Advertising Words, Listen with great care.

As always, an investor must be ever alert when an investment is being presented to him. We’re all adults so we are aware of “weasel” words that are less than definitive like may, might, should, could etc. That’s all good but lately advertisers have become ever more creative.
Have you heard the ad selling silver that’s playing constantly on network TV? It says “buying silver is the smart move since right now you can buy silver for less than its all-in-cost of production.”

What they have found is a clever way to say is that Silver is cheap now because it has been a remarkably lousy investment. Let’s review why you can presently buy silver at less than production cost.

“SLV” is an ETF that mirrors the spot price of silver. It’s annualized return for 5-years is minus (1.9%) and it is down (19.5%) for the last year. Silver peaked at $48 an ounce in the first quarter of 2011 and its chart shows a steady downtrend to today’s price of $16 an ounce. “Selling below the price of production”, indeed. I suppose that buying Radio-shack today at $.09 a share as they enter bankruptcy could easily be reworded as an opportunity to buy-low to allow selling high!