Our precious metals investment continues to put serious distance between itself and our S&P 500 (Vanguard 500 Index Fund) investment, gaining 2.65% on the day, to lead Vanguard by almost $4,000. In 32 calendar days, our hypothetical precious metals investment has appreciated by 10%, while our Vanguard 500 Index Fund investment has yielded 1.1%. To put this in annualized terms, our precious metals are averaging a 75.85% yearly return, while our Vanguard 500 Index Fund is averaging a 13.20% return. Granted, it's still early in the game and things can quickly change, but why in the world would anyone invest in Wall Street, when Wall Street is paying less than 20% as well as precious metals? It's sheer, blissful ignorance...
Silver continues its unstoppable flight to $50, closing the day at yet another post-1980 high, and a little over $8.00 off the all-time nominal high. Silver has gained 36.5% already this year, and is on pace to gain more than 100% by the end of the year. What else can I say? If you're not buying silver, you're simply not interested in making money.
In other news, gold closed at a new all-time record today. No surprise here... We should see $1600/oz gold before July.
The S&P 500 closed up, gaining a whopping 0.01% today. I think I can actually hear crickets chirping over at the NYSE. With swirling rumors of QE3 abounding, we have yet to see the market pick up in response. Apparently, they want to see the money first.
I believe that there's a good chance (~80%) that silver will break $100 before the end of the year. This article today from ZeroHedge seems to confirm my suspicions:
Two weeks ago the precious metals space was closely following the fate of Sumitomo's San Cristobal mine, where a long strike had paralyzed work at the world's third largest producer of silver and sixth-largest producer of zinc. While the strike was eventually resolved with concession to the domestic workers, a far more troubling report from Bolivian daily La-Razon states that Bolivia's president Evo Morales is now planning on expropriating zinc, silver and tin mines sold off by previous governments. Bloomberg reports that "Morales will announce a decree May 1 to “dismantle the privatization model,” said Nicolas Fernandez, a spokesman for state mining company Corp. Minera de Bolivia, known as Comibol. "The government is recovering all the privatized companies,” Fernandez said today in a telephone interview from La Paz. “When the decision is taken, Comibol will be ready to manage these mines.”" Among the contracts to be affected are those with Glencore International AG, Pan American Silver Corp., and most importantly, Coeur d’Alene Mines Corp., which is operator of the San Bartolome mine: the world's largest pure silver mine. Notably San Bartolome and Sumitomo's San Cristobal "account for about 83% of the nearly 1.1M tons of fine silver Bolivia produced in 2009, according to Mining Ministry data" according to The Gold Report. If indeed this news is proven true, and we will know for sure in 16 days, looks for the price of silver to spike considering about 1.33 million kilograms of silver was produced in Bolivia 2009, according to the U.S. Geological Survey: an amount which will likely fall off a cliff following the utter chaos that is unexpected nationalization.Like clockwork, silver responded to this news, and gained almost 4% on the day. I do get a little tired of repeating the same things over and over again, but... BUY PRECIOUS METALS!
The numbers:
Day 27
Results upon NY close of trading -- April 14, 2011:
- Gold closed at $1,475.80 per oz, up $18.40 and 1.26% from yesterday. Silver closed at $42.18 per oz, up $1.52 and 3.74% from yesterday.
- VFINX closed at $121.16 per share, up $0.01 and 0.01% from yesterday.
Investment #1, Precious Metals:
- Percent return for the day: 2.56%
- Profit for the day: $2,625.20
- Total percent return: 5.1%
- Total profit: $5,068.68
Total investment value: $104,990.46
Investment #2, Vanguard 500 Index:
- Percent return for the day: 0.01%
- Profit for the day: $8.34
- Total percent return: 1.1%
- Total profit: $1,092.54
Total investment value: $101,047.25
Advantage: Precious Metals, by $3,943.02
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