Friday, April 8, 2011

Silver not done yet

Today, the price of silver in worthless paper dollars is sitting at $40.91, about a 4% gain over yesterday's London PM fix. Silver is now up 44% since February 1. Here's today's chart, courtesy of Kitco:

Silver mining stocks are running up as well, particularly the junior stocks. Since February 1, Revett Minerals is up 40%, US Silver is up 53%, Canadian Zinc is now up 73%, and a new one I've recently added to my portfolio, Tinka Resources, is up 129%. If one had invested $5000 on February 1 in a balanced portfolio of silver and these four stocks, it would now be worth $8390, a 68% growth. Try getting a return like that in any instrument your bank offers. As I've said before, if you're not getting a 10% return, you're losing to inflation.

It is my belief the current runup is far from over. With the continued devaluation of the dollar, the growing realization of the scarcity of silver, and an exploding demand from military, industrial and investment interests, I believe silver will continue to gain ground.

Full disclosure: I hold silver bullion, and am long RVMID, USSIF, CZICF, and TKRFF. I will sell half of my Tinka when the price goes over $1.04 to recover my initial investment, but have no intention of selling any of the rest of my silver or silver mining stocks any time in the near future. Also, while I encourage you to invest, it must be done wisely; do your own due diligence before buying anything.

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