NOVEMBER 30 , 2011

Silver/Ounces in US$
Buy Date	Amount/oz.	Buy Price	Total (USD)	Price Today	Value Today
November 15, 2002	10'000.00	4.54	45'400.00
Total	10'000.00	4.54	45'400.00	32.16	321'600.00
Profit					276’200.00
Profit (in %)					608%
OUR LONG-TERM RECOMMENDATION				BUY
OUR SHORT-TERM RECOMMENDATION				HOLD/BUY

1980 to 2011: From bear to bull

In 1980, the price of one ounce of silver reached $50. Today, the purchasing power of the US dollar is substantially less than in 1980. The price of one ounce of silver would have to rise to $ 135 to reflect the value of the US dollar thirty years ago.

The long-term picture of the silver price

The bull market of the silver price started towards the end of 2002. On the way from $ 4.02 to the recent high of $ 48.42 (an increase of 1,100%), several significant corrections took place, the most severe one in 2008 when the silver price sank by 56% only to jump 440% to a new high since the bull market started. “The bull market is not over. However, at present, a correction seems to be overdue.”, we wrote in March. It is time to consider re-entering the market (if you have sold).

“Extremes never last but no extreme is an absolute extreme and there is no guarantee that the extreme of 2006 will actually be repeated.”, we wrote in our last report. The 2006 peak was in fact surpassed in March 2011, followed by a sharp correction.

In the past, excluding 1980, it would have paid off to play the extremes, always assuming that one can buy back at the right moment which is far from easy. A long-term investor may feel better simply remaining invested as he believes that prices will eventually go much higher.

The medium-term picture of the silver price

Critics of technical analysis include well known fundamental analysts. For example, Peter Lynch once commented, "Charts are great for predicting the past." Warren Buffett has said, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians."

Fundamental Considerations: THE RISING SILVER DEMAND

Silver is unique. Its natural beauty is legendary. Its range of applications is exceptionally broad. As a precious metal, it has been a source of human adornment since the beginning of time. Such as a component of fine tableware, appropriately called silverware. As a light-sensitive element, it has revolutionized preservation of memories in the form of photographic images. More recently, its unique properties comprising of anti-bacterial qualities, corrosion resistance, malleability, ductility, reflectivity and conductivity have opened new possibilities for a myriad of other industrial applications.

The demand that pushes the silver price higher

World Silver Demand in millions of ounces (Source: World Silver Survey 2011)

Implied Net Investment demand, industrial demand and demand for coins cause the silver price to increase. Without it, the silver price would never have performed as it did. Industrial demand and demand for coins and medals are expected to grow further.

The Gold / Silver-Ratio

The gold/silver ratio has been steadily declining since its high in 1990 and reached a recent low early of this year when the silver price just about touched $50 an ounce. Since then the ratio has rebounded almost 30 points. This ratio may well move lower as the silver price is poised to recover from its oversold level.

Silver is again our preferred precious metal!