“Solar Panel Industry Profit….” Seems to imply silver is the key factor for industry profit, but are there not many other direct COGS and Rev/GM pressures behind that picture? Thanks for the perspective BTW, I’m now following but wanted to double click on this exhibit
Great short-term analysis, we'll see how it shakes out...
Couple of things to consider for the near future:
A> U$T 2026 Debt Maturity Wall = $9 trillion
B> Western sanctions have eroded/collapsed institutional trust among BRICS
C> Tariff negotiations may +/- affect commodities
D> U$A is pulling support out of EU/UK/NATO
E> Power grid & generation has to grow substantially & is Ag intensive
F> Samsung's new SS battery tech will phase out Li batteries on starting 2026, creating a *safe* battery that will (probably) create more demand for EV, increasing solar panel (which also needs new tech) production/market.
Also, the amount of geopolitical tension is approaching *insane* levels, requiring another Ag intensive vacuum as .MIL production is gearing up again to match...
Modern "civilization" needs Ag on an increasing basis, we're already beyond capacity, plus the the newly *minted* Core 5 may have some PM re-monetizing goals, too (See <D>).
you might want to check the GPT calculations of COMEX margins. They are way off. the conversion into % terms is very misleading. While the USD margin is very high, in % terms we are running close to the bottom at around 6%. Quick check on the active contract on bbg should tell you I'm right. Contract size of $391,000 vs initial margin of 24,200.
“Latest GDP print came in hot. There's a lot of 2yr easing that could come out of the curve, forcing policymakers to choose between a stronger dollar or higher short rates. Neither is great for shiny rocks denominated in dollars in the short term.” - you mean a weaker dollar or higher short term rates. Market is pricing ~90% probability of a hold in Jan since 100bps GDP beat - this would be immaterial. The report came out 5 days ago, already priced by rates markets and silver has rallied since. Think this is a very weak point for the bear case. In fact, tariff price shock is likely to be more pronounced in late Q1/Q2 2026, which will hurt real yields, especially if it comes post May with Hasset/ Warsh (+ so much panic about them and Trumps fed rhetoric are a legit risk to inflation expectations when it comes). Moreover cracks in PC market are seeing the fed inject bns already (they say 40bn per month) - defo a further bull case over a slightly longer time horizon if anything on the usd front, but appreciate it isn’t going to be a driving factor over any shorter horizon anyway. V long term think debt levels across all fiats are so bullish for all preicous - never heard veblen good point re silver, lets see if that adds in more debasement dynamics longer term. Interesting piece, thanks for posting for free
The whole post was written by AI (even if the underlying content came from ideas of the author); of course there are going to be parts where A -> B is written but it should be A -> !B
Okay but the logic is wrong - they arent both bear cases for silver, if fed is going to chose lower rates (or hold w dovish messaging as is more likely for jan) then its bullish. Longer term usd trend is clearly bullish for precious
I agree. I was just saying that if someone is using AI to write posts, you're going to get a lot of things that sound right but are actually wrong, or are just annoying. For example, that line could have been phrased simply as “A high GDP print may raise front-end yields---which have currently priced in substantial easing---which would generally be negative for dollar-denominated precious metals. On the other hand, a fed that leans into easing in the face of hot GDP will likely extend the current move.” Instead you get rambling chatgpt where straightforward statements that make sense are few and far between.
"holding shares bought to delta hedge a long call. "
“Solar Panel Industry Profit….” Seems to imply silver is the key factor for industry profit, but are there not many other direct COGS and Rev/GM pressures behind that picture? Thanks for the perspective BTW, I’m now following but wanted to double click on this exhibit
Great short-term analysis, we'll see how it shakes out...
Couple of things to consider for the near future:
A> U$T 2026 Debt Maturity Wall = $9 trillion
B> Western sanctions have eroded/collapsed institutional trust among BRICS
C> Tariff negotiations may +/- affect commodities
D> U$A is pulling support out of EU/UK/NATO
E> Power grid & generation has to grow substantially & is Ag intensive
F> Samsung's new SS battery tech will phase out Li batteries on starting 2026, creating a *safe* battery that will (probably) create more demand for EV, increasing solar panel (which also needs new tech) production/market.
Also, the amount of geopolitical tension is approaching *insane* levels, requiring another Ag intensive vacuum as .MIL production is gearing up again to match...
Modern "civilization" needs Ag on an increasing basis, we're already beyond capacity, plus the the newly *minted* Core 5 may have some PM re-monetizing goals, too (See <D>).
It's all a bit much, isn't it?
Please check my margin math
25000 margin / 5000oz *77 = 6.5% or 15x leverage
Probability of touching $90 at any time in the next 6 months (GBM / Black–Scholes)
Work in log space with m=\ln(H/S_0). For a GBM, log-price has drift
a=(r-q)-\tfrac12\sigma^2 \approx -\tfrac12\sigma^2
and the “touch” probability is:
\mathbb{P}\left(\max_{t\le T} S_t \ge H\right)
=
\Phi\!\left(\frac{-m+aT}{\sigma\sqrt{T}}\right)
+
e^{\frac{2am}{\sigma^2}}
\Phi\!\left(\frac{-m-aT}{\sigma\sqrt{T}}\right)
Compute:
• m=\ln(90/75.34)\approx 0.1778
• a=-\tfrac12(0.43)^2\approx -0.09245
✅ Result: \;\mathbb{P}(\text{touch }90 \text{ within 6m}) \approx 0.509 → about 51%
Waow, thats one hell of a post.
This should be taught in every finance cursus.
Fantastic piece and extremely helpful.
Any thoughts on platinum and palladium?
Top notch quality analysis. Thank you
BCOM/GSCI rebalancing not one of the issues?
I thought solar demand was flattening
Your view fails if upside convexity stops being overpriced insurance and becomes the engine that mechanically drives SLV higher.
you might want to check the GPT calculations of COMEX margins. They are way off. the conversion into % terms is very misleading. While the USD margin is very high, in % terms we are running close to the bottom at around 6%. Quick check on the active contract on bbg should tell you I'm right. Contract size of $391,000 vs initial margin of 24,200.
“Latest GDP print came in hot. There's a lot of 2yr easing that could come out of the curve, forcing policymakers to choose between a stronger dollar or higher short rates. Neither is great for shiny rocks denominated in dollars in the short term.” - you mean a weaker dollar or higher short term rates. Market is pricing ~90% probability of a hold in Jan since 100bps GDP beat - this would be immaterial. The report came out 5 days ago, already priced by rates markets and silver has rallied since. Think this is a very weak point for the bear case. In fact, tariff price shock is likely to be more pronounced in late Q1/Q2 2026, which will hurt real yields, especially if it comes post May with Hasset/ Warsh (+ so much panic about them and Trumps fed rhetoric are a legit risk to inflation expectations when it comes). Moreover cracks in PC market are seeing the fed inject bns already (they say 40bn per month) - defo a further bull case over a slightly longer time horizon if anything on the usd front, but appreciate it isn’t going to be a driving factor over any shorter horizon anyway. V long term think debt levels across all fiats are so bullish for all preicous - never heard veblen good point re silver, lets see if that adds in more debasement dynamics longer term. Interesting piece, thanks for posting for free
Great take as always, thank you!
Have a great 2026!
With respect,
Mav
The whole post was written by AI (even if the underlying content came from ideas of the author); of course there are going to be parts where A -> B is written but it should be A -> !B
Okay but the logic is wrong - they arent both bear cases for silver, if fed is going to chose lower rates (or hold w dovish messaging as is more likely for jan) then its bullish. Longer term usd trend is clearly bullish for precious
I agree. I was just saying that if someone is using AI to write posts, you're going to get a lot of things that sound right but are actually wrong, or are just annoying. For example, that line could have been phrased simply as “A high GDP print may raise front-end yields---which have currently priced in substantial easing---which would generally be negative for dollar-denominated precious metals. On the other hand, a fed that leans into easing in the face of hot GDP will likely extend the current move.” Instead you get rambling chatgpt where straightforward statements that make sense are few and far between.
Yeh you’re right on that, still gives some interesting points