Loading ...Alternative To Most Silver Miners
Most of us here at Goldtent believe Silver is not only going back to it’s ATH at 50, but many multiples of that, over time. I was a big fan of MAG silver last year around 9. Recently I took profits at 16, 17 and blew out the position at 18. MAG will be profitable but I have an alternative that I believe will perform equally if not better with a lot Less risk. Instead of going back into MAG (my targeted entry point would be to try around 14.05) I recommend PSLV. This is another Sprott, closed end investment trust that holds actual physical silver. I contend that if you get a similar entry point you will achieve comparable gains to those of MAG without the risks entailed with a miner, particularly in Mexico. I still have and will be buying a number of rocks that are mostly silver and gold and silver projects. I believe the risk reward is tilted to PSLV compared to any major silver producer in questionable jurisdictions.
Junior silver explorers have much higher leverage, and risk, but this can be managed by position sizing and spread.
Mexico is a “safer” jurisdiction than the USA now, in terms of the landscape for doing business.
Spock, what about Canada and Australia? Where do you rank them vs Usa and Mexico. Thanks
Its all changing rapidly. Pretty soon Mexico will be a favored destination for doing business and living, as people escape the madness and crazies running USA, Canada and Australia; including the higher taxes and lock-downs.
There is no way Mexico is safer than US. Taxation, cartels etc. Canada and Australia are OK. I stated in my piece that this is not instead of juniors and rocks. It is a better risk reward than large silver miners especially, in Mexico and South America.
PSLV is a far way better way of investing in silver than silver miners, because volatility in silver is so high, you can get similar returns as in GDX without company risks. As for silver juniors, most are way overvalued, have no economic studies and do not generate cash flow. Gold miners at least have a free cash flow yield of 6-10% or more. The only silver companies generating cash are the bigger silver producers like PAAS, AG, FRES.L and HOC.L.
That may be true right now at 26-28 dollar silver. If it goes to the old high and beyond, the fundamentals will be there for most. Stocks are discount mechanisms and will move before the fundamentals reflect the profitability.
I beg to disagree. Many USA residents now emigrating to Mexico.
The picture painted by the news media about Mexico, is designed to paint USA in a good light.
By the end of this decade expect the emigration across both borders, out of the USA, to turn into a flood.
I wonder about going to a casino as an alternative to PSLV.
I wonder about giving cash to a random person entering a casino and asking said person to invest said cash in said casino and return with the proceeds as an alternative to investing in many silver stocks.
(Disclosures: not immune to gambling tendencies, I own some PSLV in an IRA, where I think its probably being a PFIC is not going to be trouble, and I own a dabbling of silver explorer-developers in IRAs plus silver via WPM.)
Kark, Another ridiculous comment! Was it about PSLV which is owning physical silver or are you just another troll who has to make dumb comments on every post? You go to so much trouble to show off your knowledge and intelligence in most of your rants and then this just confirms your lunacy.
Thank you for your comments.
As I noted, I hold PSLV. I agree with you on that. I implied that it is safer than others, again agreeing with you. I left the warning, without trying to be too dull about it, about PFICs. Again, I try to suggest US persons consult tax experts or else may find some unpleasant consequences without being too dull and naggy about it.
Our host, Full Gold Crown, likes to make jokes about the crazy behavior of silver (“Bob”). Perhaps humor is to be his and his only and other jocular comments about the erratic behavior of its pricing and the perilous nature of heavy investment in it are “dumb” and lunatic. Perhaps one is supposed only to be relatively dull, a drone in the hive, a follower, a so-called contrarian lined up along with all the others, etc etc. That is the way things often are.
That random person casino strategy works! But it’s done by robbing a random person coming out of the casino. And these days no one will think you look suspicious wearing a mask…
Hi CM, I like PSLV and have owned in the past. I would prefer better leverage and am not selling my MAG. I am a bit disappointed to see the lag in miners this time around. I am hoping Q4 into next year we really see them take off. I appreciate your input and will keep an eye on it for sure.