Silver is up 4.85% this morning… If this comes as a surprise to you, it shouldn’t… Over the last few months, it was CLEARLY evident that the silver stocks were telling us something was brewing behind the scenes. To me, it made absolutely no sense why the stocks had multiplied by 2x or 3x, while the physical metal was languishing at around $15-16/oz.
Well, silver finally broke out today… Gold moved higher as well, but just as everyone says, in an upmarket, silver will ALWAYS outperform gold. The gold-to-silver ratio is about 76 now, which means that it still has a loooooong ways to fall, if we are to get back to a more “normal” level of 50 or so.
As for the silver stocks? They are continuing their 2016 tear and reaching new heights.
Year to date:
- Alexco Resource (AXU) up 253.1%
- Bear Creek Mining (BCM.V) up 262.1%
- Endeavour Silver (EXK) up 147.9%
- First Majestic Silver (Ag) up 192.2%
- Fortuna Silver (FSM) up 132%
- Great Panther Silver (GPL) up 183.3%
- Silvercrest Metals (SIL.V) up 381.3%
When it comes to a bull market in precious metals, these are EXACTLY the type of results investors look for (why else would anyone bother to play in such a “risky” sector?). As I’ve mentioned so many times before in the past, the performance to the downside can be drastic, but typically, so is the outperformance to the upside when the tide finally turns… and it always does, eventually… No asset class moves up or down in a straight line for perpetuity, contrary to what many investors might think. You just have to be patient. Anyone who doesn’t study up on the history of mining stocks usually misses this critical point, and thus refuses to participate in this space, even when the shares are trading at a 95% discount, or for less than cash in the bank.
That’s unfortunate, because the gains that can be made by investing in mining stocks are indeed life changing.
With that said, I still believe that we are in the very early stages of the next bull market in precious metals, call it the 2nd inning if you will.
The party is just getting started…