Below are links to various articles written by Adrian Day or quoting him. Please note that in some of the articles, he is speaking in his capactiy as president of his registered investment advisory firm.
Silver prices are roughly flat this year but are outperforming the S&P 500. Adrian Day, chairman and CEO of Adrian Day Asset Management, says some investors see value in the gray metal, which they believe is cheap in absolute terms and relative to the price of gold. He notes that silver-backed exchange-traded funds are seeing both increased volume and assets under management…
Some market watchers see a positive environment for silver as the Federal Reserve cuts U.S. interest rates as a hedge against inflation and as inflation-adjusted interest rates for U.S. Treasurys turn negative. Very low interest rates make precious metals such as silver and gold attractive, since these assets act as a store of value, offsetting the fact that no yield is paid…
The perfect environment for silver would be low interest rates, a declining dollar, strong economic growth and increasing inflation, Day says. Although all four factors are not present, ultra-low interest rates help increase silver demand…
Day notes that while buyers of junk silver do not get much value for the total weight of the bag, it is easily divisible since owners can sell off individual pieces...
Investors who want exposure to the silver price but do not necessarily want to own physical metal can buy silver ETFs. The biggest by assets under management is iShares Silver Trust (ticker: SLV), at more than $8 billion. Day says the Sprott Physical Silver Trust (PSLV) is different from other silver ETFs because it allows owners to redeem their shares for physical metal and sometimes has premiums when the silver market is hot.
Day prefers to buy individual silver miner stocks versus a mining-company ETF because there are few pure-play silver miners left...
About 70% of silver production is a byproduct of base metal mining, Day says.
Industrial use and supply affect silver’s value. It’s one of the reasons why silver production depends on the health of the economy and the industrial sector. Because silver is a byproduct, base metal miners are unlikely to ramp up production if silver demand suddenly spikes.
“This is why silver can have such dramatic moves because the supply doesn’t always respond to the price,” he says...
Steven D. Bleiberg did a great job in "The Limits of Modern Portfolio Theory" (Other Voices, April 14). MPT simply tells us what worked in the past, but doesn't take into account future uncertainty. Practitioners also tend to conflate risk and volatility.
The latter is temporary and of concern only for those who need to draw down their portfolios, or who can't sleep at night.
Risk isn't a temporarily lower stock price; it is the permanent loss of capital. MPT is a reflection of the contemporary tendency to use false precision, thinking that it makes us more intelligent.
"Buying a good asset at a good price is the key to long-term investing success."