Enterprising Investor Forum

Silver and Coeur d’Alene Thursday, July 10, 2008

In our series on interesting charts, today we look at the evolution of the price of Silver and that of CDE.

From the Coeur website:

Coeur d’Alene Mines Corporation is one of the world’s leading silver companies and also a significant gold producer. Coeur, which has no silver or gold production hedged, is presently constructing two of the world’s largest silver mines – San Bartolomé in Bolivia and Palmarejo in Mexico; operates two underground mines in southern Chile and Argentina and one surface mine in Nevada; and owns non-operating interests in two low-cost mines in Australia. The Company also owns a major gold project in Alaska and conducts exploration activities in Argentina, Bolivia, Chile, Mexico and Tanzania. Coeur currently expects to produce approximately 16 million ounces of silver in 2008, representing nearly a 40% increase over 2007 silver production levels.”

As already discussed, in previous post on CDE, this company gives investors a change to participate in the inevitable increase of silver prices due to the fact that the world has nearly run out of silver and it is also interesting as a hedge against the economic downturn and current market conditions.

Despite recent turmoil and general speculation about the quality of the management team, is the sell-off justified?

The above chart clearly shows that whilst Silver tracking ETFs have remained relatively stable after the march sell-off and have been slowly recovering, CDE is continuing to dive…

We somehow feel that this situation will not last and that we will see a reversal. Stay tuned for more.

Please read our disclaimer.

Commodities vs. the rest Thursday, July 3, 2008

Nothing new but we thought that this was an interesting char to post in order to visualize the extreme run that oil and overall commodities have had in the past 2 years.

We have used ETFs for this graph- please click on the graph to enlarge:

- PowerShares DB Commodity Idx Trking Fund (DBC)

- iPath S&P GSCI Crude Oil Tot Ret Idx ETN (OIL)

- Vanguard Total Stock Market ETF (VTI)

- Vanguard Total Bond Market ETF (BND)

- Vanguard Small Cap Value ETF (VBR)

- Vanguard REIT Index ETF (VNQ)

Naturally, the question is how long will this last? Sooner or later things will have to turn around and it is precisely in these times that we have to take a long-term view. To confirm this, most of the top ranking value oriented money managers are claiming that it has been years since they have seen these many opportunities in the market place. Having said this, it also means that there is risk so make sure you stay away for things you can’t understand and focus on solid businesses which will come back once the economy turns around.

If you want to have an idea of what the top value guys are buying, have a look at GuruFocus, it’s a great place to get investing ideas: link.

Please read our disclaimer.