ARTICLES

Silver on the move?

One of our clients, Mr. Koot Jordaan, drew our attention to the fact that the rand price of silver, which has been underperforming gold since 2011, may be making an upside breakout.

Mr. Jordaan suggested that silver in both rands and US dollars had been moving in an extended sideways pattern. Consider the charts:

Silver in US dollars

(We regard the downward break in March 2020 in the US dollar chart as an aberration.)

Silver in rands

You can see here that silver has been moving sideways in US dollars since September 2014 and in rands since 2011. Both charts also show an upside breakout in the last week or so.

Sideways markets like this are periods of consolidation. The price is “backing and filling” while it waits for new direction. The longer the sideways pattern continues, the further up the price will go once there is a clear upside breakout. That is the basis for the horizontal count method of point and figure (P&F) charting.

If you are unsure about horizontal counts in P&F refer to our article No. 49 “Upside Target” published in December 2016. https://www.pdsnet.co.za/index.php/upside-target/ We used a P&F horizontal count to predict that the S&P500 index, then trading for about 2050, would rise to 3027 – a target which it has subsequently far exceeded.

Using Metastock, we tried various box sizes to find an unbroken horizontal count. The following charts show our results:

Silver in US dollars

Silver in rands

In both charts you can see there is an extended sideways pattern in the most recent years with an unbroken horizontal count of 6 in each case.

In US dollars, the horizontal count gives an upside target of $45.92 – more than double its current price.

Mr. Jordaan points out that historically it is normal for gold to move before silver. So, it is entirely possible that in the next few weeks, silver will catch up with gold as it has done in the past.

The only problem is that while both the rand and the US dollar line charts show an upside break, neither yet shows that break in P&F – which is necessary for the horizontal count target to be valid. Valid horizontal count targets in P&F are more than 70% accurate and usually conservative in our experience.

DISCLAIMER

All information and data contained within the PDSnet Articles is for informational purposes only. PDSnet makes no representations as to the accuracy, completeness, suitability, or validity, of any information, and shall not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. Information in the PDSnet Articles are based on the author’s opinion and experience and should not be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Thoughts and opinions will also change from time to time as more information is accumulated. PDSnet reserves the right to delete any comment or opinion for any reason.

PDSNET ARTICLES

Sibanye takes off

We have been writing about Neal Froneman and Sibanye for years now. Beginning in 2013, Froneman assembled the Sibanye group over a period of 7 years, buying up mining operations both in South Africa and America at bargain prices. Initially he bought precious metals producers, but more recently he has been diversifying into base metals like zinc and lithium which

The 16 Year Bull Trend

Since the Second World War, the stock markets of the world, including the JSE, have always tended to follow the New York Stock Exchange (NYSE) - and the NYSE is best measured by the S&P500 index (S&P) of its 500 largest companies.

For this reason, we believe it is important for private investors to constantly

CA Sales Revisited

Retailing in Africa is difficult with many of our leading retailers having attempted to open stores in countries to the North of us without notable success. These countries are often unstable and volatile politically. Getting adequate stock to branches has proved problematic and expensive.

It is not surprising therefore that a company has been

Bluetel

Bluetel (BLU) is a company involved in pinless top-ups, prepaid electricity, ticketing and universal vouchers. As such it is a company with substantial repeat business from existing customers. This type of business model is attractive to investors because it implies minimal working capital and strong cash flows.

Bluetel’s purchase

The Debtors' Book

A BIT OF HISTORY

Many years ago, in 1982 when I started this business (which became “PDSnet”), I ran advertisements in both the Rand Daily Mail (RDM) and in the Star – which were the two most widely read newspapers in Johannesburg at the time. At that time, we were a very small business and had no credit rating at all. Despite this the RDM immediately

WeBuyCars - Results

The financial results of companies show how profitable they are and give a good indication of their share’s risk and potential return. WeBuyCars (WBC) is a recent listing which came to the JSE on the 11^th of April 2024. Unlike other listed motor vehicle companies, it is a company which specialises in the purchase and sale

Choosing Winners

We are often asked how we go about selecting the shares to put on to the Winning Shares List (WSL). Right now, there are 102 shares on the list with 5 having gone down since they were added, 94 are up and 3 are unchanged. On an annualised basis, 24 of them are performing at above 100% per annum.   

As a private investor,

Kore Revisited

Kore (KP2) remains at once the most exciting and most risky investment on our Winning Shares List (WSL) at the moment. We originally added it to the list just over a year ago on 16^th May 2024 at a price of 20c. It subsequently rose to a high of 83c on 3^rd October 2024 and we published an article

Rand Strength 2025

The strength of the rand is both a critical and a complex issue for private investors on the JSE. Our currency is influenced by two primary forces:

1. Our local economy’s prospects
2. The rand’s role as a leading emerging market currency

These, in turn, are

Sibanye Revisited

In these uncertain times, when nobody really knows to what extent Trump will back down on the international trade war which he has initiated, many investors are moving into precious metals as a hedge against the weakness of paper currencies (especially the US dollar) and paper assets like equities and bonds.

The problem