What to buy? Gold or Silver?

Hi folks,

Yeah, gold/silver is a very weird animal in our portfolios. I'm of the school that everyone should have some small percentage of pm's in their portfolio, say 5-7%, as a core holding against whatever. My grandkids had their bed buddies. Well, gold is mine. In this particular application, I consider pm's an 'investment'. But only this small core holding. More than this is speculation. Speculation is fine, so long as you recognize it as such.

That said, stocks and bonds can also be both investments or speculations.

I'm retired and a pretty conservative investor. However, wifey and I like to hit the reservations and play blackjack. It's call gambling. I also enjoy a wee speculative play ever so often. It's also called gambling.

Right now I have sizeable momentum play on junior silver miners. It's pure, 24K, tripled distilled nutzoid speculation . . . . but's fun.

BTW, my big horse is SVM but am also riding EXK, AG, ASM.

You find gold and silver miners at kitco at either page gold or silver. The big leverage is with those under $1.00 but that's where the most risk lies. I've been scaling into SVM from $0.60 to $.80. Here's the chart:
http://bigcharts.marketwatch.com/ad...f=4&lf2=16&lf3=32&height=0&width=0&mocktick=1

and so it goes,

peace,

rono

 

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Buy gold or platinum.
Silver is mainly for amateurs.

 

I have no problem with SPECULATION as opposed to INVESTMENT.

Just ask yourself if the speculation goes down 50% or 90% or 100%, if it hurts you financially. If the answer is yes, stop what you are doing.

Same thing with "investing" in coins. If you can't stand a coin falling from the price you paid to pure bullion value, then don't buy it. The Coin Bubble of 1989-90 showed what can happen, though I don't think prices are vulnerable like that today (except with some moderns).

If you like a coin, fine. But always ask what happens if the numismatic premium collapses or disappears entirely.

 

Watch out for those over the counter stocks.

 

The phrase and acronym "OTC" dates to the 1970's and early-1980's when anything that couldn't make the NYSE (or AMEX) was traded overt-the-counter.

Later, as prestigious tech companies (Intel, Dell, MSFT, etc.) all listed on the NASDAQ system, the tarnish disappeared.

 

I would never buy bullion as an investment. You pay a premium both buying and selling so your chances of turning a profit are slim! The stock markets have always proven to be the best long term investment. Short term gains or declines in bullion prices are a bullion dealer,s best dream. They will always turn a profit at your expense. Remember that bullion is a commodity, it is no longer used by governments to back their currencies. There is simply not enough supply to keep up with expanding economies. There is a very strong chance that gold could drop 30-40% in the coming years, while silver may rise a bit. No one can begin to predict what bullion will do. You stand a better chance at the race track.

 

And if you shorten the time frame to 4 years or 5 years it shows substantial losses. With the exception of the short run up (which you would have had to sell at the top to benefit from) the stocks have performed better

 

Howdy,

The data doesn't lie. You can go back to before the Great Depression and run the numbers and stocks have outperformed all other asset class including precious metals. For long term investors this is crucial to understand. However, as Lord Keynes said, 'in the long run we'll all be dead'. Not all investing is for the long run. My long run may not be yours. Our goals and objectives my differ, etc.

In the short run, things diverge. At any one time, different sectors, segments, regions, countries and even asset classes outshine one another. Some get hot while others go into the tank. A lot of these trends can last for several years. Witness the last precious metals bull market lasting from ~2002 to 2011.

While my basic portfolio is pretty conservatively invested, I like to augment my returns by momentum investing on some hot trend. When I see a divergence which might turn into a trend, I make a minor bet, say 25% of my intended speculation. Then I watch it. If it goes up, and only if it goes up, I add another 25%. And watch it. If it goes up, I add the last 50%. You do this with a stop loss if only a mental one and you MUST stick to your stop loss. It at any time it drops, say 10%, you reduce your play and watch it. Another loss and you further reduce or even exit.

I learned this years ago from Gary Smith (not the Fox commentator) and it works very well at reducing the risk, at a very risky game.

And that's the nut folks, investing in the stock market is very much like gambling at a casino. The house has it's edge and it always take its vigorish and we have to accept it if we want to play. And we can lose our ass at any time whether we like it or not. Witness the dot.com meltdown in 2000 and the 2007/2008 crash. There are peeps that were heavy 'invested' in equities that got handed their heads.

Best advice I remember reading was from the Elder Rothschild who said to protect your wealth from whatever, you should have 1/3 in securities, 1/3 in real estate and 1/3 in rare art (define as you wish).

Do yourselves a favor and run your numbers.

and so it goes,

peace,

rono

 

god would be mine as look what happened to gold verses silver ,silver probably will never hit what it did when the Hunts tried to corner the market got almost 50.00 per oz. if you can afford gold buy it that's my opion

 

In market terms, it is called 'data-mining.'

Again....rolling periods eliminate time-frame bias.

 

Interesting discussion. Here's a twist that I have spent a lot of time thinking about: Mr. Wonderful of "Shark Tank" Fame once opined that ANY stock that does not pay a dividend is a speculative investment to a certain extent. Of course Google is a much better investment than XYZ Corp., but in both cases the stock buyer is getting nothing -- such as a dividend -- in exchange for his risk.

 

Well, technically he is correct. It's a legacy from decades ago when information was scarce and outside of a few dozen blue-chips you might not know about fraud or bogus financials -- even for a utility or mining company that seemed big and safe.

Non-dividend payers can be 'safe' and dividend-payers can be risky (esp. if they are about to cut/eliminate the dividend !).

 

I agree 100 percent, especially after diving out of Kinder Morgan just before the bottom fell out of the stock and the dividend was slashed. Pulled the trigger just in the nick of time.

 

Exactly. You can pretty much make any data look how you want it too picking arbitrary parameters if you don't use long term data.

 

Even long-term data can distort. Rolling periods takes into account the long-term but eliminates deliberate or random choices that choose bad/good starting and ending points.

 

I consider a 10 year window to be fair as solid long term data, and it wasn't a random window - it was the last 10 years. I guess my point is that saying "stocks will always beat" is not true. It is true that you can grab a sample window to prove a point and cut it off on either side for effect.

The key is understanding market momentum, and knowing when to tap the trends that you see making a change.

At some point everyone must pull out and realize their gains or losses.

The same sheeple that were buying blue chips when the DOW hit 18.4k last year are probably the same people that were speculating in real estate in 2008.

As for gold and silver, I think we've seen the big rise in the last couple months and that will now stabilize. I think we may see both go up a bit more as we near the election, but I think it will be range bound to ~$1350 and $17.50 respectively for the next year or so.

Breaks downward will be followed with heavy buying, and breaks upward will be heavy selling to realize short term gains.

Always lead, never follow - Viva La Contrarion!

 

That's certainly true in isolated times, nothing is true 100 percent of the time. I think the counter point was more towards overall and the long haul not isolated periods

Though there is the argument that in the stock crash shorting stocks would have still outperformed metals during that period.

 

Yes, but we don't STOP investing so you can't just assign an end point and by implication a fixed time period. The clock continues to tick. Individuals have to invest for as long as they are alive.

Only if you have drastically overvalued or undervalued asset classes. Otherwise, you are timing the market and playing games.

No, you invest in perpetuity. You may change your asset allocation but you don't stop investing in stocks, bonds, CDs, etc.

Real estate was 5 standard deviations above FMV in 2007-08 (actually, the peak was mid-2006). The DJIA and S&P 500 were a bit above FMV at the recent peaks.

2000 was much worse because of large-cap and Tech.

No opinion, I buy when it gets super-cheap and avoid buying into panic upswings like 2011.

Eventually contrarian plays work out -- but they can take a while to develop. The herd can be right a long time before the trend reverses.

 

Cash will outperform during a bear market, but nobody says that money market funds are the way to get rich and accumulate wealth. Certainly not at 0.10% or less !

MMFs and CDs and were a great investment alternative to stocks from about 1973 to 1989. But they were losers after that and HUGE losers after 2008.