WatchIs this it - is this the final run up? Crap, in just a couple weeks silver went from $26 to $35.xx .....
I'm sure the events in the Middle East aren't helping, but it seems like a new high his becoming the norm for metals. I'm wondering when/if I should cash out. $2k gold and $50 silver sounds about right, but man.
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See, I am such an idiot. Meant to buy silver last week with the big drop, then when I screwed up and didn't everything in my gut said to buy yesterday. WTF is wrong with me?
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A few months ago, I was so close to buying call options of SLW when it was hovering around $20. You coulda bought $30 options below a buck. It's still haunting me. Can't complain though. I've been so leveraged towards the metals prices that I should be feeling much better about myself.
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47 male
Lafayette, CA
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The one change I'm making is that I sold my physical silver and bought SLV shares. I expect the top to last no more than a month or so and I want to be able to move fast when the time comes.
Otherwise things look very promising and I feel no urge to sell until the hype really starts and I see silver and gold featured on the evening news as the next big thing.
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47 male
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Now THIS is silver going parabolic!
The current chart is pretty ho hum by comparison.
Here's what the oil bubble looked like:
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So IWOG, tell me, would you still buy silver etfs today? My gut tells me it's going over $50 at some point in the relatively near future. But my fear tells me it will go back down below $20.
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Tude says
I doubt we're headed back to $20. Silver people are stubborn and hate selling it even when they know they must. There's something about holding those coins and bars that turns on the dopamine.
I'm buying SLV right now, but only as I transfer cash from physical to the ETF. Would I buy today if I didn't already have a large position? Probably. I think the closer we get to the magic $50, the more certain it is that it will cross and exceed $50. Unfortunately you might have to wait a year or two and that's the hard part. Bear traps knock a lot of people out of the market and metals can chop you up unless you're willing to ride the roller coaster.
I remember when silver fell from $20 to $10 and everyone was jumping on the bear train. (I think I was telling people to buy at $16 at the time. Quite a gut check, but long term the dollar is toast and metals will respond accordingly.
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okay then, I just bought 5k worth of SLV so be warned. Because I bought it I expect it to drop, lol, but it's in my IRA and an amount I can afford to lose.
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I want to be able to move fast when the time comes
What makes you think the fork lifts at the vault will be able to move quicker than a duck heavily laden with a couple of silver bars. Settlement takes what? Three days? What happens when the buyers can't come up with the cash to take delivery if there are net outflows from the ETF. I know, don't worry, the gov't will step in and deal with counter party risk... we've seen the script before. Sorry to be so negative. Cough, cough, I'm just one of those bitter bear trap guys looking at a pile of cash instead of the shiny stuff. $%#@! Warsh is gone... clear the runways...
Well the one thing I did buy and hold during the crash, LXU, is not a bad consolation prize.
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I hear you EBGuy, I am still 95%+ cash, I am just sick of THINKING about buying some SLV. Now, whether it goes up or down, at least I did it, with an amount I can afford to lose in a retirement account.
I need to do something for goodness sake, I read all these damn investment blogs every day and am sitting on nothing but electronic "cash"
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jvolstad's website
I sold the remander of my gold and silver holdings about 6-months ago. Oh well.
BTW, there is something about owning physical gold. So nice to the touch. Silver not so much.
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Oakland, CA
i'm looking for buying opportunities but
i wouldn't touch silver at these levels.
Sure it might go even more parabolic but if that happens I'll be ok
missing out.
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People have been saying "i wouldn’t touch silver at these levels" since I've been buying it at $14/oz.
I am up over 100% and I am still buying at these levels. The price action tells the story. This is about to move up in a big way and you will wish you had been buying at these levels. I have been watching silver spot prices every day for three years.
Statistically speaking, you are more likely to make profit from purchasing an investment that is making new 52-week highs than any other type of investment. Buy high and sell higher. This is a trader's motto. Buy low, sell high is the amateur's way.
Consider buying junk silver coins, especially Mercury dimes and pre-1965 Kennedy halves. The Kennedy halves will maintain their quality, and the Mercury dimes will be small enough to transact with if you have to, when silver is at much higher prices and the US dollar is diluted all to hell.
Remember, the numbers do not add up. The US dollar is absolutely drowning from debt that has no end in sight. The World Bank and IMF want to get rid of the US dollar as the world's reserve currency. What more do you really need to know to hedge your US dollars by purchasing silver?
If you are attempting to time the market but you are not using technical analysis to do that, you are throwing darts at a dart board.
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jvolstad says
And you are being left behind as I write this, sir. Nothing prevents you from buying back in to correct your mistake. The fundamental reasons for purchasing silver in the first place have not changed, but have only become more apparent.
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jvolstad's website
http://financialsurvivalradio.com/026-jason-hommel-heres-why-silver-is-headed-to-500-per-ounce/
$500 an ounce for silver?
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There are never any guarantees, but I'm going to hold until gold hits $2000 an ounce. Whatever silver is selling for at that point, I will almost certainly sell and attempt to short the back end of the bubble.
$50 is an important psychological level for silver and I can't imagine the market will stall before reaching it. The little guy will always favor silver because of cost and therefore silver should outperform gold from this point onward.
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jvolstad says
No chance. I think $100 an ounce would be the absolute top with $70 a lot more likely. At some point the silver mines will start opening up and new supply will pour in.
Right now almost all silver is a byproduct of copper production.
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Mulege, Mexico is awesome says
that's what they said about housing. At least being priced out of silver shouldn't be too much of a problem
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toothfairy says
This is true - the only thing is that I don't know a single person invested in metals. I hear people talk about it occasionally - but when they start putting their money where their mouth is, that is when I think we'll be near the top.
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iwog says
did you sell to Apmex?
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What are some of the reputable online coin dealers? How do I know the physical silver eagles I get are legit?
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theoakman says
Yeah mostly. I have a few family members who picked up some of it.
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Oakland, CA
have you ever seen this chart? This pretty well sums up my thoughts on investing in Gold.
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47 male
Lafayette, CA
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1. Charts that date back to the time when gold was money are meaningless. You might as well be making the argument that the stock market outperformed dollar bills.
2. Values for gold from 1933 to 1971 were fixed by governments for international transactions and in no way reflect the true market price for gold.
3. Putting the zero point at 1801 is extremely misleading and artificially inflates the value of the stock market to 6 digits before it was even legal to own gold again!! This is a horrible representation of the true relationship between the two markets.
4. I'm not endorsing this chart, but it shows just how easily you can manipulate numbers to show gold or stocks being the superior investment:
5. The true story is that from 1971 until 1980 gold far outperformed the stock market. From 1981 until 2000 the stock market far outperformed gold. From 2001 to 2011 gold far outperformed the stock market again.
Score:
Gold - 20 years
Stocks - 20 years
I believe gold will peak either this year or next at about $2000. an ounce. I expect stocks to outperform gold from that point onward.
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Oakland, CA
That chart doesn't lie. It's over 200 years of strongly correlated data. Stocks on an average earn 7% after inflation.
Gold basically keeps pace with inflation the actual return is almost zero.
that doesn't mean you can't make money in a bubble if you time the market right.
That's easier said than done because crash when it comes will be fast and furious.
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You forget one thing... what is happening to the US economy was planned by Fabian socialists behind the UN, World Bank/IMF, and the Bank of International Settlements, which also own controlling stakes in the mainstream media which does their bidding:
The Cloward-Piven Strategy
By Richard Poe
DiscoverTheNetworks.org
2005
First proposed in 1966 and named after Columbia University sociologists Richard Andrew Cloward and Frances Fox Piven, the “Cloward-Piven Strategy” seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.
Inspired by the August 1965 riots in the black district of Watts in Los Angeles (which erupted after police had used batons to subdue an African American man suspected of drunk driving), Cloward and Piven published an article titled “The Weight of the Poor: A Strategy to End Poverty” in the May 2, 1966 issue of The Nation. Following its publication, The Nation sold an unprecedented 30,000 reprints. Activists were abuzz over the so-called “crisis strategy” or “Cloward-Piven Strategy,” as it came to be called. Many were eager to put it into effect.
In their 1966 article, Cloward and Piven charged that the ruling classes used welfare to weaken the poor; that by providing a social safety net, the rich doused the fires of rebellion. Poor people can advance only when “the rest of society is afraid of them,” Cloward told The New York Times on September 27, 1970. Rather than placating the poor with government hand-outs, wrote Cloward and Piven, activists should work to sabotage and destroy the welfare system; the collapse of the welfare state would ignite a political and financial crisis that would rock the nation; poor people would rise in revolt; only then would “the rest of society” accept their demands.
The key to sparking this rebellion would be to expose the inadequacy of the welfare state. Cloward-Piven’s early promoters cited radical organizer Saul Alinsky as their inspiration. “Make the enemy live up to their (sic) own book of rules,” Alinsky wrote in his 1989 book Rules for Radicals. When pressed to honor every word of every law and statute, every Judaeo-Christian moral tenet, and every implicit promise of the liberal social contract, human agencies inevitably fall short. The system’s failure to “live up” to its rule book can then be used to discredit it altogether, and to replace the capitalist “rule book” with a socialist one.
... which makes silver a necessary investment for the long-term.
More info at http://centurean2.wordpress.com/2009/03/06/inevitability-of-gradualismby-their-ideas-we-should-know-thembirth-rate-down-or-death-rate-up/
Born to Russian-Jewish parents in Chicago in 1909, Saul Alinsky was a Communist/Marxist fellow-traveler who helped establish the tactics of infiltration -- coupled with a measure of confrontation -- that have been central to revolutionary political movements in the United States in recent decades. He never joined the Communist Party but instead, as David Horowitz puts it, became an avatar of the post-modern left.
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toothfairy says
Over the last 40 years gold has outperformed the stock market for 20 years and the stock market has outperformed gold for 20 years.
200 years of strongly correlated data doesn't matter. The object of a business (therefore a stock) is to make more money than you started with. If gold is money, then OBVIOUSLY the stock market is going to outperform the money it's denominated in.
If gold is no longer money, then it becomes a commodity that goes up and down based on supply and demand. That situation has ONLY EXISTED for 40 years therefore counting data prior to 40 years ago doesn't make a lot of sense.
BTW do you realize that from 1801 to 1933 it was impossible for an ounce of gold to be worth more than $20 in the long run? An ounce of gold WAS $20. Literally.
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iwog says
It seems to me that the price of gold will be even less stable now that it's no longer money.
Which makes it even less attractive as an investment.
That's sort of what we've seen in the past 40 years.
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toothfairy says
There's no doubt that gold is volatile. Speculation isn't a game for the timid, and I think most professional money managers advise only about 10% in gold as an inflation hedge.
That being said, gold was the correct play over the last 10 years and the returns have blown away the stock market.
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toothfairy says
Actually, that chart does lie. It completely ignores the fact that every canal and railroad in the 1800s went bankrupt and the stocks dropped to zero. Once they do, they get erased from the index and you get the result that stocks magically always go higher. Of course they do, when you ignore the ones that failed. Jeremy Siegel is a bad source to reference.
Stocks don't earn 7% a year on inflation on average. If they did, everyone could get rich using "buy and hold". It's also pretty silly to compare gold to bonds for the entire 19th century given the fact that those interest earning bonds were being bought and earned interest in gold itself. This is the type of nonsensical arguments that you receive from well respected academic economists. It's amazing that they've read so many books, studied so many papers, and can solve all types of convoluted math problems, yet not have a single shred of understanding of how any economy or investing actually works. To them, it's just a number. I'm sure, if we got to look at their investment portfolios over the years, we would get a big laugh. Meanwhile, we have a bunch of people on a blog who aren't even involved in the investment/finance industry that can run circles around the big shot investment/finance people themselves.
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Oakland, CA
If Jeremy Siegel is a bad source I'm kind of curious who you would consider a good source?
http://www.jeremysiegel.com/index.cfm/fuseaction/Display.Page/page/about_bio.cfm
I agree there are plenty of blowhards on the blogosphere who can say and get you to believe pretty much anything because much of
it goes unchecked.
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toothfairy says
Jeremy Siegel is a shameless self promoter that writes books and gives presentations. He makes all sorts of predictions on both sides of the spectrum and only highlights the ones that turn out to be right. The fact that you provided the link from his own website explains exactly what I'm talking about.
His chart of stocks runs an index that includes stocks while they are booming and excludes them as they go to zero and into bankruptcy. How can you measure the long term performance of stocks when you don't count the actual performance of those stocks over the long term. The reality is, in the long term, especially in the 1800s, most stocks go to zero. During the industrial revolution, we saw every canal and railroad go bankrupt over time. Huge economic gains were made and living standards were raised. Meanwhile, shareholders were wiped out. His index would have counted GM while their stock was up for 100 years and would completely ignore it circa 2008 as if everyone who bought and held GM did just fine.
Here was a prediction of his in 2008
Right there, he downplayed the mortgage crisis and advised people to go long financials right when they were all headed straight for zero absent a bailout from the fed.
We were headed straight for a market crash, which, I and several others predicted outright. Meanwhile, he said.
He didn't even think we were headed for a recession when anyone who was objective knew we were already in a recession, despite the lies coming from the BLS. The BLS was later forced to revise their numbers and admit we were already in recession.
Here's what he said about gold and other commodities in 2006.
I would note that most commodities are much higher than they were back then. Especially the gold he badmouths in that article.
For such an academic big shot, he sure makes some god awful calls that are obvious to anyone who has balanced a check book.
If you want a good source with academic integrity and spot on calls, I would suggest Jim Grant of Grant's Interest Rate Observer. Marc Faber has also had superior and consistent calls for about 10 years. As has Eric Sprott of Sprott Asset Management.
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Oakland, CA
Jeremy Seigel is a long term strategist so any short term call he makes take with a grain of salt.
That's what we're talking about here if you're looking to know when to get out of the gold bubble he's not the one to ask.
But he can tell you when we're in one.
If you dont like Jeremy Seigel check out David Swensen
http://moneywatch.bnet.com/investing/blog/wise-investing/is-david-swensen-lucky-or-good/1507/
who definitely has the track record to show for it.
These guys all saying basically saying the same thing about stocks vs. gold.
I will check out some of those other guys as well.
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toothfairy says
toothfairy says
Rofl, so long term, he was advising people to go long companies like Bear Stearns and Lehman Bros. Long term or short term, your losses would have been 100% had you listened to him. And no, he can't tell you we are in one. He predicted that we were in a commodities bubble in 2006 and he proclaimed that as the top. He was dead wrong. There's a huge difference between making a bad call and forecasting that there will be no recession in the face of the greatest crisis that we've seen in 80 years. That's not some little mistake. It's an epic failure. It's akin to a physicist ignoring the force of gravity in a calculation and concluding an object rolling off the edge of an incline plane will fly into space.
Like I said, Siegel's index is flawed and tells anything but the truth. The Dow Jones was about $68 in 1900. A 7% return annually on $68 invested 110 years ago would have yielded about $124433. That's 1000% off the true value of the Dow today. Stocks don't yield a 7% annual return. The DJIA over 100 years hasn't earned 7%, and they drop the lower performers off the index. Like I said, Jeremy Siegel, despite all his so called credentials, is a quack.
Anyone who has argued against gold has been wrong for 10 straight years and the numbers prove it.