I made 342% on silver—and still think it was a poor investment

When I bought silver bars at ₹55,000 per kg, however, I harboured no such illusions of heroism. I was not riding in to save anyone. My motivation was entirely selfish: to protect a slice of my savings from becoming worthless in a troubled world.

Today, at indicative prices of around ₹2,43,000 per kg, I have sold that silver.

Selling it, I discovered, was a journey in itself. I took the bars to a recommended buyer in Mumbai’s Zaveri Bazaar. The final stretch of traffic alone consumed an hour. After showing the silver to the buyer, I was directed—silver in hand—to another location, a ten-minute walk through handcarts, bicycles, motorbikes, cars, stray dogs, and generous helpings of mud and sewage.

The weight was verified and scribbled onto a handwritten slip. Then back along the same dusty route to the original shop. The price per kilogram was quoted. The multiplication done. KYC followed—PAN card, driving licence, cancelled cheque. And finally, the sale.

At that moment, I was profoundly grateful that my gold exposure sits in Quantum's Gold Fund. Buying and selling physical gold coins would have tested both my patience and my cardiovascular health.

The arithmetic is simple. I bought silver at roughly ₹55,000 per kg and sold it at ₹2,43,000. The profit: ₹1,88,000 per kg, or 342% on the original investment. Even after paying capital gains tax, it remains a handsome return.

But before you cue the victorious “Hi-Yo, Silver! Away!", there is one detail worth noting.

I bought that silver in April 2013.

No typo. Twelve years and eight months ago. A holding period of 152 months.

That 342% return, stretched over 152 months, translates to a compounded annualised growth rate (CAGR) of about 11.5%. Respectable, but not spectacular. Over the same period, gold would have delivered roughly 13.4% CAGR, and the BSE-30 Index about 14.5%, before costs and taxes.

Lessons from a poor investment decision

By my own assessment, buying silver in April 2013 was a poor investment decision. The outcome was decent, but not for the reasons I invested in silver.

From 2013 to 2020, I was underwater. My purchase price exceeded market prices. A post-Covid rebound gave silver a burst of life, followed by another long stretch of lethargy. It took nearly 11 years just to break even.

Only after 2024 did silver truly take off, accelerating into a near-hyperbolic curve through parts of 2025. Even the Lone Ranger—master horseman though he was—would have struggled to stay mounted during that vertical ascent.

What caused this surge? The prevailing explanation is demand—real and perceived—from computing, data centres, and electric vehicles (EVs). Silver has always been an industrial metal. What changed was its perceived role in the architecture of the new economy.

Making money is one thing. Understanding why you made or lost money is another.

A gambler rolls the dice and hopes for luck. An investor dissects the thesis, then judges the outcome against expectation.

So let me examine my rationale.

Silver is often described as “half copper, half gold"—part industrial input, part precious metal. That was the thesis. Yet from 2013 until early 2024, silver behaved like neither. It showed little correlation with economic growth and offered none of gold’s protection as a monetary hedge.

In hindsight, equities would have been the superior way to capture growth. Worse, silver also failed as a precious metal while gold surged ahead. My thesis that silver would act as both was simply wrong.

This wasn’t my first flirtation with silver.

In 1979, at the age of nineteen, I took a small punt after the Hunt Brothers from Texas cornered the silver market. Prices exploded from $9 an ounce in August 1979 to nearly $50 by January 1980. India banned silver exports at the time, but speculation was rife that the government would allow exports to ease the foreign exchange shortage.

I bought 1 kg of silver for about ₹2,800 and sold it a month later for ₹4,200 when the export waiver came through. What I did not foresee was that silver would go on to rise another threefold, or that it would subsequently collapse below $15 an ounce and fail to revisit $50 until October 2025.

Not every “Hi-Yo, Silver" ends with an “Away."

Is silver a new-age economic ingredient?

The current bull case rests on silver as the “copper of the new industrial revolution"—fuelled by artificial intelligence (AI), EVs, and data centres. That was not my thesis in April 2013. I did not anticipate a shift in the definition of industrial demand.

If I had foreseen AI and EVs, I would have invested directly—Tesla (30x), TSMC (18x), or their peers. Silver’s fourfold rise over the same period is a dull, late-stage proxy for that transformation.

Had I split my capital in 2013 between gold and equities, specifically the BSE 30 index, my CAGR would have been about two percentage points higher over those same 152 months.

This does not mean silver cannot rise further. But silver is not a new technology, it is an input. History suggests that inputs are often optimized, substituted, or displaced as innovation accelerates.

Copper wires gave way to wireless signals. Copper pipes to PVC. Glass bottles to plastic. Technology evolves to use less of what is expensive, and sometimes to eliminate it entirely.

I have no special insight into future breakthroughs. But decades in markets have taught me to trust scientists more than sell-side narratives. Innovation tends to reduce material intensity, not entrench it.

Silver today is priced for a future I do not understand. That, for me, is reason enough to step aside.

Keep it simple, solid

Decades of experience in financial markets have taught me a few lessons.

Common sense, and the history of rapid scientific innovation alongside repeated financial bubbles, suggests that the geniuses running research laboratories are generally more trustworthy than the talking heads in financial services who churn out reports explaining why silver is the new copper, bitcoin the new reserve currency, or tulips worth more than the house you live in.

My personal investment portfolio is intentionally simple. I retain 12x to 24x of my monthly expenses in liquid funds, while the balance of my savings is allocated 20% to gold and 80% to equities.

This 12/20/80 framework is what we built at Quantum Mutual Fund, for investors to adapt as they see fit. The baaraa, beess, assi (12/20/80) model deliberately allocates across three asset classes—liquid funds, gold funds, and a select set of equity mutual funds—making it easy to understand and implement.

Since I am accountable only to myself, I can admit that my thesis for investing in silver turned out to be a poor one, with a so-so outcome. But what if I had bought silver in April 2024? Would the story have been different?

The returns would certainly have been outlandish—achieved over just 20 months rather than 152. The CAGR would have been astronomical, comfortably outpacing many direct EV and AI stock plays over the past year.

Had I bought silver in April 2024—still on my original thesis of “copper plus precious metal"—would I have sold it in December 2025?

Yes, I probably would have.

It’s not that I am unhappy with a spectacular profit in a short span. The real question is whether I made money for the reason I believed in—or whether I was simply lucky, in the right place at the right time.

I never linked silver to the frenzy around computing power and electric vehicles. The market did. Good for the market, and good for me. I have my returns; those still holding silver have their convictions.

I will now return to the couch and wait for the sale proceeds to clear.

Then I will deploy the money into a select basket of Quantum Mutual Funds to pursue my long-standing objectives:

(i) liquidity and safety through liquid funds,

(ii) gold as a hedge against political excesses and fiscal indiscipline, and

(iii) equity funds that allow steady compounding—without owning businesses run by suspect CEOs or pirate promoters.

The Lone Ranger still rides Silver.

But the metal is now riding on something else entirely.

Something I do not understand.

“Hi-Yo, Silver! Away!"

The author is founder Quantum Advisors Pvt. Ltd.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com