This Asset Is Ready to Soar – And You’ll Be the Only One Watching
From $27 to $300 ...
There’s a veritable army of investment banks, institutional traders, marketers masquerading as allies, vested-interest “experts” and more … whose No. 1 goal is to divert your hard-earned savings into their personal pockets.
And they’ve got an arsenal of slick weaponry – options masquerading as income, so-called “zero-day options” (which even have a Pentagon-like code-name of 0DTE), margin trading and “algorithmic” tools that are supposed to make you better than everyone else (and “everyone else” better than you).
In short, folks, these are little more than “Wealth Killers” – all setting you up to be the proverbial “Greater Fool.”
We talked about these Wealth Killers – the “not-to-do” moves – in yesterday’s issue.
Today I’ll flip the script – and focus on Wealth Builders. And I’ll start with an intriguing “Special Situation.” It’s an investment opportunity that, in a prior bull market, potentially turned every $1,000 invested into $38,000.
And in this new bull market, the returns could be equally impressive – if not more.
The opportunity is in silver.
So let me share the “investment case” with you …
An Expert Who Knows His Business
There is a growing supply and demand imbalance in silver.
“Its use in solar panels has soared to 20% of the market. It’s also in automobiles, electronics like smartphones and tablets, medical applications, glass coatings in mirrors ... and that’s just a short list of the use cases,” Peter Krauth, author of the Silver Stock Investor, told me in a March interview.
To Peter’s point, industrial demand for silver is expected to rise 9% in 2024 according to a recent projection from the Silver Institute, the trade group that serves as the industry’s voice.
That’ll hit a fresh record for demand.
Then there’s the “supply” side of the equation. When you stack supply up against demand you’ll end up with a projected 17% silver deficit for this year –the fourth year in a row for a shortfall.
The “Special Situation” for investors is the growing supply and demand imbalance, which creates the perfect recipe for higher prices.
Silver is like a coiled spring that’s going to get sprung, says Peter … and I wholeheartedly agree.
The Inside Silver Scoop
I’m a “stock jockey” at heart.
But I am a silver bug, too. So I understand both fields and know that silver (whether it be through bars, coins or mining stocks) should be in the portfolios of Wealth Builders.
Peter’s prediction for silver by year’s end is $30 an ounce, or about 9% higher than where it is now.
That’s not bad – not at all. But it’s his call for an upside as high as $300 – and the investment case he’s made to justify that forecast – that’s the real adrenaline igniter.
Now, that $300 prediction wasn’t what my engineer Dad used to refer to as a “SWAG” – a “scientific wild-ass guess.” Peter didn’t just pull it out of thin air: My longtime friend and colleague put a lot of time, analysis, study of history and discussion with industry insiders into his prediction.
But just hearing the price prediction itself only goes so far.
I also want you to have the context.
And I want to make it “actionable” – in short, by showing you specifically how to ride along and reap the benefits.
But unlike those “enemies” I talked about at the opening, here at Stock Picker’s Corner (SPC), I don’t merely give you the stocks or assets or Special Situations to play.
I also give you what I like to call “The Why.”
I want you to be smart investors as well as rich investors.
So I’ll always explain why I like (or why I’m avoiding) a particular trend or investment.
Gold Rush = Silver Bonanza
Gold and silver each have unique features and unique use cases.
But they’re also intertwined. For instance, gold prices matter for silver – since a bull market for gold historically has been a boon for silver prices. And simply because silver costs less than gold, the price increases have had more room to “run” for silver than its “flashier” counterpart:
Peter believes gold will “peak” at $5,000 an ounce (nearly double today’s prices). But he also “won’t be stunned in the least if the ‘yellow metal’ ultimately traverses the $10,000 plateau.”
And if gold hits that $5,000 level, Peter says his $300 target for silver would be a bullseye, too.
I don’t want to numb your mind with a deep dive into “metals-market algebra.” But with my insistence on presenting “the why” – so you understand what’s what – let me do a quick run-through on how Peter came to that target.
There’s something called the gold/silver ratio, which you can use to see how much silver it takes to buy an ounce of gold. Peter says that the historical average over the last 40 years has been 60. But the ratio right now is around 85 – which is 41% above the norm.
That means it takes more silver than usual to buy gold – lots more, in fact.
Viewed another way: Silver is cheap.
Peter believes that once the Federal Reserve cuts rates, gold prices will rise but silver prices will rise faster, bringing that ratio down. He believes that the ratio could eventually drop below 30 and could reach 15, like in 1980 at “peak” silver.
So with gold at $5,000 an ounce, and a gold/silver ratio of 15, you’re looking at $333 silver – which is just slightly above his $300 target.
Silver Is Cheap – Historically So
If $27 silver is where we’re at – and $300 is where we’re headed – you’re looking at a “bonanza” moment to start accumulating silver.
From copper to gold, most metals have doubled or tripled in price from 1980 to 2021.
The key word there is most; silver is the lone exception.
But that’s okay.
The name of the game as a Wealth Builder is buying or accumulating low – and riding along as the powerful storyline plays out.
And that is true for silver, Peter said in his book, published back in 2022.
“At today’s price around $25, silver is still 50% below its 1980 peak,” Peter wrote. “That’s just senseless.”
Peter also said: “As part of my ongoing research, I follow a lot of assets. I honestly can’t think of one easily investable sector as cheap as silver is today. And that makes silver and silver stocks very exciting as we look forward.”
That leads into the final point, tying together a gold rush, historically cheap silver prices and a bit of investing psychology …
The Looming “Trigger” for Soaring Silver
Even with things like fractional shares for stocks and crypto and divisibility with precious metals (owning part of an ounce through something like coins), a lot of folks still like thinking in terms of a “whole” amount.
They think about how far their money goes by owning one thing.
Here’s what I mean – some folks may look at Bitcoin (BTC) at $63,000 and say, “Oh, I can’t afford a whole Bitcoin. Let me buy a whole Ethereum (ETH) for $3,000 instead.”
The same scenario can play out in investor’s minds with Eli Lilly & Co. LLY 0.00%↑ ($766 per share) and Novo Nordisk NVO 0.00%↑ ($124 per share) for weight-loss drug stocks …
Or Nvidia Corp. NVDA 0.00%↑ ($921 per share) and Advanced Micro Devices Inc. AMD 0.00%↑ ($155 per share) for semiconductors.
It’s human nature.
And it’s a psychological “trigger” for the bull market in silver.
So if gold prices ultimately rise to $5,000, all along the way, people, naturally, start looking for a “cheaper” alternative.
“Bull markets are famous for people drawing in the most participants during the later phases. Once new prospective gold investors realize how expensive an ounce of gold is, they turn to its cheaper alternative: silver,” Peter says.
I’m sharing this part of investing psychology so that you can identify this happening as well.
The Takeaway – So You Can Act
The potential is there for silver prices to reach $300 and usher in another historic bull run like the ones below:
As always, do your due diligence. Understand what you’re investing in – especially with respect to your own goals. And understand the difference between bullion bars, junk silver, bullion coins, graded coins – and the assortment of silver-related stocks.
I’ll see you back here tomorrow for a big announcement.
