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Strategies & Market Trends : Fundamental Value Investing
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To: bruwin who wrote (3241)8/9/2013 7:48:42 AM
From: The Ox1 Recommendation  Read Replies (3) of 4719
 
bruwin writes:


So if one has SLW in one’s portfolio, there could be times when it contributes, negatively, to the portfolio. And we may just be unlucky to catch it at a time when its price is in a longer term decline.


How has this changed in the past year? We all knew (or should have known) that adding companies like APA and SLW were a risk. They are both priced by the market depending on the underlying commodity, oil and silver. Why aren't we dumping APA? Who's to say that the price of oil won't fall in a similar fashion as gold and silver did over the past year?

If one is convinced that silver is going to be dead money or have a steady decline in value over the next 3 or 4 years then I think we are smart to dump SLW. I have no insight into the pricing of silver, so I can't say where it's going. I certainly didn't expect this type of a move in silver in August of last year and I don't think too many of you out there have any idea where silver is headed over the next 12 months, let alone 3 or 4 years from now. Here's the last few months of the silver ETF chart:



So I question the basic principles of what we were trying to do a year ago, if at the end of each year we say "well, XYZ is a good company and run well but the underlying commodity has tanked, so we don't want it in our portfolio any longer".
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