scrap is down significantly yoy and compared to 2009.

      Steve

      • I have a topic on gold scraps which you may be interested. Here is a report on the Chinese gold market in 2011 produced by the Shanghai Gold Exchange. The 2012 report is not out yet.
        http://www.sge.sh/publish/sgeen/docs/20121129150156292870.pdf

        On page 27, you can see the SGE estimated that in 2011, 405 metric tonnes of gold scrap was added in the total supply.

        And here is GFMS’s World Gold Survey 2013 update
        http://share.thomsonreuters.com/PR/Misc/GFMS/GoldSurvey2013Update1.pdf

        On page 30, you can see the GFMS estimated that in 2011, about 400 metric tonnes of gold scrap was recycled in East Asia. Since China is the biggest gold consumer in East Asia, this seems about right.

        But you can see from SGE’s report that in 2011, 277 tonnes of gold was supplied through other sources (imports I suppose). And we know that the total gold import from Hong Kong to China in 2011 was around 400 tonnes although this figure is total and may include things like gold powder. Hong Kong is not the only 1 source through which China buys gold. Therefore, China must be hiding gold imports data in the scrap category.

        Then if China’s gold scrap supply was not so much then either the global gold scrap supply (in 2011) was not so high as the GFMS estimated or some big supplier in the Western World has been supplying gold in large quantities since 2009 but has been hidden in the gold scrap category of the GFMS report.

        Maybe you can do some further research on this topic.

  11. Hi Steve

    Have you ever come across a mining company by the name of: Lydian International Limited?

    I would be curious to hear your thoughts on this company!

  12. @ Steve and Adolf re Scrap

    I have been buying and hoarding scrap gold and silver for over 15 years and have yet to sell a gram of it…This stuff will be the first “money” that folks will relate to when the money is obviously going bad for them, and with a rising gold and silver price those that sold this decade and the previous ones will be open to buying again…. My sources have been antique and collectibles shows, thrift shops, and yard sales and visiting these places has been both an enjoyable hobby and VERY lucrative over the years….This “smalls” material will be used as currency money during the bad times ahead – just like it was during WW2 in occupied Europe.

    And yes, I have noticed some patterns in selling behavior. People still sell at yard sales (believe it or not) but not very frequently. Metal at shops and shows are way down and very expensive (they never changed their prices since 2011 and few have scales or watch the spot price).

    Yard sale metal mostly dried up three to four years ago. Prior to this one could buy a gram or two of gold or 2 to 3 ounces of sterling yarding….After this, the lower middle class, working class people dishoarded most of their “excess” jewelry and silver wares – mostly to the scoundrels at $5 per gram average as the news mentioned a rising gold price…By 2010-2011, scrap buyers in the larger centres had to pay upwards to 20% less than metal content as the early sellers were cleaned out….The wiser sellers (including a lot of collectibles and antique dealers) now began to put metal into dealer hands….A lot of this has also dried up – including a lot of collectibles stock for antique dealers who sold at the 2011 high…An interpretive approach would suggest that the dumb crowd dishoarded too early, and too quickly, and too cheaply…As we approach 2014 most of the scrap is from people who do not want to sell but are forced to…

    I still remember buying an almost complete sterling flatware set of 32 pieces for $5 at a yard sale. A 30 ounce sterling tray found at Value Village for $9.99 also earned bragging rights.

    But there isn’t a lot of metal out there now, Steve and Adolf. Even at shows. And if you were wondering, I would pay 20% under metal content for my buys…(as a dealer for scrap one on one – in a show or a shop, I would negotiate for best prices and could often do better than that).

    I await your article, Steve to see how well this breakdown matches your words.
    Best,
    G.

  13. Great answer Steve. It is so tempting to speculate in the small cap silver producers, many of whom may turn out to be ten baggers or more before all is said and done.

    However, I find it truly ironic how idiots like Casey describe a hyperinflationary dollar collapse out of one corner of their mouth while recommending credit dependent junior explorers out of the other.

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