Unless you have been hiding under a rock, you probably know that silver has had a major correction over the past week. The precious metal plummeted about 30% from a high of almost $50 an ounce to less than $35 yesterday. This six-day drop is one of the largest since 1983.
Silver has given back just about all of its gains for the past month and some traders are thinking it might be time to get long. But before you run and buy silver, there are a couple things to consider.
Warren Buffett held a press conference on Saturday in Omaha, Neb. He answered questions about the trading scandal with David Sokol and Lubrizol. The public has been really focused on this story. No surprise, really. David Sokol was on the short list of people who could take over for Buffett when he retires. But there was another announcement that might be more important to investors. It was about the $5 billion investment he made in Goldman Sachs (GS:NYSE) during the financial crisis. Buffett bought stock warrants, which are kind of like options. These warrants expire in 2013, and Buffett said his company will be holding those warrants almost until they expire. Before we get into why, let me explain some of the nuts and bolts of what stock warrants are and how they work.
Fed Chairman Ben Bernanke held his first press conference after a Federal Reserve meeting... ever. Traditionally, the Fed releases minutes to the meeting about three weeks later. That's not what other central banks do around the world.
Most give a press conference. And now the Federal Reserve will be giving these conferences after every meeting. It's an effort to offer a clear view into their decisions. But is it really? Here's what we learned from Ben Bernanke's speech: The Certainties The Federal Reserve will complete its $600 billion buy-up of government debt. This program will end in June, so we have two full months of bond-buying to go. We could see U.S. Treasury yields drop again.
Tomorrow we leave Amsterdam. We are told that the weather we have experienced here is the best at this time of year in 30 years. It has been a wonderful three days and we are thankful to Willem Middlekoop and his team at The Gold Discovery Fund. It was one of the best organized meetings I have ever presented to. I include here a question from a reader that I received yesterday. I decided to answer this in some detail because it is probably on the mind of quite a few readers for quite a few stocks. Restating the question another way is, “why do not all stocks price the same way?”
Written by Michael A. Berry, Ph.D. - [ Discovery Investing Web Site ]
Ed Note: This is an article and a theme we’ve published before, but due to a large number of new readers, we thought it important to re-publish this piece as it forms the basis for our investment thesis going forward.
As gold and silver continue their inexorable rise, another "class" of metals, if you will, has emerged in importance. They may mean more for future economic growth and energy security in the United States than ever before. If gold and silver are thought of as proxies of “fear,” or gauges of economic health, this new class of metals is a proxy for discovery, innovation, and the development of next-generation quality of life technologies.
Written by Michael A. Berry, Ph.D. - [ Discovery Investing Web Site ]
