Sprott's silver lining: when you wish upon a starChart seems to say that silver was at about $ 30 (U.S.) in September, 2012, and it dropped steadily down t0 today's $17 (U.S.).
let's see...5.2 million ounces at $30 (U.S.) is 156 million (U.S.) minus 5.2 million ounces at $17 (U.S.) is a paper loss of $67.6 million (U.S.)...good thing that the Cad has tanked against the US, as that saved about $30 million CAD, but still way underwater.
TIM KILADZE
The Globe and Mail
Published Wednesday, Aug. 17 2011, 12:32 PM EDT
Last updated Monday, Sep. 10 2012, 1:32 PM EDT
Eric Sprott, the perennial gold enthusiast, has his sights set on a new precious metal. v Mr. Sprott’s charitable organization, The Sprott Foundation, is selling two million units of its gold holdings and using the money to buy silver.
The move comes as gold veers close to $1,800 (U.S.) per ounce, and less than a week after Mr. Sprott had declared the metal “the investment of the last decade” in an interview with GoldMoney Foundation. “I think silver is going to be the investment of this decade.”
Since the commodity boom kicked into high gear last fall, Mr. Sprott has been touting silver’s merits. To demonstrate his conviction, he set up and invested his own money in the exchange-traded Sprott Physical Silver Trust , which buys silver bullion and stores it at the Royal Canadian Mint. Investors in the trust can cash in their units, or take delivery of silver in physical form if they wish.
...On Wednesday, Mr. Sprott said his comment about silver does not mean he is abandoning gold altogether. “Anything I said about it being the resource of the last decade was not to suggest that it wasn’t going to do well this decade,” he said. “It’s just I think silver will do better.”
...Moreover, the price of gold is trading about 45 times the price of silver. Historically, the ratio has been about 16 times and Mr. Sprott thinks the two metals will move back in line with that ratio.
...He also doesn’t apologize for shifting more of his attention to silver, and is still touting his gold trust to retail investors who think economic turmoil will send bullion prices higher. “I think silver will outperform gold this decade, so why wouldn’t I position myself, position our accounts, that way?”
...Although the foundation announced that it would reinvest its money in the silver sector, it is interesting that it did not specifically say where it would invest, either in Sprott Physical Silver Trust , or the metal itself. But if you look at Sprott’s recent selling activity, it’s clear that money will go into the metal. In the past month or so, Sprott has sold about $23-million of the Silver Trust units. That comes on the heels of sales this spring worth about $34-million of the trust’s units.
...The sales have been pointed out by blogger ‘ kid dynamite.’ While he acknowledges that Sprott is reinvesting the money back into silver, he points out that the Silver Physical Trust currently trades at about a 20 per cent premium to the net asset value. By exiting, Sprott captures that premium and then buys the metal at fair value.
Buying the metal ties back to Mr. Sprott’s recent comments about being bullish on silver. In the GoldMoney interview, he pointed out that the physical amount of gold above ground is about 100 times greater than silver, yet people are buying the two metals on a 1-to-1 basis. That means the price of silver has to go up, he argues.
Plus, gold is trading at about 45 times the price of silver. Historically, the ratio has been about 16 times and Mr. Sprott thinks we will get back in line with that number.
But he isn’t sure of the timing. “When it actually happens, I don’t know,” he said in the interview.
https://www.theglobeandmail.com/report-on-business/streetwise/think-gold-may-lose-some-lustre-eric-sprott-sees-a-silver-lining/article617140/
08-13-2012 02:32 PM
especially when I told him JPMorgan Chase had bought 5 million ounces at $27 range as did Eric Sprott who bought 5.2 million ounces of physical silver also