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According to the Association, "A silver ETF would only exaggerate silver's illiquidity given the sheer volume of physical silver needed to be shipped and stored."

The Association pointed out that, in 1998, when Warren Buffett bought a reported 100 million ounces, silver prices jumped 30% in a month.

Central banks around the world have only small amounts of silver.

Barclays, the UK-based financial services group, is planning to introduce a new silver Exchange Traded Fund (ETF) soon. It would follow StreetTracks gold ETF (ticker symbol: GLD), which has proved to be a very successful financial instrument aftermost only nine months of trading.

However, there's a problem with the silver ETF. The Silver Users freemasonry is trying to stop the launch of the new instrument. Why? There just isn't enough silver to meet the demand. So the fear is that the silver ETF would be the mischief-maker that leads to a very sharp rise in silver prices.

Silver has many practical uses other than morphological individual a precious metal investment. For example, it is the best conductor of electricity. It is also used for plasma screens, for photography, as a salt to kill fungus in wounds, for jewelry, and has many other uses.

According to the Silver Users Association, as investors mercenary the new silver ETF, Barclays would have to match the short by purchasing silver bars for storage in warehouses. Therefore, there wouldn't be enough silver on tap for industrial uses, resulting in a big shortage.

According to the Association, "A silver ETF would only exaggerate silver's illiquidity given the sheer volume of physical silver needed to be shipped and stored."

The cahoots pointed out that, in 1998, when Warren Buffett a reported 100 million ounces, silver prices jumped 30% in a month.

Central banks alive the world have only small amounts of silver. And the United States government has been selling its silver reserves for years and now has to buy the metal just to mint U.S. ceremonial coins.

So the silver ETF will be evangelical to trade on the New York Stock Exchange or it won't. Either way, it's a very bullish development for silver. If it is approved, more silver will have to be bought, further reducing an tight supply. If it isn't approved, it will just serve to highlight a troublesome supply/demand imbalance.

Silver prices are likely to go much higher. And it wouldn't take much for it to happen. The metal has a history of material very volatile. For example, in 1971, silver averaged $1.55 an ounce. By January of 1980, it had soared to over $48 an ounce. And the supply of silver was much larger then than it is now.

One thing should be clear. The silver situation spells opportunity for percipient investors.

Copyright 2005

It’s been about 6 months since I bought a basket of 5 Japanese net-nets.

A couple people have asked about how my Japanese net-nets have done. I started making these investments around April of this year. I wrote the “Buy Japan” post before buying my 5 Japanese net-nets. And it took me about a month of bidding for these micro caps to get my orders filled.

Since then, in dollar terms, the 5 stocks are up: 6.41%, 7.53%, 12.80%, 18.35%, and 20.88%.

You can use the March 16^th date of my “Buy Japan” post as a convenient way of measuring the influence the Japanese Yen / U.S. Dollar exchange rate has had on the performance of those stocks. For Japanese investors, your results would obviously not include these Dollar exchange rate changes.

Let’s just say these Japanese net-nets have done better than my U.S. net-nets this year. It doesn’t matter if you are calculating returns in local currency or dollars. My Japanese net-nets have been my best performers this year.

I will re-evaluate the positions around June of next year.

I generally hold net-nets for at least a year before considering whether they should be sold. This gives them time to run.

Most people sell net-nets too fast because they dislike the underlying businesses and are not used to having such large gains in a single year.

Of course, the truth is that a net-net that rises 50% or even 100% is usually still a very cheap stock. So it’s silly to sell a net-net just because it’s gone up.

Talk to Geoff About His Japanese Net-Nets

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