October 2008 Stock Pick

The last time I recommended a silver miner, I picked one with large silver reserves and without a reputation for excellent management. That was Coeur d'Alene Mines (CDE), and it is way down, despite an imminent explosion in silver prices. I still think it's a good buy, and I still own it myself. This month, I am going to recommend a silver miner with far less reserves, but a strong reputation (as silver miners go): Silver Wheaton, ticker SLW.

Silver Wheaton actually buys silver from miners of base metals. These other miners, for whatever reason, are willing to part with their silver ore for just a fraction of spot prices. Then they can get back to mining base metals and Wheaton can profit from the spread. Wheaton still has some silver reserves, and they never hedge their prices. Also, they suffer fewer production problems than companies like Coeur. SLW is probably an excellent way to profit from the coming stagflation.

SLW closed at $8.15 today, and is a good candidate for new capital anywhere up to about $10. All silver miners are screaming buys right now, and SLW happens to be one of the safer, better-managed companies of the bunch.

Other silver miners I am officially recommending now are SSRI, HL, and wild riders PAAS, MVG, EXK and (perhaps the wildest, favoritest of all) SIL.

Sorry I about the dearth of detail, but I am tired and need to go to bed early tonight due to a change in my work schedule.