Silver Bulls Should Be Bullish on Silver Bull
Recently I did an interview and the interviewer asked me what was cheap and why was it cheap. I pondered for a moment and came up with platinum and silver. When pressed for reasons my response was to say, “Who needs a reason? Something is either cheap or it is not. You don’t need a reason to invest other than it’s cheap.”
We may sell for any one of ten thousand reasons. We need a new BMW. We need to eat this weekend. The baby is sick. It’s time for a vacation. But there is only one reason to buy. That’s because we think the price will go up. What better time to buy than when something is cheap?
We all know that prices go up and prices go down. We don’t really know why but why would we need to? It’s the nature of all investments. They go up and they go down. At some point they become absurdly cheap and at another they become ludicrously expensive. Why would we need a reason? Doesn’t that just complicate a pretty simple issue?
My opinion is that we have too many gold and silver bulls if you measure sentiment via speculator longs in both commodities. And I do. We need a washout to clear the decks before the next bull storm.
I’ve noticed that for the last few years, we have tended to have a bottom twice a year, in late June, early July and the typical tax loss silly season at the end of the year from mid-December into the New Year. I think we are due for a low about then and then we go higher.
In the interview I was asked what was cheap. For certain both platinum and silver are cheap relative to almost anything but especially gold and palladium. There aren’t many platinum stocks in a safe country that I follow so if you like platinum, you are pretty much stuck with buying the physical metal.
But I did come across a silver stock that I wrote about years ago that was a hell of a deal then and absurdly cheap today with right at an ounce of silver per share, twenty three pounds of zinc per share, four ounces of copper and an additional two pounds of lead. All for a dime a share. That’s a hell of a deal. The company is Silver Bull Resources. (SVB-T)
Silver Bull has a giant silver/lead/zinc project in Mexico. I suspect that the only reason they haven’t been bought out is because most of the deposit is an oxide material and companies are far more comfortable with sulfide ores. In any case they have an absurd market cap given the 43-101 resource in M&I of 91 million ounces of silver, 4.7 billion pounds of zinc, 56 million pounds of copper 393 million pounds of lead.
To the extent that I understand the reluctance of investors to buy into an oxide silver/lead/zinc story because of the processing issues, I don’t understand the lack of response to the barn burning drill results released recently from sulfide material.
Channel sample results released in late August showed silver as high as 1.13 kg per ton, 22% zinc, 3.26% lead and 12.8% copper. The in the ground value of that rock is $2284 and economic under any conditions. But channel samples don’t trump drill core. A month ago Silver Bull began to release the numbers from the first underground drill program for this year showing 294 g/t silver and 0.96% copper over 25.5 meters. That’s a still respectable $226 per ton in the ground.
In the interview just completed, we talked about what was absurdly overpriced and agreed that Tesla, Bitcoin and the S&P were all overpriced. Tesla dropped from $330 to about $300 before he could even post the interview. The S&P is a bubble in search of a handy pin and when a shit for brains company adds the words “block chain” to their name and goes up 396% as a result, you have every fool in the world fully invested in the bitcoin scam.
Not far off the results from Novo Resources and De Grey and others in the Karratha region of Western Australia are going to light up the resource market. I see that in as early as December and as late as January. Silver is going to run and eager investors are going to step up to the lottery machine and start dropping in their quarters to buy silver lottery tickets. Silver Bull is a great silver/lead/zinc story and will become very popular.
Silver Bull is an advertiser. Do your own due diligence, please.
Silver Bull Resources