SILVER

[Pixel8r]

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.

[drbubb]

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.

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.

[Pixel8r]

double post.

[Pixel8r]

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.

[drbubb]

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.

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.

 

 

=== === ===

 

*"Disciplined trading": from the Beating B&H thread:

I am using options primarily as a way to control price exposures (!), not to take on excessive and dangerous gearing. For someone who, for example, was comfortable investing $10,000 in silver - that's about 300 ounces at $33, or about 300 SLV Call contracts - to plow the whole amount into Call options, would be a real mistake. I am not trading that high-risk way at all.

 

If you wanted to buy SLV-Calls costing $5, an option (covering 100 shares) would cost $500, and theoretically you could buy 20 of them. That is not what I am doing or suggesting anyone else here do. In my method, the trader would buy 3x contracts costing $1500, and sit with $8,500 in cash, waiting to see if he wants to exercise the 3 contracts. And he should also check his option strike price, and see if the cash he holds is enough - if not, then risk control becomes even more critical.

 

Traded in the way I am using them, options are much less risky than putting the whole amount of cash into calls. This is only one of several cautions I would want to make if I was intending to ADVISE people - which I am not - I want people to LEARN from my ideas, but to take full responsibility for their own trades.

 

Thanks for pushing me a bit to make this important point - in case it was not obvious to some here.

[Peppa Pig]

slv is in a continuation pennant, and I claim my five pounds. get ready for the next plunge.

[Peppa Pig]

I think slv tanks tomorrow or Monday.

[electroweak]

I think slv tanks tomorrow or Monday.

If it does, I'm gonna be right there waiting to sink some more cash in for metal.

(real metal, of course)... but i may use spreadbets to take advantage of waterfall decline in prices..

Waterfalls/downward spikes which will not of course budge the price of physical.

Seems crazy, but it could go back to 2008 where you could take delivery of a 1000 Oz future and melt it down mint some rounds and double your cash.

I think Jason Hommel did that.

[Pixel8r]

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.

[Peppa Pig]

me too Chris CT. I am all out of silver, have been since spring, but hoping to get back in. I am waiting for some substantial volume days, either way, before getting back in. that last sell off, severe though it was far too transient too be meaningful somehow. I am quite new to this game so I would nit recommend anyone take me seriously - at least until I make a few decent calls!

[warpig]

Be careful how you interpret the data, it might be people fleeing to physical.

 

 

 

I think slv tanks tomorrow or Monday.

[romans holiday]

RSI doesn't look over-sold yet.

 

 

[chazza]

There is a VERY subjectve channel from the April 09 - June lows, feb 09 top which silver tested with its spike low on the 26th. I think we retest that channel, so 26.70, or 25.0 for a lower low. Then looking for a rebound to 33/34 area.

 

Close your ears Pixel8r, I think this calls for an ETF punt...

[Perishabull]

WELCOME TO BATTLE OF THE EGOS

TONIGHT'S MAIN EVENT

 

MP3 : http://k003.kiwi6.com/hotlink/rr3c55x60b/3_progress_1.mp3

 

 

Unallocated paper PM's are subject to massive counter party risk, especially in the largest financial crisis the world has ever seen. I have no idea as to why you continue to ignore this fact, is it purely greed?

 

This is the last time I am going to talk about this on here as I have said it many many times before.

 

I think I have demonstrated to anyone's satisfaction that the PRICE RISK in Buy & Hold

has thus far been massively higher than the purely theoretical risk that you discuss.

 

 

 

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.

 

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.

 

 

"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.

 

 

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?

 

 

 

 

 

 

 

 

[drbubb]

WELCOME TO BATTLE OF THE EGOS

TONIGHT'S MAIN EVENT

Actually, I do not understand why you do not analyse what is happening here...

 

WORTH FIGHTING FOR?:

I am suggesting Options and TA are useful tools and have been demonstrating how to use them

 

Pixel keeps coming on, and saying things like:

 

+ You are missing this big risk : etf's aren't physicals

+ "I don't give a stuff" (that your options & TA techniques are working)

 

It is not about ego - it is about trying to get across to someone who is very close-minded, the value of the information I provide freely here. (I thought a real-life demonstration over many weeks and months, might be enough to show that options and technical analysis of great value in trading and investing.)

 

In fact, the close-mindedness of a few who post on this website is really starting to get to me.

 

Not only are some people coming here with very fixed ideas, but they somehow feel duty-bound to rubbish the useful information which is freely provided here, at the expense of time and (some) money. I really wonder why I bother at all ?!

 

What is being battled here is the "Buy and Hold is best - & everything else dangerous" mentality. But frankly, those who understand and use these techniques, or have learned them here, never seem to jump up and defend them against the attacks from Pixel et al. They leave it to me. Instead of just ignoring them, or telling Pixel etc to shove off, I try and defend them using the very real track record that has been built up here now.

 

What's wrong with that? (It puzzles me that so few others not take up what - to me - is very clearly the side of self-empowerment against the force of ignorance, reaction, and lets-stay-in-the-darkness?) / Haha- (I am aware that I am baiting some)

[Perishabull]

I was trying to attack the argument itself, it's unfortunate that didn't carry across in my skit. My take is that one of you focuses on hedging and swing trading via options whereas the other believes that PMs are the ultimate hedge against systemic/inflationary risks and should not be traded (apart from swaps between gold and silver). My belief is that the argument is being presented in too black and white a manner and I thought it was perceptive to point this out, clearly you disagree with the message. My belief is that it is wise to hold both cash and precious metals to hedge against dual outcomes. Interestingly I have adopted a balanced approach, typically holding dollars and metal, and aside from Roman's Holiday, that is rarely presented here.

[drbubb]

... My belief is that it is wise to hold both cash and precious metals to hedge against dual outcomes. Interestingly I have adopted a balanced approach, typically holding dollars and metal, and aside from Roman's Holiday, that is rarely presented here.

I have no problem with that. So you are saying, "there should be no battle."

 

Actually, I agree with that. I am merely presenting a demonstration that there exist tools (options and TA) which can enable one to produce returns which beat buy and hold, without gambling - merely by understanding the tools, and deploying them in a disciplined fashion.

 

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."

[drbubb]

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?:

 

"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."

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.

[romans holiday]

I was trying to attack the argument itself, it's unfortunate that didn't carry across in my skit. My take is that one of you focuses on hedging and swing trading via options whereas the other believes that PMs are the ultimate hedge against systemic/inflationary risks and should not be traded (apart from swaps between gold and silver). My belief is that the argument is being presented in too black and white a manner and I thought it was perceptive to point this out, clearly you disagree with the message. My belief is that it is wise to hold both cash and precious metals to hedge against dual outcomes. Interestingly I have adopted a balanced approach, typically holding dollars and metal, and aside from Roman's Holiday, that is rarely presented here.

The continued polarization on gold amazes me. On the one side you have the "gold is the only true/ natural money" crowd, and on the other "gold is only a commodity". The one thing they hold in common is that gold's an inflation hedge.... it is unthinkable for the first crowd that [hyper] inflation will not play out, and though the second crowd thinks deflation is possible, or probable, they tend to then assume that the price of gold must go down in this scenario.

 

The pramatic and balanced approach is to think of gold just as a currency.... the rise in price simply reflects the appreciation of a currency [a process of monetization by the market]. Even if at times gold and the dollar will move contrary to each other... in the aggregate they may both appreciate as the most desired forms of liquidity. Exter's liquidity pyramid portrays the dynamic well, where the dollar will appreciate against assets [and other fiat currencies] even as gold continues to appreciate against the dollar. More than mutual hedges, the dollar and gold could even be considered complemetary "investments" [or disinvestments]. It's all about liquidity now.

[Pixel8r]

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.

[Pixel8r]

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.

[drbubb]

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...

I think the risk you talk about is far from imminent - and by the time it arises,

I will have enough funds parked in Physicals, that it will be able to withstand it with ease.

Meantime, I have been hedging the very real price risks using options - a great tool that you do not seem to recognise. Nor do you acknowledge the historical track record that I have painstakingly built up on the Beating B&H thread.

 

...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.

I have no agenda to "turn people into traders" (!) as you put it. (That's ridiculous, the whole mission of GEI is self-empowerment, which I think everybody posting here knows.) I do want to help people progress in their understanding of markets, and tools like options, rather than encouraging the grim-&-superficial-scapegoating that some sites like GATA's seem to encourage. (Other sites like Financial Sense have also performed a useful mission by explosing some of the lies and half-truths that GATA has used.)

 

IMO - Your analysis of derivatives markets is deeply flawed.

 

With some real justification (my prior employment) I can claim to be an expert in this area (or at least a former expert.) The risks have been far over-dramaticised, and I do not want to contribute to the exaggeration. I have been reluctant to respond to your points, because I did not want to embarrass you - amongst those who really do understand something about the derivatives business.

 

I suggest you continue this discussion on a new thread that I have started on this topic- as a response to your complaints that I was ignoring you:

http://www.greenenergyinvestors.com/index.php?showtopic=15411

[drbubb]

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.

Those outsiders were very wrong in 2008 - We never saw the derivative nightmare that they forecast.

 

What we did see was the Treasury stopped fears from spreading by saving AIG, Fannie and Freddie. But IMHO they should have forced a haircut on the banks saved when they guaranteed AIG - that was a major mistake.

 

We can discuss this on the other thread, sil vous plait.

[Peppa Pig]

mentioning no names, but I am somewhat surprised to hear industry professionals in the metals sector declare that they do not know who the sellers are, other than hedge funds

 

 

er, the miners maybe?

 

duh.

[Perishabull]

Huge head and shoulders on SLW right now;