SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Waiting for the big Kahuna
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: RWS who wrote (16511)4/15/1998 4:33:00 PM
From: Chip McVickar  Read Replies (1) of 94695
 
RWS ---- Buffet's Silver

Here are a number of reasons for Buffet's purchase:
1] undervalued commodity -- slack between mine production and demand
2] commercial use of silver is expanding within the high-tech arena
3] new batteries are being developed that use silver and can be
recharged to full capacity in 30 minutes...new cars, etc
4] hedge for his holdings, against the instablity of world currencies
5] new euro-$ will be backed by a basket of commodities(including silver)
to give some measure of substance to the euro's value
6] he's a miser

Most Interesting part of the transaction is the fact he took physical
delivery and did not lease the commodity. 1-2-3 would not require delivery
to carry out a position and also less expensive.

This leaves us with 4-5-6....my preferance is #4....I think he hedged
his holdings with something solid and felt silver was a better value then
gold. He took delivery as a hard asset and is willing to pay the fees
to maintain his position. Coupled with this...is the purchase by Sorros of
a Mexican Silver mine not to long ago as well as his significant holdings
in Seven Seas Petroleum established a while back.

It is very possible they know something the rest of us do not yet
understand about the worlds unstable system of currencies.
I believe it will take a significant event to scare the money out of
these markets. Until this occurs and creates fear...the bull will
continue. Currency crisis would be a big key to unlock that trunk.

Floated Currencies are highly unstable....as we have seen. Rubin a few
weeks back on the Jim Leher show...and I quote" ...We are in uncharted
waters when it comes to dealing with the enormity of Japan's and
Asias's currency crisis."

As for #5....Thatcher and Sir Alan Walters wanted a solid base to
the EMU and Euro before Britan would sign on....one of the proposals was
system of commodity back pledges, which included silver and oil. If the
euro$ is weak...they may have to prop it up with some sound basis and
compete against the dollar in that manner.
This would be administered by something like a currency board as recently
proposed for Indonesia and in place in Argentina.
Anyway...interesting **Stuff**
Chip
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News