"it can be done profitably"
A good place to start. Everyone should have an approach "that works"... and work at what works... for them. A learning curve in getting there... work to retain skills... and work to keep head in the game well enough to compete... and know when to not play... but you don't have to compete with others doing other things... only with yourself and past performance... while improving.
And then... be ready to take a risk now and then... swing for the fences when that fast ball isn't fast enough... and your timing feels on... which requires work.
Learning something new... is interesting. Learning how to convert what you learn into a trade ?
Once in a while a convergence occurs... right place, at the right time... with the right trade... resulting from overlaps in lessons learned over time... And, then, rather than wait for that... go looking for that... which turns out to require work, and patience...
Or, as my daughter pointed out to me today in an unrelated subject area... "is it patience, or is it procrastination?"
So a brief update on the silver related issues...
First, seeing confirmations coming in that suggest "yes, this trade is going to happen"... Latest reports suggesting that are showing silver lease rates are spiking into the positive... up to 1%... when normally they tend to be negative. Banks will pay you to lease silver because it is bulky and the storage costs of keeping it in secure vaults are quite high. So, they'll lease it out at a slightly negative rate... just to avoid paying higher storage costs. When you see lease rates go positive... so you have to pay to lease silver... instead of being paid to lease it... that's potentially a big deal. It's not a fool proof indicator, though, as lots of things might alter the balance in the cost equations. One of them, though, would be... vaults that are not that full... that it makes any sense to pay for off site storage.
Second, having done my analysis of silver shares based on ROE... mostly what I learned is that the idea works a whole lot better for gold shares than it does for silver... and I think the reason for that is important to understand.
With silver prices hovering higher than they have been in a while... you might think that has silver miners making more money. The numbers don't support that view, however... There are a number of gold miners who are making good money at current prices... but silver miners making money are a real rarity.
A few thoughts on that... a lot of opportunity lost due to Covid... fuel prices dropped, which should have spiked silver miner profits... except... the virus spiked metal prices... causing a short squeeze last year due to forced failure to deliver when the transport quit running... and mining stopped... so while grinding mining to a halt... no money made in mining. As business resumes... oil prices rise again... but the covid related costs don't decline in tandem... operations are still limited more than they were... so again, no one is making money... at current prices. That price argument alone... should drive silver higher... as industrial demand can't be met at current prices... as existing supply will soon tighten only due to a resumption of industry.
But, while silver mining has been less profitable than gold for a long time... its just really ugly right now. There are hardly any "pure" silver miners making money. That makes it easy to find the few who are... just sort for silver miners that have a P/E... but it makes it a lot harder to sort out the good ones from the better ones and the ones to avoid... when you can't look at performance based on production and profits right now... when there are no profits. That's a good thing... from my perspective item that the best silver stocks to buy in a rising price environment... are those that are just out of the money. Because right now that's most of them.
To address that problem... silver miners try to "diversify" silver holdings... which allows them to make more money as gold miners, even when silver is down... but that makes it harder to find a pure silver play when that's what you want to have to leverage the rising silver price...
So, I adjusted criteria to include a smattering of gold producers... both as QC issue in vetting the miners performance, and because it would be a pretty thin list otherwise... if the criteria is positive ROE and making money... And then, throw in a few other things to flesh out the picture. I chose ROE / PE / YLD / QRG... as likely sufficient to flesh out the picture that ROE alone fails to provide... adding price earnings ratio (either trailing or forward, as some lack one or the other), forward yield, and quarterly revenue growth.
Still worth considering: What does ROE measure... when a company isn't making any money ? Still shows management having a positive impact... or... the opposite ? Which do you want now... if the goal is "buy low"... before changes in the market force re-valuations in a "rising tide lifts all boats" sort of environment ?
I don't think you can get the answer about future potential performance from a statistical analysis based on past performance... when there is no past performance.
Anyway, I have a lot more work to do in sorting out the sleepers lurking among the miners that aren't mining anything yet... and the miners that are mining but aren't making money at it. For now, here's my list, which I've sorted by ROE... with a cutoff in ROE at -5.0 %... that value for no reason other than it turning out to be the patience/procrastination boundary limit, for now.
There are 20 stocks above the line, when I do the sort... most of them turning out to be the gold miners... one a royalty company... and an obvious trend toward the larger players... so this list isn't delivering what I want... "the best silver stocks to own when silver goes higher"... but it isn't without value. My approach to finding value on the list... would have me re-sort it by PE and QRG versus ROE.
Silver/...ticker…..ROE…....PE…....Yield…...Quarterly Revenue Growth
Gold
…S…..SILEF….. 53.54…..4.5…....0%……...0%
...G…..DRD……..32.88…..19…....4.25…....185.2
...G…..BTG……..30.77…..11.…....3.35……371.4
...G…..KGC……..22.65.....8.6…....1.83……50.2
...S…..SSVFF…..22.38
...G…..KL…….....22.10…..10.2…..2.1...…..14.4
...G…..CMCL…...17.85…..9.38.….2.77…...(-36.7) ?
...G…..LGDTF….12.63…..65
...S…..SVM……..10.74…..19…..…0.41…...33.6
...S…..PAAS…….6.96……16.86....0.86…...225.2
...S…..FNLPF…...6.00……19.92...1.06......(-8.00)
...S…..FSM……...3.33……9
...S…..ISVLF……(-0.77)
..GS....SGSVF….(-0.91)
..SG…HL………..(-0.99)…36.........0.62
..SG…OBNNF.....(-1.73)
...G….EDVMF…..(-1-74)...12.32....1.81
...S…..KOOYF…..(-2.55)
...S…..EMX……...(-3.95)...2.85 basemetal/royalty/explorer
...S…..WLBMF….(-4.90) |
