Ah, the old conspiracy theory. The goobers catch the hide and seek Osama and all of a sudden the world is a safer place to live in. Da goobers really timed it right......
you know what it always happens like this though as funny as it may be to both of us. dollar is still week but we caught usama so lets dump our silver and gold in for some green lol
As an old street saying goes: "I buy 20% off the bottom and sell 20% from the top, but the 60% in between sure is sweet."
clarify ... maybe i've been working too long and my brain has shut down ... but what does "I buy 20% off the bottom" mean? How would someone know they are 20% off the bottom? .. or are you talking about the % of your holdings that you buy or sell
It means when everyone thinks it's going to $50 you sell at $40 to be safe, rather than risk it crashing. Same way when it's going down and everyone thinks it will get to $10. You buy at $12. It means don't get greedy.
i get the theory of that ... problem is it's impossible to predict where the top and bottom will be exactly ... and if you can't predict that ... you have no idea when you are 20% away "everyone" may think silver will top out at $50 ... so the guy following that saying will sell at $40 ... but what if the true top in silver in this cycle was actually going to be $200 ... he would fell pretty stupid selling at $40 and he would have missed his "sell within 20% of the top" by a factor of nearly 3
Well, first of all I don't make a 60% return on every investment! My overall average annualized rate of return over a 9 year period is a bit better than 9.6%, which I think is pretty good, but among the results are a few investment decisions that had 60% negative returns! There were also some investments that were pretty easy to spot as low-hanging fruit that worked out well. On the last decision I made, I sold 72% of a PM mutual fund last Friday, which coincidentally had a 72% return. I took profits, but I didn't want to be completely out of the gold market. Since this position is in an IRA, I don't have to be concerned with tax consequences. One reason I sold a big chunk was that I was getting a bit giddy about its performance and wasn't able to remain objective. Fear and greed were working their way into my mindset, so I took profits. The quote I posted is just a "saying". For every investment decision, there are a unique set of circumstances. It is however helpful at the outset to establish targets at which you would buy or sell to eliminate some of the emotion in the investment decision. As well, if circumstances change along the way that could affect your investment either positively or negatively, you might raise or lower your original target to fit the new landscape.
So, with silver hovering at around $41 now, who sees this as a buying opportunity? I told myself to wait until it corrects back to $35-40, but I'm sure tempted to buy some more now. The last minor correction we had, when it did drop to around 34 from 40 six weeks or so ago, I held off. I felt like kicking myself as it rocketed up to almost $50.
To the party that said "we don't know what is causing these declines", the answer is Yes we do. The prices we are seeing is for paper silver and mostly due to the the bankers pulling out all the stops to keep from having to deliver on the massive silver shorts they created. They dump massive naked shorts on the market, and get the crimex to increase their margins, in hopes of scaring off a lot of longs, so they are not forced to deliver the silver or pay them off with huge premiums in cash not to take delivery. There simply isn't enough silver to cover even one day's trading these days. As noted in the video (of those cartoon bears) that I posted earlier, the price of physical silver is diverging from that of paper silver. A quick check of the Nucleo Exchange at bullion direct shows that ASE's are trading for around $45/coin whereas the current silver price is around $41. The point of this is to use the opportunity to acquire more physical silver.
I am not discounting the theory that the price of physical silver will start to diverge more and more from paper silver. I actually can see than happening with the shortage of physical silver. However the larger spread between spot and the selling price of ASE's has always been around. What happens is the US Gov't sells their newly minted ASE's for $2 over spot to some of the major 1st tier distributors (so an ASE for $2 over spot is basically the wholesale price which the Gov't gets for a newly minted ASE, however only the big distributors get them for that price). Then those distributors sell to other distributors for a profit, and along the way a 5% to 7% premium gets tacked on (which is the profit margin of the distributors ... to pay the salaries of the employees, the rent, utilitites, insurance, shipping, etc) 1. So with spot right this minute = $41.44 (spot price) 2. Gov't sells ASE's to their major 1st tier distributors for +$2 per coin = $43.44 (wholesale base price set by U.S Gov.t) 3. Then the 1st tier and 2nd tier retailers tack on another 5% (+$2.17) to 7% (+$3.06) as a profit margin = $45.61 to $46.50 (retail price) This lines up with this major 2nd tier retailer prices below (note the prices below include a 5% cash discount). Note you have to pay cash and buy in bulk (20 coins to 500 coins) to get these lower prices at " + $2 + 5% " premiums. Also note the "this item is delayed" notice ... shipping in 3 weeks. They cannot keep ASE's in stock. In other words, shortages of physical silver is rearing it's head at 2nd tier distributors.
RaceBannon, the best strategy that I have found is figure out how much silver you want to buy ... then take 25% of your final desired position and buy that position right now ... then wait a week or so if it goes up ... great ... you made money if it drops more ... buy another 25% always try to add on the dips
Physical prices always diverge from market prices. This is always apparent in fast moving markets. This is driven by investor sentiment as to market direction as well as premiums that items like ASE drive. However, I will say this divergence cuts both ways, as pay price from dealers when the market is falling is dramatically different than a stable market or when the market is rising. In 1980 it was not uncommon for silver value to be worth 20x face and only be offered 14x for it. This was the exact same reason you could not buy silver a couple three years ago when it got below $10 for that price. It is the expectations of market movement that are also priced into the physical silver. Not trying to throw cold water, just pointing out that in a steadily declining silver market this price divergence works against the physical holder, making it harder for him to get out. This is what I have always said, its best to sell into strength especially in the PM market because of this peculiarity. Its not like the stock market where you can sell for the market price whenever you wish. Yes, if price expectations are high you will get higher than market for physical, but the down side can be a bear, (no pun intended).
Good advice on the surface, but in 1999 many were following this exact advice and bought on the dips of tech stocks. Just because something was worth $50 last week does not mean that it will eve go there again. It may, but past price means nothing to future pricing. Always make sure you know WHY what you wish to own is worth that, and WHY you are investing, and don't just get caught up in technicals. Technicals are mainly for near timing of purchases rather than for investment decisions unless that is your business.
Except there is no retailer's profit at play at the exchange. Retailers BTW also bulk up on handling charges. What I listed also, was single coin price. Usually the bid price is close to spot. It doesn't mean they get it, but now it's running 10% above with ask even higher. It's a sign of things to come. At this point anyone going long on the comex knows what is happening there and are looking to play the game against the banks.
That is an important point. There are a lot of people investing in silver without an exit plan. The downside is not the mirror image of the upside. And to believe there will never be a downside is not a good plan. I've been unloading mining stocks and "paper PMs" since November and made another sale last week.
YES! Exactly. You should only do this technique on something you think is going higher long term. Certainly, if you think silver is going back to $4 an ounce, then dont buy it! However if you have picked out some asset that you think is going higher longer term (be that stocks, energy, grains, metals) ... this is a good strategy to build a position.
