Silver Unmasked

Most individuals have no clue about the dynamics of silver, thinking there is an infinite supply of it both above and below ground. But those Savvy investors who incorporate commodity based stocks in their portfolios likely own the silver ETF (SLV) or silver miners with a high degree of leverage to the price of silver. The largest of this group include Silver Wheaton (SLW), Pan American Silver (PAAS), Coeur d’Alene Mines (CDE), Silver Standard Resources (SSRI), Hecla Mining (HL). There are also numerous junior and exploration companies that will provide extraordinary returns over the long term.

Silver is often thought to be a metal and little else. It is often assumed that silver is rather cheap due to the lack of scarcity. But both of these assumptions don’t reflect the true underlying dynamics.

It is true that silver was mainly used for industrial purposes as well as jewelry, but that fact doesn’t hold true today as silver is being used in numerous electronic devices, water filters, piping, batteries, solar panels and more, as this metal has been proven to be extremely versatile. It is highly unlikely it will stop with these uses as more technological uses for silver are discovered. Many of Silver’s newly discovered uses are in the preliminary stages of eventually becoming “the gold standard” in such things as the longer lasting and recyclable silver-oxide batteries that are slowly gaining traction in the industry. This should make a huge splash in the battery industry.

Duracell has already developed basic everyday batteries while companiessuch as Intel (INTC) capital have developed first generation silver-oxide laptop batteries. They obviously recognized the shortcoming of the lithium-ion batteries, as the silver-oxide batteries have a 40% longer battery life, hold their charge (as opposed to lithium-ion batteries which begin to lose their charge after just a few months of use). This will likely be wholeheartedly embraced by big businesses, causing computer manufacturers to replace lithium-ions with silver oxide. Silver is also used as a pipe cleaner as it prevents the bacteria that forms legionnaires’ disease from forming. This is and will be increasingly used in water purification systems and pools due to the superior safety profile and the lack of harsh reactions to the skin (as chlorine and bromine have).

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