These days it displays all the speed of a shooting star -- but shows none of the propensity for petering out.
I am speaking, of course, of silver, which is tethered to gold by the slingshot effect. Investors are witnessing that slingshot effect in action, as silver has surged briskly to bring the gold-to-silver price ratio nearer to the range of modern historical averages. Long-term, I expect silver to outpace gold until a ratio of about 40:1 is achieved, but at the present level of roughly 56:1, we are already well on the road to correcting the anomalous peak of 80:1 reached in 2008.
Silver's meteoric 36% rise -- from about $18 in late August, to more than $24.50 on Thursday -- has translated into some noteworthy moves among the shares of silver miners and explorers. Silver Wheaton
Although I foresee a meaningful continuation of this secular bull market trend for silver (toward my long-term target price of $50 per ounce), I understand the difficult position that newcomers face in mulling fresh exposure to silver at these elevated price levels. Back in May, I proposed that any silver stock will do, but as the trend matures further, effective stock picking becomes increasingly significant as a means to ease concerns over downside risk.
When I want to sleep well at night while investing in a red-hot space like silver, I hunt for value. For newcomers seeking the widest value moat in the business, I recommend a careful look at major producer Pan American Silver
At nearly twice the market capitalization of low-cost sensation Silvercorp Metals
I am eager to hear your thoughts on the matter and encourage you to share your opinions in the comments section below.
Fool contributor Christopher Barker can be found blogging actively and acting Foolishly in the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Endeavour Silver, Hecla Mining, Pan American Silver, Silvercorp Metals, and Silver Wheaton.
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