The Great Equalizer

Since this is my first posting, I shall share with you my favorite investment vehicle for the moment. Unlike yesterday's bell bottoms, this is not a one minute fad. I've tracked this vehicle and followed it's movements for several years now. I believe it will be 'The Great Equalizer' as it can be the so called ten bagger that everyone dreams about catching. It can make Princes out of Paupers. In the vernacular of big game hunting, this will be the elephant or maybe the lion of the Serengeti that is the prize - take your pick. The investment returns might be so big that people will name their kids after it.

Okay, enough of the buildup... drum roll.....
The winner of this year's 2009 Miss Universe pageant is.... Ms. AU. On the periodic table AU is better known as SILVER! Yes, silver. The stuff that forks and knives are made of (well for the rich folks at least). The trinkets that Tiffany charges an arm and leg for.

Why silver? The most compelling reason is that this will be the first element on the periodic table that will be totally consumed according to the US Geological Survey (ETA ~2020?). Wow, if that doesn't perk up your ears, I don't know what will. Just imagine for a minute. No more silver to be mined on Earth. Technically, there probably will be silver left on Earth, but not enough to satisfy both growing industrial and investment demand. Silver does not just serve as a store of wealth, but is actually consumed in electronic goods and other applications that make the modern world tick - ipods, laptops, etc. At some point, there will be so little left for consumption that prices will HAVE to move higher - it's simple supply and demand. And since silver is used in such small amounts per industrial application, it is not economically feasible for recycling (at least not until silver price rises significantly higher). So when we say it is consumed, it is gone... kaput... no mas.

So this brings me to my point. Current silver price is at an attractive level for a great potential investment - one in which the price can rise perhaps one to two significant orders from the current price. What do I base this on? One can compare the price of silver to say another source of wealth like gold and say it is relatively cheap. But that is another topic for a future blog.

What I would like to leave you with today is the following thought. If I told you that there was only a basket of oranges left on the face of the entire Earth. Or in the vernacular of Joe Six Pack, only one 12 pack of beer [insert your favorite beer] was left on this world.  How much would you be willing to pay for that beer? To what dollar amount would you value that beer at? Hmmm.... In the case of silver we're not talking about a want but a necessity (some would argue that beer is a necessity, and I wouldn't argue that). Silver is a necessity in modern day society where cellphones and laptops are all around us. How much do you think people will value something that is slowly disappearing from the surface of the earth?
Just really think about it for a moment and perhaps you will see that my estimate of silver increasing one to two significant orders is too low of an estimate... Beer anyone?

Cheers.