The Most Profitable Company in the World

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If a more profitable business exists in the realm of publicly traded companies, I would like to see it. That's right: I'm issuing a challenge, and I'm inviting you to prove me wrong.

I believe that Silver Wheaton (NYSE: SLW  ) may now be the most profitable company in the world. Unless someone out there in Fooldom can pinpoint a greater champion, I propose that we call a spade a spade, and recognize this amazing achievement.

Of course, Silver Wheaton's nominal net profit of $123 million for the fourth quarter of 2010 looks like small potatoes next to a gargantuan haul like ExxonMobil's (NYSE: XOM  ) $9.25 billion profit for the period. At $6 billion for its fiscal first quarter 2011, Apple (Nasdaq: AAPL  ) gets right to the core of what we might consider monster profits. But if, like me, you are more impressed by the efficiency with which a company garners gains than you are with the headline number, you will understand why Silver Wheaton is the apple of my eye.

Silver Wheaton's lean, essentially fixed-cost business model converted an astounding 82% of sales into net profit. As silver surged to an average realized price of $26.44 per ounce, the silver-stream specialist watched its cash operating margin expand 64% to $22.42 per ounce (or 85% of sales). Thanks to the low overhead of its beautifully simple corporate structure, that minuscule 300 basis-point differential between cash operating margin and net profit margin likewise speaks to the efficiency of this high-octane profit machine.

The spoils of world-class profitability
After expanding the company's cash balance by 87% to $428 million, which together with forward cash flow and an undrawn $400 million credit facility will suffice to fund aggressive acquisition of new silver-stream agreements going forward, Silver Wheaton determined that this is "the ideal time for Silver Wheaton to implement a sustainable long-term dividend policy." As silver continues to track higher for all the reasons cited by fund manager Eric Sprott here, and Silver Wheaton's production volume launches 80% higher over the next five years on the basis of existing silver streams, I view this inaugural $0.03 quarterly dividend as merely a teaser for far more meaningful payouts to come.

For 2010, Silver Wheaton's 37% production growth (reaching 23.9 million silver-equivalent ounces) came principally on the back of Goldcorp's (NYSE: GG  ) successful ramp-up of operations at Penasquito. With 3.8 million ounces delivered to Silver Wheaton during 2010, that number is set to expand further to 7 million ounces annually. Helping Fools to cozily bide their time while awaiting silver production from Barrick Gold's (NYSE: ABX  ) Pascua Lama project in 2013, Silver Wheaton expects a further 15% increase in silver production for 2011 to reach at least 27 million SEOs. Incredibly, the company sees 2011 operating cash flow more than doubling to $700 million, following a 93% rise in 2010.

Once Pascua Lama's anticipated 9 million ounces of annual (attributable) production kick in, Silver Wheaton expects to yield an eye-opening 43 million ounces of silver by 2015. Investors can have fun plugging their own individual targets for where silver prices might trend over the course of this monumental production growth spurt, and forecast just how profitable this company can be as surging volumes collide with further expansion of net profit margin beyond this already stunning 82% figure.

Back to the profitability challenge
Before I ask each of you to sift through your own personal watchlist of stocks to identify a company with superior profitability to that of Silver Wheaton, let's lay out a couple of ground rules. To keep the comparison current, let's look only to fourth-quarter results or roughly equivalent fiscal periods. We're looking for a net profit margin, calculated as net earnings divided by sales, with a value greater than 82%. To make it sporty, you can even have your pick between using headline earnings or an adjusted figure, provided the adjusted figure is not unduly boosted by some enormous asset sale or similar gain having nothing to do with ongoing operations. And finally, while all documented examples of reported net profit margin by publicly traded corporations are welcome for consideration, I may still reserve the championship title for Silver Wheaton if no U.S.-listed stock with a market capitalization of $500 million or greater is capable of claiming this profitability prize.

I will get you started by providing some examples of companies that can't hold a candle to Silver Wheaton's profitability. ExxonMobil, for all its noteworthy profit-heft, yielded a net profit margin of only 8.8% for the fourth quarter. Apple is renowned for its impressive cost controls throughout its supply chain, but even this tech giant's 22.5% net margin looks paltry next to Silver Wheaton's 82% bonanza. And what of the now-famously profitable miners of gold and silver? Goldcorp and Yamana Gold (NYSE: AUY  ) , two of the industries' outstanding low-cost leaders, both recorded net profit margins of about 32% for the fourth quarter (using adjusted earnings). Silver Wheaton's closest U.S.-listed competitor by production scale -- Pan American Silver (Nasdaq: PAAS  ) -- recorded an attractive 24.2% margin that still is not even close.

Although I have a feeling you may find yourself out on a wild goose chase searching for a net profit margin to match the incredible efficiency of Silver Wheaton's unique business model, I look forward to reviewing any result that even comes close as you post them in the comments section below (please include a direct link to the relevant earnings press release). I wish you great success in your quest, since I would argue that any company with equal or greater net profit margins is likely worth watching closely.

Fool contributor Christopher Barker has issued this challenge to promote the Foolish ideals of collective research, constructive dialogue, and community intelligence. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Goldcorp, Pan American Silver, Silver Wheaton, and Yamana Gold. Apple is a Motley Fool Stock Advisor choice. The Fool has written puts on Apple. The Fool owns shares of Apple and ExxonMobil. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool's disclosure policy has never earned a dime.

Read/Post Comments (35) | Recommend This Article (129)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 04, 2011, at 6:36 PM, prginww wrote:

    I couldn't agree more about Silver Wheaton. I love the simplicity and the profits.

  • Report this Comment On March 04, 2011, at 7:54 PM, prginww wrote:

    The headline actually is misleading. Reprinting my comment off the separates CAP thread:

    I'm not going to knock SLW, but you are concentrating on one number (profit margin) which can be surpassed by lower profit margins with higher volume.

    In your post you are projecting SLW getting 43million ounces of silver by 2015. Let's say SLW nets out $ 50 ounce. Your total profit is 2.15 bilion dollars. That divided by the 345 million shares outstanding, gives you an EPS of about 6.26.

    I say AAPL crushes that. I say XOM crushes that. I say any company with an EPS over 6.26 beats it.

    So in the end who is more profitable? The company with lower profit margins but higher EPS overall, or the one with a higher profit margin but lower EPS overall.

  • Report this Comment On March 04, 2011, at 8:16 PM, prginww wrote:


    I am even more convinced after reading this article. Great stuff! Gonna be an epic couple of years for those holding SLW :-)


  • Report this Comment On March 05, 2011, at 11:51 AM, prginww wrote:


    "So in the end who is more profitable? The company with lower profit margins but higher EPS overall, or the one with a higher profit margin but lower EPS overall."

    Great question. Companies like ExxonMobil and Apple certainly receive their share of well-deserved global recognition as some of the world's foremost profit leaders. I thought it was time to recognize a meaningful achievement in profitability through another lens. At the same, I consider the exercise in collective research that this challenge is meant to encourage to be a valuable one.

    I personally find net profit margin a fascinating metric to track, and I consider Silver Wheaton's 82% achievement deserving of some renown.

    Thanks for your comments.

  • Report this Comment On March 05, 2011, at 12:57 PM, prginww wrote:

    Hey Chris,

    Good piece, and yes, it's quite a feat. I think a few public companies might beat SLW in profit margins though. The mortgage REITs like Chimera have profit margins in the 90% range. Chimera was at 89% last year:

    Spectra is also close, in the 75% range:



  • Report this Comment On March 05, 2011, at 5:01 PM, prginww wrote:

    I have been an astonishingly happy owner of SLW for the past year. My reason for owning it has nothing to do with the excellent reason shown by Chris. Owning SLW is my insurance for exactly what we now see in the world. When all is well my Rule Breakers crush the market. When middle east madness breaks out, irrational fears drive even the best of companies down. Now that the crushing debt of most states is dawning, silver shines brightly and still has a ways to go before catching up to it's sister, gold. $50 silver is inevitable. $75 will occur in most of our lifetimes. In other words, FEAR is why prudent Fools will start buying SLW.

  • Report this Comment On March 05, 2011, at 5:39 PM, prginww wrote:


    Very interesting! Someone on my blog suggested the REITs would be most likely to give SLW a run for its money.

    I see Chimera reports a figure called Core Earnings, which they define as: "a non-GAAP measure that approximates distributable income, and is defined as GAAP net income (loss) excluding non-cash equity compensation expense, unrealized gains and losses, realized gains and losses on sales and other items that do not affect realized net income, regardless of whether such items are included in other comprehensive income (loss) or in net income (loss)".

    It looks to me as though regardless of whether we use their net earnings / net interest income (97.7%), or their core earnings / net interest income (85.1%), we're still coming out ahead of SLW's 82%.

  • Report this Comment On March 05, 2011, at 5:54 PM, prginww wrote:

    BPT had 98% net profit margins for the most recent quarter.

    Of course it is legally a trust, not a corporation like SLW. Several other trusts like NRT and CRT are also above 83%.

    I found a few foreign corporations that have over 83% net margins, for example Fenerbahce Soccer Club in Turkey.

  • Report this Comment On March 06, 2011, at 12:38 AM, prginww wrote:

    Great article. SLW has been one of the top picks of the Capital Research Institute for several years now, check out the latest about a return to the gold standard.

  • Report this Comment On March 06, 2011, at 1:12 AM, prginww wrote:

    Sinchi & Morgan:

    Here's the info. on Chimera from their website:


    2010 Q4

    Total Revenue: $170,684.000

    Net income:$156,227,000

    91.52 % net profit margin

    For the record, I feel SLW has much more upside.

    Sky Pilot

  • Report this Comment On March 06, 2011, at 10:01 AM, prginww wrote:


    Thank you for linking to that page. In a cursory glance at their Q4 press release, I surmised that perhaps their net interest income was their top-line figure.

    Your link, however, indicates $193.7m as their top line revenue figure. I'm not an expert on REITs, but it would appear to me that Chimera's Total Interest Income is the revenue figure that provides a fair comparison to non-REITs, as opposed to their total revenue figure (which already takes expenses and loan loss provisions into account). Using Chimera's net income to total interest income, we get a net profit margin of 80.6%. It's close, but not quite there.

    In any event, it's time for the community to take a vote. Is it fair to include REITs in the running? I did stipulate within the ground rules of the challenge that only "documented examples of reported net profit margin by publicly traded corporations are welcome for consideration" (corporations being the key word there). So technically, it would seem we could exclude them from the running.

    But, to be fair, even though SLW has a corporate structure, its modus operandi is not all that distinct from that of an investment trust. They invest in a silver stream, and derive long-term revenue from that investment without any further obligation of direct action apart from taking delivery of attributable silver production. If their dividend climbs over time to the heights I believe it can reach, they may begin to resemble a trust in that way as well.

    I find it especially fascinating, given those operational parallels, to note the incredible dichotomy present in the nature of their respective asset portfolios. Whereas mortgage REITs intentionally deal in debt, SLW targets the world's primary antidotes to debt. Chimera, for example, deals in the very sort of derivative instruments that nearly dismantled our financial system in a catalysmic market failure, while Silver Wheaton gains access to the two precious metals that reassert their traditional currency roles precisely when toxic digital creations like mortgage-backed securities topple like the house of cards that they are.

    It is hard to imagine two more polar-opposite entities in the financial universe than Silver Wheaton and Chimera, and so the musical strings of irony are plucked when these two entities are submitted for comparison within a challenge to pinpoint the world's most profitable company.

    This was intended to be an interesting exercise in collective research and community intelligence. In that regard, it certainly has not disappointed. Please, keep them coming, and share your thoughts on whether REITs should be included or excluded from the running for the purposes of this profitability challenge.

    Fool on!

  • Report this Comment On March 06, 2011, at 10:15 AM, prginww wrote:

    Hey Chris,

    "I did stipulate within the ground rules of the challenge that only "documented examples of reported net profit margin by publicly traded corporations are welcome for consideration" (corporations being the key word there)"

    FWIW, Chimera's full name is Chimera Investment Corporation. Per its 10k: "We were incorporated in Maryland in June 2007 and commenced operations in November 2007."

    Fool on,


  • Report this Comment On March 06, 2011, at 10:16 AM, prginww wrote:


    Good finds! BPT certainly takes the cake so far on net profit margin. At 98%, that will likely be hard to beat. Whether it ousts Silver Wheaton will come down to the community's collective opinion as to whether royalty trusts, REITs, and other non-corporate entities ought to be permitted as viable contenders to the title.

    I look forward to gauging collective opinion on the matter.

  • Report this Comment On March 06, 2011, at 10:24 AM, prginww wrote:


    Thanks for clarifying! So "corporation' and 'trust' are not mutually exclusive legal designations after all.

  • Report this Comment On March 06, 2011, at 12:08 PM, prginww wrote:

    Most profitable large cap product based companies in terms of gross margin are Microsoft followed by Intel.

  • Report this Comment On March 06, 2011, at 12:14 PM, prginww wrote:

    It seems like it would be smart to put a little in SLW and a little in CIM, and you win either way we go :)

    David in Qatar

  • Report this Comment On March 06, 2011, at 12:50 PM, prginww wrote:

    Sinchi wrote:

    "In any event, it's time for the community to take a vote. Is it fair to include REITs in the running?"

    I don't think REITS should be included. Because, physical and intellectual "labor" costs are minimal in those organizations. Using them, you’re not comparing “Apples” to “Apples”.

  • Report this Comment On March 06, 2011, at 1:00 PM, prginww wrote:

    "Because, physical and intellectual "labor" costs are minimal in those organizations"

    Correct me if I'm wrong, but it's the same for SLW.

  • Report this Comment On March 06, 2011, at 5:28 PM, prginww wrote:

    4 questions:

    1) what happens to slw if silver prices fall ?

    2) what happens to slw if chinese demand abruptly

    falls because of a recession ?

    3) what happens to slw if silver replacements are found ?

    and -

    4) if you insist that silver is not another tulip, aren't their more reasonably valued stocks than a stock with a trailing p/e of 72 and a forward p/e of 27 ?

  • Report this Comment On March 06, 2011, at 7:37 PM, prginww wrote:

    Silver prices will fall as they always have, and consequently, the price of SLW will fall. However, the long term trend for silver is up and significant drops in silver will be an excellent time to add to SLW holdings.

    Chinese demand will inevitably slow if they fall into recession. But taking a wiser long term view will reward the patient investor. Recessions come and go.

    Perhaps silver replacements will be found in some industries, like the dental industry, for example. However, I believe other uses will be found for Ag. Silver has an intrinsic value in and of itself.

    Sure, there are more reasonably priced stocks. But we live in a world of wars, recessions, national and worldwide debt...all of which will cause fear and uncertainty which will cause investors to seek the shelter of Au and Ag.

    Bottom line, it is the wise investor who takes a long term investment horizon of at least 5 years when investing in metals/stocks.


  • Report this Comment On March 07, 2011, at 12:27 PM, prginww wrote:

    Beware, SLW has no legal recourse if the contracts with the miners is not kept (remember the housing bust). Registered in the Caymans means no government protection for contractual commitments. If I were the miners I'd find a way to keep the huge profits they are not being allowed to keep because of a contract with a small options marketing co (SLW). Their (SLW) long term profits are in great jepardy because that have no enforcement option that I am aware of by their annual report. Maybe they are buying a CDO to protect themselves from the default possibility. Otherwise it is like a credit card company trying to collect a debt without any collateral to get payment. I recommend selling short or at least covering yourself with a put option to cover the possible losses. The original contracts were made for both signers benefits, this is not so now, I'd be afraid!

  • Report this Comment On March 07, 2011, at 1:27 PM, prginww wrote:

    What about all the debt that CIM brings with it. That alone keeps me from getting shares while SLW barely has any debt. I think those should be important metrics to consider as well. In the end, the companies got to pay of its debt with it's profits, right?

  • Report this Comment On March 07, 2011, at 2:38 PM, prginww wrote:

    RBC Capital has downgraded SLW to *Market Perform*.

    I'll bet you (figure of speech) that SLW is up 50% by December 31, 2011. I doubt the S&P will be even close to 1900 by that same date.

  • Report this Comment On March 07, 2011, at 2:42 PM, prginww wrote:

    Chimera? Seriously?

    When the housing bubble bursts (again, and it will), if you're not invested in precious metals, you'll be toast. ;)

  • Report this Comment On March 07, 2011, at 3:04 PM, prginww wrote:


    "a small options marketing co" - That is a grossly inaccurate characterization of SLW.

    Contracts lie at the core of international commerce, and contrary to your inference every contract is subject to redress within the relevant jurisdiction(s). The costs to a mining company for deliberately contravening one of these forward purchase agreements -- including legal defense and likely damages assessed within the appropriate jurisdiction, impaired access to financing, and severe, lasting damage to the company's public image -- would greatly outweigh the cost savings from booking full market value for silver byproduct.

    Beyond your overstatement of the company's contract risk, your recommendation that investors seek short exposure to SLW is in my opinion a far more dangerous prospect than the long exposure you sought to frighten them out of acquiring or maintaining. Shorting SLW in this environment is, with all due respect, a preposterous notion.

  • Report this Comment On March 07, 2011, at 7:22 PM, prginww wrote:

    TMF Sinchiruna,

    What are company's doing to make money now a days, being honest and above board? Check the banking institutions, they were not worried about reputation only making money to please the stock holders and the CEO's to make themselves rich on options assignments. Where are you living in La la land? Jurisdictions mentioned are in various countries all over the world and those countries are not looking out after SLW but the company's that are hiring their workers and giving them income from mining receipts. SLW is a leach to the mining industry, and those none mutual benefit contracts are not going to be honored, and the SLW stockholders will lose their A--. Ecuador is still trying to get money from chevron over the drilling and operation environmental poisons they left when Texaco was there. Do you think SLW has the resources to go after big companies in a Latin American country when they see that the company doesn't pay taxes and is living on being domiciled in the Caymans which implies they are a marginal company who tries every trick to make a profit at others expense! I don't believe Canada will support them if they don't pay taxes there, but have a company office there to give them a Canadian mining reputation. Time will tell but money wins over reputation. Also the small company's you might be thinking about are not the Barrick, Capstone, Goldcorp and Lundin that are supplying the bulk of the silver. SLW, if smart will re-negotiate the contracts to provide mutual benefits for both parties. Do you think mining companies providing all the exploration and construction risks are going to give away the store? just to avoid the handling of the by-product silver. New contracts, will not now give them an ounce of Silver for $4.00. Maybe for $4.00 less than the average price over the last six months but not forever, unless the price stays at $8.00 or less forever. No company is that stupid now.

    As much as I am an idealist, I don't think the business world operates from that premise.

  • Report this Comment On March 08, 2011, at 8:01 AM, prginww wrote:


    With all due respect, your understanding of Silver Wheaton's business is significantly lacking. It is just plain silly to call Silver Wheaton a "leach", since miners enter into silver streaming contracts of their own volition in their bids to secure development capital for their mining operations.

    Ecuador's experience with Texaco bears no relevance whatsoever to your flimsy case against Silver Wheaton. I happen be intimately familiar with that case, having lived in the region of Ecuador where Texaco operated and worked with the indigenous populations affected by their actions. You are attempting to compare a landmark case of environmental litigation to a theoretical test of contract law, and there are no relevant parallels to be drawn.

    I'm convinced you haven't thought through the full implications of your hypothesis. If what you say is true (it's not), and contracts in international commerce are a like a wild west of lawlessness that must be avoided (or even shorted because of their imminent demise), then investors employing your logic would need to similarly avoid every company with business dealings of any kind abroad. Labor contracts underlying international production by companies like Apple would thus be suspect under your apparent reasoning. Oil companies relying upon service contracts with foreign contract drillers had best be prepared to step in with their own manpower and equipment when those companies walk away to more lucrative contracts expecting no enforceable response. An equipment manufacturer that expands capacity on the basis of new international after-market service contracts would then be forging its own destruction in a world where contracts have no standing.

    There are deficiencies within our system of global commerce, but the image you paint of a world where contracts are meaningless and unenforceable is thankfully not the world we live in. I hope your broker is U.S. domiciled, since otherwise they will surely abscond with your holdings.

    I reiterate, I don't think you have adequately sought to comprehend the nature of Silver Wheaton's business. You use words/phrases like "leach", "small options marketing company", and "marginal company" to characterize one of the most innovative and universally respected names in the mining business. It's ludicrous.

    Also, if I understand your rant correctly, you imply that the larger silver suppliers like Barrick and Goldcorp represent the greater risk for unilateral contract default. Would that be the same Goldcorp from which Silver Wheaton was formed in the first place? This has all the makings of a Greek epic or a Shakespearean tragedy.

    Silver Wheaton provides an invaluable service to the mining industry, supplying miners with attractive alternatives to bank debt and shareholder dilution as means to finance capital-intensive mine construction and development costs. Barrick Gold did indeed get something of tremendouns value out of it silver stream for Pascua Lama: a cool $625 million in cash to meaningfully defray the impact of a multi-billion-dollar construction project. The silver stream has been worked into mine planning and economic models, and in any event 75% of Pascua Lama's silver will still fetch full market value. It's a win-win-win for the miner, the streamer, and the shareholders of both.

    Anyway, I've invested far too much time in responding to your comments, and I have done so purely in the interest of ensuring that my readers are correctly and fully informed with respect to the company I have examined and analyzed from every imaginable angle.

  • Report this Comment On March 08, 2011, at 11:55 AM, prginww wrote:

    The problem here is that for metals to continue their upward spiral somebody has to buy them--I think that most of the metal buying money is already spent--it is far easier (money wise) to drive gold from 20 to 1200 than it is to drive those same ounces on to 2500--much less 5000--do the math and figure out where the money to buy those metals at ever higher prices is going to come from--What you will see is that as people with money who parked it in metals become more convinced that the market is, in fact, alive, they will pull their money out of metals and put it back in the market where it can actually go to work--money in metals may well appreciate--but it can't work--I don't see vast quantities of NEW money going in to metals (I just explained that to drive the price higher costs a lot)--but I do see money coming out of metals to go to work the first chance it gets--and as you see gold drop you will be seeing that more and more folk are convinced that times have become better.

  • Report this Comment On March 08, 2011, at 12:51 PM, prginww wrote:
  • Report this Comment On March 08, 2011, at 9:11 PM, prginww wrote:

    TMFHousel wrote:

    "Because, physical and intellectual "labor" costs are minimal in those organizations"

    Correct me if I'm wrong, but it's the same for SLW. “

    TMF Housel

    My understanding of a REIT is that they own buildings and receive income by leasing or renting those buildings to others.

    I assume their day to day labor cost is miniscule. Basically, they are administering the investment of the cost of the buildings and their subsequent return on those investments.

    As well as, redeploying the funds collected from their rental or lease agreements.

    I assume SLW experiences higher labor costs recovering their silver than the owners of REITs administering the income from their properties.

    But, I am open to being “Educated”. Please let me know where my understanding of this situation is lacking.

    I look forward to being “Educated”, as well. Maybe, even “Amused”.

    Sky Pilot

  • Report this Comment On March 09, 2011, at 9:09 AM, prginww wrote:


    Morgan's point on that issue was spot-on.

    SLW's labor component is indeed miniscule, and in that way there are parallels to be drawn between their corporate structure and that of a typical REIT.

    I'm only sorry that I haven't had my coffee yet, or else I might be prepared to amuse you. :)

  • Report this Comment On March 09, 2011, at 8:51 PM, prginww wrote:

    TMFSinchiruna wrote, "I'm only sorry that I haven't had my coffee yet, or else I might be prepared to amuse you. :)"


    I can identify with that!


    You see, I've learned something I didn't know. I feel it's important to learn something each day.

  • Report this Comment On March 11, 2011, at 1:34 PM, prginww wrote:

    What was the Fed's net profit? It's not publicly tradable, but isn't it the most profitable company in the world?

  • Report this Comment On March 14, 2011, at 1:42 AM, prginww wrote:

    #18) On March 05, 2011 at 1:32 AM, DarthMaul09 (99.05) wrote:

    Thinking outside the box, I would pick a private non-tradable stock called the Federal Reserve Bank.

    It can mark to imagination anything on its books, assuming it would ever be audited; and it can print as much money as it wants, which the US citizens must accept as payment.

    In the real world, now that SLW has begun to pay a dividend, it is likely the best stock going forward. Low risk and a huge return.

  • Report this Comment On May 04, 2011, at 2:12 PM, prginww wrote:

    The suddeness of the decline in SLW and silver is tough to stomach.....but we've seen it before.

    Imagine if they raised margin requirements for technology stocks bought on margin when technology shares were in a bubble.....

    What I'd love a regulator to look at is who was short the silver mining equities, as well as SLW....and who ramped up their shorts during the last 3 weeks of April. Sadly....there appears to be no regulation in this country for that type of conduct....

    SLW's share price is very correlated to SLV.....yet SLW fell $6.98 per share from its high on April 8th to the close on April 29th....while SLV rallied $6.98 per share from its high on April 8th to the close on April exact match in the opposite direction for two investments that should trade in the same direction. What are the odds of this?

    The two resumed their trading in the same direction between the close on April 29th, and the open on May 2nd.....SLW gapping down $2.42 at the open and SLV gapping down $2.78 at the open on May 2nd. Heck, based on the relationship of the two silver investments between the highs on April 8th and the close on April 29th, why didn't SLW gap up $2.78 per share on May 2nd when SLV gapped down $2.78?!? The concept is laughible of course....just as laughable as the divergence between silver investments and the price of silver between April 8th and April 29th.

    Many of us who invest in silver mining equities as well as SLW were in the proper place to make alot of money between April 8th and April 29th. We were gamed by what appears to be a corrupt system. I suspect information was leaked as to when margin requirements for silver futures would be increased.

    In the long will all fade into the background as Silver resumes its price appreciation as the massive amounts of Fiat Currency printed in the past and still printed daily requires.

    SLW and the price of Silver should trade in the same direction....remember, SLW is not a miner and does not have the related risks....what exactly was going on between April 8th and 29th?...would make for a good investigation.

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ExxonMobil CAPS Rating: ****