As I write this silver has just made a 31-year high above $38 per ounce. Its price has more than doubled over the last seven months. From its low under $9 following the financial meltdown in 2008, it is up four-fold. And from its low of $4 over the last decade, it is up nine-fold. So the question is a logical one. The answer is simple. Since I don’t know the future, my answer is I don’t know what’s next for silver. But there is some information I can give you which I believe could have substantial value to your investment portfolio over the next few years. Let me share it by looking back a little first.

I have been accumulating silver since 2002, slowly at first, more as the decade of the 2000s has unfolded. To date I have not sold any of my silver. On November 11, 2007, I wrote Letter 8 (http://www.somehelpful.info/Money/Letters/Letter008.htm ) on the subject of silver. Following are a few brief quotes from that letter:

“The objective of this letter is to suggest that silver offers us the best risk-adjusted potential for gain of any publically traded investment of which I am aware…Both silver and gold hit their all-time high prices in US dollars in 1980. Today gold is back within a fraction of that high, while silver is down about 70% from that high. Adjusted for inflation silver is down almost 90% from its 1980 high. The public is almost unaware of its existence. It’s rarely mentioned in the mainstream media. A few days ago when it hit a 27 year high near 16, it got almost no coverage. I believe it would be dirt cheap at $25 an ounce, a bargain at $50 per ounce, and fairly priced at $100 per ounce.”

I haven’t changed my mind since I wrote that. At that time I was willing to allocate up to 20% of our portfolio to silver. Since then, silver has grown to approximately half our portfolio, and I am very comfortable with that. Silver has made the major contribution to the success of our portfolio since 2000. As reported in Jay’s Portfolio, the portfolio has averaged an annual return of 16.2% since 1-1-2000.

Before I go any further let me admit that the success we have enjoyed is not due to my knowledge and research, rather to the experts I have listened to since 1999 (see below).

I have little to add to what I wrote about silver in Jay’s Portfolio for February 28, 2011. But there is one major point I would like to share which could be of great value to you. I begin with a short story. During the last days of 2007, all the asset markets topped out. Early in 2008 the financial meltdown began and didn’t reach its bottom until March, 2009. Almost everything went down by at least half. The Dow Stock Index fell 57%. Prior to the meltdown, silver had reached a high of $22 per ounce. Soon, silver was less than half what it had been just a few days earlier, and it kept falling.

The words quoted above were fresh in my mind having been written just a few days earlier. All the best research I had been studying for five years told me silver was a good value at $100 per ounce. Now I could get it for under $10 per ounce. I heard Jim Rogers saying to me, “Buy hated assets!” Then I heard him saying my favorite of his expressions, “When I see money lying in the corner I just walk over and pick it up.” In other words when you see a great value in plain sight, and no one cares enough to walk over and pick it up, you know you’re buying near the bottom. What’s interesting is that silver actually is money and has been for over 3,000 years. It’s no one else’s liability. It is intrinsic wealth.

In October of 2008, silver traded down to below $9 per ounce on the Comex commodity exchange. On October 27, 2008 I bought silver on the Comex at $9.12 per ounce. Sixty days later I took delivery of my silver in the form of 1,000 ounce bars which I am still holding today. I’ve owned that silver for only 2.5 years, yet it is today worth more than 4 times what I paid for it and still a bargain.

Now I come to the sole point I want to make in this article. Will silver fall by 60% or more again someday? I have absolutely no idea. It certainly could as its bull market reaches ever higher levels and new investors and traders are attracted to it. My point is if it does, tell yourself you are not going to sell it.

I learned just three weeks ago that within a day or so that I bought silver at $9.12 Chris Weber was buying it within pennies of the same price I paid. I didn’t even know who Chris Weber was on that day. I have since subscribed to his newsletter (see below), and am encouraged by the fact he bought at the same time I did; that he has never sold any of his silver; and that he has set a target price of $187 per ounce for his silver.

Chris has done studies on investor behavior. He has discovered it is our natural tendency to buy assets that are rising in price and sell those falling in price. You must program your emotions to do just the opposite in order to join the ranks of the most successful investors. You must learn to move opposite to the crowd. Chris further points out that for some reason a drop of about 50% from the high is the point the average investor can no longer bear the pain and sells out, missing one of the best opportunities he may ever have. Have I done it? Indeed I have. I cannot describe the regret. It took me half a lifetime to learn not to do it.

PRACTICAL SUGGESTIONS BASED ON THIS ARTICLE

1. If you own any significant amount of silver or plan to, subscribe to Ted Butler’s silver research service (http://www.butlerresearch.com). It comes by email usually 2 or 3 times per week. $34.95 per month cost. It’s the best research on silver I have found.

2. If you want to learn to invest, subscribe to Chris Weber’s Global Opportunity Report (http://www.weberglobal.net). It comes by email twice monthly. $249 per year cost. His archive alone is worth many times that in my opinion.

3. Re-read the article on Jim Rogers’ strategy (http://www.somehelpful.info/Money/Rogers-strategy.htm)

4. If you have missed the silver bull market, reread the comments section of last month’s Jay’s Portfolio 

5. Reread Letter 3, Whom to Listen to (http://www.somehelpful.info/Money/Letters/Letter003.htm) It has been revised.