The Profit Maze Of Silver

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The Profit Maze Of Silver

While in the last century, one could fair pretty well with “set it and forget it,” meaning you bought a high-quality stock or an index and wake up 30 years later with compounded profits, today you need to be on your toes not to lose all your money. Current affairs in Silver are an excellent example that only the most flexible and informed investors will be able to preserve their wealth. Let us help you find the profitable path through the maze of choices to reach your goal. The profit maze of Silver.

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Q4 2020 hedge fund letters, conferences and more

We took for many months the stands of a Permabull in Silver and still do. Our primary call for acquiring physical Silver might find some hurdles. You might not get any. When we started in March of last year at the price of US$12 to urge for acquiring physical Silver holdings, we already experienced the vast percentage difference between the spot price and the actual acquisition price of Silver. This phenomenon persists to the present day. And what to do if one can’t purchase real Silver anymore?

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We look at the markets primarily from the perspective of risk. As long as you do not have too dramatic pullbacks (= a homogeneous equity curve), you can always recover from a temporary setback. After all, not every investment idea might work out.

Sil, Global Silver Miners ETF, Weekly Chart, ETFs might look good, but they aren’t:

SIL Global X FDS Global X Silver Miners ETF in US Dollar, weekly chart as of February 4th, 2021.

SIL Global X FDS Global X Silver Miners ETF in US Dollar, weekly chart as of February 4th, 2021.

If Silver’s physical acquisition should come to a halt, we find mining stock ownership to be an excellent second choice.

Here is why. Leveraged positions like ETFs (see above chart of silver miners ETF “SIL”), futures, and options allow special restrictions made by brokers and clearinghouses tied with their firms’ positions. Large players like this can also go belly up, especially in six sigma events. In that case, it is essential to find liquidity, the ability to transfer positions from one broker/clearinghouse to another, and mostly to liquidate positions. An option they may deny you through their regulative powers.

Monthly Chart of Silver, Think long term and win:

Silver in US Dollar, monthly chart as of February 4th, 2021.

Silver in US Dollar, monthly chart as of February 4th, 2021.

While Silver’s smaller time frames can be intimidating at times due to their volatility and recent limelight in the news, the larger monthly time frame clearly shows the health of the trend in motion and the long term opportunity.

With this bigger picture in place, mining stocks will follow the uptrend.

Daily Chart, Reyna Silver Corp in Canadian Dollar, The profit maze of Silver:

Reyna Silver Corp in Canadian Dollar, daily chart as of February 4th, 2021.

Reyna Silver Corp in Canadian Dollar, daily chart as of February 4th, 2021.

There is a vast array of choices to participate in mining stocks. You can employ various strategies like buying the market leaders or underdogs, for example. In this field, evaluation can change quickly based on depository discoveries, soil sample quality and many other factors. Another point of consideration is the accessibility of stock depending on the country you are trading from, which exchanges you can access.

The above chart depicts the stock price of our sponsor Reyna Silver which we find undervalued and very attractive as a long-term investment. Stocks in this price range have the advantage that not too much of your money is parked long term. And still percentage returns can be substantial. (Disclaimer: Please note that Reyna Silver is the sponsor of our weekly silver chartbook).

In this specific case, you can see that there is excellent support at CA$0.98 from a volume analysis perspective, right below where prices trade for a low-risk entry on a long-term time horizon.

The profit maze of Silver:

While we hold physical Silver in the highest regard to risk-averse wealth preservation (next to Gold and Bitcoin), additional investments in mining stocks are prudent. As a stockholder, you are a part-owner of a company with the acquired rights by law. From all the choices out there to participate in the Silver boom, mining stocks seem to be the ones with the smallest risk potential.

With a goal of long term investing and wealth preservation, it is essential to look at investments from a risk perspective rather than leverage.

Besides, many mining stocks pay dividends. That additional income flow can be reinvested, and one participates in the 8th miracle of the world: “Compound interest.”

We post real time entries and exits for the silver market in our free Telegram channel.

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About the Author: Korbinian Koller

Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent.Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

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