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Top Strategist: Silver Surging To At Least $50

Thursday, 9 Dec 2010 | 6:21 PM ET

Should you buy silver on the pullback? According to strategist John Stephenson there’s no time like the present.

He thinks silver is on the brink of a surge. In fact, he’s calling for silver to hit new record highs - - $50 / ounce. The Fast Money traders were so intrigued by this very bold call they wanted to hear more.

Call of the Day: Silver to $50?
Investors should buy silver because it's the new gold, says John Stephenson, First Asset Investment Management.

In a live interview Stephenson, the author of “The Little Book Of Commodity Investing” tells the desk that his $50 prediction may be conservative. That's right, conservative.

”If you look at the ratio of silver to gold during the 1970’s (which is the last time it hit an all time) it was 16-1.” Now that ratio is even greater. “It’s currently at 50-1. That would imply silver should be at $88,” he says.


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Silver Futures
iShares Silver Trust
Pan American Silver
Hecla Mining
Silver Wheaton

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If you’re concerned about demand for silver falling off, Stephenson says don’t be. He thinks money continues to rotate into silver (and all precious metals for that matter) due to growing “concerns with the level of debt that the government is racking up in the US.” In other words Stephenson expects the so-called race to debase will generate investor interest in metals for some time to come.

How should you trade?

Of all the names listed above, Stephenson tells the desk he likes Silver Wheaton best “because it’s not really a miner it’s a royalty company. And its going to double production over the next two years."


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Trader disclosure: On December 9, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Adami owns (AGU), (NUE), (BTU), (MSFT), (C), (GS), (INTC). Karen Finerman Owns (AAPL), (BAC), (GOOG) and (JPM). Jon Najarian owns (EK) and is short (EK) calls. Jon Najarian owns (BBT), is short (BBT) calls. Jon Najarian owns (SHAW), is short (SHAW) calls. Jon Najarian owns (MSFT), is short (MSFT) calls. Jon Najarian owns (IBM), is short (IBM) calls. Jon Najarian owns (CME), is short (CME) calls. Jon Najarian owns (CBOE), is short (CBOE) calls. Jon Najarian owns (XLF) call spreads. Jon Najarian owns (GS) call spreads. Jon Najarian owns (JPM) call spreads. Jon Najarian owns (BAC) call spreads. Jon Najarian owns (ERTS) call spreads. Jon Najarian owns (GDX) put spreads. Jon Najarian owns (GDXJ) put spreads. Jon Najarian owns (MGM) put spreads. Jon Najarian owns (SIRI). Jon Najarian owns (C). Jon Najarian owns (SFD). Stephen Weiss Owns (MDRX), (SWC), (VZ), (QCOM) and (FAS). John Stephenson Owns (SLV), (PAAS), (HL) and (SLW).

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (AAPL)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (GDXJ) straddles
Accounts Managed By Kanundrum Capital Own (QCOM)
Accounts Managed By Kanundrum Capital Own (DE) calls
Accounts Managed By Kanundrum Capital Own (POT) calls
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (JJG)
Accounts Managed By Kanundrum Capital Own (TBT) call spread
Accounts Managed By Kanundrum Capital Own (MCP)
Accounts Managed By Kanundrum Capital Own (FXY) Puts

GUY ADAMI
Adami's wife works at (MRK)

KAREN FINERMAN
Finerman's firm is short (IJR)
Finerman's firm is short (SPY)
Finerman's firm is short (IWM)
Finerman's firm is short (MDY)
Finerman's firm is long S&P puts
Finerman's firm is long Russell 2000 puts
Finerman's firm owns (JPM), (JPM) leap
Finerman's firm owns (KFT)

BRIAN STUTLAND
Stutland's firm is a Market maker in VIX futures and options holding positions
Stutland's firm is a Market maker in SPX options holding options and futures positions

First Asset Investment Management Is Long Silver Futures
First Asset Investment Management Owns (SLV)
First Asset Investment Management Owns (PAAS)
First Asset Investment Management Owns (HL)
First Asset Investment Management Owns (SLW)

BRIAN MARSHALL
No disclosures on Dell, Compellent, HP, Netezzam, Cisco, Commvault, Quantum, Oracle, NetApp

BRIAN KELLY 10/11/2010 SOT
Accounts managed by Kanundrum Capital owned (ANDE) on 10/11/2010

BRIAN KELLY SOT 12/02/2010 (GT)
No disclosures on (GT) from 12/02/2010

CNBC.com with wires.

  Price   Change %Change
HL
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PAA
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SLV
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SLW
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  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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