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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (3504)	4/2/2001 3:04:19 AM
From: goldsheet	Respond to of 8010

> Does FCX_pd look attractive to you? At $9 you buy 3 ounces of silver plus dividents. Am I wrong? You actually buy the cash value of .5 ounces of silver paid over the next 6 years. If you do a simple NPV using $4.40 silver, then a current price of $9 gives you an IRR (internal rate of return) of about 16%. Add the dividends and you get close to a 20% total return. If you do not expect silver to go up (or down), then this is a decent return. I think, however, you expect silver to go up and want to leverage to the possible upside. If silver goes up to $6, the return on the FCX-D only goes up to ONLY around 35%. Once would expect silver stocks to easily triple at $6 silver, so I see no reason to limit your upside by buying FCX-Ds. > Are you still bearish on silver? I was expecting silver to average 4.75 in 2001, without going much below 4.50 or over 5.00. At 4.35 it looks cheaper than I though it would get, but I am still having trouble developing a bullish case. I'm neutral at best.