EC Why-Yo Silver?

The Lone Ranger's horse Silver became a star in his own right (image via War History Online).


Why-Yo Silver?

The iShares Silver Trust ETF (SLV) has frequently been one of our top ten names over the last several months, despite its less-than-spectacular return. A subscriber asked us why. It's a good question, so let's address it here. Let's start by looking at our top ten names from July 23rd, which was the first weekly featured top names cohort to include SLV. 


Our Top Ten Names From July 23rd

These were our top ten names on July 23rd, as displayed to subscribers at the time. 
 

In addition to SLV, there were two other precious metals names: AngloGold Ashanti (AU) and the VanEck Vectors Junior Gold Miners ETF (GDXJ). The rest of the top ten names on July 23rd were stocks: Amazon (AMZN), Netflix (NFLX), Tesla (TSLA), Shopify (SHOP), Nvidia (NVDA), Square (SQ), and Twilio (TWLO).


Why Those Names Made The Top Ten

Here's a screen capture from our admin panel as of July 23rd, summarizing key steps in the analysis that selected our top ten names. Below we'll explain the 8th row containing SLV while referring to the columns labeled with red letters.

A) The "Exp Return" column was the mean of the average 6-month return for SLV over the last ten years and its most recent 6-month return as of July 23rd. For SLV, this was 13.73%. 

B) "w/Cap Drop" refers to the first gauge of options market sentiment we applied to SLV. We attempted to hedge it against a >9% decline with an optimal, or least-expensive, collar over the next ~6 months capped at the figure from the last step, 13.73%. We were able to find collar using that cap, so number stays the same in the B) column: 13.73%. If you look at row 7, you'll see that with Square, that wasn't the case. Square has 22% in its B) column because our system had to drop the cap to 22% to find an optimal collar for it against a >9% decline. 

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