Dear Subscriber, Winter is starting to feel a whole lot closer with leaves on the ground and temperatures flirting with 0 celsius. I can’t help but feel like it comes so quickly, leaving us almost no time to acclimatize. Anyway, time to get the gloves, hats and fall/winter coats out. And the “fall back” to standard time is here too! Enough of that. There’s plenty for silver investors to look forward to in the near and medium terms. Let’s start with some macro. Another Fed meeting has come and gone, and this one produced no changes to rates, stuck at 22-year highs of 5.25% – 5.50%, while the Fed is allowing for a hike before this year ends. It’s looking like the market is doing a good chunk of the Fed’s work. Consider that nearly the entire US Treasury yield curve is above 5%, with the only exceptions being the 2-year (4.95%) and the 10-year (4.73%). This suggests the market is expecting inflation to stay elevated and wants to be rewarded for lending, even to the lowest risk lender. Higher long-term yields are a considerable headwind for businesses, mortgages, car loans, and beyond. And with inflation stubborn around 3.7% in […]
Here Comes The NEW Green Revolution New ways of thinking catapulted fertilizer use in the mid-20th century, triggering the first Green Revolution. It’s credited with alleviating world hunger and saving countless lives. That was a true paradigm shift. In the February issue, I made the case that feeding 8 billion people today would lead to great opportunities. This month I circle back to this arena and show how striving to reach that goal sustainably will favour particular agrifood subsectors. But first, I’ll detail this sector’s progress over millennia so you can better understand how and at what pace we arrived where we are today, and why the future is so bullish. Let’s start with a look at this chart of fertilizer consumption. How did the planet go from relatively limited to explosive use? This true paradigm shift, like those Gwen fleshed out last month, embodied new ways of thinking and doing that became widely adopted and created tremendous wealth for those involved. Before we look at where this paradigm shift is heading next, let’s look back at how agriculture evolved. According to a team led by archaeobotanist (a new term for me) Amy Bogaard from the University of Oxford, the […]
What Comes Next? Tailoring the portfolio to the realities of today (three sells). Lots of good portfolio updates
Gold and Bonds Diverge…Permanently? Lots of company updates.
Silver Stock Investor Update Conflict and Inflation Silver Technicals Silver Stock Portfolio Updates October 17, 2023 Sadly, over the past week, a new conflict has broken out between Israel and Hamas in Gaza. Silver prices are up, but longer term implications are mixed. That has clearly lit a fire under precious metals prices, with gold gaining +$100 per ounce or 5.5%, and silver gaining $1.75 per ounce or 8.3%. The question now is, is it sustainable? In my view, that depends. Normally, the war premium fades. We’ve clearly seen that within weeks/months after the Russia/Ukraine war erupted. Gold popped above $2,000 temporarily, then dropped back to $1,800 within months. Silver rallied above $25, then retraced to $21. So unless this conflict escalates, I’d expect the premium to dial back. We may already be seeing that start now. I think it would require other factors, like a clear end to central bank rate hikes to sustain recent gains. My guess is that it’s still early for that to happen. And then there’s always a potential Black Swan. So for now, I’m going on the thesis that precious metals will dial back, at least partly. Meanwhile, one of our portfolio holdings […]
Dear Subscriber, Wow! One of our junior silver explorers is soaring after hitting a blind and open discovery. With shares up about 140% I’m taking partial profits. You’ve probably already noticed, but Hercules Silver (TSXV:BIG; OTCQB:BADEF) is on fire. It’s what we live for as investors in junior explorers. In its first deep drill hole at the Hercules project in Idaho, the company hit a major new copper porphyry discovery. Hole HER-23-05 is what’s called a blind discovery, where not previous drilling was done. The hole hit an outstanding 185.29m of 0.84% copper and 111 ppm molybdenum from 246m to 431.2m, including 45.33m of 1.94% Cu. Anything above 0.4% copper is attractive. In fact, the hole ended prematurely because of the rock type. But subsequent holes suggest the mineralization likely continues significantly below HER-23-05 at 435 meters. This new porphyry is below the known deposit of rhyolite-hosted silver mineralization which 300 historical holes defined. That makes this a totally blind and open discovery. A follow up 3D IP survey will help understand the system along with ongoing drilling. Step out holes intersected similar rocks, and the potassic center, where the highest grades usually lie, is still down there to be found. […]
Things investors can do while they wait for metals market excitement. A new approach to the letter portfolio and lots of updates on portfolio companies.
Maven discusses falling bond yields and what they mean for gold before answering reader questions on New Found Gold (TSXV: NFG) and gold supply-demand.
It’s at times like these, when the silver markets continue to struggle for what seems like an endless period, that we need to review and set our sights on the bigger picture. I’ve had the opportunity and benefit of discussing with a number of subscribers and investors at both the Metals Investor Forum (Vancouver), and the Silver Symposium (Las Vegas) over the last few weeks. (In fact, you can watch my recent presentation at the Metals Investor Forum here: The Silver Roadmap. I lay out my expectations for the next 12-18 months, along with the main silver drivers and outlook.) Meeting with silver investors really is invaluable for insights on how they are thinking and acting. Are they impatient? Yes. Are they frustrated? Yes. Do most of them get the concept that the precious metals investment arena is a long game which ultimately delivers the biggest rewards to the best informed and most patient participants? Definitely yes. That’s very encouraging. Because after all, the bigger picture has not changed, except to become even more supportive of precious metals’ outlook. Ayn Rand, the author of Atlas Shrugged, was fond of repeating in that work the phrase “check your premises”. Rand wanted […]
Paradigm Shifts: Massive Investment Opportunities (that require patience & timing) The term “paradigm shift” was first coined by American philosopher Thomas Kuhn in his 1962 book The Structure of Scientific Revolutions. It describes fundamental change in the basic concepts of something and in the resulting practices of how that thing works or can be done. The box above, taken from good old Investopedia, sums up how paradigm shifts play out for investors. New ways of thinking or doing that totally revamp old orders erase some investments while sending others soaring. Streaming services annihilated CDs/music stores and necessitated huge changes for cable TV operators but made Spotify and others into huge successes. Online shopping took a huge bite out of the market for brick and mortar stores, while Amazon soared. Those are smaller paradigm shifts, which make for good simple examples. The green transition is not small. For better analogues of scale and timing/duration of impact, we need to look to past big paradigm shifts. The two I will lean on today are the rise of the internet and the rise of China. There are other examples, to be sure, such as the invention of the automobile, cryptocurrencies, antibiotics, and the […]