18. September 2020 | 09:22 CET
Lufthansa, Silver Viper, TUI - does diversification and patience pay off?
After 6 months of Covid-19 restrictions the world we knew no longer exists. We have had to accept many sacrifices, but did we also feel a loss every time? No more vacation trips abroad and business had to be concluded online without personal contact. Suddenly things started to work out in a way that we never thought possible. Our new world, with adapted everyday rituals, is in the making and with it new investment opportunities are arising.
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ISIN: DE0008232125 , CA8283341029 , DE000TUAG000
Innocence in the chaos
Due to the spread of the Corona Pandemic and no fault of their own the share prices of Lufthansa and TUI fell in the first quarter of 2020. Thriving companies with employees around the globe had to stop more or less their entire operations at short notice by government order. In the summer months that followed, there was still hope that a breath of the old habits could return in the autumn months or at the turn of the year at the latest. But at least for now, this does not seem possible.
State rescues those affected
Since the latest travel restrictions brought in by the Federal Government for Amsterdam, Vienna and the whole of Spain, everyone is conscious that policy makers will not permit the endangerment of lives. With the fear of an uncontrollable rise in the pandemic the authorities have extended their restrictions once again resulting in the airplanes of Lufthansa remaining unoccupied as well as the high vacancy rate at TUI hotels.
In the interest of the common good, the state is stepping in with aid packages and rescue packages for the affected industries. In a spirit of solidarity tax money is allocated for emergency situations like these to help bridge the financial requirements of those affected.
Precious metals as a safe haven
Investors who want to position themselves in this market environment in order to make short-term profits are certainly better off in industries other than tourism. In addition to the e-commerce and biotech sectors, companies in the precious metals sector in particular have been able to benefit from the increase in money supply by various central banks around the globe. Wealthy people have already been fleeing from fiat currencies to gold and silver for months. The price of gold reached an interim all-time high of over USD 2,075.00 per troy ounce. The price of a troy ounce of silver has risen since mid-year from USD 18.00 per troy ounce to almost USD 30.00.
Exploration potential in Mexico
Besides the producers in the mining industry, exploration companies can especially benefit from the increased interest in commodities. For example, Silver Viper Minerals' share price has risen from below CAD 0.32 at its peak to CAD 0.85 since April 2020. The company is on the lookout for gold and silver in Mexico.
Management has been successful in previous drilling programs in the areas and recently raised a total of CAD 5.1 million from investors at a share price of CAD 0.36. The new capital will allow Silver Viper to continue to develop the La Virginia Project. The market value of the company at its current share price of CAD 0.69 CAD is approximately CAD 43.5 million.