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drbubb

Beating Buy and Hold (thru disciplined speculation)

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could you point us at a thread where you describe this risk

It is simple:

If you own physical, you have to store it somewhere, and it may be harder to protect in storage than paper assets would be.

 

EXAMPLE:

A burglar breaks into your home and finds both your gold and silver bars, and your paper statements of etf holdings.

Which is safer?

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It is simple:

If you own physical, you have to store it somewhere, and it may be harder to protect in storage than paper assets would be.

 

EXAMPLE:

A burglar breaks into your home and finds both your gold and silver bars, and your paper statements of etf holdings.

Which is safer?

 

I thought you were referring to a specific risk with Goldmoney or BullionVault who both seem pretty safe

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I thought you were referring to a specific risk with Goldmoney or BullionVault who both seem pretty safe.

 

I agree I would not like to keep physical at home.

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The risk of counterparty risk on futures is acceptable to me, and is SMALLER imho than the storage risk, that I have described and is rarely mentioned

Insured allocated & audited storage in a specialised vault doesn't seem very risky to me. I think it is stupid to keep more than a nominal amount at home, you wouldn't keep ten's of thousands of fiat notes at home would you. I personally keep some in allocated vaults, some in local bank vault and a small amount at home stashed where no one would possibly find it.

 

 

We will see when this plays out which in the longterm proves to be the better for safety, but I think we kind of saw what could happen during the first round in 2008 when AIG nearly went under.

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There was a huge drop in 2008, that few want to mention, and there is also the risk that a B&H owner misses the ultimate peak, as many did back in 1980

There was a very different set of circumstances in the 1980's, they raised interest rates above the inflation rate. That will not happen this time as doing so will make the system break from the level of debt, all they can do is keep going with the fiat currency race to the bottom. In the end gold will become money again, so there won't be a top followed by a crash as your expecting more like a plateau to a stable currency value. cool.gif

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There was a very different set of circumstances in the 1980's, they raised interest rates above the inflation rate. That will not happen this time as doing so will make the system break from the level of debt, all they can do is keep going with the fiat currency race to the bottom. In the end gold will become money again, so there won't be a top followed by a crash as your expecting more like a plateau to a stable currency value. cool.gif

 

I've heard that before somewhere....

 

from Wikipedia on Irving Fisher;

 

The stock market crash of 1929 and the subsequent Great Depression cost Fisher much of his personal wealth and academic reputation. He famously predicted, a few days before the crash, "Stock prices have reached what looks like a permanently high plateau."

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There was a very different set of circumstances in the 1980's, they raised interest rates above the inflation rate. That will not happen this time as doing so will make the system break from the level of debt, all they can do is keep going with the fiat currency race to the bottom. In the end gold will become money again, so there won't be a top followed by a crash as your expecting more like a plateau to a stable currency value. cool.gif

 

I think the purchasing power of gold will overshoot by some degree and then fall back as some productive activity resumes but the falling back will be slow and anyway, will be many multiples of the present purchasing power.

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I think the purchasing power of gold will overshoot by some degree and then fall back as some productive activity resumes but the falling back will be slow and anyway, will be many multiples of the present purchasing power.

I agree and doubt we will stabilise at the exact top, but believe it will be within 20% of a much higher price than here.

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I've heard that before somewhere....

 

from Wikipedia on Irving Fisher;

 

The stock market crash of 1929 and the subsequent Great Depression cost Fisher much of his personal wealth and academic reputation. He famously predicted, a few days before the crash, "Stock prices have reached what looks like a permanently high plateau."

So I take you don't think that gold will be relinked to currency in the future?

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does anyone see Government confiscation of Gold as a possibility

Do you see government confiscation of other financial assets, like houses, banks account, ISA's etc...?

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So I take you don't think that gold will be relinked to currency in the future?

 

It's possible, but the point I was making is that when people only see an upside, that's when you want to be alert to potential downside. Your comment suggesting gold will go up and stay there is quite similar to Irving Fisher's comment that was made before the 1929 crash. Looking back over some of the comments on the "$50-ish peak in silver" thread it's clear many were just looking at the potential upside, there were some suggesting that a significant top was not a possibility, only a correction. That makes me concerned that what is happening in the markets could be much more significant. For example oil has also had a huge abnormal dislocation of 10% down in one day. EUR/USD has seen a sudden snap back down.

 

The volume of trade in the dollar index at this level suggests a potential turn and that would be negative for commodities including metals;

Screenshot2011-05-07at203009.png

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It's possible, but the point I was making is that when people only see an upside, that's when you want to be alert to potential downside. Your comment suggesting gold will go up and stay there is quite similar to Irving Fisher's comment that was made before the 1929 crash. Looking back over some of the comments on the "$50-ish peak in silver" thread it's clear many were just looking at the potential upside, there were some suggesting that a significant top was not a possibility, only a correction. That makes me concerned that what is happening in the markets could be much more significant. For example oil has also had a huge abnormal dislocation of 10% down in one day. EUR/USD has seen a sudden snap back down.

I still don't think that $50 is anywhere near a significant top for silver. Even though $50 was the previous high in 1980, that was in 1980 dollars, imagine what those dollars were worth in those days. For silver to hit a similar relative value these days it would mean the price needs to go to somewhere around $200. I actually think that the fundamentals behind silver mean that it will actually go higher this time than the previous high in relative dollars and that we are only still in the middle stage of of this run rather the the final mania one. I am sure that we will see another similar margin hiking top at $100, maybe I will have to learn to trade options for that one. tongue.gif

 

The daily manipulations and swings in the market are less important to me as I am not a short term trader more a longterm value player. I feel the reason that there has been such swings in commodities, silver & oil in particular is that it has been engineered between the fed and it's favourite bankers (GS, JPM etc.) to help clear their shorts and to help make things look better on the inflation front to pave the way for QE3, which they know they have to do soon. Imagine where silver will be when that is announced.

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does anyone see Government confiscation of Gold as a possibility

 

Why take the chance? Sell now while it is still possible - I hear 1% interest can be accrued on fiat stored in a bank.

 

Edit: sorry, I meant minus 8 percent. :lol:

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does anyone see Government confiscation of Gold as a possibility

Oh gosh, another try to beat up this almost rotten horse.

 

http://www.greenenergyinvestors.com/index.php?showtopic=12313&st=0&p=194692&fromsearch=1entry194692

The PENSIONS CONFISCATION (it's pensions, not gold, stupid!)

You paper bug sheeple should worry

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...many were just looking at the potential upside, there were some suggesting that a significant top was not a possibility, only a correction. That makes me concerned that what is happening in the markets could be much more significant. For example oil has also had a huge abnormal dislocation of 10% down in one day. EUR/USD has seen a sudden snap back down.

Indeed.

Gold and Gold shares have already fallen back to near some important support levels.

 

(For the GDX the 252d.MA is at $56. GDX closed on Friday at $56.09.) GDX chart

(For the GLD the 144d.MA is at $137. GLD closed on Friday at $145.30.) GLD chart

 

These MAY hold, but if they do not there may be more downside risk now than some here think.

 

As I said weeks ago, I want to be sitting with plenty of cash if a slide like 2008 repeats. And it is possible from where we are.

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I still don't think that $50 is anywhere near a significant top for silver. Even though $50 was the previous high in 1980, that was in 1980 dollars, imagine what those dollars were worth in those days. For silver to hit a similar relative value these days it would mean the price needs to go to somewhere around $200...

Those are Bull Market calculations, Pixel.

 

They may prove meaningless in a Bear market. That is why I prefer to use options to limit my exposure

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I remember at the time that certain ETFs that were stopped by AIG ended up acting very strangely for a while.

Those were the days, my friend! I remember the panic of the paper bugs. And then they papered even more over it. But the piper must be paid, even if he is pied.

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Those are Bull Market calculations, Pixel.

 

They may prove meaningless in a Bear market. That is why I prefer to use options to limit my exposure

The precious metals are in the most fundamental bull market anyone could have dreamed up (thanks to Ben, Merv and the camarilla). I think the possible levels of tops (especially $50 for silver or $1,500 for gold) mentioned in some places will look absolutely ridiculous in a few years time.

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Indeed.

Gold and Gold shares have already fallen back to near some important support levels.

 

(For the GDX the xx is at $XX. GDX closed on Friday at $XX.)

 

These MAY hold, but if they do not there may be more downside risk now than some here think.

 

As I said weeks ago, I want to be sitting with plenty of cash if a slide like 2008 repeats. And it is possible from where we are.

 

any particular gold shares worth looking at, does there price lead physical?

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It's possible, but the point I was making is that when people only see an upside, that's when you want to be alert to potential downside. Your comment suggesting gold will go up and stay there is quite similar to Irving Fisher's comment that was made before the 1929 crash. Looking back over some of the comments on the "$50-ish peak in silver" thread it's clear many were just looking at the potential upside, there were some suggesting that a significant top was not a possibility, only a correction. That makes me concerned that what is happening in the markets could be much more significant. For example oil has also had a huge abnormal dislocation of 10% down in one day. EUR/USD has seen a sudden snap back down.

 

The volume of trade in the dollar index at this level suggests a potential turn and that would be negative for commodities including metals;

Screenshot2011-05-07at203009.png

 

interesting volume

 

what exactly is this a graph of PD, the dollar against what?

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any particular gold shares worth looking at, does there price lead physical?

I bought some calls on ASA on Friday. (Have traded these profitably in the last bounce, in Feb.) ASA chart

 

I plan to buy more, but want a more convincing sign of a potential upturn

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There was a huge drop in 2008, that few want to mention, and there is also the risk that a B&H owner misses the ultimate peak, as many did back in 1980

 

There was not a huge drop in gold GBP in 2008 as the pound devalued. Silver went down quite a bit in gbp

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interesting volume

 

what exactly is this a graph of PD, the dollar against what?

 

 

The volume of trade in the DOLLAR INDEX at this level suggests a potential turn and that would be negative for commodities including metals;

Screenshot2011-05-07at203009.png

 

from WIkipedia;

 

The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies.

 

It is a weighted geometric mean of the dollar's value compared only with

 

USDX goes up when the US dollar gains "strength" (value) when compared to other currencies.

 

 

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Those are Bull Market calculations, Pixel.

 

They may prove meaningless in a Bear market. That is why I prefer to use options to limit my exposure

Are you saying that you now think silver is in a bear market? I think it is in a bull market and will be for some time.

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