Silver Isn't the Next GameStop – but Is Still Headed Higher 
Eric Fry | Over the last couple of years, I have presented and reiterated bullish arguments for investing in both gold and silver… and have pinpointed specific ways to capitalize. Most of these recommendations have delivered nice gains so far, and I'm expecting more of the same over the next few months as gold and silver prices work their way higher. The major "big picture" trends for gold and silver remain positive. And now, a brand-new influence has barged into the precious metals markets: Reddit. This online forum, which hosts a group called "WallStreetBets," has become a powerful force in the financial markets… or at least in the specific stocks this group targets. WallStreetBets gained a high profile recently by flash-buying the shares of GameStop Corp. (GME), AMC Entertainment Holdings Inc. (AMC), and other heavily shorted stocks and driving them up to stratospheric levels. But now the group has fanned out into other names, including the iShares Silver Trust (SLV). That's the exchange traded fund (ETF) that tracks the price performance of the underlying holdings in the London Silver Fix Price. As a result, the silver-focused ETF jumped 14% in two days and hit a new eight-year high. America's Top Stock Picker Reveals Next Big Winner (Free) Suddenly, silver rumors and scuttlebutt started swirling throughout online financial forums and financial news stations. Some of the rumors even made it to the top of the 6 o'clock news. Most of the stories focused on the idea that Wall Street banks are short the silver market – i.e., betting against it – and would therefore suffer if the silver price rocketed higher. Rumors of this sort have been circulating for the entire 30 years that I've been in the investment industry. Maybe there's some truth to them, maybe not. I don't think that issue matters much. Today, let's talk about what does matter… This Small Action Could Produce a Big Result What does matter is that millions of investors are now focused on the teeny-tiny silver market. If some these investors shift some capital into the silver market, the silver price could move significantly higher. For perspective, the combined silver holdings of all known silver ETFs totals 940 million ounces, which is worth $25 billion at current prices. Additionally, the COMEX commodity exchange here in the United States holds another 400 million ounces, worth about $9.5 billion. So even if we combine these tallies, the total value equals only $35 billion, which is almost exactly the peak market value GameStop shares reached late last month. To repeat, that one single stock was temporarily worth the entire value of all the physical silver in the world's ETFs and the COMEX warehouses. Here's the Stock Symbol of Eric Fry's Next Huge Winner For additional perspective, Tesla Inc. (TSLA)'s $800 billion market cap is 23 times larger than this tally of physical silver. In other words, the publicly traded silver market is quite small. Therefore, a relatively small amount of silver buying could produce pyrotechnics in the precious metals markets. Even if the stated rationale for buying silver is based on a false premise, the silver price could still move higher… and create its own "truth." To be sure, the Reddit crowd's flash-buying of SLV could flip to flash-selling in an instant. And that flip-flop would certainly weigh on the silver price. On the other hand, I've been arguing for months now that the silver price has plenty of room to grow from its current level. At $27 an ounce, it is selling for about half the record high it hit in 2011. That's why earlier this week I recommended a unique play on gold and silver… The Attention Economy "Gather assets under management… and bill them." That's how a money manager from Greenwich, Connecticut, once described his business plan to me. A nearly identical strategy drives the success of the money management firm that specializes in precious metals investments that I recommended to members of my elite trading service, The Speculator, earlier this week. This firm manages several precious metals exchange-traded funds (ETFs), as well as funds dedicated to stocks in the precious metals sector. Because of this narrow focus, it is a direct play on gold and silver. But just as importantly, it is a play on investor interest in those metals. If investors expect precious metals prices to rise, they will commit capital to them. Then this firm will collect its management fees on those investments… no matter what gold and silver actually do. This attribute makes it a unique play on precious metals. And so, for this Toronto-based firm, silver's ultimate price gains are not the whole story, nor even the most important part of it. Investor interest in silver and gold is what makes the wheels go round. The Toronto-based investment firm serves more than 200,000 global clients and manages approximately $17 billion. Most of that capital resides in the company's four physical bullion ETFs. Unlike many competing precious metals ETFs, this company holds physical bullion, not simply paper claims on the metal. In addition to these physical bullion trusts, it manages four other publicly traded investment vehicles: two gold stock ETFs, a value-focused closed-end fund, and a resources-focused investment company. All together, these publicly traded funds make up 75% of its managed assets and produce a similar percentage of the company's gross earnings (EBITDA). During the first nine months of 2020, the firm's assets under management soared 73%. Fund inflows accounted for about half that gain, while rising precious metals prices accounted for the rest. As a result, the company's third-quarter report showed a 58% jump in gross earnings (EBITDA) year-over-year. I'm expecting a much larger percentage increase when the firm reports it fourth-quarter earnings on March 1. Looking farther down the road, I expect the company's full-year 2021 results to top 2020's by a large margin. Bottom line: This firm's shares offer plenty of upside potential, based only on current bullish conditions in the gold and silver markets. But if the precious metals catch a spark, the stock could soar to a multiple of its current quote. Learn how to join The Speculator – and get this recommendation – by heading here. Regards, 
Eric Fry
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