SILVER

[HPCsoYESTERDAY]

The question raised by Dr Bubb is about buy and hold as a thought about strategy, when it would

seem better, to have a core position and sell a little after strong rises and then be continually adding back in from earnings, where large pull packs from strong rises are normal and expected because there will always be speculative activity supporting the price in strong bull markets.

 

Ramping buy and hold in a strong pull back is to my way of thinking a bit daft. If it works for some people then fine but there are other ways of approaching this investment and money making strategy.

 

You also have to wonder to what extent the market is ignorant of federal reserve activities and likely outcomes.

All those base money electronic reserves for example could dissapear enormously quickly as the banks swap into higher interest paying bonds in exchange for uselessly huge amounts of base money that they are currently holding.

 

All my attempts and other peoples attempts to engage silver and gold investors about this are met

with mostly hate talk and contempt of a highly personal kind. Why is that?

 

For example if there are huge opportunities in silver based products in the future then there must

be huge opportunities for a sustainable recovery over the next years. That is not talk we hear

much about here where the future is full of collapse and doom.

 

So what is to be? Feds restoring their balance sheet to normal levels in an inflationary period or a difficult economic

environment for years to come where new products have a hugely difficult time in getting sold

and prices are struggling?

 

It cannot be just this one eyed view of prices to the moon without large pull backs

 

 

was DR. Bubb advocating a core position then?

 

also i took a short position at $45 & $49 for your info

 

i seem to recall your opinion a few years ago was that it would fall back to under $10, is that still the case?

 

edit - short pos. now closed

 

i think we are within 10% of the pull-back bottom

[drbubb]

Silver has still risen from around 5 and most enthusiasts here are adding from their earnt income.

 

At best a fall from 50 to 20 or 8 , or whatever it goes to, is just a bit dissapointing and does provide an

opportunity to get more at a cheaper price.

 

As people have pointed out before, many people here are not sophisticated traders. Silver holders

have done nothing wrong as far as i can see providing at some point in the future they do realise

that they will need to exit there position when prices are high, before others are also heading

for the same exit, where their only buyer is likely to be some gnarly old metal trader offering

them a pretty unattractive price for metal he cannot sell and does not want to hold.

THAT's WHAT I THOUGHT TOO.

 

I imagined that Buy&Holders might have an average Silver cost of maybe $8-10 per ounce, or a maximum of $12.

 

I was AMAZED when I heard that Bob Chapman had an average cost of $18. That means that if Silver falls back to where the Parabolic move started, then he might even have a LOSS on his entire silver position. What sort of Buy & Hold acquisition policy does that show : A buying panic when prices took off last fall - that's what it seemed to me.

 

I like to buy cheap, and sell dear. I don't chase uptrending markets, because you can always find something cheap, if you dig and research hard enough, which is how I wound up buying things like: the Swiss Franc, GLW.t, and even CRB last year. Not popular trades when I was buying in, but they worked well.

[G0ldfinger]

... where their only buyer is likely to be some gnarly old metal trader offering

them a pretty unattractive price for metal he cannot sell and does not want to hold.

No, no. In the end, the long term silver holders will sell to the self-proclaimed trading geniuses who will attempt to trade the last bit of the silver bull / up as well as down. These guys have proven over and over again that they can't fail in these super-volatile markets.

[HPCsoYESTERDAY]

THAT's WHAT I THOUGHT TOO.

 

I imagined that Buy&Holders might have an average Silver cost of maybe $8-10 per ounce, or a maximum of $12.

 

I was AMAZED when I heard that Bob Chapman had an average cost of $18. That means that if Silver falls back to where the Parabolic move started, then he might even have a LOSS on his entire silver position. What sort of Buy & Hold acquisition policy does that show : A buying panic when prices took off last fall - that's what it seemed to me.

 

I like to buy cheap, and sell dear. I don't chase uptrending markets, because you can always find something cheap, if you dig and research hard enough, which is how I wound up buying things like: the Swiss Franc, GLW.t, and even CRB last year. Not popular trades when Iw as buying in, but they worked well.

 

 

so no core position in silver then?

 

to me a core position is a percentage of a silver metal which is being held against which you may take paper shorts when the opportunity arises from time to time (but never in excess of 20% max of your long position)*.

 

Also, holding silver miners may lower your allocation of the physical long, but not more than 25% say

 

a sensible approach in a long-term bull market don't you think?

 

*this is similar to what S.Thomson advocates

 

edit - actually 20% is too high, 10% short max would be more sensible imo, if you wish to gamble on the corrections

[drbubb]

Ramping buy and hold in a strong pull back is to my way of thinking a bit daft. If it works for some people then fine but there are other ways of approaching this investment and money making strategy.

 

You also have to wonder to what extent the market is ignorant of federal reserve activities and likely outcomes.

All those base money electronic reserves for example could dissapear enormously quickly as the banks swap into higher interest paying bonds in exchange for uselessly huge amounts of base money that they are currently holding.

 

All my attempts and other peoples attempts to engage silver and gold investors about this are met

with mostly hate talk and contempt of a highly personal kind. Why is that?

You are challenging an "article of faith" perhaps?

 

People do not like to think too much for themselves, and would rather accept someone else's views as "gospel", I suppose.

 

I remember buying gold at around $500 after it came off its $850 peak in 1980, a few years earlier. I thought: it MUST go back to $850 - I can recall all those strong arguments that I was hearing in 1979-80, and they "made so much sense."

 

Well, I got "my clocke cleaned" on that buy, and I learned that I needed to develop my own long term points of view, not just rely on experts.

 

I challenge the Buy&Hold purists here, who are fond of quoting their favorite precious metals gurus. That is because I know those gurus may let them down at the peaks, when it wil really matter. People need to learn to think for themselves and not just accept the price targets of their favorite Gurus.

[aliveandkicking]

was DR. Bubb advocating a core position then?

 

also i took a short position at $45 & $49 for your info

 

i seem to recall your opinion a few years ago was that it would fall back to under $10, is that still the case?

 

edit - short pos. now closed

 

i think we are within 10% of the pull-back bottom

 

I can try and dig out what i said. What i think i said was that it was likely to or could fall

back to around 9.50 and in the conversation that ensued i committed myself to buying at that price.

 

My view at the time was that the prices of all things would rise so that holding silver was not likely to be a better position than holding copper or tin, baked beans, if you could store them or ammo, or even a house as i have done. In that kind of view you would have to be able to get out of silver to buy what you wanted to buy while silver prices were at a high, since it is known that these metals suffer from volatility, due in part to the numbers of buys who do not buy silver to use it but rather to sell it for a profit or as an inflation hedge or whatever you want to call it.

[G0ldfinger]

I remember buying gold at around $500 after it came off its $850 peak in 1980, a few years earlier. I thought: it MUST go back to $850 - I can recall all those strong arguments that I was hearing in 1979-80, and they "made so much sense."

You should have listened more to Sinclair back then, it seems. He had his model, had seen that there had been an enormous overshoot (over the debt equilibrium price), and got out for good.

 

EDIT: The point is that these cycles take long, they don't swing back and forth in a few years time, this is multi-decade stuff. And the belief in the paper force was strong after Volcker.

[drbubb]

so no core position in silver then?

 

to me a core position is a percentage of a silver metal which is being held against which you may take paper shorts when the opportunity arises from time to time (but never in excess of 20% max of your long position)*.

 

Also, holding silver miners may lower your allocation of the physical long, but not more than 25% say

 

a sensible approach in a long-term bull market don't you think?

 

*this is similar to what S.Thomson advocates

 

edit - actually 20% is too high, 10% short max would be more sensible imo, if you wish to gamble on the corrections

I am flexible enough to move my "Core" (inflation protected) positions around, and they need not remain in precious metals, or even in metal commodities.

 

For instance, I consider owning my own property in HK a "core position." I am now thinking about selling it- after a gain of 50% or so. But I may not do that until I have worked out an alternative place to park a 7-figure inflation-protected investment.

 

Over the years, it moved from:

 

+ London property, to

+ Junior gold stocks, to

+ HK property, to

+ Less HK property and HK$ cash

 

Where next?

 

I am seriously thinking about buying property in the US. And if silver gets cheap enough (under $27?), I may give it some thought as a CORE position

[G0ldfinger]

I can try and dig out what i said. What i think i said was that it was likely to or could fall

back to around 9.50 and in the conversation that ensued i committed myself to buying at that price.

Congratulations, you must have made an absolute killing. And now you have just started to rinse and repeat. Retirement in the Carribean getting very close now, I presume?

[drbubb]

You should have listened more to Sinclair back then, it seems. He had his model, had seen that there had been an enormous overshoot (over the debt equilibrium price), and got out for good.

 

EDIT: The point is that these cycles take long, they don't swing back and forth in a few years time, this is multi-decade stuff. And the belief in the paper force was strong after Volcker.

My Gold buying then was pretty modest, and so was my wealth in those days.

 

Where did JS invest?

 

I was mostly in property then, pyramiding my wealth - to make it grow.

[HPCsoYESTERDAY]

I am flexible enough to move my "Core" (inflation protected) positions around, and they need not remain in precious metals, or even in metal commodities.

 

For instance, I consider owning my own property in HK a "core position." I am now thinking about selling it- after a gain of 50% or so. But I may not do that until I have worked out an alternative place to park a 7-figure inflation-protected investment.

 

but i am not referring to other positions; of course they have merit (i am fortunate to own a property with enough land for decent-sized vegetable plots)

 

however, i am referring to having a core position in silver irrespective of other investments - i guess it's down to your overall strategy

 

i own silver because i think it is in a long term bull that is far from over - simple

[G0ldfinger]

Where did JS invest?

Cable TV, AFAIK.

[aliveandkicking]

Congratulations, you must have made an absolute killing. And now you have just started to rinse and repeat. Retirement in the Carribean getting very close now, I presume?

 

Mock all you want, i have made a few tens of thousands of euro by having a house and touch wood it will continue to work out well.

[drbubb]

but i am not referring to other positions; of course they have merit (i am fortunate to own a property with enough land for decent-sized vegetable plots)

 

however, i am referring to having a core position in silver irrespective of other investments - i guess it's down to your overall strategy

 

i own silver because i think it is in a long term bull that is far from over - simple

Yes, indeed.

That's it exactly - your OVERALL position and strategy matters.

A CORE position in physical silver makes much more sense, if you have a safe place to put it.

 

That is not so easy in a small Hong Kong flat./

[drbubb]

Cable TV, AFAIK.

Big money and political connections help there.

 

I suppose being a renegade member of an Illuminati family would have helped him in that field.

[G0ldfinger]

Mock all you want, i have made a few tens of thousands of euro by having a house and touch wood it will continue to work out well.

That's fine. But if you exchange "house" with "gold" or "precious metals", many on here would/could say that same sentence, I believe.

[G0ldfinger]

I suppose being a renegade member of an Illuminati family would have helped him in that field.

Let's not go down that road.

[Icarus]

Nervous and fumbling Jeff Christian on Bloomberg. Watch his response to the consecutive raised margin rates in silver on the the CONmex. Enjoy.

 

http://bloom.bg/lh3NYr#ooid=FoeDdnMjqD47qQUuuNko1PiXIA3nHRyF

 

Suggesting that margin requirements do not affect price reveals gross incompetence. It is a well understood that raising margins decreases price and lower margins increases price. See, for example, the paper 'The role of margin requirements and haircuts in procyclicality' by David Longworth of the Bank of Canada.

 

'In the upswing, a reduction in haircuts or initial margins increases the maximum leverage available to a borrower even if other credit terms remain unchanged. As the leverage that can be effectively employed increases, additional purchases of collateral assets can be financed....

 

...In a downturn, actions taken by individual market participants to protect themselves, such as calling for additional collateral, reducing the amount of credit extended to specific classes of counterparties or ceasing to accept certain types of collateral, can induce further contraction of the supply of credit through collateralised lending. This may lead leveraged investors to liquidate assets, which in turn may lower collateral values and intensify deleveraging pressure through further margin and collateral calls, or other responses by credit providers. In extremis, where calls for additional collateral cannot be met, forced liquidations or seizure of collateral by lenders can result, reinforcing and accelerating the adverse asset price dynamics.'

 

http://www.bis.org/publ/cgfs36.pdf

 

To even suggest that raising margin requirements does not affect price suggests gross incompetence at best. People who do not understand the relationship between margins and prices should not be setting margins at the CME. In which case they should step down. If they do understand the relationship between prices and margins they have knowingly commited fraud.

[romans holiday]

Assume markets will be volatile and uncertain.... and assume this will be good for gold in the aggregate.

 

Take a pragmatic approach, and draw a distinction between gold and more volatile silver.

 

Buy and hold gold [and a bit of a silver if you want].

 

Then [attempt to] hedge gold by trading the volatility of silver against the currency of your choice. I think either Yen or US dollar are the best for this as they move "contrary" to silver/ gold.

 

Relax and chill.

[Schaublin]

Silver has still risen from around 5 and most enthusiasts here are adding from their earnt income.

 

At best a fall from 50 to 20 or 8 , or whatever it goes to, is just a bit dissapointing and does provide an

opportunity to get more at a cheaper price.

 

As people have pointed out before, many people here are not sophisticated traders. Silver holders

have done nothing wrong as far as i can see providing at some point in the future they do realise

that they will need to exit there position when prices are high, before others are also heading

for the same exit, where their only buyer is likely to be some gnarly old metal trader offering

them a pretty unattractive price for metal he cannot sell and does not want to hold.

 

If the (does he have to be old and gnarly?) trader cannot sell and will not hold he would not give you anything at all. This scenario is pedalled by those in thrall to normalcy bias who just cannot see how the system is unravelling and cling to the idea that their paper will store their wealth in the coming years.

[Schaublin]

You are challenging an "article of faith" perhaps?

 

People do not like to think too much for themselves, and would rather accept someone else's views as "gospel", I suppose.

 

I remember buying gold at around $500 after it came off its $850 peak in 1980, a few years earlier. I thought: it MUST go back to $850 - I can recall all those strong arguments that I was hearing in 1979-80, and they "made so much sense."

 

Well, I got "my clocke cleaned" on that buy, and I learned that I needed to develop my own long term points of view, not just rely on experts.

 

I challenge the Buy&Hold purists here, who are fond of quoting their favorite precious metals gurus. That is because I know those gurus may let them down at the peaks, when it wil really matter. People need to learn to think for themselves and not just accept the price targets of their favorite Gurus.

 

On what basis do you claim to know that PM holders cannot think for themselves and slavishly follow 'gurus'? Maybe Central Banks have been listening to the Pied Piper too much and that is why they are selling their fiat for gold? I do keep an eye on various 'experts' but the funny thing is, despite the 'snake oil salesmen', reek of some of them, the underlying facts of debt, monetisation of debt, lack of wealth production etc, are real.

 

If a shady character said that day follows night, one would initially be suspicious that it does! DOYR and you will find that it indeed does. Funny old world.

[Pixel8r]

And if silver gets cheap enough (under $27?), I may give it some thought as a CORE position

Now I really don't understand things, my cheapest buy was at £6 per ounce in '08 why didn't you build a core then?

[G0ldfinger]

I bought Silver Wheaton, Silvercorp and Great Panther Silver recently. I'll buy more over the next few months if they drop further.

[warpig]

I'm going in to gold and silver shares quite heavily myself. It seems like an opportune time to me.

 

I bought Silver Wheaton, Silvercorp and Great Panther Silver recently. I'll buy more over the next few months if they drop further.

[drbubb]

On what basis do you claim to know that PM holders cannot think for themselves and slavishly follow 'gurus'?

Certainly, some do that - Just listen to the call-ins on various podcasts.

 

That doesn't mean the GEI members do - or should !