Friday’s Gold & Silver Selloff Defined Underscored Real Ownership

Gold and silver had a terrific run. 

Prices surged. Headlines followed. Confidence built quickly. 

Over the past three months, gold climbed more than 30%. Over that same period, silver surged higher, rising close to 140%. 

Then Friday arrived and both metals fell hard. 

In a single session, a large part of that optimism evaporated. Silver and gold reminded investors how quickly prices can turn. On Friday alone, the iShares Silver Trust (SLV) plunged 28.5%, while SPDR Gold Shares (GLD) fell more than 10% in a single session.

That sharp reversal is not unusual. It is the nature of assets whose value depends almost entirely on price. When sentiment shifts, there is nothing underneath to steady the fall.

This is why we approach investing differently.

At American Prosperity, we are not interested in guessing where prices might go next week or next month. We focus on owning pieces of real businesses. 

Businesses that earn money. Businesses that generate cash flow. Businesses whose value can be estimated, defended, and compounded over time.

That distinction is everything.

When you own a business, you own an economic engine. Customers pay for products or services. Revenues turn into earnings. Earnings turn into cash. That cash belongs to owners. 

You can study it. You can model it. You can make reasonable judgments about what the business is worth based on its ability to produce cash in the future.

Gold and silver offer none of that.

They do not have earnings. They do not produce cash flow. They do not reinvest. Their price moves are based on what the next buyer is willing to pay. 

When you buy them, your success depends entirely on someone else paying more later. There is no internal mechanism creating value while you wait.

That is not a moral judgment. It is simply a fact.

This difference becomes painfully clear during moments like last Friday. 

When metals rise, the narrative feels compelling. Inflation fears. Currency worries. Geopolitical risk. 

All of it sounds reasonable. But when prices turn, those narratives offer no protection. There is no cash flow to lean on. No earnings power to anchor value.

With a business, volatility feels very different.

A great business can see its stock price move around while the underlying economics remain intact. 

Customers still show up. Cash still comes in the door. Management still allocates capital. Over time, that steady progress asserts itself. Price eventually follows value.

That is why we focus so heavily on earnings and cash flow. 

Earnings represent the share of economic output that belongs to owners. Cash flow shows how much of that output actually lands in the cash register after the business reinvests to sustain and grow itself.

Those numbers allow you to think like an owner rather than a trader.

You can ask practical questions. 

These questions bring clarity. They reduce reliance on emotion.

Try asking those questions about a bar of gold.

You cannot. There is no operating leverage. No margin profile. No reinvestment rate. No competitive advantage. It simply sits there. Its future value depends on collective belief.

That makes timing essential. And timing is a fragile edge.

Owning a cash-producing business reduces that fragility. You do not need to be perfectly right on timing. If the business compounds earnings year after year, time works for you. Even if the market is distracted or fearful, intrinsic value keeps growing.

This is why we emphasize having an owner’s mindset. 

When you buy a stock, imagine buying the entire business. Ask yourself whether you would be comfortable owning it if the market closed for several years. If the answer depends on daily price quotes, that should give you pause.

A strong business keeps working even when prices do not.

It hires talent. It invests in growth. It improves efficiency. It strengthens customer relationships. Those actions create value quietly and relentlessly. Over long periods, they overwhelm short-term noise.

Gold and silver cannot do that. They do not get better with time. They do not adapt. They do not compound internally. Any gains come from price appreciation alone.

This is also why valuation matters so much to us. When you can estimate the present value of future cash flows, you gain a reference point. You can tell when price and value diverge. 

Sometimes the market offers opportunity. Sometimes it offers risk. Either way, you are grounded.

With precious metals, there is no such grounding. There is only comparison to past prices and guesses about future psychology. That may work for traders. It is not how long-term wealth is built.

Periods of volatility tend to expose these differences. When assets rise smoothly, everything looks attractive. When sharp declines arrive, you see what is built on substance and what is built on sentiment.

Friday was a reminder.

At American Prosperity, we want assets that justify their value through cash flow. We want businesses that can be analyzed, valued, and held with confidence. We are not interested in hoping someone else pays a higher price tomorrow.

That discipline is not exciting. It does not make headlines. But it works.

Wealth is built by owning productive assets that compound quietly over time. Earnings matter. Cash flow matters. Value matters.

Price will take care of itself.

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If you have questions about this recommendation or any others, you can send them to me at [email protected].

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Regards,

Charles Mizrahi
Prosperity Insider