Physical silver markets remain unattractive. Please remember that we advised readers to stay out of this rip tide over a week ago when the price was just shy of $50/oz. Several emails have come in asking questions like, "What is going to happen to silver?" Who cares? This site is not your own personal crystal ball and we do not have a syllabus describing how the markets will move going forward. What we do have is a strong aversion to losing capital. When the physical market goes parabolic and the value of the stocks mining the product go down buy the latter. Our shopping list of silver miners continues to provide plenty of excitement.
5 day chart of May '11 Silver Futures:
As a reminder, we posted this in an article on how to own silver:
Finally, many readers might not understand how to invest in silver. This is a good way to look at proper capital placement:
- 20% PSLV Sprott Physical Silver Trust
- 20% Physical Silver Bullion (Storage becomes an issue)
- 30% Mid-Large Cap Silver Producers Properly Managed
- 30% Small Junior Silver Miners (Future post will be necessary to help explain how to pick these properly as your broker will have no idea how to help you)
At this time, focus your energy on the 60% of stock related holdings and don't worry about the physical silver market. A pullback to $41/oz would be within the realm of normal behavior in this type of bull move. As a reminder, well run silver mining stocks are trading at valuations consistent with $30/oz silver.
Take the low hanging fruit.