Buy, Sell or Hold

I have a question for those of you who are into silver and gold as an investment (not a thread for collectors). Presumably PM investors are expecting a return for one of two reasons 1) as an investment that responds to the "normal" supply/demand dynamic or 2) as a store of value in expectation of some sort of economic calamity. Silver has pulled back 13% (to $26.98) from it's recent high and gold to $1,333. I would like to take a straw poll and find out if you are a 1'r or a 2'r and if you're current strategy is buy, sell or hold. If you want to give more details beyond that, as Ross Perot said, I'm all ears!

 

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I am doing a little of everything, of course the simple answer is what will hold value more. With the price of silver as high as it is i been selling some of my silver and made a descent profit since i got most of it at around 15-17 an oz. As i collect coins as well i put most of the money back into higher end coins/semi key/key dates as they seem to hold there value better. In my honest opinion it would not be wise to just have simply bullion .999 in a collection for an investor as silver can either go up or down but if you have silver coins in your collection you are playing in two markets vs just one. A variety is key so i will still be buying, there needs to be a pull back before it goes up. Silver has not hit historical high as it did in the 80s and right now i feel more comfortable buying silver then gold. Gold on the other hand has passed its record high and if you get in now you could loose lot as i know some may disagree with me but silver is the real king

 

Actually, I am both a 1'r and a 2'r. I'm holden on. I read everything I can get my hands on regarding precious metals. And not from company's selling precious metals either. I'm holden on. From viewing threads on Coin Talk, to visiting with associates, investment articles in numismatic publications, articles on the internet, to studying anything involving the economy and gut feelings, I take in all I can. I'm holden on. Do I want silver to go up? Yes. Am I worried about whether it does or not? No. Am I in love with this investment? No. Will I buy more? Yes. If it goes down to $1 per ounce, will I be ruined and jump off a building top? No. I'm holden on. No panic, no waver and I won't blink. I just feel it is adjusting right now for another couple of weeks and then it will go back up and eventially get to the point where it belongs. Some say it is a gamble to hold on to it, I say it's a gamble to let go of it. I'm holden on.
Others can do as they wish. I'm not trying to pawn my philosophy off on you, I'm just stating here what I FEEL IS RIGHT FOR ME. Not here to argue. I wish everyone the best of luck in their investing/collecting endevours. Yes/no, buy/sell, agree/disagree, coins/paper. It does not really matter. We are all in this investing/collecting/hobby thing together and connected in some way or the other. I'm just thankful for a resource such as Coin Talk where we can express our opinions. And mine is......I'm holden on.

 

Took the words out of my mouth, this planet has only so many resources that are attainable. I am young and have a lifetime to wait for the price to go up, I buy high, I buy low.

 

If it keeps on dropping defiantly buy. If it starts to move up a little, buy a little less. Silver is a unique PM. It gets used up in industry, ie gone forever. In hard times it moves up and when the economy starts moving the demand for manufacturing moves up. If you've got the time to wait, I don't think you can lose with silver. Silvers potential in the next 10 to 20 years could be shocking.

 

Without a doubt, I am a 2'r. I fear the worst for our Country and it's economic situation.
I feel that this pull back is artificial and will not hold as the next 2-3 yrs (or sooner) play out and the the dollar becomes more inflated and valueless.

 

I'm more of a 3'r. I got into the metals around 2004 because they were selling at the same prices of 30+ years earlier and starting an uptrend. Very few things are available at those prices. And I expected the prices to adjust upward and potentially end in a bubble the way the tech stocks did in the late 90s. So far things are on track.

 

I agree with this. There are three emerging economies: Brazil, India and China. China is growing faster than expectations. The rate of growth is exceeding the ability of mining to supply. I think buying silver and gold both will pay off.

Still, don't buy when it's so high, (except collector's coins with low mintages). There are going to be fluctuations. Take advantage of them.

I'm not an investment adviser, but I think the view on emerging economies is pretty solid.

 

The onset of a potential new World Reserve Currency [China's] has me very afraid of what might happen here in America. I am sure that I am not alone in my thinking. Along with my intention to have silver bullion as a hard asset I plan to protect myself with old besty as well. A 6 round 12G semi-auto shotgun. 1 in the chamber 5 in the mag.

Here she is.

 

Any precious metal or other commodity store has its place in a portfolio. I bought silver years ago because it was very cheap historically and as a bonus they were coins I could admire. If I didn't have these still, I would have been looking to put 5% or more of my portfolio in these types of assets just as a hedge. So I guess you could call me a 2, even though I haven't bought in almost 20 years, (silver price increase from $4 to todays price has enabled me to keep up with my 5% ratio).

Reason number 1 is a fine reason to invest as well, I am just unconvinced these market levels constitute a buy versus historical pricing levels. I am not saying they are not fairly priced, but just not enough of a deal for me to want to expand my exposure.

 

This is recent correction is a buying opportunity. IMHO we haven't seen the end of the run-up in PMs yet. All the long term fundamentals/macro economic trends support a long term appreciation in gold and silver; to wit
--the growing middle classes in China and India will buy more of it as their disposable incomes increase.
--the US dollar will continue its devaluation as our government continues to print and spend money at astounding an rate.
--silver has many industrial applications which enhance its upside
--gold is still in very limited supply, if all the gold ever mined in the world were melted and poured into a mold the size of the Washington monument, it would fill just over 1/3.
Now if you want to buy PMs and sell them tomorrow, you could still lose your shirt. But I think PMs are a great long term investment, as long as you can hold onto them for a while.

I suppose that makes me a 2.

 

Zeplyn, is that a Bernelli? The butt stock looks like my buddies super sport.

 

Yes it is. A Benelli M2 tactical shotgun. It is gas operated and one of the finest shotguns for home defense on the market.
With 6 rounds of buckshot (home defense load) this is a really scary weapon. It would cut a man in half easily with several well placed shots.
I am saving to get the Benelli 5.56mm tactical rifle as well.

They get my goods when they pry my cold dead fingers off the trigger.

 

I agree. The swarm of new silver and gold investors to the site is also a warning sign. It's starting to look a little like the late 90s with tech stocks. I don't expect much more of a pullback before the next leg up, but it's getting a little late in the game.

 

Thanks for the replies, good discussion but let me get back in here. It seems that the motivation for being a 1'r vs a 2'r are completely different. If you are a 1'r and you have not liquidated your silver/gold position, what in the Sam Hill are you waiting for? Silver has had several new 30-year highs in the past month and Gold has reached all-time highs (the sweetest of sweet spots for an investor). I would really like to understand what you 1'rs think will drive metals even higher since by our definition, you don't see an economic calamity as a significant risk (otherwise you would be a 2'r). I would really love to get your input on this.

Regards,

Bluesboy65

 

In terms of real dollars, gold has NOT reached it's all time high.

http://www.marketwatch.com/story/golds-next-hurdle-is-80s-inflation-adjusted-peak-2010-09-24

I'm not saying it's going to get that high. But, I'm not really buying bullion either. I am buying gold coins with low mintages, and still believing that gold will reach greater highs down the road.

If gold falls below $800.00, I'll consider buying bullion.

 

I'm still buying silver but may wait to see if gold pulls back to $1300 before I buy. I'm going to a coin show on Sat so I'll check out the prices.

 

Howdy all,

Much of what's been said mirrors my thinking. I'd call myself 1, 2, 3, 4 and etc. I've been stashing silver off and on since '64 and was fortunate to mgt restaurants in the mid-70's and bought a lot of 90% out of the till at face value. I later cashed it in to augment my GI bill when I was back finishing up by BA in Econ in the late 70's. Started buy again with silver under $5 and in the late 90's started buying a roll of silver eagles each year and augment that with some Prospectors and 10oz bars. At the time this was the 'bullion' portion of my coin collection - part hoard, part stash, part investments, part security blanket.

While this was going on I was becoming more involved as an investor and evolved into a momentum investor. As such, and with my experience in the pm market, I noted the breakout back in 2001/2 and started to invest in paper gold and silver in the form of mining stocks and mutual funds. This was about the time that wifey and I bought our first AGEs at a POG of 335. While continually accumulating, I've made addition buys on the dip at ~750 and ~950.

My thinking about precious metals as an investment has really evolved over this time. I'm not of the mind that everyone should hold at least 5% of their wealth in gold and silver. Much more than this is speculative, which is fine as long as it's acknowledged as such. And this spec play can be paper. I own SLV and CEF - the bullion silver ETF and the Central Fund of Canada which is a closed end fund holding gold and silver bullion at ~55/45. For active plays, securities are easier to deal than a stack of AGEs.

Currently, I'm adding to the physical side because it's on sale. However, if gold breaks the 200 DMA (~1275), I'll cut back a little on my spec play. I don't see this happening and am enormously bullish on gold and silver over most every time period forward. However, until it rebounds, I won't be adding to my spec position - just holding for now. What I'm looking at are silver mining stocks, particularly juniors (own SLW). A nice way to cover this square is with SIL the silver miner ETF. I'm also looking at some specific nutzoid plays for sh*ts and giggles. I own Fortuna in wifey's Roth but can't get it with my deferred accounts and don't want to own it taxable. Taxable has been Tocqueville Gold TGLDX for years. It's mixed with a lot of silver and actually holds some physical bullion unlike most pm mutal funds that consist of only mining stocks.

I see silver as undervalued relative to gold and the miners stocks undervalued relative to bullion. After you have your plain vanilla allocation for the pm's, this is where you can tweak the mix by adding a bit more silver and a few more miners. At least that's where I see it being most promising. Recall that in 1980 gold peaked at 850 from what 250-300? And silver peaked at $50 from $4.

just some ramblings,

rono

 

Rono, great post! Thanks for the transparency; very helpful to me.

Regards,

Bluesboy65

 

Interest rates are supposed to go up so that may mean buy and hold.