Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Value Case for Silver

Commodities / Gold and Silver 2011 Jan 21, 2011 - 02:29 AM GMT

By: Dr_Jeff_Lewis

Commodities

The prices for commodities can change quickly and wildly, and in many cases, investors can hold commodities for years without any realization of profits. 

The wild cyclicality is what has kept many out of the commodities markets, and it is the reason why so many value investors choose to ignore commodities as a broad investment alternative.  In respectful disagreement, making the case for a value investment in silver is a cakewalk at worst.


Securities and Commodities

Stocks and commodities are nothing alike, except when they are.  The world's most popular and most highly regarded value investors (many of whom don't have a favorable opinion of commodities) have laid down investment traits that, contrary to their viewpoints on silver, make it a very attractive value investment.

Among the basic tenets of value investing are that companies are boring and operate in boring industries.  Ideally, value investing companies are those that many people take objection to, and that very few investors own. 

Rumors are excellent, even preferred, and it would be best if the investment were in a low-growth industry.  It has to be a product that people will keep buying indefinitely, and under the best case scenario, the company is buying itself back through share purchases.

Drawing Comparisons

Compare the above commonly adopted value-investing tenets to silver. 

Silver is not only boring, but mining silver is a pretty dull exercise.  Most investors still take objection to silver, and few, despite the recent surge, own physical metals.  There isn't a single industry with more rumors than metals production, and in fact, several organizations are dedicated to uncovering such hidden evidence of backroom deals and price manipulation. 

People will continue to buy silver indefinitely, as it is in every electronic known to man, as well as prized for its beauty. While silver ounces cannot buy back other silver ounces, it is safe to say that the supply of silver is being depleted, just as shares of stock are depleted in buybacks.

Silver is the ultimate value investment because it always has intrinsic value, even if it has no intrinsic price.  And where even the most unlevered companies can go belly up when the markets turn, silver can't go to zero, nor can it disappear.  Where executives, auditors, and others have violated the public's trust in making their companies appear more valuable, all evidence in the silver market points to lies intended to make silver less valuable.

Commodity Similarities and Differences

Silver's commodity cousins are what keep it in check.  While the world can produce a near infinite amount of corn, wheat, sugar, etc., all the silver (and gold…don't forget about gold!) is already on earth.  No more can be produced, and eventually, the only silver that will be left is that which we can economically recover. 

The take home here is that silver is a value play.  The metal virtually defines what the world “intrinsic” really means, both in and out of the financial world.  Very few own it, everyone uses it, and it is very, very limited in supply.  Whether it goes to $5,000 or $25,000 per ounce isn't important.  Understanding that it will not lose value in the long-term is what is important. 

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

    Copyright © 2011 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in