Pixel8r

yes. but not quite as painful as thinking you own something worth nearly $50 and then suddenly it being worth only $30

 

the point of my 'trading' as you put it, was to avoid catastrophic loss (which $50 to $30 certainly is) and, by consequence to avoid holding the thing once it has completed its bull market. it is all well to talk about buy and hold, but one day the bull market will end and you will have to make the same sort of decision traders make on a daily basis. the difference is that you will not have acquired any practise!

It is only painful if you need the cash now the amount of ounces I own has only increased during this correction, so really it is a welcome buying opportunity. The fiat value of the metals I own isn't very important to me, more the number of ounces. I want to have the most possible ounces by the end of this bull market and don't really care how much they are worth in a fiat currency, as I don't need access to the funds to buy something and won't need for a while yet.

We are miles away from the final top in this bull run, why I am just in accumulation mode rather than sell mode. There are plenty of indicators out there which will tell you when this bull run is approaching the end. I have taken advantage of the giant smackdown swapping gold to silver at 57 on the ratio which has already proved the right thing to do with the ratio at 51.5 today. I think holding metal is much better than being stuck holding fiat, waiting for correction which doesn't come, in the current times of quantitative easing and bailouts. I have seen numerous times during my posting on forums during this bull run people thinking they are smart and selling on a pullback, only to be stuck holding dollars waiting for a pullback as the metal takes off (just ask romans holiday).

BTW I have been practising for years, so won't be something new I can promise you.

i own only some gold now and a great bundle of usdollars that appear to be going down the crapper!

 

hmm. will stick it out for a few more weeks and see what transpires.

That sound a very painful position you have put yourself in, sitting on a large bundle of dollars. That is the thing with attempting to trade things you often miss the low and then are sat holding something which you shouldn't be waiting for a pullback that doesn't happen.

To me silver is still very cheap, $33.5 will seem as cheap as $26 when it gets to $40 over the next few weeks.

I am increasingly convinced that gold is acting as a currency. In which case, is it right to constantly watch its price in US dollars? Should one not be looking at how it is doing in the "next best currency to gold"? Against the euro, I can tell you that it is going nowhere right now...

Why value it against any failing fiat currency, much better to use something of determined value like the commodity index. Here's a chart of gold valued against the CRB commodity index, as you can see were moved a large amount yesterday back above the 50 MA.

Hi Pix, Bubb,

 

If someone could move my post from ysterday and your replies to another topic I would be more than happy to reply, as it is I don't tink we should carry on this debate re taxation /trading time on a GOLD thread which is as good a gold thread as you will get on the tinternet!

 

Regards

 

ML

It already has been - http://www.greenenergyinvestors.com/index.php?showtopic=15485

When we first started these "debates" many months ago, I suggested to you that you should focus your antagonism against traders on getting a more fair, and long-term oriented tax policy. That might encourage more productive investing.

Double post...

I have been talking about how this crisis has been caused by the rise in trading for years, anyone who has been around here long enough will remember. If it makes you feel better to make out that you suggested my topic of conversation go ahead, but I know that is not correct.

It is comments like the above that make me want to give up posting on this site. Maybe I should.

Here's a thread from 24k were I was talking about it in February 2010 and I remember talking about it on here before then. - http://www.24knews.com/viewtopic.php?f=2&t=197

Pix, what is your issue with Bubb sharing his ideas? Have you not discussed swapping Gold to silver and back within Goldmoney accounts...could this not be misinterpreted by a novice also? Could the ramping of precious metals also be seen as dangerous, if one were to be picky? One would hope that most people on this website implicitly understand the need to DYOR with regard to any 3rd party views. Surely the point is to discuss, share and interrogate ideas for the benefit of the whole?

I do not have an issue with what DrBubb does, I just raise points about what I think is wrong and needs changing to try and pull us out of this financial crisis. It just so happens that DrB takes my comments very personally and tends to blow them up.

My discussions above have been about the need for taxes to be raised on short term trading and reduced on long term investments, something even DrBubb has come to agree on. Sorry if my style gets a bit prickly at times, but I find it hard to read stuff about how easy investing is without reminding people that nothing is that easy.

Ramping of precious metals now theres an idea, will help me load my truck.

Hi Pix,

 

there is way to much control and taxation in there for me. It should be left as it is the idea of taxing people like DB because they can survive and prosper in a cut throat world at the sharpest edge of self employment is totally wrong!

 

I agree with the earlier post that hedge funds survive prosper and or fail on their performance so good luck to them.What gauls me is our goverments backing the debts of large banks with tax payer money in a futile atempt to prevent the inevitable,I don't get that bit?

 

Re Trading v investing debate, successfull short term traders are a rarity and should be valued,DB Imvho hasn't grasped the fact that he is such a rarity a by encouraging people to speculate via T/A he is taking people down a very dangerous route, on the basis a little knwoledge can be a very dangerous thing, and that by trading in and out at the wrong times some people on here could actually lose money in this potentially once in a life time metal bull run. From what I have read and understood Gold is the place to be over the coming years a a haven of safety?

 

Without doubt he is right in th fact that he has the ability to trade in and out at the right moments and therefore out perform buy and hold, however he is the exception to the rule!

 

Buy and hold as advocated by a few stars on here via fundamentals who back up their reasoning with historic ratios etc. are a much safer option to follow over the long term, for the great majority on here, and we should be very thankfull you and they do.

 

However having said that it is very good to have the medium of sites like this where we can consider the merits and dangers of both, and DB takes the time to post some of his short term trades I guess we are all adults so can choose which route to take.

 

Regards

 

ML

Hi Ml,

What good does a trade bring to the world? It is said that it brings liquidity to a market and helps with price discovery. In the world of high frequency trading that the big investment banks are advancing further all the time, they front run real investors by seeing orders milliseconds before everyone else. So in effect this process distorts the price discovery mechanism and leads to more money being removed from real investors capital to line the pockets of bankers, so rather than bring liquidity and price discovery it actually removes both from the system.

The bankers have got so much power that they now control the politicians and get the laws changed so they can take even more control of things and remove more money from the people. When I am talking about raising taxes dependant on the length of time an investment is held, I am not talking specifically about people like DrBubb, I am more thinking about ways of controlling the power of the bankers. The investing of capital is required in the world to advance projects, but these days things are moving to shorter and shorter term investments down to the extreme of the high frequency trades.

What I am proposing is that investments are taxed primarily on the length of time they are held for, this would in effect make long term investment a much more profitable thing and extremely short term less attractive. This would encourage the building of new business, technologies & projects which everyone would benefit from, rather than just a few bankers skimming more off the top of other peoples work. Why don't you think that would be a good thing? It would still mean that people would be able to trade, if they desired, but by doing so they would actually be doing good for everyone through the taxes raised.

I very much agree with what you are saying about trading being a very dangerous thing for many to attempt. It shows the detachment of traders from the real world that they think it is an easy thing and that everyone should be doing it. For a start not everyone has the amount of capital required to follow the strategies that DrBubb does, by the time you scale things down and take the time required and fees into account most peoples time would be better spent doing other things. I certainly wouldn't want to live in a world full of traders all trying to outsmart each other, it would be a very cutthroat and boring world to live in.

Sorry I have taken this thread very much off topic, maybe one of the mods could move these posts to another thread where we could explore the idea more.

Pix.

For US Citizens who are individual traders , like me, we pay a higher tax on short term profits.

 

But big banks, do not have a two-tiered system, and in fact they pay bonuses out of pre-tax income. Perhaps that needs changing.

I think there should be a system in place that means that the shorter time a trade is held for the higher level of tax is paid and the longer one is held the less is paid. To deter high frequency trading and encourage long term investment, which after all is what investment capital is supposed to be about. The trouble is the big banks are now so powerful that it is unlikely to happen, they now control the politicians via funding and lobbyists. It should be the same for everyone personal or mega bank. I think the tax could range from very high for very short term (90%) down to zero for very long term investments (0%).

A system similar to the old taper relief that used to be in action on Capital gains tax in the UK could be used.

Crikey. I have to say, as someone who has recently moved to full-time trading and who has hopefully retired from full-time work in his mid-30's, I do have certain ethical problems with my occupation. I am in many ways little more than a parasite and it could be considered a shame that a well educated and physically capable young man can contribute nothing to the greater good. But then I consider the fact that I was pretty much driven out of Britain by the Brown Terror, that wages in Britain and indeed the rest of Europe are for the majority very low and taxation so high that it makes actually working for a living a bit of a mug's game for the majority, the Laffer curve in action I guess. As the old song goes, Only Fools and Horses Work. Equally the rewards for the bankers do seem incommensurate with what they provide for the greater good, but how to stop it or at least moderate it is the question.

I think that when this crisis ends that the act of short trading will be taxed much more heavily than it is currently, maybe then you will reconsider your options and put your eduction to a more productive use.

The taxation laws need changing to encourage long term investment and deter short term trading, it is an easy thing to do and was the system in the past. The longer you hold an investment the less tax you pay on the gain simple.

(Do you think it is merely "luck" that I am beating Buy and Hold, and making a decent living as a trader and investor? Unlike some others here, I even give away much of "my product" for free.)

The problem I have is with the act of trading not investing, I have only seen you talking about trading recently rather than any investing. I originally started posting on this site because it was called Global Edge Investors (GEI), you should change the name to Global Edge Traders (GET) it seems a lot more descriptive of your purpose. As I have gone into at length previously on here I think that the rise in trading over the last decade is helping to bring the world to the current situation. I have no problem with investing of course , investing is exactly what is missing from the world currently. Bankers are being allowed to make too much money from trading, they are putting the whole financial system at risk and are not being taxed highly enough. The sooner they are disallowed from acting the way they have been the better, the money men should go back to investing in developing the economy for the whole community rather than just trading (gambling) between each other paying themselves giant bonuses while letting their losses be monetised. This all comes down to control, selfishness & greed IMO, bankers have become too powerful and by encouraging trading you are just playing along with their game. Ask yourself when will you ever have enough money and power?

I have a good job because of the investment of time and money I have made into it.

Answer me this what good does your trading do, or the passing on of your knowledge, do for the humanity as a whole? Do you believe the same as Jamie Dimon that you are 'doing god's work'.

Well I am glad you have a "real job" that throws off surplus cash flow - that's lucky for you.

Does it throw off enough that you can invest $300K in one go? I hope it does.

 

By contrast, I actually make my money from trading and investing and cannot afford to miss big buying and selling opportunities. I don't get them all right, but I can - and must - beat B&H if I want to stay aheadf of the game.

Back to the I have a bigger dick than yours comments, that just makes you sound like a bigger bigger dick to me.

You will get on well with the bankers with their giant bonuses paid on fantasy derivative profits, you can all go and live in Shangri-la together while the real world burns around you and the people of the world doing real honest work are left in massive amounts of debt placed on them by those bankers. Soon the banking traders will own everything and nothing will actually be produced anymore for them to spend their worthless fiat currency on.

How long before the wbankers get a sense of community where not everything is valued by how much money you have or have won via trading today? There is a massive deficit in the banking community and I am not talking about a financial one, they are seriously missing basic humanity. They exist in a world where they detach themselves from the rest of the world and consider themselves to be above other humans, you display this trait via this website and why people take offence to your approach.

BTW luck has nothing to do with the fact that I have a job, it is due to my ability and hard work.

(Here's a KEY POINT for the B&H purists !

You need to have Cash to buy when the opportunities roll along.)

The thing about buy and holders is they add to their holdings as cash becomes available by buying on dips with the money they have earnt.

It may be a foreign thing to you, actually working for money, but it is something that most of us do. It means we have regular money coming in which doesn't depend on a gamble coming right.

I've put another 25% of my silver profits into gold today - it seems to be holding up well around this $1600 level.

Personally I would have put those paper profits into physical silver, with the gold silver ratio where it is. I recently swapped some physical gold for silver @ 57 on the GSR, I am expecting to be swapping some of it back around the end of the year at hopefully below 40.

Here's a good article which explains some of the shortages of supply that are building in silver currently. Goldmoney seems about the only place you can buy physical at near spot currently.

Physical silver running out because its spot price does not reflect true investment demand

By: Peter Cooper, Arabian Money | Posted 6 October, 2011

Several readers of ArabianMoney have written to us over the past two weeks to express their astonishment at the current price of silver because demand where they live is so high that stocks have run out.

 

Consider this comment: 'I used to buy silver from a shop in Kobar in Saudi. From the last four weeks they said they ran out of silver. I cannot find anyone who sells silver in Saudi now. I asked them from where do they get their silver. They said the UAE. The problem is they only have 1kg bars…and I still cannot find any supplier.'

 

No stock

 

Well don't bother coming to the UAE. Our information is that the 1kg bars mentioned here and featured in a video on the website last month (click here) are all sold out too. We've also had feedback about low or no stock in Texas and Australia from big private bullion dealers there.

 

Now what would normally happen when a commodity is in short supply is that the price would go up to encourage sellers to put some more into the market. That is presently not happening because the silver price is being artificially suppressed in the Comex futures market by the bullion banks acting on instructions from the Fed presumably, so why would you sell that silver cheaply if you happened to own some?

 

But something has to give and it is the price of physical silver rather than the Comex price of the shiniest of metals. If you can find any silver these days you will pay quite a substantial premium over the spot price. But pay it because that is probably still a bargain compared to where silver prices are going.

 

The truth is that silver is a rare metal, more rare than gold. Silver reserves have been estimatated at one-hundredth of gold reserves. Silver is after all consumed by industrial processes and reserves have dwindled over the years because the price has been kept so low for so long by market manipulation. Why is that?...

I think Pixel could defuse the whole "Battle" by saying:

 

+ Some do not have the time, or the interest in learning the "disciplines"

+ You are taking a risk, that while you use options on etfs, that they may blow up in your face if the etf fails

 

Had he made such an argument, then I would have to agree with the second point, and say:

"Yes, I know that, but look at this: I am generating excess returns so quickly that once I have parked 10,000 ounces in physicals, I can use the excess profits that I have generated to carry on with the TA-&-Options games."

I have said to you many times that I don't have the time or the inclination to taking up trading as a full time job, as I am too busy running my successful advertising photography business which I have been doing for 20 years. I have also said to you that the risk you are taking in options on ETFs could very much blow in your face as they carry heavy counter part risk and we are in the middle of a financial crisis where most banks are actually already bankrupt zombies. You have chosen to not read parts of what I have written as it doesn't fit in with your agenda of turning everyone into a trader. I don't see this as a battle or a competition, I am just trying to reassure some of the readers on here who have are professionals and have been buying and holding for wealth preservation, that they don't have to take up paper gambling to see themselves through this. I do find it funny though that the traders are seeing what I am writing as a battle, hence my reply 'that I don't give a stuff'.

I am only into trying to work out what is going on as the financial world has directly effected my business. I was finally reaching the time when I would be making serious money out of my profession and we have moved into this banking crisis. So I am choosing to protect my capitals buying power through this crisis, but I have no interest in joining the bankers that have bought the world to this point. I would much rather be able concentrate fully on my chosen profession and invest the money that is sat doing nothing in metals back into serious production.

It frustrates me that the bankers of this world think that everyone should be like them and that they are so much better than everyone else, we don't really all want to learn how to 'trade'. Some of us just want the world to go back to a stable financial footing and the bankers to just disappear back in to their boring grey world.

You have a very narrow and restricted view. (It seems very naive to me!)

 

That fact that I understand and use derivatives well does not mean that I condone the ways that they have been abused. But to me the biggest abuse is the way that derivative markets are over-blamed by those who do not understand them for all sorts of problems - some of which are purely imaginary.

 

2-3 years ago, many were saying that the financial world would be dragged by loses on the trillions of dollars of derivatives that were out there. In fact, the problem was almost entirely in a very small number of players - with AIG by far the worst. And the "solution" of paying out 100% to AIG's creditors, while allowing Lehman's to fail was the big mistake IMHO.

 

Remember my old saying: "No bailouts without haircuts"?

 

IMHO, what the government should have done was to say to those Top 10-20 firms with AIG exposure : You can have a government guarantee, but if you decide to take it, you will only get 75% of your money (or whatever non-100% figure seemed most appropriate.) You have 2-3 days to decided, and if you do not elect to take it, you will have to take your chances with AIG risk.

 

This wise solution would have removed the "moral hazard" argument, and taught the Too-Big-To-Fail banks that there is a limit to how much of the risk they can pass on to the taxpayers.

I don't have a very good understanding of this but it appeared to me that when Lehmans went bust the Fed came to realise very quickly the scale of the problem. They soon came to realise how much the other banks where dependant on Lehmans honouring their derivative contracts, Lehman going bust caused a snowball to start rolling.

The Fed realised that they had to do something by the time it had got to AIG, so agreed to payout at 100% to stop the snowball from taking out the rest of the fragile system.

Since that time the banks have taken on even more derivative exposure, so have in effect been allowed to make themselves even more 'too big to fail'. How can any of the big banks be forced to take haircuts? They have massive leverage which means if they take any haircuts those losses get multiplied, the other reason that they won't be forced to do so is they control the governments.

As I said at the beginning of this post, I don't understand the situation enough really, but the above is an outsiders viewpoint of what has happened and where we are now.

It is humorous, too be sure.

But there's a certain short-term-ish logic in it.

Are you being serious? The dollar is 'backed' by the the FED who have been running the printing presses at full speed. Gold needs no backing as it has intrinsic value in it's self, it is no ones else's liability. The same cannot be said of course of the paper gold that put your faith in.

CTV where obviously very embarrassed about the comment and have pulled the video of youtube for copyright infringement.

LOL.

I point out that you are not managing the price risk as well as you could, and you say:

"I don't give a stuff."

 

Well perhaps, I should put it the same way, "I don't give a stuff" about your theoretical risks inherent in owning Etf's rather than physical (at this stage.) So far, they have been totally theoretical, and the Options on GLD, SLV, UGL, and ZSL have proven to be great tools in managing the very real price risk inherent in Precious metals.

 

By the time I see some loss from "etf risk", I am likely to have parked enough of my investments into physicals that it will not matter, because I will be miles better off.

 

It isn't a "trading competition" (there is no prize!) It is just a well-documentated illustration that Buy & Hold can be beaten by a disciplined* options trading approach. I would appreciated it that you would acknowledge that this is the case. You are worrying about theoretical risks while I am managing real price risks.

 

"...your trading buddies..."

You are listening to people ("Your Buy and hold buddies"?) who have vested interests in getting people to hold onto their gold, while I am using the ideas of experienced and successful traders to sidestep or minimize opportunity losses on the big price swings. Their knowledge has proven useful, although I do not expect all their ideas to work - and I use them in my own way.

It isn't that 'I don't give a stuff' about the price risk, it is that I don't about the fact that you will do better than me via using options trades to do so.

As usual you have avoided answering what I see as the main issue about using derivative based trading instruments in this financial crisis. Is profit the only thing that matters to you?

It does annoy me that you seem to get some of what is going on, but then in other ways don't. I see the financial crisis being bought about by greedy bankers and their massive over leverage bets between each other in the derivatives market. I realise that I could use their tools and make myself a load of money during this time, as I do understand a fair bit of what is going on, but I don't see that is morally the right thing for me to do. I prefer to be what I see as the better man and help bring about the demise of this via simply encouraging the buying and holding of what I think is their achilles heel in this, physical gold and silver. Trading gold, silver and miners via options, spreadbets, leverage ETFs etc. is just feeding the bankers derivative machine as far as I am concerned and helping to justify it's existence.

Okay.

But you could have done more using options.

My Beating B&H portfolios, are more than 50% ahead of Buy & Hold.

At the point were I hit 10,000 physical oz., the lead will be unassailable.

I could get there instantly, but am using options until we see a lower price.

This may come as a shock to you but the thing is I actually don't give a stuff.

The difference is that you see this as a trading competition and I don't. I am purely trying to protect my hard worked for capital while we go through this financial crisis, which has been bought about by your banking buddies and their reckless gambling addicted lifestyles. As far as I am concerned, the sooner I can turn my back on all this and concentrate more on my productive work promoting businesses the better. In normal times I can make very good money through productive work that everyone is more than happy to pay me very well for. I have adapted my business over the last couple of years to ride me through this crisis, but I very much look forward to leaving it behind.

It does annoy me that you seem to get some of what is going on, but then in other ways don't. I see the financial crisis being bought about by greedy bankers and their massive over leverage bets between each other in the derivatives market. I realise that I could use their tools and make myself a load of money during this time, as I do understand a fair bit of what is going on, but I don't see that is morally the right thing for me to do. I prefer to be what I see as the better man and help bring about the demise of this via simply encouraging the buying and holding of what I think is their achilles heel in this, physical gold and silver. Trading gold, silver and miners via options, spreadbets, leverage ETFs etc. is just feeding the bankers derivative machine as far as I am concerned and helping to justify it's existence.

double post.

By focussing on a theoretical risk, you have been blindsided by the price risk

Not strictly true, I have been swapping between gold and silver during my time buying and holding, during that time I have over doubled the metal swapped. I also have been free to concentrate on my daily work rather than being fixed to a computer trading.

 

Log chart shows a good chance of silver falling further.... perhaps only half the ways so far.

 

 

 

 

If the previous crash is anything to go by, it may take a few more months for silver to bottom. Target to buy 25.... target to sell 100.

There is little point trying to use a monthly chart to find a bottom. You say a target to buy of $25, I say you have missed your chance again at $26. The current situation is nothing like the liquidity crisis in '08. This has just been completely manufactured with margin hikes in a falling market as usual.

If you start to learn about the bullion bank cartels modus operandi you won't be permanently sat on the sidelines looking for lower entry points.

^^ OMG. Onion News Network??

No it is was actually for real, it was on the Canadian CTV network - http://www.ctvnews.ca/

LMAO

http://www.youtube.com/watch?v=aWyrjwXoIqA

Likewise. Although one should take onboard how GM do it. The exchange is fixed at 12pm - london fixing. My brain was struggling to put 2 + 2 together when i put in my order.

 

When I got to work the prices were such that the ratio was about 63, my first target on the ratio being 60, I put an order in. Though thinking about it 5 secs after pressing execute....the volatility in the next 5hrs could mean the prices could be anywhere! Gt about 57 in the end so could have been worse.

 

Good chance we see higher numbers on the ratio, so might kick out the silver at 40 if we see a sharp rebound.

That is only true if you are over a certain amount, I tend to keep mine within my CGT allowance so usually below the maximum amount,

Purchases larger than 1,000.000oz ($33,901.43 at the current spot rate) will be based on the London Silver Fix on 2011-Sep-28.