The Canadian Investor - Is It Too Late to Buy Silver and Is TELUS Dividend at Risk?

Episode Date: January 12, 2026

After BCE cut its dividend in mid-2025, investor capital rotated into TELUS as the next high-yield alternative. In this episode, we examine whether TELUS is now facing the same fate or whether the comparison is flawed. We break down the key differences between TELUS and BCE at the point of stress, focusing on free cash flow coverage, leverage, capital intensity, growth outlook, and management execution. While TELUS’s dividend remains uncovered today, improving free cash flow and contributions from capital-light segments such as TELUS Health and TELUS Digital differentiate it from BCE’s deteriorating position prior to its cut. We also discuss the specific scenarios that could force a dividend reduction, including stalled tech-segment growth, regulatory pressure, and prolonged share-price weakness, as well as one recent management move that raises concerns around signaling. In the second half, we shift to silver and explain what is driving the recent price surge. We cover CME margin hikes, record physical delivery requests, backwardation, U.S.–Shanghai price divergence, China’s new export restrictions, and silver’s addition to the U.S. critical minerals list. The conclusion: this is primarily an industrial and geopolitical supply story, not a monetary hedge narrative. Tickers discussed: T.TO, BCE.TO, PSLV, PAAS, AG, HL, CDE, WPM, SIL, SILJ New to investing? Check out these episodes: Investment Accounts Simplified and 5 Stocks on Our Radar Apple Podcast Spotify Web player 3 Things to Do Before You Invest a Single Dollar Apple Podcast Spotify Web player 8 simple ways to Save and Have More Money to Invest Apple Podcast Spotify Web player Investment Accounts Simplified and 5 Stocks on Our Radar Apple Podcast Spotify Web player Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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Welcome to the Canadian investor podcast. My name is Simone Belanger. I'm here with Dan. Kent. Damn, before we get started, Happy New Year. It's our first recording of the year, even though we had a few releases since 2026. It is still the first time we were recording. We did a bunch of pre-recordings in mid-late December. So happy new year. Happy New Year to everyone listening. Again, hopefully it'll be a great year for your investment. And if we have some new listeners, we always do in the New Year. So welcome to the podcast. Hopefully you'll like what you're here and you'll stick with us for the whole year. Yeah, happy New Year. I think you're going to go over some episodes here for kind of, you know,

starter points, I guess, for people looking to invest. Yeah, exactly. So as part of financial literacy month, we did four episodes that will help you start to invest if you're brand new to investing. It's a primer. Of course, it doesn't cover everything, but it's a good way to get started. Episode 539, eight simple ways to save and have more money to invest. Episode 543, three things to do before you invest a single dollar. Episode 545, investment account simplified and five stocks on our radar. And episode 547, pay down your mortgage or invest. So a really useful episode.

We'll be talking, of course, about RESPs, I'm sure, in the next month or so with RSP deadline coming up in less than two months now. And obviously, if you have questions for us, you can always reach us by going on our website and sending questions over there. We're also pretty active on Twitter, although I've been less active over the last month, but we'll restart posting a bit more in the new year now. But aside from that,

anything else, Dan, before we get started? No, we got two very different topics, I guess I'll say today, like kind of opposite ends of the spectrum there. So yeah, it should be pretty interesting. Yeah, so we'll get started with Dan will go over. Tell us, obviously, the household name, if they're going to go down the same path as BC. I'm assuming it's going to talk about the dividend.

Yeah. If they're going to be cutting the dividend like BCE. So I'm interested in hearing what you have to say there. And then I'll be doing a decent dive on what's been driving the price of silver higher. I mean, if you haven't been paying attention, silver was basically the best performing asset in 2025. It crushed gold and gold had a phenomenal year. I don't know the exact return for silver, but I think it was around 140, 150. percent for the year and it's continuing its run here early in the new year. So there's a lot of

things that play with silver and I'll give my thoughts on if I think it's a bubble or not and where it could go from here. But we'll get started, Dan. Is fell is going to cut the dividend. Yeah. So, I mean, I guess just a quick overview, like it when we mentioned like going down the same path as BC. So midpoint of 2025, it would be around May and that was when BC, you know, B.C. cut the dividend after, I don't know, probably like 12 or 18 months of kind of insisting that, I guess I don't want to say insisting, but saying it's not going to be cut. They kind of came out and said, like, you know, the dividend can be maintained. We just, you know, have to have to work around a few things. But after they cut it from that point on, there was kind of like a

three or four month timeline where there was a decent size bump until it's a share price while BC kind of remained flat. So, I mean, I would imagine a decent chunk of this came from probably a rotation out of BC, maybe, after the dividend cut and into Telas, which would be the next highest yielding telecom there is because Rogers isn't, you know, it's kind of weird. It's a telecom company, but Rogers isn't really seen as a dividend play. They don't really have, you know, they haven't consistently grown it over the last few years. They've kind of prioritized other things, but. Yeah, they're putting money into Blue Jays.

Yeah, exactly. You got to save some money to invest in the Blue Jays payroll. Yeah, they're buying B.C. solid assets. But yeah, anyway, it's, I guess, like, disclaimer before we start, I did buy a chunk of TELUS at the start of 2025, which with kind of the intentions of selling once valuations came up. I thought they were a bit too discounted. I got a bit too greedy there. Obviously, didn't sell, and it fell. They were at one point up around 25% last year, but the Globe of Mail released an article in late 2025 that, like, in a nutshell, said that the dividend was on

unsustainable and it should be cut. And interesting, like, funny enough, BNN Bloomberg had someone come on and say that the dividend cut, the dividend should be cut as well. And I mean, the one thing that makes us a little bit funny is BCE owns BNN Bloomberg. And there was never a single mention of BCEs need to cut the dividend back when they were going through a lot of trouble. But tell us, it was kind of at the forefront. They were, they were pretty much saying it was the worst telecom and need to cut the dividend.

It was unsustainable. So, and it's kind of interesting because if you were involved, like, I guess this is kind of an isolated area, but let's say just, you know, the dividend Twitter space on X. I'm not really sure if I've seen more than a handful of tweets since the start of COVID about how TELA should cut the dividend. And I mean, once that Globe a mail article was released, it was all over the place. Like a lot of people came out of the woodwork and mentioned, you know, how unsustainable it was. And I mean, I like looked at some of these accounts and, you know, a year or two prior, they were the exact same. same accounts that were praising the company for raising the dividend. So this kind of shows you that, you know, price drives narrative. There was nothing different about TELUS financially on the day

the global mail article was released compared to the day prior. However, you know, it kind of shifted, you know, the sentiment kind of shifted. So the question is now is whether the company will suffer the same fate as BCE. And, you know, that would be whether the dividend gets cut. And I mean, the numbers do paint like I guess are a poor story but a pretty different one. So back when the issues for BCE surface, the dividend made up around 130% of free cash flow for the better part of three years. And telecoms are prone to pretty wild dividend coverage over shorter durations because, you know, during this period of time leading up to the pandemic and even in the pandemic, there was a lot of 5G rollout. So they were spending a ton of money. And, you know,

you get certain instances where the dividend is not covered just simply due to the pandemic. a higher spending. But the biggest warning sign with BCE was that it was the first time since the financial crisis that BCE had gone two plus years without getting back to dividend coverage. So there was always like a fluctuation where it would kind of go in the negative for a bit and then get back to coverage. And I mean, this was a clear shift. It was caused by, you know, higher rates, higher interest rates and inflation. I mean, interest expenses through the roof, things like that. And with BCE, the company was kind of guiding to low single digit rates. revenue growth, flat EBTA, double digit free cash flow declines, ballooning interest expenses,

leverage ratios like ticking upwards. There was a lot of warning signs. Again, as I had mentioned, they would issue leverage targets and then they would kind of realize they couldn't hit them. So they'd bump their leverage target higher. Or they would issue guidance. They would revise the guidance downward. And then, you know, in the annual report, they would mention how they came in ahead of their target. Like it was, there was a lot of issues with BCI. I mean, or the other one I mentioned, and they sold MLSE, mentioned they were going to use that money to pay down debt and reduce leverage. And then a couple weeks later, they went on and bought Zipley Fiber.

And then they realized they couldn't fund that growth, so they had to sell half that growth off. It was just a ton of horrendous management decisions that led to the cut with TELUS. I think it's just, it's not as bad. The blemishes are not as bad. Tellis International was obviously a bad situation for TELUS. They IPO the company for a ton of money. It fell like 80%. and then they scooped it back up.

Like obviously, Tellus made out like bandits here, but it's not, it wasn't a good look. But I mean, the free cash flow situation is, I would argue, drastically different.

I mean, for BC, it was heading south. It was heading south fast for Tellus. It's actually improving. So quick math puts the dividend expense at around $2.6 billion and free cash flow of around $2.2 billion.

So you're looking at 118% payout ratio, but the difference is, TELUS is guiding to free cash flow. of around $2.4 billion in 2026 and then 10% growth in free cash flow years after. So if they hit this guidance, the dividend would be be covered by the end of next year. So I think that's- Do they typically hit their guidance when it comes to free cash flow or do they undershoot it, overshoot it?

They did this year. I think they were guiding to around $2.2 billion the year previously they missed the guidance. I mean, with telecoms, it would be there's a lot of areas, I guess levers you can pull in terms of, you know, reducing capital expenditures to kind of hit that free cash flow guidance. But they've generally been a bit more consistent in this regard. And again, a lot of people are saying, you know, it's the same situation than they look to the payout ratio. But I mean, BC was guiding for potentially negative 12% free cash flow growth when they cut the dividend and tell us is guiding for 10%. Obviously,

you have to hit that guidance, but it's a much different situation in that regard. And I think the business model is a lot different. It provides, I guess, a bit of shelter. So obviously, B.C. is heavily tied to media. The forward growth is also tied to a lot of capital-intensive businesses, again, like Zipli. In order for BCE to grow, they need to spend a ton of money. For TELUS, there's a lot of capital-light businesses that kind of provide some growth, security, TELUS Health, TELUS agriculture, and whether or not, you know, a lot of investors like it,

TELUS Digital, which would be TELUS International. they did buy that company back, but it wasn't a cash burning company. It was at one point they were generating hundreds of millions in pre-cash flow. I mean, Telas Health, I believe grew EBITA by 24% last year. BC just really doesn't have something that moves the needle like that. So much different business. But will they cut the dividend? I personally don't see it.

And just because I don't see it doesn't mean I don't think it's possible. But again, like they just have more levers. to pull then BCE. I can't see them going through the process of of cutting the dividend and kind of tarnishing the reputation of the stock if they truly do believe they can kind of get their free cash flow north of $2.6 billion in 2027. And they stop dividend growth. So they're not going to be increasing their dividend payments outside of their drip plan,

which they do plan to get to get rid of. But I just don't see them cutting the dividend and probably shaving billions of dollars. off the market cap for a $200 million shortfall this year in the dividend. With BC, we were talking about $800 million and we were talking about a company that they literally had no way out. What I think would lead to the dividend getting cut would definitely be the tech side of the business, kind of the tech engine stalling would be something that would result in probably a no-brainer dividend cut. They need that segment to drive, you know, most of the growth. And if it isn't, it's a very similar situation to BC and the fact that they're just not going to do it through telecom operations.

The other thing would be regulatory issues. Obviously, a lot of these companies are complaining about the CRTC putting more rules on the company. You know, if pricing rules come into place, it might have to cut. I recently had to travel to Calgary for some medical treatments and I wanted it to feel like a home away from home while I was recovering. I found an apartment on Airbnb that made all the difference. While I was on demand, it helped that I could cook some homemade meal in a real kitchen and just sit in a comfortable living room or rest in bed. Having a space that actually felt like home helped me focus on my recovery rather than the stress of the trip.

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I would say another situation where they would cut is if the price continues to slide. I mean, this may seem confusing to some people, but if the price gets low enough where, you know, a dividend cut is priced in, the company might just cut the dividend because it's probably, obviously, it's not financially the best situation to be paying. I don't even know what tell us yields now. It's probably nine or 10%. Like, it's not wise to be yielding that much. So like if the price, if the stock price absorbs most of a dividend cut, they probably just cut it anyway because, you know, if you're not going to crater, they're, you know, if you're not going to crater, they're share price anymore. It's probably best to just get it over. Yeah. I didn't realize it was that high. Yeah. Yeah, 9%. Like I said, they had ran up, like they were up 25% on the year and then that Globe and Mail article came out and just cratered. And the one thing, and I mean, you can give your opinion on this. And this is actually why I made this segment. Like I wasn't going to talk about this at all, but then they came out with this article. So Tellis issued a press release. He's talking about insider buys and share buybacks. First off, their buying back shares, but they don't even

offset the amount of shares that they issue via the drip. So like the buyback is a complete PR like it's yeah. Yeah. And the buyback, the insider buys, sorry. I mean, this type of stuff is is very, I guess, off putting for me as a shareholder. Again, I'm not really overly bullish on TELUS long term, but I did try to kind of make some short term money there. But I mean, companies rarely put out press releases to speak on insider volume. And I mean, it gets even more awkward when they do this after a 25% plus drawdown. I mean, it just reeks of, you know, desperation, just kind of trying to save a sliding share price. And another situation of when this happened was Algonquin power. So insiders were buying shares and Algonquin was kind of coming out saying, hey, you know,

the stock's cheap. Our insiders are buying. And then, you know, they cut the dividend and the stock fell like another 50% from there. Yeah. Yeah. And there is a phrase, you know, there's only one reason to buy a stock and many reasons to sell. This doesn't apply to insiders. I mean, there's two reasons.

I mean, they can buy because I think it's cheap or they can also buy to kind of try to save their bag. You know, CEOs can easily, you know, try to, I don't want to say take the fall, but kind of, you know, buy up a bunch of shares to try and get some confidence signals to retail investors. Who knows if they do cut the dividend, but this is, this is a bad look. another company that did this was light speed, didn't work out too well for them. It's just, it's not something you should be doing, in my opinion. Yeah, when companies come out and try to

justify or show that everything's fine, I mean, when they're really trying hard, sometimes it's a bit of a red flag, but we'll have to see it's still a pretty high payout ratio, but like you said, telcos tend to have higher payout ratios here. And even if they do cut the dividend, And Bell has performed is actually up since it cut the dividend in May of last year. So in Bell's case, it was, I mean, we had been talking about them having like how they should cut the dividend for about 18 months before that. And I think you started seeing some article early in last year, early 2025 about them doing that. And then I think the general investor base kind of was expecting a dividend cut. and was already priced in.

So we'll have to see whether that's the case would tell us or not, but it doesn't always have to be bad because sometimes it's just the right thing to do from a business perspective and the market's already pricing it in. I'm afraid that the market may be pricing it in a little bit right now, but I don't know. I feel like it's definitely a possibility whether it will happen for sure we'll have to see, but it's definitely, I think, in my view, possible that they would cut the dividend in the next year or two. Oh yeah, like when I say, when I say I don't think they'll cut it, but they could. Like, I'm probably at like 60, 40.

Like I don't want to give anybody the impression. I think this dividend is like 90% safe. Like, if they miss their guidance, it's almost like there's nothing else they can do. I mean, especially if they're looking to get rid of the drip because that kind of saves them some money like issuing shares, things like that for the dividend instead. But yeah, when I say they won't cut it, it's not like I am not confident. and they won't cut it. I just don't think, but I think it's like slightly better than than a coin flip right now, which I mean, when I bought it in, let's say the start of 2025, like this was kind of my thought process back then. Like I didn't need that Globe and Mail article to to kind

to, you know, shine light on that. But it clearly did for, you know, a lot of retail investors. Because again, like, everybody was talking about how solid this company's dividend growth was. And then, you know, a few bad PR reports from from the Globe and Mail. people are talking about how bad management is. It's, it's just kind of funny how, again, price drives the narrative. Yeah. And I guess I'll finish on this for TELIS and the TELCOs in general. It's been a rough couple of years for them because, of course, the federal government has really reigned in immigration versus during the pandemic where we were seeing record immigration. And record immigration is great for telcos because you have people coming into the country.

and for the most part, the cell phone and internet is essentially a necessity for most people, right? So that was a big tailwind for them. You get a bunch of new customers coming in, but now it was a complete switch to a trickle of people coming to Canada. So your only potential growth is essentially stealing customer from your competitors. And how do you do that? You offer competitive pricing.

you take a hit on the margins. It does impact your business. You have, thankfully, you have fixed cause, but still with those fixed costs, I mean, if you're not, you're having trouble increasing your revenue, it's going to impact the bottom line. But where it could be bullish for these telcos is this low immigration level is not going to last forever. At some point, they're going to increase immigration coming into Canada. probably not to the same level we saw in the pandemic because we saw all the issues it caused and you know pushing prices higher we didn't have the infrastructure to support it but probably somewhere in the couple decades before that more sustainable level but you will see it

increase i think it's a pretty much a given it the only question is when but when you do start seeing that increase in more people coming into canada it will likely be benefiting these telcos. But the big question is when and will it happen fast enough to avoid a dividend cut for a tellus for example. Yeah. And that's kind of what I mean like as you mentioned the the telecom side of things. Like tellus needs all their kind of, you know, security tellus digital, all that type of stuff to to kind of drive it because the telecom like the telecom business is just not doing it. Like I think tellus does have like industry leading ARPUs and I think turn rates as well like low turn rates. but I mean, it's still.

Yeah, ARPUs is average revenue per user. Yeah. And the churn is just, are they keeping their customers or not? Yeah. But it's still, yeah, it's still just not, it doesn't move the needle enough to, to save the dividend. They need that, you know, those smaller segments. And again, as you mentioned, immigration is huge as well.

I mean, when you get out of the airport in Calgary, like you walk out, the first thing you see is like pretty much three cell phone booths that you'd like go to get a, get a cell phone plan, right? So that's obviously a big hit. Interest rates, big hit as well. But yeah, I'd put it at like again, if I were to guess, I'd say 6040. It doesn't, or sorry, it doesn't get cut compared to it does get cut. It just depends, you know, if the market keeps hammering the stock, like eventually they're

just going to be like, okay, we may as well cut it because it's priced in, yeah. Okay, well, no, that was a good segment. I'll look forward to see whether it cuts or not. For the shareholders, obviously, and especially those who own it for dividend, I do hope they don't cut it. But then again, sometimes, like I said, I cut is a good thing. Like, I think it was a good thing for BC. Now, let's switch over to silver. So silver, unless you've been living under rock and mainstream media has definitely been reluctant to talk about it,

but you're starting to see more articles now on silver. I mean, it's been phenomenal. December has been absolutely why. for silver. It was up 27 in December. At one point, I think it was up like 40% before it had a pullback. And it's up more, I did my notes yesterday. It's probably up more than for 36, 37% the last month. I had 33% yesterday, but it's up about 10% since or maybe not 10, but 7 or 8% since. And there has been some mention of silver, like I said, from Main Street Media. But the problem is I find the analysis very surface level and whether they have a narrative or it's just laziness,

I'm not quite sure, but they do not dig very deep. So let's start with the beginning here. So we saw the CME, so the Chicago Mercantile Exchange, which does essentially the options trading in the U.S. They increase margin requirements for silver futures three times in December. So the first one was not really talked about all that much. The first one was, the first one months on December 12. So they raised a margin requirement for one contract. And I'll explain what that means right after this. They raised the requirement from 10, about 10% from 20,000 to 22,000. Then the big one, the first of the two big ones on December 29, the second height. So the margin was raised 14% from 22,000 to 25,000. And then the market really reacted there. So that was a,

bit of a tipping point. Silver had hit about $84 an ounce and it dropped about like 14, 15%. I don't exactly remember the percentage, but there was a sharp drop as soon as that was announced. And then there's another hike that happened just a few days later. So that one was raised 30% from 25,000 to 32,500. It still affected the price of silver, but not to the same extent as that second one I just talked about. Now, traders can buy the right to silver futures contract by using margin. So what that means, they only need a small portion of cash to be able to control a large amount of silver. And a large amount of silver, one contract is 5,000 Troy ounces. So just say, we can just say an ounce, but when you're talking about precious metal is Troy ounces.

And at current prices, just to give people an idea, a trader would need to put down about 30, 2,500, so the latest requirement to control over 350,000 worth of silver. So it is like, it's still, yeah, Tenek, it's a lot of leverage. And typically the goal here is just selling the contract later out of profit if you're long the contract or long the commodity in this case. So you think it's going to appreciate in price. And the goal is not really to own the silver once the contract end is. just to sell it. And if that still sounds complicated, just think about it like a mortgage.

You control the whole house, but you only put down payment of 10%. And now the exchange says, so the CME, says, okay, the house is getting too expensive. So we're retroactively raising your down payment by 30% effective immediately. So if you don't come up with that extra cash to supplement your margin account or in this case your house, you lose the house and you have to sell it. So what that does and what it did, especially that second height that they did, it really forced a lot of traders to panic sell because they just couldn't come up with the amount of cash that they needed to keep the position open. So obviously it created that big move down.

It also essentially got rid of a lot of the weaker hands, let's be honest. The big buyers, and that was an interesting thing, is you saw during that big pullback, there were large buyers that were buying those contracts. And what that means is these buyers were buying them, and they were actually requesting delivery. Because like I said before, a lot of traders will essentially do this leverage play on silver or on commodities with the intent of selling at a higher price later, but you'll also have big players like banks, like big industrial companies that will buy these contract but will also request delivery.

So they actually don't plan on selling the contract. They actually plan on exercising it and paying the rest with cash to get the silver delivered. So the CME will do this to protect itself, the higher the leverage or the smaller the margin required to place a bed, the more risky the trade is. and if the trader is unable to pay for the laws, then the broker would be on the hook or even the CME ultimately. So they do this to protect themselves. I know there's the thin foil ad that they theory that they did this to kind of crush the market

because there were some pressure from the U.S. government and government officials. I mean, it's very possible they got tapped on the shoulder and said, like, look, you got to put the brakes on this a little bit. We'll have to see. But in the most part, it is. is a risk management strategy that they did. Yeah. So what, like, what you're saying is you could buy 350 or get exposure to 350k and silver before December 12th for around 20,000 and now you'd have to go 325. So I mean, that would, yeah. So I mean for. It was, it was obviously a bit less because the

price of silver wasn't that high. So they increased that as a response to the increasing price of silver because as silver starts going up rapidly, if they don't increase a margin requirement in pure dollar form, I mean, they're essentially letting traders leverage up even more. Yeah. So 15x or whatever it is, right? And it's the same thing with stocks. Like, they can increase, like, your brokerage can increase your margin requirements. Like, you sign an agreement.

They can do whatever they want in that regard. On the physical delivery. They can do it overnight. And you better, you better come up with a cash quickly. Yeah. They'll sell liquidate. You'll get a margin call and they'll sell it. They got to protect them.

I mean, the one, I don't know what it is on metals, but I know, yeah, like for physical delivery, I don't know, people, like very few energy contracts at least are actually physical delivery. Like, I think it's like 2%. I don't know what it is on metals. Oh, you have something on there? Okay. Yes, I have something on that.

I recently had to travel to Calgary for some medical treatments and I wanted it to feel like a home away from home while I was recovering. I found an apartment on Airbnb that made all the difference. While I was on demand it helped that I could cook some homemade meal in a real kitchen and just sit in a comfortable living room or rest in bed. Having a space that actually felt like home helped me focus on my recovery rather than the stress of the trip. It really got me thinking about our own place. That host had provided me with some much-needed comfort when I really needed it, and maybe our home could do the same for someone else.

Hosting our home on Airbnb would let guests experience our neighborhood while giving us a little extra money to put toward a fun trip when I'm back on my feet. Plus, it's flexible, we decide exactly when it makes sense to host our home. Your home might be worth more than you think. Find out how much at Airbnb.ca.co. host. So the next point here is I alluded to that. So there's large physical delivery requests. So in December, Comex, which is the commodity exchange.

So I'll be referencing Comex quite a bit here. So I'll just get familiar with that acronym. Had a record amount of requests for delivery from trader, which is unusual. What traders will usually do, like I said before, they'll buy on margin with the intent of selling later at a profit. but they never have the intent to taking delivery, a bit like you were mentioning before. In a typical month, you might see, yeah, 1 to 2% of all expiring contracts

resulting in a request for delivery. In December, it was closer to 10%. So that is massive, and more than 60% of comics registered physical silver was actually requested for delivery. So there's some real concern that they may face some physical silver shortage. And there's also been some concerns in London as well. So we'll kind of leave this at that for now. Now, what probably didn't help, or I don't know if it alluded people to start getting into the silver trade.

I'm not quite sure, but I don't know if you saw this tweet from Elon Musk responding. So Elon on December 26, when silver was absolutely ripping, I think it was in the high 70s. at that point was about to hit the $84, I think. My memory served me well. He said, this is not good. Silver is needed in many industrial processes. And he's not wrong. Like, you know, he may not like Elon, but he's not wrong about that.

And what it simply highlights is how critical silver is on an industrial basis. More than 50% of silver produced goes towards industrial uses, very different than gold. It's used in solar panels, electric switches, EVs, phones, military equipment, and I could go on with other uses. For certain uses, it's just better than alternatives like copper. Silver is the most conductive metal, and it continues to do so even if it oxides, whereas copper will not conduct electricity. When it becomes green, it's no longer conducting. So if you're trying to substitute for some cases silver to copper, you get into that issue where, you have to make sure that it doesn't oxide.

If not, you know, it doesn't do any good. And that is the challenge with solar panels, for example. Yeah. You'll see like a lot of silver and like very expensive switch gear, like stuff like that. But I mean, standard electrical, like copper is like an absolute fraction of the price. That's why they use it. But yeah. In like big, heavy switch gear, like critical type stuff, you will see like silver plated or like silver.

Yeah. Yeah, exactly. And that's probably the thing, right? For certain things, obviously, it just makes way more sense to use copper because it's more readily available. It's much cheaper. But for things even like phones, there's a tiny bit of silver in the phones. And it's minimal amounts. But if an Apple or Samsung actually, you know, it would not be worthwhile for them to try and make it work with copper because the amount is not big enough. And there will. what we would call price in elastic. So the price of silver could triple and it won't really impact them on terms of bottom line because in the grand scheme of things it's not a huge cost for them. But they'll still have to secure it and pay for it and make sure they have enough on hand to build their products. So it is, there's a big industrial play here.

Now, what we're also seeing here that's really interesting. And this chart was as of probably early, early and more. warning hours just so people are aware when joint TCI subscribers if you're watching the video. And you'll see here there's two lines. So there's the spot price in the U.S. for silver and the Shanghai price. And that was the last time that the Shanghai price actually closed. And the U.S. spot price was $75 roughly and Shanghai price was $81 roughly. So you're seeing a pretty big spread in terms of divergent.

There's always going to be a little bit of a divergence, but what's really interesting is that it seems to be widening. And people may say, okay, well, whatever, they're two different markets, ones in the U.S., one's in China. Well, the problem is if it continues, it would be a strong indicator of the shortage of physical silver and ever-growing regional restriction on the metal. That's because when there is a significant gap in price from an exchange to another,

you'll typically see trader arbitraging the price of silver. So you'd see a trader in this case buying it in the U.S., shipping it over to Shanghai and then selling it at the much higher price, obviously, minus they would pocket the spread minus the shipping costs. So it would be a trade. But clearly they're not doing that right now. And there's a reason why they're not doing that because there is more and more geopolitical. there's a geopolitical or national strategic aspect for many countries now when it comes to silver.

And the first one of this is obviously, I think people probably saw this in the news. China has export restriction that started effective January 1st, 2026. And then the U.S. late in 2025 actually added silver as a critical mineral. Now, talking about the U.S., adding it to the critical mineral list, it's significant because it now facilitates the procurement of silver by the U.S. government and its agency for national security reasons. On the other hand, China has now put in export restriction that came into effects earlier this year. That's really significant since China is the largest refiner of silver in the world. A lot of unrefined silver goes into China, gets refined, and then gets shipped out at least prior to 2026. And now they're imposing a licensing requirement.

In other words, the CCP will have the Chinese Communist Party will have a whole lot to say whether silver is going in, is going out of the country. They'll probably still let it come in. They probably won't let it go out once it's refined. So pretty much people aren't going to send it in. I mean, they still, it really depends, right? Because you need to be able to refine. I guess, yeah. So if you have different mining companies that essentially already have agreements with China,

they might not care. They might just say, yeah, you take it. We'll pay us for it. We don't care what you do afterwards, right? I guess. Yeah, we don't care what you do. And after. Yeah. Exactly.

Depending on where the mines are located by who they're controlled. And because China does, you know, have good relationship with some countries, it's not just a Western Hemisphere. And there's really two things to show, and those two things really show how important is, because on the one hand, the U.S. clearly will play a big role in the demand side of things, and China on the other hand will have a big role to play on the demand, but also on the supply side of silver into the market. So I think this is another argument why silver could continue to be in very short supply

for the foreseeable future. And on top of that, silver has been a supply deficit for five years, five straight years now. And it's probably not going to get any better, especially as we see everything, you know, all the money being poured into AI. There's a lot of silver requirements for just related on electrification and anything related to AI. So that's a second reason here that you could see really a structural shift in terms of the supply demand imbalance for silver. The other thing here that is not really talked about is backwardation of silver. So backwardation simply means that the spot price or the price that silver is trading right now is trading at a higher price than the futures price.

Typically, you see the markets being in contango. That means that the futures is selling at a higher price than the spot price. That's because it costs money to store the commodities, so you pay a bit extra for that. That's, you know, it makes sense, right? Backwardation happens when buyers are saying, you know what, I'd rather pay more now to get the commodity because I won the actual physical commodity. I'm not sure I'll be able to get it when the future contract comes into effect. So that's where those doubts with the ComX may be running out or being in short supply of physical silver. You're seeing the restrictions, the potential export restrictions from China.

we don't know how they'll be applying it. So it's really up to China how they'll be applying that. But it's essentially the market saying, okay, we're concerned here that there could be really some supply issues when it comes to silver. And we'd like to get our hands on it now rather than later to make sure that we have it, especially if I'm an industrial buyer or I'm the U.S. military or whatever it is. if you need silver and your price insensitive, price enelastic, I mean, you'll do whatever you need to do to get your hands on it. Yeah, exactly. And now what I'm showing here, so, and just as a note,

we're recording this on January 6th, and I think it will be coming out in about January 12th on the Monday. So just so people are aware in case there's, because silver is definitely very volatile. Exactly. But right now, live, we're looking at it, 8123, 812, around there for an ounce of silver in the US. And then the silver, the futures, is actually trading in backwardation. So it's actually trading at a lower price. And it's been like that for a better part of three weeks now. Not the whole time. Sometimes the futures will be a bit above.

but even if it's a bit above, if it's not a buck or two above the spot price, it probably doesn't make sense from a storage perspective, the associated cost. So it does tell you that the market is getting more and more concerned, I think, and wants the physical, exactly scared and wants the physical good here. Yeah, I mean, that's a word I have never heard before. Backwardation. Backwardation. Yeah.

Yeah, yeah, exactly. Well, it's in more in the options world, right, than the futures world. But the last couple of things here is people might say, okay, well, higher prices, there are just incentives to mine more, right? So the same goes, a cure for high prices is high prices. That's because if you have high prices, you have more incentive to mine. That's true in theory. But the problem is that there are very few pure silver mines in the world. Even if you look at some of the silver miners,

like the most pure plays probably produce about 50% of their output is silver. And the rest is going to be gold, like copper, other minerals. So there's not, it's not that easy to mine silver. And it's also the majority of it is just a byproduct of other minerals. So for example, they might find silver in a predominantly copper mine as a byproduct. But the majority of that mine output is copper. So let's say 95% of the mine's output is copper and 5% is silver. If silver is ripping but copper is flatter down, do you think they'll go ahead and try and produce

more silver? No, it doesn't make economic sense to do so. Because even if silver doubles in price, it still probably won't compensate for the much lower copper prices. So that is the trickiness of the availability and the mining. yes, if the prices do go up. So just to wrap this up, what does it tell us and how to get exposure here? Well, silver is becoming an increasing strategic resource from a geopolitical perspective.

We're seeing a lot of sign that there could be significant shortages of silver, of physical silver. There are a lot of buyers that are price incentive, and a lot of the weaker hands have been flushed out by the CME margin hike. So those traders that had no intent on buying the physical metal and didn't have the cash to cover it, while their positions were likely sold at a discount, liquidated, whatever it is, but they were bought by some large buyers. And you notice that I didn't even mention the aspect of buyers who are buying it as a fiat debasement hedge, which tends to be a lot of the mainstream media article, which is kind of weird because it doesn't really make sense.

yes, there is a monetary aspect to silver. I'm not saying there isn't. I do own some physical silver myself in full disclosure here, but for large buyers, it makes no sense. Think about it. If you had a million US and you bought physical silver, it would weigh about 900 pounds. And if you bought, had a million and wanted some way to store your money that wasn't silver, another precious metal like gold, it would weigh 15 pounds. So if you're moving large amounts of money, you're not using silver, you're using gold. So I think that argument doesn't hold that much weight, to be honest. And in terms of getting exposure, and first I want to outline here, it's not without risk.

We saw the big 14, 15% drawdown when the CME increased the margin requirement. They could very well do another one. Will it have the same impact? I don't know because I feel like now traders are aware that this could happen again. but we'll have to see. Even though I am bullish on silver for the reasons I mentioned, it's notoriously volatile. The silver market also is much, much, much smaller than the gold market. So when you get a much smaller market, it can definitely swing more when large buyers enter that market.

And now, look, again, full disclosure, I have about 6% of my portfolio in silver and silver mining stocks combined. So there's different ways to get exposure, but just be aware that, you know, it could, don't be surprised if price of silver goes down to like $40, $50 in a couple weeks. It could happen like it could keep going up. It's just that's volatility. It's on the way up or down. Just be aware of that. Physical silver, there's a bunch of dealers out there you can buy silver from, whether

it's online or local precious metal dealer. I will recommend buying things that are official, whether it's. it's American Eagles or you're buying stuff from the Canadian Mint. I think those are the most recognizable and they'll keep their value the best. Costco is a good option since you can get cash back from your membership plus the credit card rewards when you buy it with a credit card. So you can really get it at quite a good price. But be prepared, you will pay more than spot price. The spot price is not reflected of the actual price that it trades for when you're buying the physical metal.

you can the second option would be physical silver fund like a PSLV the Sprott physical silver trust there's other options out there but this is the one I prefer since they always hold one for one they also have silver allocated which means they have specific bars allocated this is the one I do own so I have some in my TFS SPSSPSV and then silver miners I'll just rattle off a few here so you have Pan American silver ticker PAS one that I own first Majest The most pure play, I think, would be First Majestic. Also one that I have a very small position in. Ticker AG.

Hekla mining, ticker HL, I don't own any of that one. Carr mining, CDE, Wheaton precious metal, which you used to be called like Wheaton Silver streamer or something like that. You remember that one? No. Yeah, yeah, it used to have silver in its name. This one is a precious metal streamer, but I think they have a bit more exposure to silver than Franco Nevada, for example. You can get exposure just by binding gold miners because, again, they'll have a byproduct of their production, most of them, that will have some silver. And then if you're looking for some mining plays for ETF, there's SIL, the Global X Silver Miners ETF, and SILJ, the Amplified Junior Miners ETF.

Again, like I said before, I do own Pan American Silver, First Majestic, PSLV, and I own some physical silver. So I'm quite bullish on silver, but it's not a huge position in my portfolio. And I really don't know where the price will go, but there's such the structural shift affecting it that it could be, it could very well be a bubble, but there are some big, big demand factors and the supply is in big question. So I think that's why we're seeing the price continue go up right now. Yeah, and I think as soon as anybody sees the price go that vertical, like a lot of people think, you know, there's eventually going to be a falling out. Funny story. I mean, I had a family member at the start of 2025.

They showed me two stocks, Pan American, Pan American and ASML. And they were like, which one should I buy? And I said ASML. And ASML? Yeah, and ASML is up like 60%. And they're texting me like WTF because Pan American's up like 170. Yeah, crazy. Yeah, I mean, Pan American is definitely one of the.

more diversified play. And please do your research if you look at any of these minors specifically because there's a lot of specific regional risk or country risk when it comes to the politics. And you know, you see, I know there's been some issues in Mexico for First Majestic in terms of taxation with the Mexican government. Like governments aren't stupid. They see the price going up and these companies like raking in tons of money. And they'll oftentimes try. try to get some of it in terms of in the form. Yeah, exactly. Get their piece of the pie. Taxation is probably the least of the concern. It's really when they get more aggressive than that and they request a mine shut down or they take over the mine or whatnot. So

diversification is really important. You know, the more concentrated it is, the riskier it is. Maybe the more upside there is, but the more downside there is as well. So something to keep in mind. And I guess the last thing here is, yes, it's gone up, but there's, I think, a fair argument to be made that the price had been so low for so long. Yeah. Like I'm not even sure it's an all-time eye on an inflation-adjusted basis right now. So I would venture to say it isn't because you had the, yeah, back in the late 1970s, it was like $35 an ounce.

Oh. So I would think, yeah, that's like almost. No word close. Yeah. No word close to that. Yeah. So keep that in mind, even though the price might look high on a nominal basis, it may not be all that high inflation adjusted. But I thought we were due to do a silver segment, especially given how it was crazy the past month of December, whether it keeps going up, who knows.

And obviously, there is risk associated with that and even investments. But I'm still pretty bullish on silver myself. Yeah. Yeah. I mean, it's a side of the market that I really don't pay attention to much at all. I just own Franco and that's kind of my precious metal exposure. Yeah, that's a good way. Yeah.

Yeah. So yeah. Yeah. Franko I think has like maybe 10, 15% silver exposure or something like that. I remember correctly. It's double digits. Yeah. So a lot of miners or streamers, you will get a decent amount of exposure.

You just won't get the same kind of appreciation when it starts ripping like it is compared to like a first majestic, for example. Yeah. Definitely. Yeah, it was a good segment. Okay. I learned a lot. Yeah. I think that's it. That was a good episode. Hopefully everyone enjoyed it.

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The Canadian Investor Podcast should not be construed as investment or financial advice. The host and guest featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.