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« Silver Standard Resources Incorporated: Take a Breather! | Main | Hecla Mining Company: Starting to move? »
Thursday
Jan222009

Silver-Prices.net: Portfolio Update 25 January 09

Silver Chart 23 Jan 09
Chart courtesy of StockCharts.com

As we write silver is trading at $11.34/oz, gold is trading at $853.70 and the DOW is hovering just above the 8000 level. The financial turmoil continues with the flight to cash alive as stocks are sold pushing the US dollar to higher ground. The demise of The Bank of Scotland and The Bank of America has put the financial sector on to the back foot once again. However, the world’s biggest stimulus package is being injected into the system so it’s a case of holding on to your hat at the moment.

Here is a summary of the silver stocks we are currently invested in or following:

Hecla Mining Company (HL) – Initially we bought this stock for $5.27 - a quality silver stock which was going along nicely and then we thought Hecla was overbought, as it hadn’t corrected with other silver stocks, therefore we took profits on Hecla at $11.89, the stock price then dropped so we bought it back at $9.72, getting a 18% discount on our shares. On the 14th April we sold 50% of this stock for $11.79 in order to lock in some profits as we anticipated a fall. On the 18th June 2008 we re-purchased Hecla’s shares for $9.61. We have recently purchased a few more Call Options on Hecla, which are detailed in the Traders Corner section below. Hecla closed yesterday at $2.28 having traded at $1.25 two months ago.

Pan American Silver Corporation (PAAS) – Initially we bought this stock for $18.00 and on the 23rd August we gave another BUY signal on PAAS when we said “We made a further purchase today at $24.10” giving us an average purchase price of $21.50. On January 31st, 2008 we sold about 50% of our shares for an average price of $36.65, locking in a profit of around 70.32%. On the 18th June 2008 we re-purchased PAAS shares for $31.06 and on 16 July 2008 we made another purchase at $36.53. They were trading at $9.96 two months ago but have improved recently to close at $16.49 yesterday.

Silver Wheaton Corp (SLW) – Originally bought for $9.41 and made another purchase on 15 July 2008 at $15.61 and a further purchase on 6 August 2008 at $11.43. SLW closed yesterday at $2.85 two months ago leaving us gutted, but we did not sell and we are slightly relieved to see the stock close yesterday at $6.28.

Silver Standard Resources Incorporated (SSRI) Initially we bought this stock for $19.98 and on the 20th August we gave another BUY signal when we wrote “we think Silver Standard is at a good level to buy at the moment and we bought today at $28.99” giving us an average purchase price of $24.48. On January 31st, 2008 we reduced our exposure by selling around 50% of SSRI for an average price of $34.82 locking in a profit of 42.22%. SSRI dropped to $7.99 two months ago during in the sell off but closed yesterday at $19.08 restoring some of our confidence.

Eagle Plains Resources Limited
(EPL) – We bought this stock for around $0.53, it has been down to $0.08 but closed on Friday at $0.13, still a very disappointing performance by this stock. We will continue to hold for now and keep a close eye on
it.

Endeavour Silver Corp (EXK) – We initially bought Endeavour for $3.97 and on 7th December 2007 we bought more shares saying; “EXK is down from over $5.50 and as it has been beaten down so much we are signalling a BUY again on this stock and we made a further purchase bringing our average price to $4.10 per share as we doubled our position.” we secured EXK for $3.26 on the 2nd April 2008. This purchase being the largest we have ever made in EXK. Two months ago EXK closed at $1.02, another victim of the sell off despite encouraging results and yesterday the stock closed at $1.20. This stock has moved above its 50dma and hopefully it will continue to head north.

Minco Silver Corp (MSV) - Bought for $2.80 as a speculative move, two months ago it closed at $0.40, which hit us hard, however it is showing signs of a recovery and closed yesterday at $1.09. Again we will continue to hold and hope that it too can remain above its 50dma and continue to head north.

Traders Corner:

On 6 January 2009 we purchased a small number of the March 2009 Call Options (HLCZ) for $0.75 per contract at a strike price of $2.50, they closed at $0.30 yesterday on the back of a 3% fall in Hecla’s stock price.

On 9 January 2009 we purchased a small number of the March 2009 Call Options (HLCA) for $0.10 per contract at a strike price of $5.00, they fell 50% yesterday to $0.05, again on the back of a 3% fall in Hecla’s stock price. It is difficult to say just why Hecla’s stock price remains so low, however it is above its 50dma and hopefully will head north from here. Everything depends on silvers progress, it is moving up but in a leisurely manner. It feels like a case of the watched kettle never boils!

We continue to look for short term trades on silver and silver stocks as we have done in the past. However, the next up leg could happen quickly if the ‘Obama’ effect can inspire the markets in general. We are in observation mood and will try and remain patient during this world full of financial turmoil, the outcome of which we expect to be the continuing demise of the dollar and an ever-increasing recognition of both silver and gold as the only place to be.

Have a sparkling week.

Stay tuned for updates in this fast moving market…

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Reader Comments (2)

HL has fallen quite a bit the past two days. Any concerns about this stock. It seems both times I have purchased this company it doesn't live up to expectations. Sure it will come around. Any thoughts..Thanks gary

February 4, 2009 | Unregistered CommenterGary

Gary,

We will investigate and be back shortly.

February 5, 2009 | Unregistered CommenterSilver Prices

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