GameStop Is Over. Silver Is Next
The only thing that matters in this game is how much money you made. Nothing else. Greed is good. If you are playing the game for any other reason than to make money you will get slaughtered.
I have been posting on Twitter why I think silver could go up from here. No, its not because I am a paid Citadel or Melvin shill. I’m just a regular guy trying to make money in the market. And it appears as if silver is the next high dollar play, not GameStop.
GameStop is dead and risky money. Where do you honestly think it will go from here? $500? $1,000? It’s not like GameStop is reinventing the world of video games. It’s a struggling retailer - that is it. Sure it might pop up another $100 bucks, but where will it go from there? Valuation metrics are insane across the board.
Eventually the GameStop bubble will pop (and it looks like it’s happening now with the stock down 30% today and 20% in post market trading). When that happens it will fall back to earth where it belongs.
Hate me if you want, I don’t care. But I have seen enough people bring emotions into this game these past few days from unhappy “Redditors” who disagree with my silver case. You can disagree all you want, but if you start name calling, that is a huge sign you are thinking with your emotions and you will eventually blow up your portfolio.
Instead of raking on these GameStop bagholders I’m going to discuss why I think silver is going higher from here. And by higher I mean in the $50 range, not $1,000 like you see some guys talking about.
First, the physical market is pricing silver over $40 per ounce. Check out AMPEX, my preferred bullion dealer. American Silver Eagle’s are selling for over $40 per ounce.
The last time I saw a big divergence like this was in March of 2020 when the stock market was tanking.
During the massive March 2020 selloff paper silver tanked to the $11-12 dollar range while physical shot up in the $20-25 range. As I penned in my last post, I was buying paper silver ($SLV) hand over fist during this time period as it seemed like the market would soon correct. As seen in the picture below, the price corrected extremely rapidly.
Today there is the same price discrepancy. Physical silver is trading for a substantial premium to paper silver. Sure, the physical market could be priced wrong resulting in bullion dealers to lower prices in the coming weeks, but I think the probability of that happening is slim based on the volume of physical silver being moved.
Remember, last night dealers were running out of silver. Everything was out of stock.
Well now the CME has hiked margins on Comex silver from $14,000 to $16,500. "The decision is based on “the normal review of market volatility to ensure adequate collateral coverage,” CME said in a statement.
Silver fell 2% initially in post-market trading but is up 0.56% as I type this. What this means is physical silver is about to go higher as it has become more expensive to get paper form.
In addition, there is a significant amount of long-term trends benefiting silver - and don’t forget, the price of silver was rising for the past year way before this entire WallStreetBets trend happened.
Last year the supply of silver fell by more than the total demand consumed.
In addition, the massive push into green energy will (solar panels and EV cars) will continue to increase the demand for metal - a good tailwind to be behind.
Finally, the reckless fiscal and monetary policy seen by major global governments should serve as a strong backdrop amidst a falling dollar. Like it or not, but inflation is going to go up big time from here. There are more dollars and debt in the system. And one of the greatest hedges against inflation, you got it, silver.
If you got this far and you are a diehard WallStreetBets fan, you are likely thinking of the Citadel narrative. Sure, Citadel might be one of the largest holders of $SLV, but it is only a measly $180 million position. When you are managing $35 billion in assets under management, this position is meaningless to your fund.
What question that really should be asked is why are mods on WallStreetBets deleting everything they can about silver? Are they trying to suppress information? Shouldn’t the users, “police” the posts with upvotes or downvotes? And if the mods are really deleting as much silver posts as they can, wouldn’t this be considered some sort of market manipulation - or a small form of it?
And don’t forget, WallStreetBets is not the end all be all. There are many different forms of market commentary. Silver has been trending for five days straight on Twitter. You will want to be on the right side of the trade.
Disclaimer: The publisher does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.
Alpha Letter is a publisher of financial information, not an investment advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.
THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.
No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.
Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.
The publisher, its affiliates, and clients of the a publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.
Neither the publisher nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.