“While everyone’s focused on the price, the profit margin story underneath is what actually matters.”

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This is the key point that seems to be getting totally lost on investors and even sharp pundits in the sector right now as it relates to the silver stocks. (which is quite perplexing as it is not a difficult concept to understand).

Considering how much these producers margins are expanding at these record high silver prices, the silver equities should actually be ripping higher on a 2:1 or 3:1 ratio, and yet over the last couple months the equities have actually been falling further and further behind the moves higher in the underlying metals price. There has been a HUGE disconnect going on in December and January.

I don’t believe most investors are looking at the silver stocks objectively, through this lens of valuation relative to the moves in the underlying metals price.

Instead many drive-by investors are just mesmerized that their stocks are actually in the green and moving higher and celebrating that they had a good year in 2025. People point to some stocks having gone up 3x 5x 8x… last year; and while this is great, most of that happened on the road from $30 to $50.

What has been crazy is how since the mid-October peak and corrective move through mid-November, the PM stocks really lost momentum and then started slipping behind the moves in the metals and lagging, instead of leveraging…

Silver went from $45 to $90 since late October, which is way more than a doubling of margins and revenues….its a multiplier effect. These silver stocks (and to a lessor degree the gold stocks) should be up multiple times more in December and January than they actually moved up.

Of course it is nice to see green on the screen and portfolio stocks going higher the last couple years, but to point to that as an acceptable analysis of what has been happening and shrugging off the lack of performance in silver stocks as “fine” in the context of “they’ve done pretty good” completely misses the point and is not smart analysis.

If investors really understood the value disconnect going on here, then they’d be a bit more concerned about this overall lackluster performance in silver stocks relative to silver.

Look, we know when metals prices correct the stocks will correct much harder, so the converse should have also been true. The silver stocks SHOULD HAVE BEEN LEVERAGING the recent surge in silver prices to the upside much more than they did. As a result, we’d have reached levels that reflected how importantly the economics have shifted, and we’d be correcting from MUCH higher levels, when the consolidation of this move comes.

>> I don’t get why this is so difficult for some people to understand… (and no… this disconnect is NOT because investors are distracted with A.I. stocks or US general equities…. that is total B.S.) The PM stocks were totally leveraging the moves in the metals in late 2024 and the first 3/4 of 2025 while lots of other sectors were simultaneously doing great… There are also PLENTY of investors following the precious metals sector at present.

So why in the world would that then change when Silver goes ballistic and suddenly shows up in headlines all over the planet? There are more generalists talking about silver or gold than there have been since 2011.

Simply brushing away this disconnect in the silver equities to silver with the “investor distraction” cover story is a red herring, and it ignore because overall things have gone pretty good is folly.

More importantly investors should be super bullish on the eventual catchup trade that will need to happen to get silver stocks properly rerated with their record margins/revenues in Q4 and especially here in Q1 for producers, or when running the metrics and record project economics (Net Present Value / IRR% / payback period) calculations for gold and especially silver developers.