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Revisiting Silver


By iwog   Follow   Mon, 2 Jul 2012, 4:12am PDT   32,630 views   268 comments
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Although it didn't crash as quickly as I expected, the chart is pure bubble crash at this point.

1. well defined parabolic peak
2. well defined bull trap
3. lower highs, lower lows
4. bear market trend that isn't anywhere close to capitulation

I wouldn't touch the stuff under any circumstances unless it drops near $10 an ounce.

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David Losh   Mon, 4 Feb 2013, 7:01am PST   Share   Quote   Permalink   Like   Dislike     Comment 229

underwaterman says

You offer nothing to any discussion but simple personal attacks or uninformed opinions.

You have been responded to in detail, repeatedly on the Real Estate threads you high jacked. You didn't like that so came over here where you thought you might be safer.

You invited every one over here, and this is what you have to say: underwaterman says

“At $2.7 trillion in base money, our call was for $10,000 gold. As base money is now rising, from additional QE, the shadow gold price should rise to about $15,000 in roughly one year’s time.

When you read that blog post keep in mind that they are pumping the price of gold, it's what they sell, it's not a reputable resource.

Bigsby   Mon, 4 Feb 2013, 9:55am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 230

underwaterman says

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/31...

Damn. Is that what you base your investment decisions on?

Facebooksux   Mon, 4 Feb 2013, 12:28pm PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 231

I'm about to withdraw a few thousand in play money sitting in equities and buy silver.

You know who's buying equities now?

JOE SIXPACK.

Know what happens when funds/ institutions stop buying equities and the retail investors take over?

It' called buying at the peak and it's precisely what happened during the first internet bubble.

Goatkick   Tue, 5 Feb 2013, 12:43am PST   Share   Quote   Permalink   Like   Dislike     Comment 232

underwaterman says

Goatkick says

Whens the next 20 % move in SI going to happen ?

If you read the thread, I've stated over and over again that I don't trade silver or gold. I invest. It is a manipulated market and the market cap on silver is small so it is very volatile in price between the manipulation and the size of the market.

I was asking Iwog..The guy/duck who started the thread.

everything   Wed, 6 Feb 2013, 12:01pm PST   Share   Quote   Permalink   Like   Dislike     Comment 233

Silver has already made it's moves, then bouncing all around looking to find a mean. My guess is we will see it moderate between $28-$36 this year, just like last year. Supposedly summertime is a good time to buy in at a bit lower prices.

Silver mining should still be ramping back up after trading for $5 for so long it was not a very profitable metal, give it a few more years, but investment demand is lively, dollars cheap, inflation?, picking up inventory slack that may present itself.

Supposedly it only costs about $10 to pull an oz. of it out of the ground.

Just IMOP is all.

iwog   Fri, 15 Feb 2013, 4:12am PST   Share   Quote   Permalink   Like (3)   Dislike (1)     Comment 234

I think we're about to see a doomsday-disappointment selloff that will take silver to new multi-year lows. The chart is a nightmare now and all similarities between today and the 2006 and 2009 bull patterns is looooooooong gone.

NuttBoxer   Mon, 18 Feb 2013, 1:14am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 235

Has anyone on here done any research involving primary trends? All these charts are wayyyyy to short. Look at gold and silver against any assets you want to since 2000.

I'm not an investor, but is it really that hard to understand that when fiat currencies around the globe are being hyper-inflated, gold and silver are the only refuge. They're easy to barter, easy to hold, easy to store. And they've been around as money since, ohh, the dawn of the financial world.

Sound economics and stable economies = faith in government backed currencies.

Bad economics and unstable economies = faith in anything government can't easily manipulate.

Am I the only one who understands basic logic here?

E-man   Mon, 18 Feb 2013, 2:12am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 236

NuttBoxer,

Those charts indicate what might happen in the near future for gold and silver. The bulls like to look at the gold chart since 2000. Do they want to look at the gold chart since 1980?

It's like looking at the housing chart since 2012 and say the housing market is going up, but if you look at the chart since 2006 and you say the housing market is going down. However, if you look at the housing chart since 1980, you'd say that the long term trend is up.

As much as I wanted to drop $200k to buy some gold to hedge my bet from the demise of the dollar, I just couldn't even convince myself to drop $20k to buy it. At this point, history is against gold.

Facebooksux   Mon, 18 Feb 2013, 5:44am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 237

E-man says

NuttBoxer,

Those charts indicate what might happen in the near future for gold and silver. The bulls like to look at the gold chart since 2000. Do they want to look at the gold chart since 1980?

It's like looking at the housing chart since 2012 and say the housing market is going up, but if you look at the chart since 2006 and you say the housing market is going down. However, if you look at the housing chart since 1980, you'd say that the long term trend is up.

As much as I wanted to drop $200k to buy some gold to hedge my bet from the demise of the dollar, I just couldn't even convince myself to drop $20k to buy it. At this point, history is against gold.

The problem with your argument is that we have never seen such rampant increase of the world's money supply. There's no way for the FED to increase rates at this point, we would be unable to pay off even the interest on our debt; the cat's out of the bag. We truly are in uncharted waters, so you can't extrapolate back decades or centuries.

iwog   Mon, 18 Feb 2013, 10:21pm PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 238

Facebooksux says

The problem with your argument is that we have never seen such rampant increase of the world's money supply. There's no way for the FED to increase rates at this point, we would be unable to pay off even the interest on our debt; the cat's out of the bag. We truly are in uncharted waters, so you can't extrapolate back decades or centuries.

1. Yes we have. The country is called Japan.
2. Inflation never showed up, in fact they have been fighting deflation for nearly two decades.

Facebooksux   Tue, 19 Feb 2013, 7:42am PST   Share   Quote   Permalink   Like   Dislike     Comment 239

iwog says

Facebooksux says

The problem with your argument is that we have never seen such rampant increase of the world's money supply. There's no way for the FED to increase rates at this point, we would be unable to pay off even the interest on our debt; the cat's out of the bag. We truly are in uncharted waters, so you can't extrapolate back decades or centuries.

1. Yes we have. The country is called Japan.

2. Inflation never showed up, in fact they have been fighting deflation for nearly two decades.

Yeah, I guess you're right about inflation buddy, cause Ben says it's not a problem. Obviously you never buy anything besides iPads.

It's not like manufacturers try to screw over consumers by adding filler to everyday products. You know, like FUCKING HORSEMEAT in BEEF LASAGNA.

Let's even assume that it's laughably "low" at 2% or whatever Inkjet Ben says it's at. Tell me what the effect is after 5-10 years? Looks like grandma's gonna need a roommate.

Bellingham Bill   Tue, 19 Feb 2013, 11:33am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 240

iwog says

The chart is a nightmare now

Bellingham Bill   Tue, 19 Feb 2013, 11:34am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 241

Facebooksux says

Let's even assume that it's laughably "low" at 2% or whatever Inkjet Ben says it's at. Tell me what the effect is after 5-10 years? Looks like grandma's gonna need a roommate.

No wage inflation, no inflation.

You will understand this, eventually.

Facebooksux   Tue, 19 Feb 2013, 1:25pm PST   Share   Quote   Permalink   Like   Dislike     Comment 242

Bellingham Bill says

Facebooksux says

Let's even assume that it's laughably "low" at 2% or whatever Inkjet Ben says it's at. Tell me what the effect is after 5-10 years? Looks like grandma's gonna need a roommate.

No wage inflation, no inflation.

You will understand this, eventually.

Wage inflation is but one aspect of overall inflation.

The Professor   Tue, 19 Feb 2013, 2:34pm PST   Share   Quote   Permalink   Like   Dislike     Comment 243

robertoaribas says

silver is looking worse and worse...

I disagree.

I was just looking at one of my Mercury dimes this evening. It is beautiful, crisply struck and shiny. Besides it's numismatic value, which is subjective and variable, the silver content can still buy a beer or a couple of candy bars just as it could in 1942. I suspect my dime will still be able to buy a beer in 2042.

I doubt a hundred ounces of silver will ever buy a house but I will be ready if it does.

What happened to underwaterman?

American in Japan   Tue, 19 Feb 2013, 3:25pm PST   Share   Quote   Permalink   Like   Dislike     Comment 244

I am almost out of silver now, although I used to have a lot of the ETF SIVR.

Bellingham Bill   Tue, 19 Feb 2013, 4:43pm PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 245

Facebooksux says

Wage inflation is but one aspect of overall inflation.

No wage inflation, no inflation -- just reallocation.

The 1970s inflation event was thanks to the baby boom hitting their 20s and 30s en masse, plus the mideast tensions and associated oil supply shocks didn't help.

Inflation continued in the 1980s as the baby boom borrowed tons of money.

Inflation returned in the 2000s as the baby boom and a few Casey Serins re-borrowed tons of money and spent it all, a fake form of wage inflation.

But if money no longer rains on the middle class, middle class prices simply cannot go up.

Something's going to have to give here.

http://research.stlouisfed.org/fred2/series/CP/

iwog   Wed, 20 Feb 2013, 3:21am PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 246

iwog says

I think we're about to see a doomsday-disappointment selloff that will take silver to new multi-year lows. The chart is a nightmare now and all similarities between today and the 2006 and 2009 bull patterns is looooooooong gone.

Looks like today is the day.

The Professor   Wed, 20 Feb 2013, 3:53am PST   Share   Quote   Permalink   Like   Dislike     Comment 247

iwog says

Looks like today is the day.

Silver goes up. Silver goes down. As long as I can buy my candy bars or beer with my silver dime I am holding for the long haul, and buying on the down dips.

Silver is still shiny beneath the tarnish.

iwog   Wed, 20 Feb 2013, 10:12am PST   Share   Quote   Permalink   Like (2)   Dislike (1)     Comment 248

The Professor says

Silver goes up. Silver goes down. As long as I can buy my candy bars or beer with my silver dime I am holding for the long haul, and buying on the down dips.

Silver is still shiny beneath the tarnish.

The long haul is going to be ten years or longer. I think a better plan would be to put money into the stock market and go all in 5 years from now.

People who control billions of dollars sell into the back side of asset bubbles. Fundamentals are nearly irrelevant however what I can say for sure is that it is cheaper than $30 per ounce to mine silver.

Vaticanus   Wed, 20 Feb 2013, 11:33am PST   Share   Quote   Permalink   Like   Dislike     Comment 249

iwog says

The Professor says

Silver goes up. Silver goes down. As long as I can buy my candy bars or beer with my silver dime I am holding for the long haul, and buying on the down dips.

Silver is still shiny beneath the tarnish.

The long haul is going to be ten years or longer. I think a better plan would be to put money into the stock market and go all in 5 years from now.

People who control billions of dollars sell into the back side of asset bubbles. Fundamentals are nearly irrelevant however what I can say for sure is that it is cheaper than $30 per ounce to mine silver.

http://seekingalpha.com/article/1209081-the-true-silver-mining-cost-what-does-it-really-cost-to-mine-silver

The Professor   Wed, 20 Feb 2013, 12:59pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 250

Vaticanus says

I think a better plan would be to put money into the stock market and go all in 5 years from now.

Silver is a hedge and a hobby, less than 10% of our investments. I have enjoyed collecting coins my whole life. I bought silver at $4, $10, and recently at $30. I dollar cost average into pre 1965 American coins from my favorite pawn shop on a regular basis. I got a bunch of mint state 1963 Franklins and 1964 Kennedys last month

I could buy 2 candy bars for a dime when I was a kid. I still can.

iwog   Wed, 20 Feb 2013, 11:07pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 251

Vaticanus says

http://seekingalpha.com/article/1209081-the-true-silver-mining-cost-what-does-it-really-cost-to-mine-silver

1. The numbers used in the article are incorrect. PAAS continues to make record profits and mine record amounts of silver.

2. The cost to mine one ounce of silver is around $12.

3. Even if you don't believe that number, why would you buy and hold a non-productive commodity that every silver mining company in the world is desperately trying to mine as much as possible at these prices?

http://seekingalpha.com/news-article/5682921-pan-american-silver-s-2012-annual-revenue-soars-on-record-silver-and-gold-production

Vaticanus   Thu, 21 Feb 2013, 3:50am PST   Share   Quote   Permalink   Like   Dislike     Comment 252

I agree Iwog. But buying then selling, then buying again at the right time is what the powers that be and other big wigs like George Soros do.
But some people just like to hoard stuff. To each his own. Becoming a property manager/owner and renting for a steady income stream is perhaps much more desirable. But not everyone can make these large investments. The little guy might buy silver to have an investment that doesn't give banksters and other powers the be First access to their own hard earned lettuce.

iwog   Thu, 21 Feb 2013, 4:13am PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 253

Vaticanus says

The little guy might buy silver to have an investment that doesn't give banksters and other powers the be First access to their own hard earned lettuce.

An investor like George Soros can rape the silver market and drive prices to $5 an ounce simply by selling contracts for silver that doesn't exist anywhere in the world.

Before 2004 I wasn't a serious investor. Since then because of my experience with the oil market, the real estate bubble, and stocks, I've learned one important lesson: Fundamentals NEVER MATTER in the short term. By short term I mean any period of time shorter than three years.

I watched oil go from $80 a barrel to $147 a barrel to $35 a barrel in a period of 24 months...........a period of time far too short for new production to come online or oil consumption patterns to change significantly.

I've talked about bubbles fairly extensively however I now believe the massive worldwide wealth disparity has defined each stage:

1. Run up: Smart rich people act in unison to corner a market. It generally helps if driven by fear. (inflation, peak oil)
2. Peak: Dumb rich people and the general public finally take notice because record high prices are hitting the news media and mass marketing companies start to prey on taxi drivers and waitresses. (Invest in silver now!!!)
3. Crash: Smart rich people exit leaving large positions in the hands of fad investors. Buyers are gone.

We're on the far side of the bubble. Massive fed printing occurred in 2008 and 2009 along with QE1 and QE 2 afterwards. Anyone fearing inflation has had years to get into the market. The people left are those who are not impressed or who don't have the money to play. Meanwhile world silver production climbs every year.

This is a horrible market to go long in. I love metals. I've been telling anyone who would listen to buy buy buy since 2008. I also called the peak almost perfectly in 2011. If I saw ANY reason to start putting gold and silver back in the bank, I would seize it. Right now I simply can't.

E-man   Thu, 21 Feb 2013, 10:31am PST   Share   Quote   Permalink   Like   Dislike     Comment 254

"I also called the peak almost perfectly in 2011."

Yes, you did. I'm your witness. Congrats on making the right call. At the end of the day, you'd be alright when you make more right bets than wrong bets.

Say 2011 is the top for the precious metals. I'd say that 2021 might be the time to go all in on PMs. I'll double check on it, but I'm fairly certain that'd be the bottom of the PM market, give or take 2 years.

See you at the top of the housing market buddy.

iwog   Thu, 21 Feb 2013, 11:03am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 255

E-man says

See you at the top of the housing market buddy.

Oh I really hope so. This market is becoming violent and I have no idea how to pick a top. I think Canada is the best model for the next bubble but who knows.

David Losh   Fri, 22 Feb 2013, 12:13am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 256

iwog says

I've learned one important lesson: Fundamentals NEVER MATTER in the short term.

I'm going to share this story about silver just because it was my first experience with it.

My first home sale was to a couple related to my girl freind. The guy told me he had the cash for a hefty down payment, so I put him with a lender. The lender called me to tell me the guy had no verifiable funds, so I asked.

I go to the guys apartment, and in the closet he has boxes, and boxes of silver coins. Well, that wasn't going to work, so I drove him to all the places he could sell his collection. We went to half a dozen places, and each told him they would pay a per cent of what he thought the coins were worth.

He finally sold, complained, but got the house he still lives in today.

It just depends on how well you sell, as well as when you sell. Had he liquidated before, or after, or when the market was hot, he could have done better.

Graybox   Fri, 22 Feb 2013, 11:51pm PST   Share   Quote   Permalink   Like   Dislike     Comment 257

robertoaribas says

I'm not shooting till I see the whites of their eyes!

I think this is a very good, simple and powerful statement and is the way to trade any market. I'm a currency trader actively trading 30 diff. pairs and my buy and sell is determined by price proving itself. When buying any market the 1st question is "what can I afford to lose", not "do I feel lucky" and then drawing lines in the sand of the logical price points found and determined then pulling the trigger.

Gold could drop to 1425+/- very quickly and for me that would not be out of sync in the overall picture and to be honest I absolutely expect it. Silver is a mixed bag, so at present I'm looking at 23-20's for longer term support.

Gold and silver I will trade (physical) independently based on price and there's no other way to do it better, talking about price and not instrument used to do so. I'm not day trading either metals so where price is at present I'm not looking to do anything unless I see the white in there eyes as it were and price changes that opinion.

Although I do enjoy everyone's opinion from the so called pro's to the novice I do heavily filter the information being shared (background music) and just stay with the plan based on the foundation of "what can I afford to lose".

iwog   Thu, 20 Jun 2013, 1:31am PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 258

Silver blew below $20 an ounce today. This should convince even the hardcore silverbugs that the bubble is finished.

E-man   Thu, 20 Jun 2013, 3:40am PDT   Share   Quote   Permalink   Like   Dislike     Comment 259

iwog says

Silver blew below $20 an ounce today. This should convince even the hardcore silverbugs that the bubble is finished.

Well, timing is so critical when it comes to investing. Whoever bought precious metals in the early 2000 did extremely well compared real estate. However whoever came late to the party and bought precious metals in the last couple of years has lost 1/3 to 1/2 value of their investment while housing investors saw their ROI has doubled to quadrupled had they leveraged their purchases.

Emotion does no good for investors. :)

chanakya4773   Thu, 20 Jun 2013, 4:03am PDT   Share   Quote   Permalink   Like   Dislike     Comment 260

E-man says

while housing investors saw their ROI has doubled to quadrupled had they leveraged their purchases.

not in bay area. there is approx 12% to 15% appreciation in most areas in bay area.
a leverage of 1:5 gives you 60% to 75% returns. after mortgage interest and property taxes..etc, you will get 50% which is same as what you would have gotten if you have invested in stock market.
Also the return on homes will cool down significantly going forward which will mean you will have to either live with mediocre returns ( compared to high quality stocks) or dump the homes with a transaction cost of 6% ( to agents). With leverage that around 30% cost to your original 20% downpayment ( investment )
i still believe that investing in very high quality stocks during the 2008 crash was a better idea for long term unless you got some really very good deals like what roberto got.

E-man   Thu, 20 Jun 2013, 6:08pm PDT   Share   Quote   Permalink   Like   Dislike     Comment 261

Chanakya,

My data showed Santa Clara County has a YoY gain of about 30% for SFHs and 35% for condos.

Roberto, Iwog, SFace and I were a little more fortunate where some of our purchases have appreciated 60% to 100% granted some of these purchases were made between 2009-2011. ROI is fantastic, but ROE is getting pathetic. I cannot speak for others, but there's a high chance that I will start to unload some of my RE holdings next year. I'll let the data be my guidance.

chanakya4773   Fri, 21 Jun 2013, 1:23am PDT   Share   Quote   Permalink   Like   Dislike     Comment 262

E-man says

My data showed Santa Clara County has a YoY gain of about 30% for SFHs and 35% for condos.

which areas ? may be in some bad neighborhoods and mostly in condo's.
Most areas that i would prefer to buy , the SFH were 700K to 750K which are now 800K to 850K.
100K appreciation in 3 years looks like a lot but on a 700 K home its still a 14.2% appreciation.

lets take a best case scenerio of 30% appreciation from the bottom ( 2009) to peak (now).
if i bought a 600K house , i put 120K downpayment.
now its 780K ( 30% appreciation) = 180K up
lets assume, the house is self sustaining which is very optimistic assumption ( rent + tax benefit = mortgage + property tax). when i sell the house, i pay 6% transaction cost = 46K
total profit = 180 K - 46 K = 134K

If invested in stock market , the gain = 120 K .

I would take the 120K gain any day especially if i have invested in high quality stocks.unlike real estate, i don't have to dump the stocks because the gains will be sub par in future.

joshuatrio   Fri, 21 Jun 2013, 1:42am PDT   Share   Quote   Permalink   Like   Dislike     Comment 263

Well, I've always wanted a monster box of SAE's - maybe it'll happen sooner than later. lol...

Iwog, thanks for the advice on silver. I actually listened to your call a while back and liquidated all of my stack in the mid 30's (I think around that). When I had bought back in the day around $10-12/oz..

All in all, my wife and I were able to turn a nice profit.

How about gold? I'm still in it at $800-900 levels, but it's tanked from where it was. I definitely missed the boat on liquidation, but it's not a large amount so I'm not nearly as concerned.

iwog   Fri, 21 Jun 2013, 4:34pm PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 264

joshuatrio says

How about gold? I'm still in it at $800-900 levels, but it's tanked from where it was. I definitely missed the boat on liquidation, but it's not a large amount so I'm not nearly as concerned.

I think I'll be interested in buying mid 2014. Of course a million things might happen between now and then, but I think $1000 is an important psychological draw. There's also good reason to think that this bear market will last approximately 3 years.

iwog   Wed, 26 Jun 2013, 8:21am PDT   Share   Quote   Permalink   Like   Dislike (1)     Comment 265

Boom goes the dynamite.

http://www.kitcosilver.com/charts/24hoursspot.html

theoakman   Sat, 6 Jul 2013, 7:06am PDT   Share   Quote   Permalink   Like   Dislike     Comment 266

I'm getting ready to pull the trigger on some call options on gdxj. Maybe Monday if I get a chance.

theoakman   Thu, 15 Aug 2013, 6:37am PDT   Share   Quote   Permalink   Like   Dislike     Comment 267

theoakman says

I'm getting ready to pull the trigger on some call options on gdxj. Maybe Monday if I get a chance.

boom goes the dynamite?

AverageBear   Mon, 26 Aug 2013, 10:30am PDT   Share   Quote   Permalink   Like   Dislike     Comment 268

I wish my last car crash was like this recent silver 'crash'. Soooo glad I stuck to my guns and kept SLW... Wish I had dry powder to add back in late June.

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