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Is a silver bull market underway?

Ross Beaty, Phillips Baker, Doug Dobbs, Eric Sprott, Michael DiRienzo, Philip Klapwijk, David Morgan
January 6, 2006
Video Transcript

Ross Beaty: It's very easy to make a case that we are in what's called, "a super bull" or "a secular bull" market, which is going to last decades. Then in the last say 150 years, we've seen 3 of those. There was one just before the First World War driven by the expansion of Europe into the rest of the world, tremendous growth in metal demand, and strong growth that lasted 20 or 30 years. There was another one after the Second World War, the 50's, the 60’s; it went for about 25 years. It ended in the early 70's really with the oil shock. In that period, you had this great industrialization led by America; post war industrialization that went on for decades. We are in one of those right now. This is not going to be a 4-year bull market; I think this is going to go on for a long, long time. Obviously, I can't say when it will end, and it will end, because metal markets do evolve in cycles. I would make a very good case for this to lasting a long, long time and in the order of 10 to 20 years.

Phillips S. Baker, Jr: I think the outlook for silver prices continues to be good for easily another decade or so.

Doug Dobbs: We believe that we're still in the middle of a long-term bull market in commodities and especially now with precious metals. We've gone through the initial, probably, first phase of the cycle, where you did see the shortages, commodities prices in general rose, the central bank has increased the money supply significantly to help support the economy and bring about an economic recovery, but that effort is floundering. The government is going to need to take more of an effort, because this is the nature of government to try and stimulate the economy artificially. An effort to pay down the significant debts that they've undertaken and to meet their obligations not only here, but also in Europe, they'll likely print a lot more money to bring about economic stimulus. That should bring prices and inflation up significantly.

Eric Sprott: I did a compendium of all the things we wrote about gold in the last decade and I titled the book, "Gold Investment of the Decade" Gold out performed every asset, by a wide, wide margin. It was the most phenomena investment to have in the last decade. It's been my view that this decade, silver will out perform gold. I believe and I hope that maybe in another 8 years from now I'll be able to write a book, "Silver Investment of the Decade" and perhaps all the things I've written about silver in that decade.

Michael Dirienzo: When you look at the dollar, when you look at the fact that precious metals where they are not just silver but taking gold, palladium, and platinum into question. The percentage gains that they've had, you’re looking in some cases of gold, 12 - 13 years of price increases. Silver, pretty much the same factor going back to 2006. This didn't happen because somebody pulled the switch and said, "I'm going to get into gold or I'm going to get into silver." Initially, at the beginning of this bull market, investors both at the institutional and the individual level were looking for safe havens. This only was exasperated in 2008 with the utter total collapse of the global economic system. These shams that were being taken place, not only in the United States, but the one that is continuing in Europe today. Where are people going to put their money? They're going to put them in hard assets like they have. The good thing, in my opinion, is that at the end of the day, they're not going to get out of these positions. We've learned our lesson. Just as generations before us learned from the Great Depression, we've learned from 2008, that a portfolio must have some protection and silver offers a wonderful way to protect against the ups and downs, not only in the stock market, but geopolitical concerns and concerns that, quite frankly, are out of the control of the average investor.

Eric Sprott: We've had, of course, a huge increase in the institutional participation in the gold market. We have not yet seen that in the silver market, but I think that's just a matter of time before institutions, major money managers, get involved in silver. Of course, and or maybe, a central bank get's involved with silver here, but if major entities got involved, it could dramatically change the silver market very quickly, because there's very little inventory. As I've suggested, I don't think there's any excess supply. So how are you going get the new guy in who comes in, "I want to buy a billion dollars worth of silver." It will be very, very difficult. The investment demand is the thing that will drive silver.

Host: Indeed, it appears as if a silver bull market is under way. Not surprisingly, some of the world's most successful value investors, men like Warren Buffett, Bill Gates, and George Soros were among the first to spot the latest opportunity in silver.

Philip Klapwijk: What we've seen so far is gold and silver being re-legitimized, as investment classes fall. Let's say professional investors for funds for institutions, the public though, the general public, the general investing public, has not yet caught on to this concern. More people are looking at it in terms of seeing news reports. They're understanding to a limited extent what's going on. By no means, have we yet seen a flood of interest by retail or private investors. Therefore, I think you do have for both gold and silver the potential for a significant weight of new money to come in from private investors, which has yet been untapped.

David Morgan: Perfect opportunity, because what you've already got is you've got the solid strong hands are in the market and they're not letting go if you built a solid base. A consolidation has taken place. So all the weak sisters are out. They were traders anyway. We don't want them in the market. Now, you're in the growth phase. This is the most important place to invest. If you understand the art of investing and you want to time it; you're timing it now.

Host: Indeed, many of our experts feel that silvers recent performance is just the start of a powerful and historic move. Beyond this early momentum, what is it that makes silver such a compelling investment opportunity? Let's take a close look at the growing factors lining up to drive the compelling case for silver.

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