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David Morgan Interviewed by Nancy Massicotte of The Opportunity Show

By: David Morgan, Silver Investor,

-- Posted 19 June, 2009 | | Discuss This Article - Comments: Source:


Ellis Martin:  Welcome to The Opportunity Show. Iím Ellis Martin. Today we have an interesting interview from Vancouver, British Columbia, with our correspondent Nancy Massicotte and The Silver Guru, David Morgan.


Nancy Massicotte:  This is Nancy Massicotte of IR Pro Communications and The Opportunity Show. Today Iím pleased to be speaking with The Silver Guru, David Morgan. David has a Web site, These have definitely been some tumultuous times the past year. Do you feel that the investment market has experienced a turnaround at all?


David Morgan:  Weíve had quite a lift since the November lows. In fact gold, silver, even the stock market generally, have gotten a big lift in the last few months, however I put out a market alert to my subscribers saying that I actually thought this is probably in the topping action for gold and silver on an intermediate term basis. I still believe this is probably the case, we had what is called a key reversal Wednesday of last week. Weíre doing this interview in early June, so I was a little bit early. I didnít say it was an exact top, I said it was topping. I still believe thatís the case. Longer term Iím much more bullish than this, but the marketís ramped up pretty quickly here. I think we may need to back and fill for a while.     


Ms. Massicotte: Your main focus has been silver, but today you were speaking on other metals. What are your thoughts on the companies focused on these less glamorous metals?


Mr. Morgan:  I did speak about silver and then I turned it over to Clint Cox. Clint has done a great deal of research. Heís traveled all over the world. Heís been in China several times and he knows the rare earth elements market as well as I know the silver market. So I gave half of my time to Clint because Clint actually contributes to my report, The Morgan Report, probably three or four times a year on rare earth elements.


We keep all of our readers informed in that market. Itís a very small market. Itís a little over a billion dollars right now, total, but China has about 95 percent of the total rare earth element market. It seems to be kind of the hot buzzword up here in Vancouver in June. John Kaiser, who is very studied, gave a very accurate point of view about rare earth elements. You also have Jim Dines who has just given himself the title, ďthe original rare earth elements bug.Ē Weíve been on this for about the past two years. We have one company we recommended that doubled the money or slightly better for our Morgan Report subscribers, and then we got out of it. Weíre not afraid to sell stocks at a profit, and the company has since that time not done nearly as well. Are there opportunities in rare earth? Yes. Finding a really good company is a bit of a task, but if we do find one that we like and that meets our very strict criteria, it will be in The Morgan Report.


Ms. Massicotte:  Do you feel the investor is interested in the return for the risk in investing in rare earth elements or do you still feel silver and gold will garner the investorís money?


Mr. Morgan:  I think right now youíre probably going to see silver and gold markets certainly get more exposure. Gold certainly is in the mainstream right now. You very often hear the main commentators talking about gold. Silver of course doesnít get nearly as much exposure, but it gets some. Rare earth elements, though, is something that, unless youíre involved in the resource sector, almost nobody really even hears about. With people like Jim Dines and some of the others coming onboard and starting to talk about it, you start to learn about it more and more. It is very criticalósimilar to silver from the aspect that itís one of the most critical assets that we have in a high-tech society, yet most people are undereducated or know nothing about it. So, it will come to the fore. As far as investment itís highly speculative and risky right now, but itís very much needed. So again weíre looking for opportunities that make sense, but weíre not just willing to jump in simply because itís ďrare earth.Ē There are some companies out there that basically donít know, really, what they haveówhether itís economic at this point or not.


Ms. Massicotte:  Do you still feel silver will outperform gold? Everyone is touting 1,000+ gold. How high to do you feel silver can reach?


Mr. Morgan:  I do believe that silver will outperform gold, and it has done so since the bull market began in 2003. The ratio at that time was about 80 to 1. The gold/silver ratio is currently around 60 to 1, so it has outperformed gold although the ratio has been down as low as 50 to 1 in this bull market. I believe longer term, as bizarre as this may sound, that silver will make it to about US$100.00 an ounce or better, and the reason for that is pretty simple. Silver already made it to $50.00 an ounce in 1980. At that time there were about 1.5 billion more ounces of silver available for investment than there is today. Secondly, the M1 money supply (Iím not talking about all the credit thatís out there and the trillions and trillions of dollars thatís just been added over the last few months but the actual checkbook cash money) available is about sevenfold higher. So if youíve got 7 times the amount of cash chasing one-fourth the amount of silver, how high do you think the price could go? 


Ms. Massicotte:  Politically, have some countries been able to support their mining economy to survive over other countries? 


Mr. Morgan:  Yes. Labor costs are a very important element in mining around the world. Iím next-door to Idaho, and in the silver valley that has some very rich silver mines, the labor costs on that silver are far, far higher than in Mexico, for example, and Mexico is actually higher than what you would be able to mine in China. So, certainly it does depend on where you mine the metal, what the labor laws are and what the government mandates are around the mining industry.


Ms. Massicotte:  This being the start of summer and the old adage of, Sell in May and Go Away, do you recommend looking for opportunities in companies that may look good or waiting until the fall to see how they fare in this quiet time? 


Mr. Morgan:  Well, Nancy, Iím going to give you a bit of a curve ball here and say both. I would say the old adage may hold again this year. Iím always suspicious when I make that recommendation because you know thereís always going to be a year somewhere along the line that proves that statement incorrect. From what Iím seeing in the market currently, I think from a metals-only perspective weíre probably going to have a wide trading range for the summer. As to the other part of the question, looking for opportunity? Absolutely. I was taught early on, and Iíve proved it over and over again, that thereís always opportunity; itís just a matter of finding it.


So Iíll be working during the summer, as hard as ever if not harder than ever. If thereís opportunity there that I feel is undervalued, regardless of the metalís price Iíll make the recommendation. Sometimes you can find that the price of the metal doesnít matter, and then in other cases youíve got to be a little more careful because the stock does move the metals price. So I look at everything on a case-by-case basis and make my analysis based on each individual company.


Ms. Massicotte:  You have a plethora of information, David, for new investors and for experienced investors. How does one get in touch with your recommendations and reports?


Mr. Morgan:  Well, if youíre new and you want to explore the sector, I really donít recommend buying The Morgan Report. I think the best thing to do is go to the Web site ( and educate yourself for free and for fun, because Iíve posted about a decadeís worth of work. I write weekly. I write usually in the silver space, but sometimes about the economy, sometimes gold.


I think the best way to make an investment is know what youíre doing. A lot of people jump into the sector because itís hot or their neighbor did it or thereís some other reason thatís more emotionally based. It should be logically based. You should really understand why silver is important and why you want to make a silver investment.


Once you accomplish that and you want to get specific recommendations, we do make those, and thatís a fee-based service called The Morgan Report that you can access through the same site, I do focus primarily on silver but weíve made a great deal of money in moly, copper, drilling companies, and also uranium companies. So, Iím not afraid to look for value wherever it resides in the resource sector, but yes, most of my time is devoted to the silver market.


Ms. Massicotte:  If a company has a project that they would like you to analyze and consider, how do they get in touch with you?


Mr. Morgan:  Best way is just go to the Web site and hit the Contact Us link. E-mail is usually best for an introduction. A lot of stuff crosses my desk, as you can well imagine. I basically look for certain criteria:  20,000,000 ounces of silver, not silver equivalentó20,000,000 ounces of fine silver thatís delineated by 43-101 or equivalentóthen we could probably start talking. If itís less than that Iím really not interested. Do I make exceptions? Yes, every once in a while, but very, very rarely.   


Ms. Massicotte:  This is Nancy Massicotte of IR Pro Communications and The Opportunity Show. Itís been great speaking with you today, David. Thank you for your time.

-- Posted 19 June, 2009 | | Discuss This Article - Comments:


Mr. Morgan publishes a private newsletter for serious precious metals investors. He hosts the web site: . He has been a private economist for over two decades his background in engineering , with an advanced degree in Economics/Finance. He has been interviewed on Don McAlvany's radio talk show, Financial Sense Newshour, Hard Money Watch, and appeared on television. Currently he does an internet radio wrap up each Friday discussing the economy and precious metals. Mr. Morgan was published in Global Investor regarding ten rules of silver investing. Currently, he is writing a book on silver.

Last Three Articles by David Morgan, Silver Investor

$75 Silver Looming
8 August, 2011

Silver and the Minimum Wage
4 March, 2011

David Morgan Explains Why Silver Is Catching Up, Why It's Broken Out and Where It Goes From Here
1 November, 2010

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