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One Bear's Bullishness on Silver, and Why It Doesn't Pay to Be a Canadian Internet Stock

Also, checking in with Roger Lipton.

Fried-Day:

Bearly bullish -- the silver lining:

Every time Bill Fleckenstein of

Fleckenstein Capital

is mentioned here, it has to do with a bearish call on PC makers. Does he like

anything

? Yes, but even when he's bullish, he's contrary.

The one company whose stock he currently owns personally and in his hedge fund, and on whose board he sits, is Vancouver-based

Pan America Silver

(PAASF)

.

Fleckenstein considers it one of two silver pure plays; the other,

Apex Silver Mines

(SIL) - Get Global X Silver Miners ETF Report

, counts George Soros as a lead investor.

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Why silver, and why this company? As for silver, Fleckenstein points out that

Warren Buffett

talked at length during last year's

Berkshire Hathaway

annual meeting about why he bought silver. A key point, to which Fleckenstein subscribes, is a growing demand/supply imbalance: Inventories of silver bars in warehouses are being whittled down but silver mine production is not growing. As inventories continue to shrink, silver prices should start rising, which should help companies like Pan American. Fleckenstein says the company has the potential (if all its mines and reserves were in production) of being the world's second-largest silver producer.

Silver, he points out, was joined only by palladium in not collapsing along with other commodities in last year's fourth quarter. "At some point, things start to gather investment demand," he says. "And if you believe silver could one day have a multidollar rally," that could ultimately generate a fast ramp in earnings.

With the stock closing yesterday at 5 3/4, that's a bet he doesn't believe he can afford not to make.

Speaking of Canadian companies:

The noticeable exception to Internet mania are the Canadian Internet companies. Actually, there aren't many of these, and the one that seems to be getting the most attention these days is

Bid.com

(BII.TO:Toronto), an auction site that liquidates business inventory to consumers and to businesses.

So why does its stock still hover around 5, and why is its market cap a mere $160 million compared with about $12 billion for

eBay

(EBAY) - Get eBay Inc. Report

? The reason -- something you probably never thought about: U.S. online traders can't invest over the Internet in the stocks of non-U.S. companies that don't have ADRs or a U.S. exchange listing. As a result, these stocks are immune to the U.S. day-trading crowd. (Take a look at the whining on Bid.com's online

Silicon Investor

message board about this!)

Bubble babble:

Checked in with

Roger Lipton

of

Lipton Financial

, who in this column last brought you such companies as

Restoration Hardware

(RSTO)

and

Ethan Allen

(ETH) - Get Ethan Allen Interiors Inc. Report

. He has since sold Restoration. "When they get over 40 times the next 12 month's earnings, I get a nosebleed," he says. In fact, he has sold many of his holdings -- so many, in fact, that he now is 50% in cash.

"I've never been at 50% cash in my life," says the New York money manager. "I just can't live with this bubble. The first rule of a good money manager is, Don't lose money, and the signs are too clear of a bubble of Internet stocks.

"It's beyond anything I've lived through before. I believe in e-commerce, but now I'm evaluating every company I own by how it will be impacted by e-commerce. That alone is a reason to take a step back and reflect for awhile."

Among those holdings, this former restaurant industry analyst is loading up on restaurant stocks. "Strangely, the one thing you can't sell on the Internet is hot foods sold fast." His favorites include

Sonic

(SONC)

, an Oklahoma-based operator of hamburger restaurants;

IHOP

(IHOP)

and

Au Bon Pain

(ABPCA)

. "The names I'm in have bought back their own stock," Lipton says. "That means there's a real buyer that has shown a willingness to step in when

Fidelity

or

Putnam

go away."