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Tuesday, April 19, 2011

From Sprott Physical Silver Trust UTS (PHS.U) to Sprott Physical Silver Trust ET (PSLV): silver, silver and silver

My latest portfolio update had show results that exceeded my expectations. I own part of those good results to my asset diversification and also to my silver investment made in the Sprott Physical Silver Trust UTS (PHS.U).

I own some Sprott Physical Silver Trust UTS (PHS.U) units inside my TFSA and RRSP. With PHS.U, I had been experiencing the power of silver trading since November 2010. I discuss previously about the difficulties I had while trading Sprott Physical Silver Trust UTS (PHS.U) on the TMX market. Currently, the Canadian dollar is exceeding the parity. And this is not a good thing when it comes to sell some PHS.U units outside a register account because no wash trade is possible and huge profit can be loss because of the over-valued Canadian dollar we have right now. But good news: this won’t last forever. A strong Canadian dollar is not good for exportation, among other. And anyhow, in front of an extra-united country like the USA, Canada won’t be able to exceed the States for very long. In other words: this is the occasion of a lifetime.

Yes, it’s time for small investors to buy US dollars! And there’s never been better timing. Currently with TD Waterhouse, a 2 000$ in Canadian currency worth 2 061.01$ in US dollars! For fan of the Sprott Physical Silver Trust UTS (PHS.U) like myself, time has come to experiment the power of silver at its best: in US dollars, of course.

On the TMX, the Sprott Silver trades under the ticket PHS.U. In the US (NYSE), the Sprott Silver trades under the ticket symbol PSLV. Basically, the genius plan is quite simple: buy US dollars now because there’s never been better time, purchase Sprott Physical Silver Trust ET (PSLV) on its American market, wait for huge profit to be made, sell and reinvest the money in top US quality dividend payer companies.

Lately, I had been working at paying my 10 000$ credit line at 7.52%. I had patiently paid 2 131.03$ on the credit line. I am saying “patiently” because for the first time in years, I had done something I never been caring about: paying off debt. I am not against paying debt, but when a stock market just crack from endless possibilities, why should a 30 years old care about paying off debt? Fact is, my debt portion had made me gone richer and it’s not about to stop anytime soon. Risky, would you say. Well, the risk is calculated and I totally assume the risk I am taking because from what I had experimented so far, I know somewhere I can make my profit out of my everything. Ya ya bling bling!

Let’s study the numbers.

On March 16, 2011: I had 71 773.63$ in debt and 151 121.80$ in asset, for a net worth of 79 348.17$. On April 16, 2011: I had 74 971.30$ in debt and 160 575.64$ worth in asset, for a net worth of 85 604.34$. Inside of a month, my net worth increase of 6 256.17$. I know, that’s pretty good lol. My debt level had increased, but still, my net worth had exceeded the money own on debt. At this point, is pretty much half and half, but I am exceeding my debt level of more than 10 000$. I won’t go any deeper in debt, but I will certainly use extra cash available to buy some US dollars. I am currently working like a dog for that. All my life is concentrate at one think: make money out of the stock market. And I think the part month had been awesome for me. It’s the reward of long boring hours spend at work and trying to understand the stock market. And I think I am getting the whole thing straight out now, finally after 4 years spend investing in stock. I wouldn’t continue without meeting my expectations and my expectations were set quite low, one simple thing: not to lose money. I had lose thousands of dollars but made thousands of thousands more than what I had lost. My profit exceeds the money lost. And the best way to continue that way is to invest in silver. HZU is another silver investment but personally, I find the title too volatile. I gave HZU a try for a couple of weeks, but I wasn’t able to handle it for very long.

Sprott Physical Silver Trust UTS (PHS.U-TMX) and Sprott Physical Silver Trust ET (PSLV- NYSE) are the perfect silver investment for small investors. Why? Both titles are stable and gains continuous grow. I had been trading Sprott Physical Silver Trust UTS (PHS.U) since November 2010. Remember? Back in the time, I had invest in PHS.U units when its value was below 11$ per unit! Today, PHS.U close at 21.50$! Since November 2010, knowing what kind of special gem was PHS.U I had been buying-selling-buying-selling on a regular basis, until I got stuck in a currency problem that took off big part of my profit, leaving me only a 30$ profit instead of the 300$ expected. This bad trading experience is now behind me. Now, time to get a taste of the power silver, but in US dollars. Sprott Physical Silver Trust ET (PSLV) can make things happen and make it happen in US dollars. Is there anything better that could happen to me right now? If, like me you live in Quebec province, well, I have good news for you: you don’t have to trust the stupidity of Quebec financial planner and bankers to make money out of the stock market, you just have to trust the power of silver. Get ready for the cash, and in US dollars please.


Rob said...

I can't resist a short history lesson here. You sold HZU in March at 34.24 and I commented on your blog that you would regret that decision. It closed today at 48.44 for a gain of 41.47% in less than a month. In addition, the gold stocks I recommended such as BTO, LSG and OSK are all up. BTO went up 14% in one day 3 days after I recommended it on your blog. What frightens me is that you clearly do not understand what you are investing in. It does not matter whether you invest in US$ or C$ unless you are an exchange speculator. And your speculation is dead wrong. The C$ is not overvalued, it is undervalued dramatically vs the US$. Although this could be a stretch, I see it taking 2 US$'s = 1 C$ in 3 to 5 years. In any event the US$ will keep declining and anyone who follows your advice will be bankrupt. In addition you do not understand why silver is going up therefore you won't know when to sell it. Silver is in backwardation which means the spot price is higher than the futures price. This implies a supply squeeze and when demand exceeds supply, the price rises. This was caused by the illegal price suppression by JP Morgan and the rest of the bullion banks that has been going on for decades. Silver remains hugely undervalued and is still the investment of a decade despite already rising 150% in the last year. Here is advice going forward (1) avoid US Stocks like the plague (2) avoid anything to do with Canadian and US real estate (both in a bubble) (3) avoid banks (will get destroyed when interest rates rise and people default on loans and mortgages) (4) Buy Precious Metals. End of lecture

Sunny said...

Hi Rob!

It was my decision to invest in HZU and no one else decision. I wanted to give it a try and I did. I don't regret the move. Its just I am use to a bit more stability in my portfolio. I don't regret selling HZU at the time I did. It was my decision to take and I did what I found was in my best interest. I don't like HZU. The title is too volatile for what I can handle. That's all. Some readers may like HZU, good for them.

As for Canadian $ exceeding the US dollars - there something wrong right there. I just share my view on what's going on. I am not a professional. I don't think I have to defend myself on anything anyhow. My knowledge is limited yes, but I had been able to make some profit and my net worth had increased. For me, that huge and its all what matter.

But I do - and my readers too - appreciate your contribution.

BTO when up after you recommend it on my blog? I didn't notice. I cannot follow everything. But good for you for being that smart.

And please, continue commenting. We all like you on here.

I guess you are right on pretty much everything. Good night.

Rob said...

You also better watch out for Encana which is one of your major holdings. Natural Gas is in way oversupply and Encana reports today. I am expecting it to completely tank unless the market anticipated much lower earnings.

On a positive note, you are an investing genius compared to my ex-wife. At least you save and live within your means which is more than I can say for her.

Good luck.

Anonymous said...

According to Mark Faber, the US dollar will go to its true value, zero. He's possbily exaggerating. But consider, the US is trying (successfully) to devalue its dollar as much is possible. They cannot pay back their debt in real dollars, so they are printing and borrowing and devaluing their currency. They will pay back in Monopoly money. Why go against US strategy when they are succeeding and achieving their goals? The trend is your friend.


Anonymous said...

Sunny, for gold and silver and materials exposure, buy Sprott Canadian equity. It's worth the high fees. You pay high fees when it doubles and triples, which it does often.


Sunny said...

Rob, a compliment coming from you mean a lot for me.

Sunny said...

Hi Dale, I already own Sprott Canadian in my portfolio.

Anonymous said...

Hi Sunny-Have you ever thought of owning actual physical silver/gold?

Just a thought..just in case in the medium term the US defaults, and it will default by making the dollar worthless. The greenback has lost 95% of its' value between 1913(the creation of the Federal Reserve and 2000). I enjoy reading your blog. Keep up the good work.

Sunny said...

Hi there, I never taught about holding the real thing and I don't really know how that work. As for now anyway, my silver US investment is on hold until I have fresh new cash to invest and I am going to think about what to do next.

High on Dividends said...

April 21, 2011: I on the contrarian view think that silver and gold are about to drop, severely.

Do not get caugt with your pants down. Historical highs. It is NOT different this time. Gold and Silver hoarders will be punished for your greed, just like last time (1980's). What makes you think it is different this time? Nonsense.

USD will rebound within 12-18 months and will be worth $1.25 CAD. US stocks are on sale right now, due to our strong dollar.

Can't keep the US down. These problems are all very temporary....

Post this up and look at it 12 months from now, and we will know who was right.....

PS. Nice blog.

Sunny said...

Hi HD, I appreciate your view. Silver in Sprott is something I have like anything else. On the short term, I think I may be able to make good gain on the Sprott American silver and once profit made, I will be able to invest in a good US company.

If the current situation last for one year, it will be huge. At least, I will be able to benefit from the extra value of the Canadian dollars over the US.

I never invest in US dollars, so it will be quite interesting to see how my US investment adventure will be like. It's just a matter of when now.

NeilM said...

heyo sunny - i have read a lot of your blog and have enjoyed reading about your journey. You story,and those of the Dividend Ninja, the Dividendguyblog have inspired me to get more involved in my investements - thanks for sharing your story.


Pete said...

I think US dollar will rebound because it held its value even with all the debt it had in the first place...within 6-10 years i expect us dollar to be worth at least 1.2$ cad

also i disagree with rob some us stocks are very reasonably priced right now except for maybe netflix but buy aapl that stock will continue to soar higher

don't buy precious metals keep buying stocks i personally think rob isn't as smart as he sounds

Sunny said...

Hi NeilM,

your comment is much appreciate.

Hi Pete,

I also think the Us dollar will rebound. That's why in my post I talked about a life time opportunity. Especially for small investors like myself who don't hold anything in US dollars, this is the time. The time have good to hold the US dollars. Ever of my life would I think something like this possible. I am from New Brunswick living next to the US border and having that US dollars worth less than the Canadian one... there's something wrong right there!

I am investing a bit in silver at this time because the timing is right and Sprott silver is one of my favorite. I know I can double the value of my investment with this one. Once my profit made, I will reinvest in stocks. Most part of my portfolio is being hold in stocks anyway. Adding silver just add to the diversification. I like silver for now.


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