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9/30/09

Comparing Silvers

We did a section similar to this post (though more focussed and less snarky) in The IKN Weekly, issue 22 last weekend.
click to enlarge

Check out this chart which shows how Fortuna Silver (FVI.v), Great Panther (GPR.to) and ECU Silver (ECU.to) have performed against silver the metal, as tracked by the Ag bullion ETF, SLV. What we can see is:
  • Silver has risen by 18% in the period on its positive run. All good.
  • Fortuna Silver has risen by 54% as the quality of this company begins to shine through.
  • Great Panther lagged for a while, then shot forward when silver-the-metal reached a critical point. Then at $17/oz and above GPR.to caught up and even overtook FVI for a while. This is because GPR.to has a marginal, high cash cost operation that only makes a decent profit when silver prices are high. When silver dropped back to $16/oz, traders found out the flipside to that strong leverage. The Lord giveth, and the Lord taketh away. Meanwhile, due to its low cash cost Fortuna makes money at all silver prices.
  • ECU Silver is a total waste of time and is best left to those influenced by BS pump tactics and shillers.

Moral of the story: First identify quality, then buy it. Then hold it. When it comes tp the world of small silver producers, there's none better than FVI.v. If you want to roll da bones on a high cash coster like GPR.to, well good luck to you. You won't find me screaming at you not to do it, but you won't find me as company, either. I like investing my money, not gambling with it. As for ECU.to, if you're long it's way past the time you admitted to yourself you were wrong. Or if you like, hold through and stay in investment kindergarten. Your money, your life, your call.