Like silver?

[thoughtomator]

The past 20 years are a very atypical period, the last days of an epic credit bubble.

Historical gold/silver ratio is 16:1. This implies:

- the ratio probably isn't going to go much lower, if at all. Most likely it will converge back towards the historical mean.
- silver has a lot more potential upside to it than gold does

Silver has a number of advantages over gold, not the least of which it is nowhere near as likely to be confiscated by government.

[Adrock]

If it is affordability you seek, why not stick with copper?

Saying something that can be infinitely divided is too expensive makes no sense. Besides, it's not mom and pop that will cause the price appreciation, it is the central banks, sovereigns and wealth giants.

What I am mostly afraid of is that what goes up must come down. The historical graphs I see remind me too much of the past bubbles we have had in housing, dot com, etc. If DC ever gets serious about balancing the budget or the FED raises interest rates to combat inflation, whoever is holding precious metals is going to take a bath.

I think of silver and gold on the same playing field when it comes to precious metals. That could be a misconception on my part. It just seems to me that you can get the same type of appreciation from silver at a lower cost (less risk). I guess I am ignorant to what other special qualities gold has.

[bolil]

It's not that I don't like it, but I don't think it is or will be seen as money/wealth in the future the way gold will. I think the next financial transition will involve gold, not silver. So the revaluation of money will affect gold in a big way, not so much for silver. I view silver as a commodity, which will go higher as the dollar hyper-inflates.

But silver has always accompanied gold. As a means for smaller transactions. (Rothbard, Murray. Man, Economy, State with Power and Markets. Auburn Alabama: Ludwig Von Mises Institute, 2009. Print.)

[Zippyjuan]

The past 20 years are a very atypical period, the last days of an epic credit bubble.

Historical gold/silver ratio is 16:1. This implies:

- the ratio probably isn't going to go much lower, if at all. Most likely it will converge back towards the historical mean.
- silver has a lot more potential upside to it than gold does

Silver has a number of advantages over gold, not the least of which it is nowhere near as likely to be confiscated by government.

We were under various forms of a gold standard until 1972. That means that the price of gold was basically fixed by the government. That makes comparisons between before 1972 and today very difficult. Since 1972, both silver and gold have been allowed to float relative to the dollar.

But if one believes that it will eventually go to a 16:1 ratio it is possible that the price of silver is "too low" (meaning it should rise) but it is also possible that the price of gold is "too high" (and that it should fall).

This article from 2011 suggests a 38-1 gold/ silver ratio:
http://articles.marketwatch.com/2011...io-gold-prices

The so-called gold-to-silver ratio, the price of gold divided by the price of silver, currently stands at 39.8 to 1. In other words, a single ounce of gold is worth 39.8 ounces of silver. That’s a decline from the end of 2010, when the ratio was around 46.

Silver has surged 29% year to date to about $40 an ounce, compared with gold’s 13% year-to-date advance, to just over $1,600 an ounce.

“Some traders look at the gold-silver ratio as a way to determine if one commodity is over or undervalued relative to [the] other,” said Paul Simon, chief investment officer at Tactical Allocation Group.

“This can open up statistical-arbitrage opportunities, where a trader may try shorting the overvalued commodity and buying the undervalued commodity, with the hope of profiting from the reversion to the mean,” he said.

Comparing gold prices to those of silver “gives a good relative feel for the price fluctuations between the two metals,” said Matt Insley, editor of the Daily Resource Hunter. “Plus, it’s another tool for metals traders to gauge future metals trends.”

But analyzing the gold/silver ratio’s levels is a complicated task.
Indications
The 200-year average for the gold to silver ratio sits around 37 to 1, said Insley, and the ratio now stands very close to that historic average.

[oyarde]

What Zip & Cubical have to say is all correct. I have no idea , so , I just buy a little of all three

[Brian4Liberty]

*This is not investment advice, it is information only. If you follow my investments you will lose money!

And want to take a little paper risk? Check out these bonds. I recently got into some and think they are a great investment.

http://www.grancolombiagold.com/file...dNotes0811.pdf

The gist is this. The notes pay 5% yield and the principle is linked to the price of silver, with every bond(par $1000) being equal to 66.7oz of silver. So they are priced as if silver is $15. Since silver is $31 the principle is currently valued over $2000. It begins to payout in 2015, through 2018. As you can see from the pdf, the annualized rate of return is currently around 22% and will only go higher if silver goes higher(like most on here believe). I am not a huge fan of silver any longer, but some diversification at such an attractive rate is very nice.

The company has been operationally cash flow positive for the last several quarters. They recently did a gold linked debt offering and now have a lot of cash on their balance sheet. The insiders own a big part of the company, both equity and debt(these notes specifically). The note is a senior note, but unsecured. Per the prospectus they will store up the silver and sell it to pay off the loans.

I own this in my 401k, so there is no foreign tax withholding on interest, so holding it outside of a tax deferred account might be tricky. Keep that in mind.

Let me know what you guys think.

The key question is the viability of the company. They are a penny stock, and currently operating at a loss. Can't see how they would pay back anything if they don't start making some money. An increase in metal price would help them.

Financial info:

http://finance.yahoo.com/news/gran-c...023300340.html



* Q3 2012 * Q3 2011 * YTD 2012 * YTD 2011
Operating data: * * * * * * *
Gold produced (ounces) 26,912 * 21,727 * 78,779 * 54,501
Gold sold (ounces) 28,009 * 22,317 * 77,241 * 54,624
Average realized gold price ($/oz sold) $ 1,642 * $ 1,684 * $ 1,647 * $ 1,547
Total cash costs ($/oz sold) (1) $ 1,261 * $ 1,340 * $ 1,258 * $ 1,352
Financial data: * ($000's, except per share amounts) * * * * * * *
Total revenues $ 47,070 * $ 38,779 * $ 130,485 * $** 87,288
Gross margin (2) $ 6,101 * $ 1,862 * $17,729 * ($ 1,704)
Net loss attributable to shareholders ($ 724) * ($ 5,910) * ($ 13,320) * ($ 36,486)
Basic and diluted loss per share $0.00 * ($0.02) * ($0.03) * ($0.13)
Cash and cash equivalents $ 1,604 * $ 58,608 * $ 1,604 * $ 58,608
Total debt, including current portion $ 88,185 * $ 78,557 * $ 88,185 * $ 78,557
* (1)***** "Total cash costs" are presented on a per ounce sold basis and represent consolidated
averages for the Company from both the Segovia Operations and Marmato Underground
mine.* See "Additional Financial Measures".
* (2)***** "Gross margin" represents total revenues, net of operating costs, production taxes and
depreciation, depletion and amortization.

[oyarde]

Discaimer, I own no paper , never will , in metals.

[matt0611]

How do you hold these kinds of things in your 401k?

My company's 401K just gives me a list of mutual funds I'm able to own.

Kinda off topic but you seem like you may know the answer to this kind of thing...is there any way to "lend" gold or silver? I have a decent amount of silver and gold bullion sitting around, would be nice to collect some interest on them if it were possible. I'm assuming its not but I can't figure out why.

[cubical]

The key question is the viability of the company. They are a penny stock, and currently operating at a loss. Can't see how they would pay back anything if they don't start making some money. An increase in metal price would help them.

Financial info:

http://finance.yahoo.com/news/gran-c...023300340.html



* Q3 2012 * Q3 2011 * YTD 2012 * YTD 2011
Operating data: * * * * * * *
Gold produced (ounces) 26,912 * 21,727 * 78,779 * 54,501
Gold sold (ounces) 28,009 * 22,317 * 77,241 * 54,624
Average realized gold price ($/oz sold) $ 1,642 * $ 1,684 * $ 1,647 * $ 1,547
Total cash costs ($/oz sold) (1) $ 1,261 * $ 1,340 * $ 1,258 * $ 1,352
Financial data: * ($000's, except per share amounts) * * * * * * *
Total revenues $ 47,070 * $ 38,779 * $ 130,485 * $** 87,288
Gross margin (2) $ 6,101 * $ 1,862 * $17,729 * ($ 1,704)
Net loss attributable to shareholders ($ 724) * ($ 5,910) * ($ 13,320) * ($ 36,486)
Basic and diluted loss per share $0.00 * ($0.02) * ($0.03) * ($0.13)
Cash and cash equivalents $ 1,604 * $ 58,608 * $ 1,604 * $ 58,608
Total debt, including current portion $ 88,185 * $ 78,557 * $ 88,185 * $ 78,557
* (1)***** "Total cash costs" are presented on a per ounce sold basis and represent consolidated
averages for the Company from both the Segovia Operations and Marmato Underground
mine.* See "Additional Financial Measures".
* (2)***** "Gross margin" represents total revenues, net of operating costs, production taxes and
depreciation, depletion and amortization.

Sorry, I meant they have had positive gross margins the last 5 quarters. They are right in the heart of their production growth. One of their operating mines has an average grade of 13.3g/t, which is very very high. Like I said, the insiders know better than anyone and they have a good amount invested with the company and they love the debt(silver and gold linked notes).

[cubical]

How do you hold these kinds of things in your 401k?

My company's 401K just gives me a list of mutual funds I'm able to own.

Kinda off topic but you seem like you may know the answer to this kind of thing...is there any way to "lend" gold or silver? I have a decent amount of silver and gold bullion sitting around, would be nice to collect some interest on them if it were possible. I'm assuming its not but I can't figure out why.

I can chose to self-direct my 401k, which is nice. No you can not loan out your gold or silver unless you have a lot at a big bank.