The new silver bubble

I don't think there are many weak hands left after what we all went through last year. Yes there is plenty of room to raise margin and squeeze out the paper longs, but IMO the hands in the physical market are as strong as they've ever been thanks to the buying opportunities that were provided. Anybody who is holding physical at this point has a pretty hard shell, and the physical market is already tight. Any move to push the weak hands out will just embolden the strong hands.

 

Log in or Sign up to hide this ad.

If there are 100 million shares outstanding in a stock and you are long ( own) 100 shares, you do not own 1 millionth of the the company. You can't go in and start taking your shares' worth of paper, pencils, or even dirt. It belongs to the company. You are buying any future appreciation ( and any dividend) or loss of value of your 100 shares. If the stock doesn't pay a dividend, you generally can not realize any appreciated value for your shares unless you sell at a profit.

So you are saying there is a future market for stock other than the stock market? If you have 100 shares IBM, where do you take it to short IBM without giving up the stock or borrowing more from you broker? You can use long term put options to "short" the stock without giving up the 100 shares, but you pay the same premium I would just going and buying the put options without owning any IBM stock, so the ownership of the stock along with put options establishes a straddle situation where you can profit from either direction movement, but it is far cheaper to do the same using call options and put options alone rather than using stock.

 

EXCELLENT post and understanding of the silver market here. You're absolutely right, imo. EVERYBODY here should read and understand this.

 

I don't agree with these 2 quotes as they tend to embody the "weak hands" with little knowledge or courage to hang on when prices are diving badly like the Knowing and courageous Strong hands( and I know that some people here have done just that with stocks and physical , hoping that in the long or very long term they will get back to the top again ).

But my opinion and my goal is to buy on the way lower if I still believe in the stock or situation, and then start selling on the way up once past the average cost. But differences is what makes a market, I just wanted to express that holding forever and never taking profits along the way is not necessarily more knowledgeable, courageous , or profitable. IMO.
With respect but differences ,

Jim

 

I said theoretically.

The point being is that being long in stock and being long in futures are quite different. In regards to owning stock, I did not state that it give you ownership in the company, but you do own stock equity in the company and you also gain voting rights. Of course you don't gain until you sell. This is what being long means.

 

Thank you, I was starting to feel ignored, lol.

 

Originally Posted by InfleXion
"Anybody who is holding physical at this point has a pretty hard shell, and the physical market is already tight."
​

Can someone explain this?

 

I just meant that after the price went to 49 and back down to 26, people who still want to be in the silver market have weathered quite the storm.

By the physical market being tight, I am referring to big timers paying over spot for junk silver, and excessively long delivery delays according to Bill Murphy of GATA.

 

Yes, but then they will possibly ride it back to $49 and back down to 26 again.Nothing gained twice. They justify this as nothing was lost as they still had their XXX number of ounces. And if that is the situation you want ,then that's OK for me. But i would rather take the risk and sell more and more as it goes higher and hopefully run out before it peaks, and then hold firm. I have no loyalty to silver or gold metal. I like them,but I will sell them with no regret beyond risk potential of any market action one takes. I see no near term death of the USD$, nor hyperinflation or any man made apocalypse the rest of this year and probably next, but I don't do longer term prediction.

Neither metal nor USD will go in a straight line up or down over the next year and half in my opinion. There will always be ups and downs, and if someone wants to reload because , they actually did sell, great! or sell more for the next mini-cycle. Be greedy and hold forever and you may end up at 26 again. If you sell all of the physical, you have made lots of money , so learn how to use options to continue riding the trend, and sell those also. Your last few trades may be losses, but you have maximized your profits. IMO.

GATA is always finding "scams" and conspiracies in the PM market, paper gold funds, ETFs. Chinese Banks gold accounts, because they do not read and understand the prospectus, or rules of delivery. They just figure the rules are what they wish they were, rather than what the actually are. How many people think GLD or SLV are "cheating" because they don't deliver bullion if a person sells their stock??? Far too many. IMO.

Jim