Buffett's Silver Lining
Friday March 20, 11:55 am Eastern Time
Company Press Release SOURCE: Chilport Proprietary Research
KATONAH, N.Y., March 20 /PRNewswire/ -- Warren Buffett's purchase of 20% of the world's silver may anticipate a new use for the metal in fuel cells, according to an upcoming CPR-SPECIAL REPORT: BUFFETT'S SILVER LINING, available Monday, April 6, 1998.
''Scientists are racing to develop the next generation of fuel cells (batteries) used to power electric cars, laptop computers, cellular phones, submarines and satellites. One of the most promising is the silver-zinc fuel cells,'' explains Richard J. Siegel, managing partner, Chilport Proprietary Research, Katonah, New York, publisher of CPR-SPECIAL REPORT.
A February 3, 1998, Berkshire Hathaway press release, announced: ''In recent years, widely-published reports have shown that bullion inventories have fallen very materially, because of excess of user demand over mine production and reclamation. Therefore, last summer, Mr. Buffett and Mr. (Charles) Munger, vice chairman of Berkshire, concluded that equilibrium between supply and demand was only likely to be established by a somewhat higher price.'' Mr. Buffett is chairman of Berkshire Hathaway. The company owns 129,710,000 ounces of silver, purchased from July 25, 1997 to January 12, 1998.
''We first started to look at this story,'' says Siegel, ''when Mr. Buffett was compelled to reveal his substantial investment in silver a month prior to releasing the much anticipated Berkshire Hathaway annual report March 14th. To use Mr. Buffett's own baseball imagery, like all great fast ball pitchers, he doesn't give anyone much to hit. The key question to us, was he buying based on low supply or high demand? The fact that he took physical delivery of silver swayed us toward demand.
The fact that he is a major shareholder in Gillette, parent company of Duracell, focused us on batteries. And further reading of the February 3rd press release, ''Berkshire has no present plans for purchase or sale of silver,'' pointed us toward emerging silver-use technologies, rather than established ones, like photography. Silver-zinc fuel cells fit our investor profiler model like a batter's glove.
High energy, rechargeable silver-zinc batteries are already being used in the U.S. Navy's deep sea rescue vehicle, designed to perform at great ocean depths and on the Mars Pathfinder Lander, which provided electrical power to the lander for the mission. It was launched on December 4, 1996, and landed on Mars on July 4, 1997. Almost all launch and primary storage energy for manned space flights have been supplied by silver-zinc fuel cells.
A 1900-watt, silver-zinc battery powered the Honda Dream Solar Car, which recently won the annual World Solar Challenge race for sun-powered cars. The car used solar cells developed at the University of New South Wales. Five cars in the race covered 2,000 kilometers (1,240 miles) from Darwin to Adelaide, Australia, using the photovoltaic cells, which convert sunlight into electricity. The Honda Dream Car took 33.32 hours to complete, the race, averaging 89.7 km (55mph), and reached a top speed of 110 km (68mph) on desert roads.
Environmentalists are enthusiastic about the possibility of widespread use of electric vehicles because they are 97% less polluting than conventional ones. California has already insisted that ''zero-emissions vehicles'' be ready by the early 2000's.
''Even if Mr. Buffett bought silver simply because he likes the way it looks,'' notes Siegel. ''I think fuel cell technology is an exciting racehorse for the investment community, especially Buffett-style value investors. True portable power is finally on the horizon. Anyone who's ever had their cellular phone go dead knows there's a real need for it. Like the legendary Ted Williams, we're all swinging at Buffett investment fast balls trying to see his reasoning for buying so much silver. Whether we hit a home run here, or miss completely, we plan to cover the investment side of the story to Mars and back, just like the 32 lb. silver-zinc fuel cell in the lunar lander.''
CPR-SPECIAL REPORT: BUFFETT'S SILVER LINING is available for $80.
CONTACT: CPR, P.O. Box 77, Katonah, NY 10536. Telephone: 914-232-0479.
Fax: 914-232-0481
SOURCE: Chilport Proprietary Research |
