The leverage gap is whats really wild here. In past bull runs miners would go 10x-100x when the metal doubled, but right now theyre basically moving in lockstep with silver itself. Feels like the market is either priced for silver to crash back down or just hasn't caught on yet that this might be a sustained move. Either way, the assymetry is pretty clear if you think $100+ silver holds.
Almost like you would need stability at these levels, for the appreciation of the miners to come through in their revaluation upwards. In other words, only once it is acknowledged that the prices that are higher, are here to stay, will the valuations then reflect the additional free cash flows in the longer term. Putting yourself in the shoes of a miner, you would not draw up a budget based on $100 until you knew for sure that $100 or more was what you would predictably receive for the product you create.
They don't need to draw a budget; they just simply need to produce what they were already producing, but at levels that pay them near $100 an ounce (as opposed to the $40 an ounce that every single analyst covering these companies is estimating).
They will totally blow away expectations. Do that enough times and you get a re-rate.
The leverage gap is whats really wild here. In past bull runs miners would go 10x-100x when the metal doubled, but right now theyre basically moving in lockstep with silver itself. Feels like the market is either priced for silver to crash back down or just hasn't caught on yet that this might be a sustained move. Either way, the assymetry is pretty clear if you think $100+ silver holds.
Given macro and fundamentals, I’m leaning toward the latter.
Almost like you would need stability at these levels, for the appreciation of the miners to come through in their revaluation upwards. In other words, only once it is acknowledged that the prices that are higher, are here to stay, will the valuations then reflect the additional free cash flows in the longer term. Putting yourself in the shoes of a miner, you would not draw up a budget based on $100 until you knew for sure that $100 or more was what you would predictably receive for the product you create.
Something similar what Rick Rule explains here
https://youtu.be/RVacfj1eDYU?si=UhALL9AlTBC2YUwD
They don't need to draw a budget; they just simply need to produce what they were already producing, but at levels that pay them near $100 an ounce (as opposed to the $40 an ounce that every single analyst covering these companies is estimating).
They will totally blow away expectations. Do that enough times and you get a re-rate.
https://www.youtube.com/watch?v=RVacfj1eDYU
Rick Rule Sold 80% of His SILVER to Buy THESE Miners - 'I Know I Did the Right Thing'