Since We're Going to Be Neighbors

[Arindam]

fuma,

Since we’re going to be neighbors, permit me if you would to introduce myself to you and the community that hangs out in this forum.

I’m a Ben Graham-style value investor who uses his classic book, The Intelligent Investor, as my investing bible and trading manual. That means I’m constantly trying to buy at a discount to ‘fair value’, and I close positions when they become ‘fully valued’. Sometimes, that journey takes just days. Sometimes, it’s months or decades. Thus, my buy/sell decisions are driven by fundamentals, not by the clock or the calendar.

I bought my first stock when I was ten, doubled my money soon after, and thought investing was easy, a delusion that markets spent the next couple decades disabusing me of. But things finally clicked for me in the hay days of the dot com era when I stopped trying to trade ‘price’ and started trading ‘value’. BINGO! That was the magic formula, and wealth grew. Now, my current income-streams are 5x my current expenses, and money is no longer a worry or concern. Now, I can explore as I please in any market I please.

I trade a lot of biotechs. So the title of your post caught my attention. Some of the ones you mention seem to have decent fundamentals. But I’d question their timing, especially until the short squeeze in silver plays out on the London and Shanghai metals markets. Why did some bank or banks borrow $19 billion from the Fed this weekend? How many more face a liquidity crisis? Why is the Fed so willing, yet again, to trash our currency?

Those disruptions of “normal” market behavior are likely to spill over onto the equity markets, meaning, if some of the stocks you mention in your opening post were “good buys” last week, might not they be better buys at the lower prices likely to prevail this week?

Who knows, right?

[Later. Predictably, the US Treasury’s Plunge Protection Team has stepped into the over-night futures markets. Equity indexes are being pumped up. Gold/silver futures are backing off. My bet is those prices are head fakes. Silver is no longer just “money”. It has become an strategic industrial metal crucial to the solar industry, the EV industry, the 5G industry, and our dear, dear friends in the MIC who use many, many ounces of stuff to build their toys. Together, they create more demand than there is supply. With Mexico and China now banning exports of silver, supplies are only going to get tighter.

When, where, or whether to get in is a tough problem and no different than trying to decide if/whether a particular biotech or medical device company might be a good buy or not.

[MoneySlob]

I’m probably not much of a neighbor.

You might want to get your hugs over on Saul’s Investing Discussions after reading his Knowledge-base files and posting rules. (ie: explain your juju on a deep dive into one single stock you believe shows promise).

Over on Saul’s they seem to put their monthly YTD’s where their mouth is, which is a godsend for an idiot like me. I just tag along, cause no trouble, and model my portfolio after someone over there. It used to be Saul, but he has reached the age where he no longer posts his portfolio.

Cheers,

MoneySlob

70% ytd

[XMFfuma102]

Tell ya what.

Why don’t you provide a list of biotechs you’re watching and maybe see if we can hack through them and come to some concensus?

[Arindam]

Slob,

Thanks for recommending Saul’s board, but NO THANKS! Just not my style.

[Arindam]

fuma,

Happy to accept your challenge. Exchanging ideas is always A Good Thing.

In fact, I put on another biotech position earlier, along with 19 new positions spread across gold, sliver, copper, platinum, and palladium. 16 are now ITM, confirming my entry was correct. 3 are OTM, which isn’t a bad scorecard in a fast market like today’s, and all of them are intended as very, very, very long term positions. The biotech --which I am also already ITM on-- is just a ‘trade’ that I’ll be out of as soon as “the market” starts valuing it properly.

[Arindam]

fuma,

To start the ball rolling, I’ll report that I put on two new biotech positions today [names withheld until I close the positions], and I ended the day down on one by (-0.57%) and up on the other by +2.10%. Both had this in common. Both were trading at discounts to ‘fair value’ (on a cash flow basis), had above industry projections for growth, and were over-sold as measured by the RSI indicator.

Why my reticence to name names? Any day that TMF starts publishing their current stock picks in these forum, I’ll start publishing mine as well. But until then, nothing.

I’m happy to discuss my methods, which are drawn straight from Graham’s book, The Intelligent Investor, and I’m happy to discuss any positions I’m already out of. But I don’t tip stocks in public forums, because I’m not a financial adviser, just a guy who manages money for his own account. But I will say this. The financial press is totally misunderstanding what’s happening in the silver markets, and that merits looking into if one is serious about investing in the fundamentals.

Follow-up on Tues, Dec 30. I dumped the loser and kept the winner, which is gapping up as I had hoped. Firstrade is marking me to market with an 11.6% gain since I bought yesterday.

[BassThumb]

@Arindam

The financial press is totally misunderstanding what’s happening in the silver markets, and that merits looking into if one is serious about investing in the fundamentals.

Greatly appreciate your input on the board, thank you. Can you please elaborate on this comment regarding Silver?

[Arindam]

Bass,

Happy to share what seems to be going on in silver. Let me get some things squared ant, and then I’ll post more.

[MoneySlob]

@Arindam

But I will say this. The financial press is totally misunderstanding what’s happening in the silver markets, and that merits looking into if one is serious about investing in the fundamentals.

I typed this into the google: “what does big money think about investing in silver”

AI came back:

Big money" and institutional investors generally have a

positive long-term outlook on silver, viewing it as a valuable asset driven by a unique blend of safe-haven demand, a strong structural supply deficit, and accelerating industrial use in the “green” economy. However, there is disagreement among experts about short-term timing, with some cautioning against buying at current record-high prices.

Key Drivers of “Big Money” Interest in Silver

• Industrial Demand: A major factor distinguishing silver from gold is its extensive and growing industrial application. Silver is essential in solar panels, electric vehicles, electronics, and medical equipment, industries that are expanding rapidly. Analysts expect this demand to continue outpacing supply for the foreseeable future.

• Safe Haven/Hedge: Like gold, silver is considered a safe-haven asset and a hedge against inflation and currency devaluation, particularly amid ongoing economic uncertainty and geopolitical tensions. Lower interest rates by central banks make non-yielding assets like silver more attractive.

• **Undervaluation and Volatility:**Many analysts, and some large investors, believe silver remains undervalued relative to gold, pointing to a historical gold-to-silver ratio that suggests significant upside potential. Silver is more volatile than gold, which some investors see as an opportunity for higher returns.

• Supply Deficit: Global silver production has consistently lagged demand for several years, leading to a structural market deficit. This physical scarcity is expected to put upward pressure on prices.

• Notable Investor Sentiment:

  • Warren Buffett famously favors silver over gold due to its practical industrial uses, aligning with his value investing principles.

  • Elon Musk has voiced concern over silver export restrictions from countries like China, highlighting its critical role in industrial processes.

Cautions and Split Opinions

Despite the strong long-term fundamentals, not all experts recommend rushing in immediately:

• Timing Concerns: After a sharp rally to record highs, some experts advise clients to wait for a potential market correction before making a large investment. They warn that buying at “overbought” or “elevated” levels carries the risk of short-term pullbacks.

• **Manipulation Allegations:**Some investors point to past instances of market manipulation by large entities, such as the unlawful “spoofing” activity in precious metals that JP Morgan traders admitted to, as a reason for caution or an opportunity to buy during artificial dips.

• Volatility Risk: While volatility offers potential for high returns, it also presents significant risk, and a money manager for a portfolio wealth advisor has reportedly compared trading silver to “degenerate gambling”.

In short, “big money” generally sees a robust future for silver, but the consensus is to approach with a disciplined, long-term strategy, potentially accumulating during price dips, rather than chasing the market peak.

[Arindam]

“The consensus is to approach with a disciplined, long-term strategy, potentially accumulating during price dips, rather than chasing the market peak.”

Totally agree with that advice, which applies to all investments, and today was such a buying day (IMHO, natch.)

What some analysts --actual humans, not AI-- are arguing is that the price for silver in NY is the ‘paper price’, and the prices in Dubai and Shanghai are the ‘real price’ that the paper price will have to move toward as the shorts get squeezed and demand to take delivery of the physical continues. They also point out that some banks are running into liquidity troubles and that our dear Fed is printing money to bail them to the tune of $5 billion in just the last two days, on top of many more billions over the weekend.

In sum, they argue that the price of silver isn’t the problem, but an indicator of problems that extent beyond the disruptions to the supply chain for an industrial metal. To wit, the Fed is once again expanding its balance sheet, but not calling it the QE it really is. That’s the larger worry for them, not the price of a commodity.