The Silver Bull Market: Investing in the Other Gold
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In The Silver Bull Market, Shayne McGuire examines the vital investment considerations about silver alongside the significant drivers of the metal’s bull market. Although silver moves closely with gold in financial markets, it differs from its sister metal in that more than half of demand is derived from multiple industrial processes. While its significant reliance on film photography has ended, today silver’s industrial demand is driven by technological progress (brazing alloys and solders, smart phones, tablets, plasma panels and new applications like silk-screened circuit paths and radio frequency ID tags); photovoltaics (solar panels); and new medical applications (silver is both biocidal and highly conductive). Though Warren Buffett disdains gold for its lack of utility, he regards silver differently: in the late 1990s, he purchased 130 million ounces, one-fifth of global production at the time.
Author’s Note:
Financial market cycles, bookmarked by the booms and the busts, are often illustrated by magazine headlines like “The Death of Equities,” which appeared at one of the best times ever to buy stocks (the summer of 1979), or hyperbolic book titles like Dow 36,000 (1999), which preceded a decade-long period of stock market stagnation. It is always difficult to point to a bull market in a book since its author runs the risk of having the text become the poster child for the end of the run.
My view on silver—that it is likely to outperform gold in the present environment—is not new, as I expressed it openly in both my books on gold.1 But it is important to point out that this is in reference to silver as an investment for the years immediately ahead, not that silver is somehow superior to gold. Gold is, in my view, the most respected form of long-term wealth preservation in the millennial history of finance and should be a part, however small, of every diversified investment portfolio. Though silver is more highly correlated with gold than anything else, I believe the market has yet to reach a decision regarding the white metal’s proper position in the investment arena.
Gold is slowly being reincorporated into mainstream finance following what was, historically speaking, a very brief absence. Since gold and silver moved together for over 3,000 years (separated in value by a spread solely reflecting gold’s greater rarity), I think it is rational to assume that, given their similar nature, the metals will continue to move together as they have done in this new century.
Considering the white metal’s history of investment disappointments years ago and that its price is more volatile than gold’s, most investors simply ignore silver completely. When the metal became part of the fund I manage, my colleagues and I soon discovered that our pension fund, Teacher Retirement System of Texas, had become the largest nonbank holder of silver in the world. For a pension fund with a penchant for extreme risk management, this seemed bizarre considering the minor scale of the investment. Though our fund is one of the world’s largest with over $110 billion under management, the silver investment represented one-tenth of 1 percent of our total assets—a small fraction of the value of our shares of Apple Computer, a single security.
If no other major investment fund in the world owns a significant stake in one of the best-performing assets of this new century, I thought that it made sense to write a book about silver. I hope you, the reader, find this one useful.
Contents:
- Silver Moves with Gold, a Vital Asset for These Times
- Thinking about Future Inflation
- Silver’s Supply and Demand Dynamics
- Poor Man’s Gold Is Different from Other Inflation-Protection Assets
- The Gold-Silver Ratio, a 3,000-Year-Old Exchange Rate, Is Out of Historical Balance
- Always Keep in Mind the Risks of Investing in Silver
- 1792: The American Monetary Foundation on a de Facto Silver Standard
- 1873: The United States Joins the International Gold Standard and Leaves Silver Behind
- 1934: The Federal Government Speculates in Silver
- 1960s: As the Last Silver Dime Is Minted, Silver Demand Surges in the Electronic Revolution
- The 1970s Silver Boom, the 1980 Crash, and the 20-Year Bear Market
- 2001 to the Present: The Bull Market Begins as Silver Reenters the Financial System
- Deciding on the Best Way to Invest in Silver
- Two Investment Considerations: Market Manipulation and Potential Confiscation
- The Most Widely Respected Silver Investment Coins
- Your Local Coin Show, the Past Decade’s Best-Performing Stock Market
- Silver Mining Stocks
- Platinum and Palladium: Alternative Metals as Old as the World, but as New as the Internet, as Investments
The Silver Bull Market: Investing in the Other Gold By Shayne McGuire pdf
| Author(s) | |
|---|---|
| Format | |
| Pages | 272 |
| Publication Year | 2013 |
8 reviews for The Silver Bull Market: Investing in the Other Gold
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Memphis McGee (verified owner) –
Shayne McGuire has put together a great book at a perfect time. This is THE book to get on silver investing. McQuire is a managing director and Head of Global Research at Teacher Retirement System of Texas. McQuire has written about gold before and this is his book on silver. I really appreciated that he took the time and effort to go over the history of silver, how it has played out internationally, the changes over time of silver’s industrial uses, the rise of Silver ETFs, an analysis of silver mining stocks and the pros and cons of holding silver in its varies forms. His analysis is sound and his caution of silver’s volatile history is well noted. One of his main premises is that silver is increasingly correlated with gold which bodes well for the future of silver investing and ideally should be included in one’s account diversification.
Russell Myers (verified owner) –
Good informative book on Silver as commodity
Brynleigh Delacruz (verified owner) –
Mr. Mcguire has performed a valuable service for all of us who follow gold and silver. Too often, articles, and the few books on silver, are full of hyperbole, government and corporate manipulation conspiracies, or a ‘get rich quick’ type of hucksterism. Shayne, instead, makes the case that if you like gold, you should consider silver. After all, at this writing gold is about $1450 per ounce while silver is nearer to $23–it is much more accessible to the average person at this lower price point. And that is a very important feature. Also, gold has historically been valued at 14 times the price of silver, but right now this relationship is out of whack– right now gold sells for more almost 60 times as much as the white metal. So if you don’t like gold, read no further; silver is for people who like gold. In some ways, silver is a high beta play on gold–Mr. McGuire believes that if gold rises, then silver will rise even more, but in a plunge, silver will plunge more. This has been borne out recently, in the sell-off which began in the summer of 2011.
It is only fairly recently that investors have been able to invest in silver in a variety of ways. Today one can purchase the metal itself, an ETF or exchange traded fund backed by the metal, an ETF of silver mining shares, or silver coins. Shayne covers silver from a variety of angles–we learn about the history of the metal, the monetary history of the US, the various industrial uses of silver and why that is important, the differences between silver and gold in manufacturing, the investment rationale for holding commodities in an investment portfolio, and the macroeconomics which underlies the investment. At the end of the book he also brings up palladium and platinum and puts those two metals into perspective for prospective investors as well.
Kara Peralta (verified owner) –
I am a new investor of silver bullion. This book educated me on the history of silver, different ways to invest, and the risk involved.
Kayleigh Pham (verified owner) –
Great book that helps explain investing in silver. I recently gave the book to my son for his 21st birthday hoping he will invest some of his income into silver while the price remains artificially low.
Dangelo Landry (verified owner) –
useful, well formatted information for a new silver buyer/collector. this was a gift for my son who now feels more confident regarding how he approaches the silver market.
Noor Gill (verified owner) –
Silver has gone through a rough two years. Since it reached a peak about two years ago of $48 plus change per ounce, silver has undergone deep and lengthy corrections, making most silver bulls to doubt their conviction in silver. There can be no better time than this to review the case for investing in silver.
In this book, Shayne McGuire makes the case for investing in silver. It seems that this book’s audience is chiefly people who already own gold, but so far have shied away from silver. In other words, he barely devotes any time as to why people ought to invest in precious metals (he barely discusses the big picture). He pretty much takes that for granted. McGuire merely tries to make the case that if you’re investing in gold, you should definitely consider investing in silver.
Silver enjoys very similar merits as gold; it is a real asset, it has been money for centuries, it has no counterparty risk. So what distinguishes silver from gold? Two main things: the first, there is less available silver for investing than gold due to industrial consumption of silver. Production-wise, about ten times the amount of silver is mined every year than gold. The US Mint sells pretty much the same amount of gold and silver in terms of dollars. Yet, one ounce of gold is worth roughly sixty ounces of silver.
The second, silver is largely ignored by professional money managers, who could be potential catalysts for silver. McGuire makes this point to show that silver is under-owned compared to gold.
Overall, this book doesn’t make any life changing revelations about silver, but it couldn’t have been published on a better date, when everyone should probably revisit the fundamentals of silver to check if he might be missing something.
Matthias Harrell (verified owner) –
Now’s the time to buy silver! The Gold/Silver price ratio is very high, and the dollar will soon be collapsing. This book will give you a good background about why silver is a good commodity to buy and hold. Holding PHYSICAL silver is a wealth preservation vehicle, as well as being a good speculative play against fiat currencies. The book is well written, and will give you confidence in storing some of your wealth in precious metals.