How Low Will Silver Go?

Good assessment. I think the current market is the perfect case for dollar cost averaging. Keep taking on small stakes in the current market, until your investment goal is reached.

 

Log in or Sign up to hide this ad.

"Cramer" was only recently recommending gold at between $1500--$1700; using the old saw that "everyone should own some gold". (a phrase that some Wall St. stock or bond guys, who know little about PM, trot out, usually after a big run (up) in gold). And I could have missed it, but I never heard him recommending gold at much lower levels.

He may be right in what he said this morning, but he has a bad habit of changing his views on stocks, & maybe gold, only after a big move. Like when he started saying to sell stocks, & raise cash, in Oct. 2008--just a wee bit late, I'd say........

Your point about the difficulty of bottom--picking in PM, I think is very accurate. I also think silver could go to $10--$12 & maybe stay there for years.......& it'd be nice to get the premiums down on 90% & hopefully ASE's......

 

I tried listening to him a few times and found him to very much be the unofficial mouthpiece of small investors. He always jumps on bandwagons late and hangs on long after the smart money has taken profits and cashed out. I could be wrong, but I have never heard him actually recommend anything until long after it had started already going up strongly. It works ok to try to be a momentum player if you are a day trader, but not a long term buy and hold strategy.

I think a pretty good strategy might be to listen to what he is screaming "buy" about the loudest and look into shorting it. I wrote here about 5 months ago about my experience with a bunch of silver stackers and how they were all "excited" about pm and all would quote the exact same reasons to buy pm, and nod at each other when they did so as if they actually had an intelligent thought. I should have sold them my silver that day, but I am not a buy and sell kind of pm holder. I am a buy so I know I do not have to eat cat food when I retire kind of investor.

 

Sure Chris, I certainly agree timing the bottom is all but impossible, but this market is way different than the 2009 equities market. There was good cause in 2009 to believe there would be a strong rebound.That market was highly oversold, the Fed was easing, bond rates were almost non-existent and most important, with equities, the rule is usually the harder the crash, the stronger the recovery. I was doing some big time DCA from when it fell below 9000.

This silver market is completely different. There is no reason to think we will have a sharp recovery. The first reason is metal just don't act like equities. Since they do not grow, no one looks at them with "future" earnings potential, this will dampen any "big move" recoveries. Reason number 2 is there is a good case to be made that this market is not oversold at all. Even if we used the accepted numbers, we are really just trading at fair value, give or take. I am started to think however that the real numbers are actually a bit lower, as Justafarmer pointed out in his excellent post a few weeks back. Reason 3, the Fed will eventually tighten, and the Greenback is strengthening, these things are just not bullish for PM.

So, in short, it seems to me a V shape recovery is very unlikely, so this gives you the luxury of waiting a bit. When the market gives you time, you use it to your advantage.

I don't think 13 dollar silver is a stretch here, but more important, that 13 dollars could come in days. On the flip side I would be totally shocked if a 6 dollar rise in price would happen in days. So that 6 dollar swing either way is 30% On the downside we maybe measuring it in days, on the upside, we may be measuring it in years. For now, I believe patience will be rewarded, but what do I know, I'm just a college dropout

 

It has been a while but I used to purchase his newsletter and did fairly well. Currently, I am past the age where I buy individual stocks anymore, it is just funds now and ETF's so I no longer follow Cramer except for giggle value every now and then

There was a somewhat comprehensive study on Jim a while back, creating the scenario if you followed all his recommendations over a few years. It seems he DID beat the S&P quite handily. The problem was, he was mainly recommending mid caps during the study period. Now if you measured his picks against a mid-cap growth fund, it seemed he could only match that performance. So take that as you will.

Oh yeah, one more thing. Jim always had full position disclosure, so at least you knew you were getting his honest opinions and picks, unlike the bullion pushers where we have no idea if they have any bullion at all.

 

I have never faulted him for that, and for that reason he should be commended. Maybe my episodes I was watching was not illustrative of his overall picks. One thing I will say is I thought it blatantly absurd and unfair when that idiot from the Daily Show berated him about why he was advocating people buy stocks before the crash. I am sure Jon Stewart has a working crystal ball, though, and has never had such things happen to him. I stopped watching the Daily Show after that episode.

 

Lol, just like Justafarmer is "just a farmer", right? I believe most of us here realize college doesn't really teach common sense, and that is exactly what most investing is. If its not, it makes me extremely nervous, since there is ALWAYS someone else smarter than you, no matter how smart a person is.

 

Except for one

 

I have the opposite view. I'd trust Jon Stewart any day over Cramer (as a person at least). And as far as "Jim always had full position disclosure", that may be true with his paid newsletter, but when he rants & raves about buying & selling diff. stocks on CNBC, there is no accountability. He makes maybe 50 buy/sell recommendations a night on that crazy show of his, I don't know if anyone could keep track. Personally, I'm still angry with him for pounding the table to "SELL Apple!", at $125 in the Spring of 2009. (It later went to $600--$700, & even now is $400 or so). And personally, I was glad someone (Stewart) was finally debunking one of the Wall St. A-holes who, while he wasn't one of the people who caused the 2008 financial crisis, but for such a "guru", he sure didn't see it coming, & even said to hang on to Bear Stearns until it became worthless.

2 articles from the NYT re: Cramer: the first, Detailing the infamous "John Stewart takedown of Cramer" from March 2009: Here are a couple of quotes from the article, & the URL:

http://www.nytimes.com/2009/03/14/arts/television/14watc.html

"And while it’s never much fun to watch a comedian lose his sense of humor, in an economic crisis it’s even sadder to see supposed financial clairvoyants acting like clowns."

"The Daily Show” has shown clip after clip from last year that shows Mr. Cramer assuring his “Mad Money” viewers that Bear Stearns was not in trouble — shortly before that heavily leveraged investment firm imploded."

Here's another, longer article in the NYT about Cramer from May 2011:

http://www.nytimes.com/2011/05/15/m...time-high.html?pagewanted=4&_r=2&ref=magazine

 

Interesting articles. Like I said, maybe I was watching different episodes. I remember him pimping apple pretty hard in the high 500's when it was becoming clear sustainability of their product line sans Mr Jobs will become an issue.

As to being a "Guru" not a ton of analysts listen to the man. He might be famous as a guru as much as some perennial pm pushers are, but that does not make him any more responsible for what happened to the stocks than the pm gurus are to blame. Both are salesmen, clowns, trying to make a buck getting someone to listen to them.

I am not trying to defend Mr Kramer, (this started off as me belittling him), but OTOH I didn't appreciate someone getting PERSONALLY blamed for the market. I never saw Mr. Stewart bring him on the show and congratulate him on how well the market was going, so why bring him on to belittle him? It simply reminds me how everyone nowadays wishes to blame someone else, from people buying too expensive a house and then the market crashing, to people buying risky stocks and losing money, to people buying pm because they believe it will go up forever, people nowadays it feels wish to take credit for any GAINS they make, but to quickly blame someone else for any losses. This goes for companies as well as individuals, they wish to privatize profits but socialize losses. Stand up for your own dang actions. If you listened to a clown and lost money, suck it up and educate yourself. Don't blame the clown. He is there for amusement.

But, its just easier I suppose to wallow in misery and say "its someone else's fault".

 

Just like every farmer - jack of all trades and master of none.

 

FWIW, at the time, Kramer was being exposed as a hypocrite. There was even video of Kramer that was aired that showed him (earlier in his career) explaining how to make money in shadow markets, derivatives, etc., etc. Stewart's efforts weren't to belittle Kramer or blame the market collapse on him, it was to expose him for being complicit in letting CEOs and other corporate bigwigs come on his show and tell him how great their company was doing, when in fact, Kramer knew they weren't doing well at all, all the while failing to ask those same individuals the hard questions about the health of the company. That's easy to forgive if you're a morning show news reporter asking fluff questions in the financial markets, but Kramer hosts a TV show telling people how and where to invest their life savings. The 2008 financial crisis was prompted by extreme greed and absolute disregard for the small investors whose entire futures hinge on the success of markets that the those in the financial sector were so carelessly manipulating. Kramer was (and still is) a mouthpiece for the industry, knew of the risks the toxic assets presented, and willfully participated in pumping them all the same. He was deservedly exposed as a hypocrite and a fraud.

 

Well, where are the mobs with pitchforks demanding someone's head today? Where is the outrage over silver losing well over 30% YTD and adding more losses everyday? I haven't heard anyone on this site wanting to crucify the Patrick Heller's of the world.

Btw, there was just a groundbreaking study on mortgages from the mid 2000. It proves, without a doubt, that there was absolutely no correlation with exotic mortgages and foreclosures. Do you know what is the root cause, (accounting for all other variables, income, education, ethnicity, geography, etc)? The borrowers ability to answer simply mathematical questions like:

1. If something is 50% off, and it was priced at $300, what is the sale price?
2. If you buy a car for $6000, and that is 2/3rds the original asking price, what was the original asking price?

Simple questions like this. More than 50% of Americans could not answer correct more than 2 out of 5. If you are mathematically illiterate you were DRAMATICALLY more likely to be foreclosed on, no matter what your mortgage, than someone who can answer these simple middle school questions. Yes, greed caused the housing bubble, greed on the part of homebuyers buying a house on the assumption it will go up 20% a year and taking out a mortgage they financially did not understand. If anyone is to blame for the whole mess, it would be the trajic joke of an education system in this country, and lazy students. Make no mistake though, this new Harvard study shows whatever structure a mortgage was, the main determinant of foreclosure had nothing to do with the mortgage, it was the financial literacy of the homeowner that was the root cause.

 

I don't know where the mobs are today. That wasn't the point of the discussion at hand. I will say that Kramer is infinitely more mainstream than Heller, though, and that's the likely reason right there.

Moreover, I work in higher education and the only thing that I know, without a doubt, is that "studies" rarely prove anything to be 100% conclusive.

That said, I have absolutely no problem assigning a portion of the blame upon people who had no business applying for a loan in the first place. I'll even set aside the well-proven fact that lenders were commonly, almost criminally, deceitful about the instruments they were selling. But home buyers only deserve a portion of the blame. We can all choose for ourselves as to how much blame to assign to idiots who didn't know any better (home buyers) or the villains who knew exactly what they were doing (financial markets). Both are at fault and both deserve blame.

Lastly, the financial crisis was more than just a mortgage or foreclosure crisis. Had the damage just been limited to a collapse in housing prices because too many unqualified buyers were defaulting on their loans, it wouldn't have been the crisis it was. The real issue at hand - and the reason that Kramer was called to the carpet - was because these bad mortgages were being packaged and monetized into all sorts of increasingly risky investment instruments that were being bought and sold by institutional investors managing OUR money through retirement programs, pension funds, etc. Examples abound of the criminally negligent behavior among the large investment banks, all while Kramer pumped the firms and let their leadership come on his show and spin fairy tales about their financial health. Pointing to the foreclosure issue among unqualified borrowers only obfuscates and distracts from the original point about Kramer being called out by Stewart over the financial crisis.

At any rate, I'm going to bow out of this debate. I appreciate your posts, Medoraman, and enjoy your perspectives on metals. I've learned a lot since coming to the boards and I generally try to keep my posts on topic, although I do go off on a tangent from time to time.

 

That would involve a lot of folks admiting they were wrong. Both you and myself have indeed called out the likes of Ted Butler, Jim Willie etc. etc. but it was easy for us, because, well, we were right. For the folks who were wrong, it is a different story.

 

You guys might want to be careful. I wouldn't want either of you to dislocate your shoulder patting yourselves on the back.

 

Peace, I really think you are missing the point....

 

Was this study written by somebody with a doctorate in mortgage brokering? So only marginal blame goes to the lenders giving loans to no document mortgages? What about those that were underwritten at 200% payment to income, or more?

About what is expected, I guess. If you go looking for something and want to prove it's true, you most likely will find that info...mostly because it's all you're looking for.

 

I'm not missing anything. If anything, I think you're missing the big picture...but we'll leave that for another day...I'm glad you can post you somehow "won"...it's actually comical

 

It was a study performed by the economics departments of Harvard and Columbia, two of the most liberal institutions in this country.

Yes, loans were written up with aggressive assumptions. However, the POINT was those who are mathematically literate were not agreeing to such mortgages. At what point has this country switched over to where the person signing an agreement, with full access to hire a lawyer or accountant if they wish to review it, not responsible? What is the point of having a contract if one party cannot be held accountable to it?