Not so. I think silver has an interesting story. That said, I still have no idea how someone determines the value of metal. How do you know its underpriced? How do you know it is overpriced?
You value silver by looking at the annual production, current stocks, and annual demand. In the case of silver, the S&D equation is way out of whack, which tells you it is undervalued. As the price rises it will push out the marginal consumer and curtail demand and result in an equilibrium price. That the metal will overshoot some sort of equilibirium is without question going to happen. However, I am putting this on paper right now that if you neglect to buy gold or silver, which is now really easy for anyone with a stock account via GLD and SLV, you are missing out on the investment opportunity of the decade. I am glad we have this site so that we can see how people's calls play out. Like my interest rate call back when the 10yr yield was 60bps below today's level. Good work Doug on setting this up.
2 Comments:
Not so. I think silver has an interesting story. That said, I still have no idea how someone determines the value of metal. How do you know its underpriced? How do you know it is overpriced?
You value silver by looking at the annual production, current stocks, and annual demand. In the case of silver, the S&D equation is way out of whack, which tells you it is undervalued. As the price rises it will push out the marginal consumer and curtail demand and result in an equilibrium price. That the metal will overshoot some sort of equilibirium is without question going to happen. However, I am putting this on paper right now that if you neglect to buy gold or silver, which is now really easy for anyone with a stock account via GLD and SLV, you are missing out on the investment opportunity of the decade. I am glad we have this site so that we can see how people's calls play out. Like my interest rate call back when the 10yr yield was 60bps below today's level. Good work Doug on setting this up.
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