Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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.

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

To: ForYourEyesOnly who wrote (1787)	3/13/1999 12:24:00 PM
From: Richard Mazzarella	Read Replies (1) \| Respond to of 8010

THC, << Warren Buffett >> biz.yahoo.com

To: ForYourEyesOnly who wrote (1787)	3/15/1999 1:43:00 PM
From: Ray Hughes	Read Replies (3) \| Respond to of 8010

THC et. al.: Having spent about 35 years as a mining securities analyst specializing in commodities pricing models may I pass along some observations about silver price behavior vis a vis inventory? Metals prices rise, absent manipulation, when supplies fall short. The purchasing agent is not willing to pay higher prices until he/she knows system inventory is depleted and refinery capacity is fully utilized. These two things signal that no additional supply of the metal is available. Consider silver: inventory is declining but it is still ample. Users need only about 4 weeks worth of consumption in system inventory - users', merchants', dealers', producers', and exchanges' stocks in total. At the present rate of consumption this amounts to only about 65-70 million ounces. Jeffrey Christian's (CPM)inventory numbers show that users would not experience a silver shortage for 2, or more, years to come, at the present rate of inventory drawdown. This is not to say that the situation is not ready for short-term manipulation. Speculators may attempt to squeeze the shorts in any metal when they know that the industry is nervous about an impending shortage. Don't get me wrong - I'm a roaring bull on silver for the long term. Its just that timing based on knowledge is important if one is to trade profitably while we await the beginning of a shortage. Until the real bull run begins one needs to nail down at least partial profits on interim strong moves which are not supported by an actual shortage. How will we know when the actual shortage is beginning? When you nail down interim profits and the price roars up leaving you perplexed and frustrated. Hence, develop a strategy of covering your original investment when a position has doubled. Keep your original capital intact in case the move reverses. If its the real move you'll make money on the remaining position. If not you've got your capital for the next trade. But, you say, I will not be fully invested and will miss making some money. Remember old Wall Street saying; bulls make money, bears make money, pigs get slaughtered. RH