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Interesting Times
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I could put on this bio my education, work experience, investment strategy, and a nice thin (if I can find one) picture of me in a suit looking *smart*. Sorry but that's not my intent here. Sure I invest, help family make financial decisions, and make a ton of mistakes along the way. But my time... More
My blog:
Interesting Times For All Commodities And Investments!! CHAPTER 4......
  • Interesting Times For All Commodities And Investments!! Chapter 18.........  278 comments
    Jun 26, 2013 11:50 PM

    What started out as a small group discussing anything related to investing has grown extremely educational over the last few months.

    We have Authors, Financial Advisors, Seasoned investors, Experts in specific fields, and just the average Joe pitching in...

    Folks.. we are growing and posters like it. If you are new to investing then this site is for you.

    I am going to be the first one to admit that I haven't a clue when or if Gold and Silver will ever take off in price. I invested thinking they will though. Additionally I don't see much coverage or articles pertaining to the other commodities. So I started a blog where every commodity, and every investment is on the table for discussion. Even political questions. I only ask that you be courteous!!

    Someone posted the difference between being smart, foolish, and a moron. Well I have been all of the above and I will "man up" and admit it! However I came away from those experiences with both battle scars and knowledge.

    For years I have been reading basically any day now Gold and Silver will explode. I am by far a gold or silver bug. Yet somehow the can gets kicked down the road and I live to learn another lesson. Then Sprott's ETF'S (NYSEARCA:PSLV) are talked about as being safer then others (NYSEARCA:GLD) and (NYSEARCA:SLV).

    With all the QE'S basically not creating any new jobs what will be the consequences in the future?. Will we be "CYPRUSED "? Are we in a serious stock market bubble? Obviously we read daily about these concerns but what about other INVESTMENTS? Here is where most of us are uninformed and relish an education.

    Individual stocks are fine to discuss as well. All of us know that commodities should only be a % of your portfolio. I owned (NASDAQ:PSEC) and liked the dividend. Others may not ! So please feel free to entertain your picks and why!

    REE'S have been an interest for a few of us over the last couple of years. I had exposure to Lynas (OTCPK:LYSCF). Some posters might have questions about this group as well.

    If you disagree with a post please bring proof and display your argument. If you agree with a post, find one interesting, or have questions please feel free to respond. We must remember were all in this together. So if you want to talk politics and how it affects everyday life, fine with me!!

    Now if some have an opinion on Copper, Zinc, Palladium, etc. Do not hesitate to post that. Most of us might not understand the post but I am sure we'll be open to learning. Lumber might interest someone and I would like to learn why I should invest in it. PLEASE bracket any symbol as it also allows a reader to click on it and get some data.

    My part time job is a college and high school official so I can sit here and referee all day long. I honestly hope that ALL will be professional with their comments. So lets see who comes on board. Looking forward to what can become a nicely knit group of diversified investors.

    I have invited a few Authors whose work I admire to bring their expertise to the forum here as. Tom, Eric, Hebba, to name a few, in no particular order, will drop in once in a while to voice their opinions. Please feel free to ask your favorite Authors to join in the discussion.

    These are highly recommended people that I suggest you follow as well. I have learned a ton from them and find their work both challenging and engaging. Two areas that I hope inspire people who normally don't post to now feel free to do so !!

    Now I also feel compelled to encourage the use of the like button. It is human nature that once someone posts and see the like button add up they will feel they made a valid point. Upon that feeling they will post again! So if you do like what someone posted, either a question or an answer PLEASE use it ! It might help our core grow exponentially as well

    LURKERS , we are waiting for you to post here too!

    We are living in some very INTERESTING TIMES !!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Post away everyone!!

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Comments (279)
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  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » Here's my article;

     

    Is This the Bottom for Gold and Silver?

     

    http://bit.ly/14bkOpZ

     

    Answers to trivia questions here as well !!
    26 Jun 2013, 11:55 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    Thanks for posting IT. You copied my post as yours...

     

    "Here's "my" article." hahaha

     

    Will be interesting to see what the price action does. I am still dollar bullish. Just "feel" the next leg up. We'll see if I am right.
    27 Jun 2013, 12:27 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » DOUG

     

    OOOPS...Sorry, I was going back and forth setting it up!!

     

    Article makes a ton of sense and Tom posted that he interpreted the margin increase to actually being bullish for gold ! You might want to look back on his comments to find it or I will see if he would post his reasons why here.
    27 Jun 2013, 12:32 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » DOUG.. Here is Tom's explanation to me !!

     

    "@IT Everyone in the futures market is on margin. To play that game you have to have a certain amount of equity in your position per contract you are selling. As the price moves in the direction you are on your equity goes up and your margin cushion rises. If it goes up enough for you to take on a 2nd contract then you can do that, now having just enough margin for both contracts, for example.

     

    If the price moves against you, then you either have to add money to your position (pure cash) to hold your position or sell the contract at a loss to you.

     

    Raising margin requirements in a rising market forces margin calls on those leveraged to the limit of their equity and gives the advantage to the short seller. If the price drops even a little they have to sell or face a margin call. Raising them in a falling market thins the equity cushion of short-sellers.

     

    And, now that the commercials (bullion banks, bad guys, pick your name) are likely net long this will make it easy for them to raise the price and force short sellers to buy to cover, thereby raising the price faster."

     

    Do you agree or disagree ??
    27 Jun 2013, 12:45 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    If I were to speculate, I don't really think it is a big issue to any of the big players. They have plenty to move the markets. I probably shouldn't have included it.
    27 Jun 2013, 01:23 AM Reply Like
  • tampat
    , contributor
    Comments (995) | Send Message
     
    Hi Doug,

     

    Good to see something new from you, perhaps you can post your thoughts here from time to time.
    27 Jun 2013, 06:46 AM Reply Like
  • tampat
    , contributor
    Comments (995) | Send Message
     
    IT,

     

    There weren't any trivia questions in that article!?!
    Were you up past your bedtime??
    27 Jun 2013, 06:48 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    Hi tampat, been busy writing my second book. I missed quite a few chapters it looks like!

     

    I haven't written too many articles because nothing in my mind changes from my last article. Trying to write an article a few times a week or even once a week, rehashing current sentiment and what someone from Goldman says, doesn't really help an investor. I try and train my clients to allocate, don't watch the markets except to dollar cost average into your next position if you are not fully allocated, and then go enjoy your life making a difference in this world. Of course traders have a different mentality, but I don't do much trading any longer. I actually see clearer because of it and I hope my clients do too based on what I do write...when I do.

     

    I can write here more about macro views, and debate the Keynesian's, but it gets tiresome with that crowd. They were no where to be seen when the price was rising and will hibernate again once the prices revert. They are mostly the younger college age who haven't lived through any real turmoil and put total faith in the Fed and government while I have zero faith in them, but understand they can make the game last longer than may gold bugs think (or have thought).
    27 Jun 2013, 07:02 AM Reply Like
  • Krustyman
    , contributor
    Comments (828) | Send Message
     
    Doug Eberhardt:

     

    ''I can write here more about macro views, and debate the Keynesian's, but it gets tiresome with that crowd.''

     

    Yeah, it gets tiresome too with the goldbugs.

     

    Krustyman
    27 Jun 2013, 07:45 AM Reply Like
  • bd4uandu
    , contributor
    Comments (1797) | Send Message
     
    I think maybe the faith in government will be shaken when student loan rates double soon.
    27 Jun 2013, 07:46 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    Krusty, I don't debate goldbugs. I can easily critique them.
    27 Jun 2013, 07:54 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @PAWS

     

    You missed them I guess. They are out there !! Maybe look at the last chapter??

     

    No winner yet on the BIG question. Who was caught sleeping now ???
    27 Jun 2013, 11:21 AM Reply Like
  • tampat
    , contributor
    Comments (995) | Send Message
     
    IT,

     

    I think you missed my point. The last sentence in your first post talking about your new article (but was Dougs article) implies the trivia answers are in the article.
    Nevermind, was just giving you a hard time.
    27 Jun 2013, 11:38 AM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    I'll go with Number # 18 PEYTON Manning ! At least in Tennessee
    27 Jun 2013, 01:20 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4059) | Send Message
     
    I think not. I think Gold will go down still a bit further but the $1000 price targets by some banks now are likely exaggerated. Due to bots and algos etc. prices seem to overshoot targets by some. Also India is still a problem. The $ still has some room to go up. So my call: 1100 is the bottom. Technically I think its 1175-50 actually but the overshooting for a short time (maybe just during the day).
    27 Jun 2013, 06:25 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @TRUFFEL

     

    So where does gold go after the floor you established. Flat or back up?
    27 Jun 2013, 06:37 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4059) | Send Message
     
    There is no flat but I think it will climb more slowly. But who knows. Definitely up. Everything gets more expensive - Gold too.
    27 Jun 2013, 06:47 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » A poster asked this question as well below my link to here..

     

    "I would like to ask the group in general about two things I have big interest in. First, silver. Although the plunge was not entirely unexpected, breaking into the teens was, at least for me. Silver has dropped a mind-boggling 45% in 8 months. Since I was in eight months ago I have no choice but to ride out the storm all the way. I am confident it rebounds but now, rather than months, I expect the climb back to say $40 will be years... Thoughts on that???

     

    Secondly, I am gaining access to some IRA funds late this year and want to re-allocate them (lets say about $10k) to either silver (average down on PSLV) or I am seriously considering finding a dividend bearing stock. I would like to find one that has a relatively stable price now and hopefully long term. I would like to invest the approx $10k, re-invest the dividends into more of the same stock for a few years (5+) and then start taking the monthly dividends. One stock I have become most interested in PSEC. The price has remained inside the $10-12 range for a long time and the dividend itself is a whopping 12-13%. Why every investor doesn't jump on this is a mystery to me but they say "if it seems too good to be true, it usually is." That is my fear about PSEC. So, my second question/request for info is about PSEC. Does anyone know much about it? 12-13% dividend re-invested can really grow. Seems to me this stock could generate $200-300 per month pretty fast with a $10k start and re-investing the monthly dividend for a few years. Is this one too good to be true? Thanks in advance. "

     

    Thoughts on this as well !!
    27 Jun 2013, 12:00 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    IT,

     

    Response to first,,
    This scenario come up a lot for me regarding a stock position.. Investor A buys and holds for long term ,but now realizes he/ she is caught in a severe down trend.. Asks what do I do now ??
    Shows importance in having discipline without falling in love with anything.. In hindsight the 15- 20% Or (whatever) rule should have been employed.. Now down 45% , it is now automatically a LT position or take the loss.. Not being critical , we've all been there at one time or another.. Now its almost impossible to react with out emotion., whereas setting a "rule" takes the emotion out of it..
    In the case of stocks - i tell all there are many opportunities being presented daily... no need to take chance of being involved in "dead money" for a long period of time with so many alternatives.. As stated in the silver example --climbing back to $40 will take years, then ask the question can i go elsewhere and get a return?? IMO plenty of alternatives .....

     

    regarding the $10,000 IRA funds.. for a possible div play ... I would suggest against taking the entire amount and putting it into one position.
    27 Jun 2013, 11:09 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    Just don't buy more silver. Buy good companies that will continue to pay dividends and watch your IRA grow. Sell the silver & invest it in something else - dead money in silver isn't going to come back. While you watch your silver investment go nowhere, you could buy (KKD) & other companies that will get your money back faster. For a list of excellent companies, see my post from yesterday.

     

    I've lost plenty of money in stocks that plunged, and never came back. You win some, you lose some but the goal is to learn from your investing mistakes so that you will make money in the long term. We've all been there. Take your losses & start over with good stocks. And continue to do more research. I'm not the "quick to pull the trigger" investor any more. Plenty of research, which means not asking people on a blog for advice. Learn to read financial statements, look at earnings projections, PE ratios, (CNBC.com has great info when you look up a stock) and what the prospects for the company are. (BA), (JPM), (PEP), (MCK), (MCD), (MMM), (IBM), (UTX), (UNH), (LMT), and many other solid companies will be doing business long after we all stop cashing out of our retirement funds. The companies in the DOW are a great place to start when you are looking for a stock to buy.
    27 Jun 2013, 11:29 AM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    Just don't buy paper as some will tell you. Always back up your investments with physical metals by a % you can be content with. For me it's 25% . The reason is you won't ever be in a cash only position.PM's work as well as cash but perform better than Federal Reserve Notes.If you like Silver (as many informed people do),don't buy paper ,buy Silver ,you will be glad you did because it's an asset you can own without counterparty risk. Unlike what Blskys is recommending .You should invest in what you know ,never in the fastlane paper items that require a "broker" .It's not just the return on your investment you need to be concerned with,but the return OF your investment. When it comes to that nothing else even comes close in comparison.
    27 Jun 2013, 01:44 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ IT: You asked: "Who is the most famous runner? and why?"

     

    OJ Simpson of course.
    27 Jun 2013, 12:52 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @CURLS..Noooooo I mean a marathon, a sprinter, a runner...YOU said you like running !

     

    O.J ran away from jail ! For a while anyway....

     

    Try again as it seems everyone is sleeping now..
    27 Jun 2013, 12:55 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ IT

     

    Sorry you don't like my selection. I do believe he's quite a runner. Ran away from a great life. Ran away from an acquittal right into jail. Ran away from jail. Even ran slow-mo away from the police in a broncho.

     

    Did you think I didn't understand? I was -a joking- with you!!

     

    ...I like doing a bit, skiing, jogging, swimming, but not much watching... I have no idea who's a runner out there in marathons.
    27 Jun 2013, 01:25 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @CURLS

     

    Ok, your a winner !! I *like* the reasons a lot...

     

    Now the toughie #18???
    27 Jun 2013, 01:30 AM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    PEYTON MANNING (I'm shouting ) LOL
    27 Jun 2013, 01:51 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @COINS

     

    I agree, BUT how many Super Bowls did he win? No one remembers the losers no matter how many games they win, or how many yards they throw for. It's the wins in the BIG GAME that count!
    27 Jun 2013, 02:37 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » Thursday's economic calendar:

     

    8:30 Initial Jobless Claims
    8:30 Personal Income and Outlays
    9:45 Bloomberg Consumer Comfort Index
    10:00 Pending Home Sales

     

    Lets see what comments we get on this !!!
    27 Jun 2013, 01:38 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    2:01 AM At the second time of asking, EU Finance Ministers have agreed on measures to deal with failing banks. Losses of up to 8% of a bank's total liabilities will first be imposed on shareholders, creditors and major depositors with over €100,000, after which governments will be able to supply funds of up to 5% of liabilities. As further protection for taxpayers, states will create resolution funds that they'll finance with levies on banks. EU leaders are set to approve the measures at a meeting today.
    27 Jun 2013, 06:34 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    In other words, don't keep more than €100,000 at the bank. It still boggles my mind that people here in the U.S. keep more than $250,000 in one bank.
    27 Jun 2013, 06:35 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    2:00 AM Thursday's economic calendar:
    8:30 Initial Jobless Claims
    8:30 Personal Income and Outlays
    9:45 Bloomberg Consumer Comfort Index
    10:00 Pending Home Sales
    10:30 EIA Natural Gas Inventory
    11:00 Kansas City Fed Mfg Survey
    12:30 PM Fed's Lockhart: U.S. Economic Outlook
    1:00 PM Results of $29B, 7-Year Note Auction
    3:00 PM USDA Ag. Prices
    4:30 PM Money Supply
    4:30 PM Fed Balance Sheet Comment!
    27 Jun 2013, 06:34 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    U.S. states have pension gap of $980B - Moody's. U.S. states have a combined pension shortfall of $980B, Moody's calculates, or the equivalent of 66% of their income on average, including money from federal block grants and aid. Nebraska has the smallest gap relative to revenue with a shortfall of 7%, while Illinois - not surprisingly - has the largest hole with 141%. Moody's intends to take account of the underfunded pension schemes when assigning credit ratings.
    27 Jun 2013, 07:19 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    Good thing we have the PBGC to rescue them! http://bit.ly/139Zwwf
    27 Jun 2013, 07:59 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    Only as long as there is taxpayer money to bail PBGC out. The day may come that taxpayer money will not be available due to other priority obligations, like not defaulting on US debt.
    27 Jun 2013, 09:30 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    Of course I was being facetious...but you are right. The government will always have their hand out when their plans don't work out...to save the economy.

     

    My issue with them is live within your taxable means. We citizens have to!

     

    .
    27 Jun 2013, 10:09 AM Reply Like
  • JAMES CARLINI
    , contributor
    Comments (3865) | Send Message
     
    From our bailout money, GM is building a new plant and creating new jobs.

     

    Too bad it's a $672 Million investment in Mexico and not the US.
    27 Jun 2013, 07:50 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    You mean our failed investment in GM? http://bit.ly/139Itcz
    27 Jun 2013, 07:57 AM Reply Like
  • Common Guy
    , contributor
    Comments (79) | Send Message
     
    Pinches Mejicanos! LOL!

     

    I think is disgusting considering the need of jobs here in the US.
    27 Jun 2013, 10:50 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    June 27, 2013, 8:44 a.m. EDT
    Consumers spend and earn more in May
    Outlays rise last month after big drop in April; incomes up 0.5%

     

    http://on.mktw.net/1aQ...
    27 Jun 2013, 09:33 AM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    For every one article or forum post I see recently that is reassuring about the future of gold and silver, I am seeing two to the contrary. In hard times its easy to bash an investment and yet when low after a fall it is often a great time to buy. The article linked below is not encouraging. Sounds like this guy is expecting PMs to continue a free fall and I am becoming concerned because there is not all that much more room to tumble and still hope for a recovery to prices of 2-3 years ago when silver and gold were challenging $50 and $2000 respectively. Any thoughts from more experienced members is welcomed and appreciated....

     

    http://yhoo.it/18iizph
    27 Jun 2013, 09:33 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    rich

     

    I love any dude coming out everytime gold and silver go down mentioning of free fall even during daily fluctuations; I'd like to go up the 10th floor and drop a brick on their heads and show them what "free fall' really is; I don't pay any attention to any of them; in the 70s gold dropped 50% and then up on its way to over $800 in a short time
    27 Jun 2013, 09:55 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    The problem is, you have people like Peter Schiff, whom I do follow and appreciate, sticking with the same mantra without looking at what's staring him in the face. He looks at the big picture while ignoring the smaller things like a stronger dollar and price action.

     

    It's easy for these people to jump on the hate bandwagon. All the banks are, so they feel they have power money backing them. But they don't point to any data.

     

    The guy who wrote that ETF article you eluded to said this; "The fact is they ignore every important technical and fundamental data point that contradicts their bullish views."

     

    But he didn't provide one piece of "important technical and fundamental data" himself. Why? Because there aren't any except price action. He could have mentioned a stronger dollar, or lack of inflation (not price inflation in some areas which there is).

     

    Peter Schiff et al will eventually be right and claim victory as these guys wonder what happened. Unlike Schiff and Turk, who sell gold and silver investments, and the author claims have a vested interest, I have been cautioning investors to not go "all in" but to dollar cost average into a position. That advice has saved my clients $1,000's and $10's of thousands.
    27 Jun 2013, 10:20 AM Reply Like
  • Tack
    , contributor
    Comments (12762) | Send Message
     
    rin:

     

    Anyone who believes the outlook for gold is rosy might want to refer to this chart:

     

    http://bit.ly/19FfOw7
    27 Jun 2013, 11:35 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    Can you overlay that chart with a chart of the national debt please?
    27 Jun 2013, 12:30 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    tack

     

    thank you for the nice interactive chart and I will save it; not rosy, I am going by what happened in the 70s when gold fell by 50% and we are not there yet....times like this I look at historical data
    27 Jun 2013, 02:45 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    tack

     

    thank you for the nice interactive chart and I will save it; not rosy, I am going by what happened in the 70s when gold fell by 50% and we are not there yet...Times like this I look at historical data
    27 Jun 2013, 02:46 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    I'll take that (for silver) in a heartbeat. Although I have been interested in and watched silver for about four years I still consider myself very much a novice with all this and appreciate opinions of more experienced investors. Silver dropped 455 in eight months... that's serious value lost and while I really hope the bounce back will be rapid as you seem to feel it will, i am concerned it will take longer than we think. Regardless, i am not going anywhere with my investment. it would be foolish to sell now. i may even average down but i will watch for a few months first before making any move with silver.
    28 Jun 2013, 01:53 AM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    I do not believe in taking the hard line view that since it happened a certain way before it must do so again. That said, I believe silver will rebound in time and i do not think it has to drop much more to do so. How much time is the real question. Fortunately, as long as my health keeps me around, I have several years to allow that rebound. My silver interests are inside an IRA I can't touch for several years anyway so panic and short-term are not in my investment strategy especially regarding silver. The only question I have for myself is whether I average down this winter when I have more IRA funds to work with or diversify by investing in a dividend stock. Those are the two options I am exploring and trying to learn about over the next 4-5 months. I thank all of you for the education I am getting in here by reading your posts and thanks specifically to those responding to my posts and questions directly.
    28 Jun 2013, 02:02 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ Richonsilver

     

    "The only question I have for myself is whether I average down this winter "

     

    Every single book & article on how to invest wisely & on common mistakes says do - not- average down. Once an investment has done poorly, let it be. Whether you sell or you hold, you've already got a bet on this. Now bet on something else with the rest.

     

    Krusty suggested a book to me, & in there he explains it well "Secrets for Profiting in Bull and Bear Markets" by Stan Weinstein.

     

    Silver is not the only investment in the world. Go into anything that pays a dividend & you'll already be making money.

     

    It's like watching a horse that's limping behind in the race, & betting more because you'll win bigger if he wins from there. You can bet on another horse that may place too.
    28 Jun 2013, 08:33 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    Curls,,

     

    Very prudent advice ,,
    28 Jun 2013, 08:48 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    curls-100, "Every single book & article on how to invest wisely & on common mistakes says do - not- average down."

     

    What do you think dollar cost averaging means? You invest whether it goes down or up into the "allocation" you have for that sector. Price is secondary to this strategy.
    28 Jun 2013, 09:31 AM Reply Like
  • tampat
    , contributor
    Comments (995) | Send Message
     
    Agree Doug.
    How many posts have we read on just this blog about people who buy a stock and say they will buy more if it goes lower. Its a common theme and practice. With a long term time horizon it makes sense, but may not be the right thing to do for a short term trader though.
    Many people open a position with 1/3 or 1/2 the amount they plan to put into it and buy more if it goes down.
    Importantly, the size or % allocation to your total is important.
    28 Jun 2013, 09:41 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    right tampat, and with gold and silver, one has to have confidence the prices will move higher down the road. I still view this asset class more as insurance and not as a trade, as do many of my clients. That's why no one sells. It represents wealth that no one can take from them and price is almost secondary. Whenever they dig it up out of their back yard, they know it will have purchasing power. Comparing that to burying fiat money, whether Federal Reserve Notes or post 1964 coins, the same can't be said.

     

    The only objection I see is that you can't take your gold or silver to your local store and buy something with it. This is rather silly. You can't take Euro's or British Pounds to the store either, but you can exchanged the gold and silver for the "scrop" of the day.
    28 Jun 2013, 09:48 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ Doug

     

    My statement was in the -context- of averaging down on an already down investment that's not holding it's value. Every article & advice I've seen says not to do that. Please re-read my comments as being in the context of what I was replying to, & see what you think!
    28 Jun 2013, 09:55 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    Doug, I am a big believer in dollar cost averaging. It works on the upside too. Here's the difference, I use this strategy with great stocks that pay dividends. Silver & gold do not.

     

    Years ago, I lost a lot of money initially buying (GE) around $50 a share and (TM) around $130. Over the years, as the stocks fell so did my confidence, but I did manage to buy more shares at the lows as well as on the way down. In fact, I thru caution to the wind and bought a ton of (GE) when it was really low, under $10.

     

    The strategy worked as eventually both stocks rose in value. I was patient and collected dividends along the way.

     

    I don't invest in metals. But when gold is cheap I do buy it to give to my mother in law. Back when it was under $400 an ounce (was that the 90's? or the 80's? ) we bought a few ounces to give her. When the price was high I sold some of my gold jewelry that I no longer cared for. So that's how I play the gold market. I hate polishing silver, so I don't have any silver jewelry.

     

    If you like gold & silver, I suggest buying the real stuff and keeping it in your treasure room.

     

    For my investment portfolios, I prefer stocks & bonds that pay me with dividends and interest to hold them.
    28 Jun 2013, 09:58 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ Tampat

     

    As I said to Doug, my comment was in a particular context. What you & Doug are talking about (Dollar cost averaging as you buy into a position), is a totally different topic than what I was talking about (buying more of a tanked position to "cut" your losses.)
    28 Jun 2013, 09:58 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ Doug

     

    Oh, I see where you're coming from. You are certain silver's going up & didn't like my implication that @Rich has enough in silver & should diversify.

     

    If you go back through his comments, he's very heavy in silver with practically nothing else. It's gone down 45% for him. I was commenting on his particular situation, not on silver as an investment.
    28 Jun 2013, 10:02 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    @ curls, you said; "Every single book & article on how to invest wisely & on common mistakes says do - not- average down. Silver is not the only investment in the world. Go into anything that pays a dividend & you'll already be making money.

     

    It's like watching a horse that's limping behind in the race, & betting more because you'll win bigger if he wins from there. You can bet on another horse that may place too."

     

    The short answer to this statement, is "it depends on how much you have allocated to that sector."

     

    "Averaging down" and "dollar cost averaging" are technically the same when fulfilling your allocation into a sector, so maybe I am being anal about your choice of explanation by questioning your exact intent. That happens sometimes.

     

    There is nothing wrong with averaging down for that portion of your allocation to that sector. Some might say as the price is moving higher, why buy more? It's due to pull back. Technically, you should be withdrawing from that sector's allocation and putting those proceeds into the sectors that have been beaten down...like taking profits from the bank sector after their run up in price (thanks to BB) and putting them in another beaten down part of your portfolio.

     

    I would hope we're on the same page with that, but understand, bonds pay dividends. When interest rates shoot up, you're losing money on principal despite the dividend. When stocks are in a bear market, some pay nice dividends, but you still might be losing principal because of downward market sentiment. It's not black and white. People critique gold because it pays no dividend. But it's purchasing power can outshine what is paid on cash at the bank when bought at the right time. Now, in my opinion, is the right time.
    28 Jun 2013, 10:11 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @Doug

     

    "maybe I am being anal about your choice of explanation by questioning your exact intent."

     

    Yes you are. Or more accurately, I was writing in a context & you took my words out of that context -- then pulled them apart into something I wasn't saying & onto topics I wasn't writing about or commenting on.

     

    I tend to be long winded, and if I have to fully write out every context & carefully guard my words, i will be writing books. So better if I dont' start getting to anal myself at making everything crisp from any way someone could read it.

     

    Again, if you read over Richonsilver's posts over the last few blogs, I'm sure you will agree with my advice to him. It matches the advice everyone else has had - to diversify man! Same advice if he'd been in IBM too.

     

    None of this was a comment on silver or gold in any way!! I suspect your own emotions got you off track of what & why I was writing. (Am I getting this right?)

     

    Please check out my reply to Tampat as well. I'd hit "reply" to @Richonsilver & posted to his name. My comments were in a context!! :)

     

    I'm not getting into averaging down in general, or bonds. That's not what I was writing about & I made in implications about them & don't want to spend time on basics on them right now. (I need a shower - important things :). )
    28 Jun 2013, 10:22 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    Blue,
    u bring up a good point about Div stocks,, you're getting paid to wait , no such luxury with a commodity ....

     

    IMHO that has to be factored into an investment decision
    28 Jun 2013, 10:28 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    Curls,

     

    Don't think your are being "anal" at all .... All can choose what investment strategies to deploy, I take your comments on this topic for what they are & i believe for those that "average down, find more than not that they are stuck in a losing position for a great deal of time..

     

    If we are talking about a situation I.E a div paying stock that remains fundamentally sound , but taken down by the overall market , it may present a different situation,, U get paid to wait. No such luxury with a commodity.. Spikes like we have seen here may take years to turn, rarely resolved by making a "V" recovery.. History shows that a base is built , a spike occurs and it takes about the same amount of time to work that spike off.. The working of the markets and all of the "reasons" that it wil be different with a particular stock , commodity become irrelevant , just as the reasons for the "spike" were irrelevant..

     

    If u bought the nasdaq in 2000 , averaged down,, u could very well be waiting to break even on your total investment 13 years later,, In the meantime , other opportunities have passed u by.. the term "dead money" applies here... Also, by doing so u probably left yourself over allocated to a particular asset class with No return on investment and potential for a long wait..

     

    not about bashing anything , i've seen it in individual equities and my advice is the same ..
    28 Jun 2013, 10:44 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    curls, I don't have time to read every post and when I do read one and see what I saw you wrote, of course I'm going to challenge the thinking. IT knows I am busy doing other things, sorry.

     

    You used the word "every" so I didn't take it out of context. I have 27 years as a financial advisor under my belt and have written one book and am writing 2 more and so when I saw that terminology, I reacted to it. Not emotional, just not understanding where you are coming from which you have now explained, and taking what you have written as "literal" without knowing your context because use of that word "every" indicated to me all knowing...hence my 2 cents.

     

    Thanks for sharing and good luck.
    28 Jun 2013, 11:14 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ Doug

     

    The word "every" referred to who (books I've read), not to type of investments. You misread the sentence it was in. Even within context of books I read, my saying that made it clear it was an opinion I'd -personally- formed from reading, not a blind rule.

     

    If you don't want to read every post (I can understand that), then it's helpful if you look at the comment the post was directed towards, before commenting.

     

    Thanks for the thoughts!
    28 Jun 2013, 11:25 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ F&G

     

    I was quoting Doug's comment that he may have been anal (not referring to myself).

     

    You're descriptions of the patterns these things follow, is very helpful to read. We can never say never - never know what will happen. But I agree & stand by, once you have a enough in an allocation, there's no reason to bring your cost basis down instead of diversifying...!
    28 Jun 2013, 11:27 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    Curls,,

     

    Got it,, sorry for the mix up-- that said i do agree with your earlier commentary..
    28 Jun 2013, 11:42 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @CURLS

     

    Horse talk, just down my alley !
    28 Jun 2013, 12:11 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    "Every single book & article on how to invest wisely & on common mistakes says do - not- average down."

     

    Curls, I read that just as it is written. Sorry for not reading above it, but I saw that statement and that started this whole discussion, lol.

     

    Cheers!
    28 Jun 2013, 12:18 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    I get it now Curls, didn't realize you were discussing @Rich either. Yes, 45% is a lot. My book recommends 10% physical and 10% as a trade.

     

    I'm ok with more than that now with this pullback.

     

    See, I didn't even read this message about the 45% till just now! haha
    28 Jun 2013, 12:20 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    Blue Sky, just read your comment too.

     

    All I recommend is the "insurance" that physical gold and silver represent. No other asset, dividend paying or not, can offer an investor the real wealth and purchasing power that gold and silver represent. You can read more in my forthcoming book, "Illusions of Wealth."

     

    All I ask is for awareness of proper asset allocation that includes physical metals. I leave 80% to 90% to the experts. haha
    28 Jun 2013, 12:23 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » OK,,

     

    I just read the above comments about dollar cost averaging and @RICH'S position. I think all are right and wrong. I know his positions as he is a friend that I suggested posting here for information.

     

    He has a decent size IRA that he inherited. Now his feeling is that with his amount he can remove annually from it he was considering a dividend play(s) or average down on his exposure to the metals for one more year. All of this is still under the IRA umbrella . HE ESSENTIALLY HAS A % HE IS ALLOWED TO DECIDE WHERE IT GETS INVESTED ANNUALLY. The IRA is within a professional portfolio tied up for 7 years !

     

    He expressed the dividend plays will still be there a year from now so why not average down one more year? This is what he asked me and I said throw it out on the floor for others more qualified then I am.

     

    Personally, although it looked like a few comments got heated as long as you stay with the facts I have no problem with the back and forth. This is why we have the forum working !! I was the one who attacked someone personally but I did not see it above. Questioning a poster's opinion is different and I think all got close to that line but did not cross it.

     

    This just shows different philosophies people have. A million books have been written on how to invest and ALL can't be right. So @RICH has a decision to make.

     

    I might add TODAY is the end of the quarter and would like to know how important is today for hedge funds, mutual funds, etc. I see the market dropping and gold and silver rising. Any importance.?

     

    Plus as Doug said some gold and silver are owned as insurance for a depreciating dollar. I personally would be surprised if gold went below 1k. But I have been proven wrong before.

     

    NEVER, EVER polish your coins BTW... I also would like to add that I am getting emails from the coin companies I follow offering discounts so maybe the buying has slowed down!!

     

    But lets all just re read what was written and if you have more comments just add to it and move on.. Just like I was advised to do!
    28 Jun 2013, 12:35 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    IT,
    The importance of today is it is the last day for a company to "finalize" its number for the end of the quarter. I suspect there is a lot more going on as far as getting sales contracts signed than what is going on in the market. With the exception of mutual funds, hedge funds and ETFs that want to "adjust" their holdings before the end of the quarter.
    28 Jun 2013, 12:43 PM Reply Like
  • tampat
    , contributor
    Comments (995) | Send Message
     
    curls,

     

    If he already has 45% of his total port in silver (none in gold?) then I would say enough is enough.
    45% is a very high allocation to just one thing. In that case I would suggest he diversify more, though I have read of people who have even bigger allocations to the metals.

     

    He could average down now and buy more, but it could go lower and do nothing. I am a metals person (gold bug??) and have both gold and silver, but nowhere near that % allocation. It seems there are those who tend to lump gold bugs into a category and think thats all they buy. Not so.

     

    I think its possible we have a situation in the metals like the 1970's where gold and silver made a big rise only to drop nearly 50%. I would guess back then after that 50% drop many were saying to forget about them, but if you view an old chart you will notice not only did they recover, they exploded way past the old highs.

     

    As Doug said in one of his posts, I view it as insurance and have some for the same reasons I buy property ins, car insurance, etc.
    Well, its also nice to look at, the gold and silver eagles are works of art!!
    28 Jun 2013, 01:05 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    tampat

     

    I agree with you about the 70s except there were no ETFs like today
    28 Jun 2013, 01:17 PM Reply Like
  • southgent1951
    , contributor
    Comments (2534) | Send Message
     
    Tampat: Gold and silver were one of the few asset classes that rose in value during the 1970s. Both stocks and bonds were in bear markets.

     

    The stock bear market started in 1966, whereas the bond bear market started around 1950. Both bonds and stocks produced significant negative real rates of return in the 1970s.

     

    Starting on 1/1/1970 and ending on 12/31/1979, the annualized average return on the S & P 500, with dividends reinvested and adjusted for inflation was -1.45%!

     

    http://bit.ly/vFOfUm

     

    Gold on the other hand started that decade, using the A.M. London Fix, at $35.125 and ended at $534.

     

    Data at St Louis Fed:
    http://bit.ly/11NTM8B

     

    By 1/21/1980, the price had hit $843.

     

    I would note that it would take it would $2,383.16 in 2013 to buy $843 worth of goods in 1980.

     

    http://1.usa.gov/tj5h8X

     

    Gold has not hit a new high after January 1980 based on a CPI adjusted price. In short, the heyday for gold and silver was the massive returns provided by those metals in the 1970s. The only way to make money in them since that time, in my opinion, is to successfully trade them which would require selling into a parabolic price spike and then buying some back when the parabola is resolved which is what I hope to do after selling in September 2011 and January 2012.

     

    28 Jun 2013, 01:31 PM Reply Like
  • Tack
    , contributor
    Comments (12762) | Send Message
     
    south:

     

    The only reason for gold's very temporary outperformance in the '70's, of course, was the one-time decoupling from a fixed exchange rate with the dollar, and even then it resulted in a tremendous overshot to the upside, which was quickly resolved in the '80's.

     

    See: http://bit.ly/19FfOw7

     

    The foregoing chart demonstrates that gold doesn't really have trends; it has spasmodic episodes, usually occasioned by some kind of seminal event, like, as shown, the Great Depression, decoupling with dollar in '70s, or the Great Recession. Buying "when the parabola is resolved" is simply awaiting the next hysterical event. The bad news is that. so far, these have been spaced at forty-year intervals.
    28 Jun 2013, 01:38 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4059) | Send Message
     
    Would have missed my biggest gains if I would follow this! I tripled on ECYT under 4! I tripled down on IPGP at 35! Many market moves are unjust and then they allow you great entries.
    28 Jun 2013, 01:45 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1797) | Send Message
     
    " one-time decoupling from a fixed exchange rate with the dollar" I believe it is still decoupled. Didn't gold go up because of the massive inflation caused by overspending during the 60's and 70's? Guns and butter I believe it was referred to. Good thing there is none of that happening today.
    28 Jun 2013, 01:47 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    bd,
    No it shot up because Nixon took the dollar of the "gold standard" in 1971. Which allowed both the dollar and gold to fluctuate with the markets.
    28 Jun 2013, 01:53 PM Reply Like
  • southgent1951
    , contributor
    Comments (2534) | Send Message
     
    Tack: Your link is to what I call a typical parabola that is now in the process of resolving itself. Similar parabolas occur in other asset classes including tulip bulbs, housing prices, stocks and bonds.

     

    In my view, the rise in gold prices during the 1970s had multiple origins, including the devaluation of the dollar through ending its convertibility into gold in 1971, the removal of the legal restriction on bullion transactions in 1975, the failure of the two major asset classes over an extended period and hyper inflation.

     

    From my perspective, I would not argue too much with gold bugs when the price per ounce increased from $35 in 1970 to over $1900 in September 2011. The lesson is that there are periods to sell and to buy, just like any other asset class including stocks, bonds and real estate.

     

    Even at its current price, an ounce of gold has risen substantially in excess CPI since 1/1/1970. The inflation adjusted price for $35 now would be about $210.13

     

    http://1.usa.gov/tj5h8X

     

    Gold did not rise that much in price after the "Nixon Shock in 1971 and was at $43+ by the end of that year having started 1971 at $35.

     

    It does not require a "hysterical" event, and you seem to use that word a lot, to cause a spike in gold's price. Like any asset class, a large profit can be made buying low and selling high. The move in gold started in 2002 at around $280 and was trading at over $800 in 2007, when the stock market was also hitting new highs:

     

    P.M. London Fixes
    http://bit.ly/11NTM8B
    28 Jun 2013, 02:05 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1797) | Send Message
     
    http://bit.ly/106onKR

     

    http://bit.ly/x5SFUa

     

    What happened in 2000 to cause the drop in dollar and rise in gold?

     

    Was it decoupled again?
    28 Jun 2013, 02:05 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    One of the nuances of the Silver market that most people Pro or Con don't get is this. In the Silver run up of 1979 involving the Hunt brothers ,the big melting craze caused a 2 decade surplus of Silver due to all the melting that took place. The problem caused by this was lower prices for a long time in the Spot Silver market. The low prices persisted longer than the surplus I believe because the perception was that there was always more than enough in storage/warehousing . That contributed to the long period of time it took before the true value of Silver ever came back to where it should be. This TIME IS DIFFERENT. I don't believe that it will take nearly as long for Silver to come back into favor with buyers.
    28 Jun 2013, 02:10 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    I like to think of Silver as the only real horse in the race. The rest of the entrants are silhouette that are controlled by the man behind the curtain :)
    28 Jun 2013, 02:17 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    curls-100, "Every single book & article on how to invest wisely & on common mistakes says do - not- average down."

     

    Doug wrote: (Correctly IMHO) "What do you think dollar cost averaging means? You invest whether it goes down or up into the "allocation" you have for that sector. Price is secondary to this strategy"

     

    Thanks for setting that straight Doug. I was afraid we were going to keep going down the wrong path using a map from Detroit while the car we were in was in Cleveland. LOL
    28 Jun 2013, 02:21 PM Reply Like
  • Tack
    , contributor
    Comments (12762) | Send Message
     
    south:

     

    My main point -- which I fully expect to be ignored by never-say-die gold proponents -- is that gold is not an investment. The chart clearly shows that outside of episodic rises, gold's overall performance is rather moribund. If one regressed that chart (I'm not taking the time) on a median-value, rather than average, basis, one would see that gold's dependability as a constantly-rising investment over time would appear rather dismal. It's average price depends on enormous very-temporary excursions to many standard deviations from its median price. This is market timing in the extreme. And, the time between these rather short spikes is quite long.

     

    Also, I would disagree with you that tulip bulbs fall into the same category as any of housing, stocks or bonds.
    28 Jun 2013, 02:26 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    Blue Sky Silver and Gold are the dividends when you want it.It has NO counter-party risks.I take dividends every Saturday on the Mon-Friday purchases of Coins .Scrap Gold and other precious metals we buy .We call it a coin show and dealers get their dividends when they want them.There is a CoinShow within a 100 miles of every major city at least once a month. I like those dividends better than the one's I used to get in the mail from (BAT).
    28 Jun 2013, 02:30 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @Notrub

     

    Well, if I'd thought that through, (GM) was added to S&P a few weeks ago. If this is last day to "adjust" holdings, & a reasonably up market day (on fed tapering talk, lol), it would have been a very good bet. It's up 1.80%.
    28 Jun 2013, 03:00 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @CoinK

     

    If you go back to the whole thread starting with my comment, you'll find @Doug's was a misread of what I'd written. So nothing to correct me on.

     

    We weren't in Detroit or Cleveland. We'd driven off the countryside to visit a nice silver mine :) <--(that's intended as a joke.)
    28 Jun 2013, 03:05 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    OK Curls So,if someone has 45% of their investments in any one thing (Including in Silver). I have 1 word of advice. DIVERSIFY .
    Maybe buy a Gold coin or 2 LOL !
    28 Jun 2013, 03:10 PM Reply Like
  • southgent1951
    , contributor
    Comments (2534) | Send Message
     
    Tack: I would not classify my gold and silver bullion as an investment for me since I generally require my "investments" to produce income and be capable of valuation using objective criteria.

     

    I can not value an asset like a Picasso, an ounce of gold, or my near mint 1957 Mickey Mantle baseball card, based on earnings, income, PEG ratios, P/E, price to sales, free cash flow, real rate of returns for income investments like bonds, price to book and/or any other standard criteria used for securities that I would label an investment. Nonetheless, I could make a handsome profit on those types of assets, the sine qua non of an investment-the ability to lose or to win.

     

    I would however classify gold as an investment in the sense that it can rise and fall in value based on supply/demand and generate a loss or a profit.

     

    What would you call a Walking Liberty Half Dollar (90% silver) that I took out of circulation in 1964 and could have sold in 1978 at about $14. Was I mistaken in viewing that common date junk silver coin as an investment? ($.50 into $14 in a little over a decade!)

     

    I eventually sold those types of coins in September 2011 at a slightly lower price ($13.05 for an asset that cost me $.5). That asset never produced any income but did produce a nice profit.

     

    That are a large variety of assets that fall into that category. Would a buyer of a work of art, for example, be irrational for viewing that purchase as an investment, even though it has no clearly discernible or inherent value?

     

    Yes, like gold and silver, that painting has value which may go up or down in value and can consequently provide a real rate of return, just like any income producing asset such as a business, farmland or a bond.

     

    Gold bugs are not going to pay much, if any, attention to either of us.

     

    I would never have gold and silver at more than 1% of my total portfolio and will trade the PMs to lock in profits, looking for a more opportune price for re-entry. I would prefer silver due to its industrial uses over gold which I prefer solely due to its appearance. It has not gone unnoticed that an uncirculated $5 U.S. Mint gold piece from the 1880s, which I bought when I was 13, looks exactly like it did in 1880 and in the early 1960s which is more than I can say for its current owner. There is a timeless quality to gold in particular, more so than silver, that has an allure for humans for centuries and will continue to do so. The problem is that gold has not inherent fair value, clearly ascertainable, and consequently falls into the asset category of similar type of investable assets.
    28 Jun 2013, 03:12 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    curls,

     

    Thanks for your reply. I can't agree with your horse analogy though. An injured horse is done for good with no hope of coming back but a commodity, like silver which is well know for it's extreme volatility is not necessarily done for good. I knew the volatility factor when I bought in. Now that it is in effect on the downside do I give up and take 40%+ losses and move on??? I think not. At the absolute least I leave that investment alone and look for a long-term comeback. My argument in favor of averaging down is if you believe the stock or commodity has a good chance of rebounding during your "intended stay" in that investment then buying low offers two benefits. (1) It makes the break even point lower and therefore logically one that will be reached sooner thus producing profit faster and (2) when that profitability takes place you own twice as much.

     

    I believe those are two potentially very big upsides to adding more to the silver investment I already have. I suppose it comes down to your individual confidence in a rebound and how long you are willing to wait. One thing I have always liked about silver is unlike companies, it doesn't have the potential to just go away and if it becomes more scarce or rare, that can only boost it's value.

     

    With all that said, I am still investigating and learning about the dividend stocks and the benefits that go along with owning them. Thanks.
    28 Jun 2013, 03:12 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    Let me clarify my position. I have an IRA left to me by my father and that represents a large majority of my investments. initially, I invested in funds suggested by my advisor. These investments started two years ago and go for a total of nine. They cannot ever lose money. If the funds drop over the year I stay even with all money intact. If it goes up and stays up through the anniversary each year (in November) the profits lock in and the new value moves on to the new investment year. It is rather conservative but I can't lose and I have gained in 2 of the 3 years so far. However, as 10% is released each year for re-allocation, I look for the best places to put it. If I want I can do nothing and the 10% for that particular year just stays put in the funds. The two main funds included pretty much follow the S&P so as long as that goes well, so does my portfolio. Each year I can re-allocate 10%. The first year I did nothing, The second year I used 10% to buy PSLV. November marks the third year and another 10%. It is with that 10% that I am now trying to figure out what to do. If I average down the PSLV with the 10% this year my portfolio woud then contain 20% interest in PSLV and I have no plans to add to that beyond this year. My concern/question/dilemma is whether or not the grab that extra PSLV while the price is down before it rebounds ( and I expect it will) or move on with the 10% and get into something else. In the meantime, right now my portfolio contains 90% funds, 10% PSLV.
    28 Jun 2013, 03:25 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ F&G

     

    Thanks!

     

    @ IT

     

    Yep, you are why that horse analogy came to mind, don't you know?

     

    @ Doug

     

    Thanks! Actually I think he said silver's come down 45% since he bought, (which is frustrating for him I'm sure.) He's never mentioned other allocations as we've all asked & chatted, so I've gotten impression he's close to 100% in silver with his accessible money. That's where the "diversity" comes from ;).

     

    He's getting an inherited IRA, where he'll have some discretion & some is in dividend investments already (I think). He'd be buying down silver to cut the pain of the 45% drop, is all.

     

    Ah, we're all on the same page now with info! That's a good place to be! :) Very glad to have this smoothed out!

     

    Oh, and no need to push to see what I'll say. I'm quite straightforward & blunt, whenever I speak, like it or not :).
    28 Jun 2013, 03:27 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    That explanation is accurate about my IRA and before i read it I had posted a similar explanation above. Since that is now more clear I welcome replies to my question about what to do with the next 10%... average down on PSLV or move on to something else, probably a dividend stock. Thanks again.
    28 Jun 2013, 03:28 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ Richonsilver

     

    Don't you just love being the center of a discussion, completely by accident? So bottomline, what is your investment allocation? What % in silver, & in dividend stocks or other stocks? Definitely would help gather for you better advice & thoughts.
    28 Jun 2013, 03:33 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1797) | Send Message
     
    Your condensation is amusing.
    28 Jun 2013, 03:39 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ BD4

     

    I don't follow what you said? I condensed well?

     

    I was trying to make light of it all.
    28 Jun 2013, 03:52 PM Reply Like
  • WMARKW
    , contributor
    Comments (10251) | Send Message
     
    IT - here is link to one shop I am familiar with:

     

    Today 21.7% premium on ASE's over spot price.
    28 Jun 2013, 04:35 PM Reply Like
  • WMARKW
    , contributor
    Comments (10251) | Send Message
     
    Anyone know if funds can count on "owning" stock bought on last day of month or "not owning" stock sold on last day of month if trade settlement is some date in future and owner of record date is some day in future?
    28 Jun 2013, 04:36 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @PAWS

     

    I believe he is DOWN 45% from his initial purchase. Not that his exposure is 45%.. I cam almost guarantee that !
    28 Jun 2013, 04:36 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @COINS

     

    Where is this 45% invested in silver coming from? I am going to ask him to post tonight so he can clear the air. Maybe he posted it by mistake. But I believe he invested about 10% in silver with a 45% paper loss!!!

     

    Let's not distort the facts here. I KNOW this person for a few years now from another article and kept in touch with him for years...
    28 Jun 2013, 04:43 PM Reply Like
  • tampat
    , contributor
    Comments (995) | Send Message
     
    IT,

     

    Thanks, I saw someone else posted that too.
    But since we don't know the specific allocations to that and other stuff hard to say much more.
    Besides, everyone is different. If it were me and I only had a small amount I would buy some more now.
    28 Jun 2013, 04:45 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @CURLS

     

    Actually I have owned horses that have been hurt, bought them at a great price, gave them time off and vet work, and turned them around to be winners:)

     

    I had a group of investors and we had a very large stable of race horses not too long ago!

     

    I also see @RICH has already posted below. I did not read the whole thread ....
    28 Jun 2013, 04:47 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ It

     

    My analogy was along the lines that you already own into the limping horse. So buy another horse too. Not send the limper out to pasture.
    28 Jun 2013, 04:57 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ Richonsilver

     

    That clarification helps a lot! With 10% in (PSLV) now & 10% more to consider... that's a totally different story. It does as you say, depend on your expectation for a rebound. I'll leave that to others with more metal experience to ponder.

     

    That fund deal sounds sweet, that you can't lose.

     

    Vs. silver I'd ask, is there any sectors the fund doesn't represent well, that might add good diversity & income? Such as (PSEC) & other BDCs? Or some small/mid cap exposure since it does tend to move a little different than S&P500.

     

    Classic allocation advice is 3% in gold/silver. Here's another idea - other metals like Platinum?
    28 Jun 2013, 05:11 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @CURLS

     

    Boy, I did love the horse business. Made good money until the track changed their claiming rule. I guess they did not like what I was doing 15 years ago.

     

    It was a full time job just like stock picking. Watching tapes of races, understanding the drivers mentality. Yes we also had manipulation as well. But I could work my way through it, claim a horse for say 10k, race him the next week in the same class. Hope I finished in the top 5 as they all get paid in that group, and then have the old owner claim him back!

     

    Now today if you *claim* a horse for 10k you have to move him up in class for 15 days, essentially 2 racing weeks, where he/she had to race against better horses before you could drop it back down again. So after the trainers bill you were lucky to break even.

     

    Most races are claiming races meaning any horse in the race can be *claimed* for the price of the claim. SAY THE RACE WAS FOR 10K CLAIMERS, every and any horse can be claimed before the race for that price. Now the old owner gets to keep the purse but the new owner gets the horse after his bath !! We had times when multiple claims were entered and it was then a lottery.

     

    So I would just claim the best horse in the race, and just put him back in the next week in the SAME class. Kinda just rented him. You had owners crying they lost their pet, (sorry it is a business). But I would say no worries you can claim him back next week. We are just holding him for you !

     

    Once we claimed a 30k horse and that was unheard of back then. The trainer of that horse dropped her in for a claiming price from a race you could not claim from, It was an OPEN race for the best horses on the grounds..... Expecting no claim.... Well we claimed her, actually then moved her back up into the OPEN class where no one could claim her, and set a track record that the winning photo is still hanging on my wall. A TRACK RECORD that held up for 2 years. First claim at that price ever for that track

     

    So just like stocks you have to do your homework, I had over 60 claims one year. The most by far of any owners. I was also featured in the USTA magazine, HOOF BEATS in 2002, how I did what I did, and how we were successful. Today with all the purses being much higher I don't even want to print what goes on so we all got out of the business.

     

    Gotta tell you it was also a great tax write off. Depreciation was a wonderful thing that most tax accountants that had no exposure to that business did not know of. My accountant was a fellow owner who knew the tax laws!!

     

    Ok, I just had to bring back some memories and lighten up the conversation some...Hope a few enjoyed my story !!

     

    I see gold and silver were up huh ??
    28 Jun 2013, 05:13 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    The post I saw that stated 45% was this one by TAMPAT.

     

    curls,"If he already has 45% of his total port in silver (none in gold?) then I would say enough is enough.
    45% is a very high allocation to just one thing. In that case I would suggest he diversify more, though I have read of people who have even bigger allocations to the metals."

     

    @ IT, I got in late sorry if I contributed to the circular reasoning. And my apologies to Rich
    28 Jun 2013, 07:11 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    @Rich,10% is a good allocation IMHO.I am closer to 25% but I have people calling me wanting to buy it all the time. I would double what my current allocation at yesterdays bottom if I could. Do NOT buy paper versions based on Silver.Buy REAL Silver. Any form ,junk coins and 10 oz. bars are the closest to Spot. Right now IS the time to buy Silver,plenty of upside ,very little downside.
    28 Jun 2013, 07:18 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4059) | Send Message
     
    3%.....that won't change really anything I would say. 30% I could understand, but 3%. That is less than I make on good days.......
    28 Jun 2013, 07:33 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1797) | Send Message
     
    Truffelpig,
    Hmmm I will have to watch you a little closer 3% a day.... Wheres my calculator.
    28 Jun 2013, 07:40 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @COINS

     

    So did I, I was explaining the allocation only to find out @RICH already did !!

     

    This blog moves real fast huh?
    28 Jun 2013, 08:23 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4059) | Send Message
     
    Well, good days. Options. High risk. 3% down is also possible. I just tried to say 3% seems little as protection. You can make more money just buying the same call and put - some time out - wait. One wins usually. I just did that on GG - no clue whether it goes up or down 20% but that it will.
    28 Jun 2013, 08:45 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @Triffle

     

    20% move either way, seems very unusual? (GG)

     

    Does it work with less moves?
    28 Jun 2013, 08:55 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4059) | Send Message
     
    Sure - depends on the options premium. There are variations to this subject to where one puts a bit of bias in or caps the cost by caping the gains. The main thing is btw called a Straddle: http://bit.ly/1544CrH

     

    Usually works well with volatile stocks. Also, for a stock like GG that came down from $30 in <1 month (!!) to 22 20% in either direction doesn't seem to be that much. When you follow stocks over the course of one year, most do make much bigger moves up or down. Just an example: AAPL. You would be rich if you would have straddled at $700 without much risk! Or 600, or 500. Hint.
    28 Jun 2013, 09:06 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @TRUFFEL

     

    Some here are still new to options. I just opened Chapter 20. If you find time would you mind trying to simplify it for those who are afraid to ask, ( like me )

     

    Thanks!

     

    http://seekingalpha.co...
    28 Jun 2013, 09:11 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    10% PSLV... 90% S&P funds which contain a vast array of stocks withint he S&P

     

    From that 90%, I can move 10% per year out of the S&P funds and into anything I choose.

     

    Right now i have no dividend stocks nor have I ever. Being a novice in regard to dividend stocks i am proceeding cautiously. PSEC seems too good to be true so I am watching and learning.

     

    Also, if I decide to average down on PSLV it is not "chasing" a loss... it is bringing my buy level down so when silver rebounds i will see profits a lot sooner than just leaving it alone.

     

    The way i look at it, PSEC seems solid so whats one more year? If it looks as solid or better one year from now I can take the dividend plunge then. With PSLV, I do not want to miss the boat that sends us on a ride back UP the river. As of right now, I am leaning on doubling my holdings in PSLV when funds become available in November but a lot can happen in five months so no plan is set in stone.
    29 Jun 2013, 01:05 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @RICH

     

    Actually you do have dividend paying stocks within the fund that you have. But you don't have any BDC'S I don't believe pal,
    29 Jun 2013, 01:09 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    richonsilver,

     

    If you are 90% in S&P related investments and only 10% into PSLV, buy some gold related investments like NUGT.

     

    NUGT right now is close to $6. If we get a pullback that coincides with your 10% allocation distribution, buy it and don't look back.
    29 Jun 2013, 05:07 AM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    Here's a post from another thread by KurtdaBear :

     

    "Rather than get philosophical, I'll try to be practical, with an example from only 50 years ago, not 100. If I had saved the 90%-silver quarter and dime that my mother gave me each day to buy my lunch at school, I could still buy a halfway decent lunch today--which is more than you can do with 35 cents worth of your "sandwich metal" Federal Reserve coins.

     

    And I'm really glad that my old German grandfather used to hand out real silver dollars to all of us grandkids when we were young instead of the Silver Certificates that were later repudiated by the U.S. government. (He had first-hand accounts of the Weimar Republic from siblings still in Germany then, and my grandmother once gave me a 500,000-Mark note as play money.)

     

    I just view gold and silver as insurance against irresponsible politicians, if you'll forgive the oxymoron."
    29 Jun 2013, 07:28 AM Reply Like
  • Robert Wagner
    , contributor
    Comments (2094) | Send Message
     
    "The problem is, you have people like Peter Schiff, whom I do follow and appreciate, sticking with the same mantra without looking at what's staring him in the face. He looks at the big picture while ignoring the smaller things like a stronger dollar and price action."

     

    Yep, he seems to forget that a financial adviser should be focused upon generating returns and protecting assets, not pushing a money losing ideology.He just seems unwilling to accept that correlations and theories always break down with the markets. No market has an R^2 = 100, and yet he seems to think his does.
    29 Jun 2013, 08:25 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @ROBERT

     

    WELCOME and thanks for joining us. If you find time maybe you can post some of your ideas in Chapter 20?? I have not looked at it yet so if you did I apologize..

     

    Thanks for taking me up on the invite..

     

    http://seekingalpha.co...
    29 Jun 2013, 12:06 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    Something we can agree on Robert.
    29 Jun 2013, 12:37 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    Many people are better off with their 5 year plan following Peter Schiff's advise than they would having mutual funds that lost 1/2 their value in 2008 .Especially if they were near retirement. Otoh ,if they were traders they would have to wait for a long time to get their principal back Robert. None of those scenarios worked as well as Mr. Schiff's plan during the same time frame ,unless of course you can succeed at market timing. My hat is off to those that are here that can do that and knew enough to double down when the Stock market was at 7000. I was very bullish at that time ,but it's time to play defense again.
    29 Jun 2013, 03:19 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    CoinsK, as much as I like Schiff and he is a friendly competitor of mine in the metals business, as well as a good prognosticator of Austrian Economics, he discounted too much the strength of dollar, the Fed's power, and thus his hyperinflation remarks have hurt him. He is negative all the time.

     

    http://bit.ly/12xRNka

     

    He'll be right in the end, and take credit for being right, but in the interim has to put up with what he has said in the past that is presently coming back to haunt him.
    29 Jun 2013, 03:35 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    Point well taken Doug. There is no way someone can beat the same drum all the time and always be right. In music we have something called a a Bridge,and then there's the real big adjustment we call a KEY Change :) I like what you write about NOT being a "Perma-Bull. "
    In the Coin business ,they are very annoying sometimes. Yet they have helped me succeed also ,but I can't seem to get them to understand it's about navigating a path (On the river of life) more than just jumping on a particular boat.Stubborn people can be their own worst enemy.
    29 Jun 2013, 04:15 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    Jobless Claims in U.S. Declined 9,000 Last Week to 346,000

     

    http://bloom.bg/1ahUJdV
    27 Jun 2013, 09:40 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    expectation was 345,000 so I guess not a big issue. Looks like there was a buy to lock in lower rates on homes though.
    27 Jun 2013, 10:11 AM Reply Like
  • WMARKW
    , contributor
    Comments (10251) | Send Message
     
    Without some major change in the environment - jobless claims will be 325 - 350k from now on.
    27 Jun 2013, 01:09 PM Reply Like
  • southgent1951
    , contributor
    Comments (2534) | Send Message
     
    WMARKW: A 4 week moving average of initial jobless claims between 300,000 to 400,000 has been the normal range since the 1974 recession, spiking up during recessions. The last spike up was similar to the one seen in the 191-1982 recession.

     

    Since 1975, a 4 week moving average between 300,000 to 350,000 is about as good as it gets:

     

    4-Week Moving Average of Initial Claims
    http://bit.ly/UO7THj
    27 Jun 2013, 01:23 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @Not
    So...today's going to be a happy up day, it sounds like.

     

    Any other thoughts? Does holding above 1600 imply anything future direction?
    27 Jun 2013, 09:50 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    Curls,
    I realize after reading a LOT of post here on IT and SA I am not really a "trader". I am in things long term.
    The only thing I have done this week is buy 100 shares of Xerox (XRX) @ 8.98. That was after a weeks worth of DD finding out their business model has changed and they are generating 55% of revenues from services and not hardware (40%). (XRX) has always had a good history of paying dividends. So I am in it for the turn around 3-5 years from now.
    http://yhoo.it/12neIms

     

    The only other thing I have going on this week is my covered call on GE @ 23. Have to wait till tomorrow to see if I get my first exercise????
    27 Jun 2013, 10:08 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ Notrub

     

    Okay, so you're in it for the investing time frames! You do seem very good a DD research.

     

    Let us know how GE goes :).
    28 Jun 2013, 09:27 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    10:14 AM Mortgage rates soared in the past week, according to Freddie Mac's latest survey, amid heightened Fed taper talk. The average 30-year fixed-rate mortgage jumped to 4.46%, the highest rate since July 2011 and up from 3.93% in the prior week; the gain of 53 bps is the largest weekly change since 1987. The average 15-year fixed moved to 3.5% from 3.04%. A year ago, the respective rates were 3.66% and 2.94%.
    27 Jun 2013, 10:19 AM Reply Like
  • southgent1951
    , contributor
    Comments (2534) | Send Message
     
    Notrub: Those were large jumps but still much better than than the 12.8% rate on the 30 year in March 1983 when I completed building my home.

     

    http://bit.ly/14Vx92B

     

    I would have jumped through hoops backwards to secure a 30 year rate at 4.46% at that time.

     

    There was an article published at the Calculated Risk blog that explores the historical relationship between home prices and mortgage rates.

     

    http://bit.ly/19xInPj
    27 Jun 2013, 10:38 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » NOTRUB

     

    So what did today's economic numbers mean to you? Were they bullish, bearish? Or do they have no impact on decisions you might make.

     

    This is open to all as well.!
    27 Jun 2013, 12:25 PM Reply Like
  • WMARKW
    , contributor
    Comments (10251) | Send Message
     
    To me they don't indicate anything to be positive about in total. Same old same old re: plodding along. GDP revision supports new normal. We'll be lucky to generate 1.5% real growth from now on. Without a manufacturing base and with lower population growth...we're kinda stuck in first gear.
    27 Jun 2013, 01:14 PM Reply Like
  • southgent1951
    , contributor
    Comments (2534) | Send Message
     
    This is a link to an article published today by the Barron's technical analyst about gold. It do not know whether or not it is available to non-subscribers:

     

    http://on.barrons.com/...

     

    He is suggesting that GLD may bounce off his downside target of $118. He established that target in another article published on 6/20/13:

     

    http://on.barrons.com/...

     

    I am simply an occasional buyer and seller of bullion. I expect to nibble only when and if silver falls below $15 after selling both gold and silver in September 2011 and January 2012.
    27 Jun 2013, 10:32 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    South,
    (GLD) can surely bounce from the $118 area,, nothing goes down forever or in a straight line without rallies..

     

    However IMO they will merely be upticks or rallies in a bear market..

     

    IMHO --i suggest GLD will travel back to the mid to upper 90's , in tandem with a gold price of approx. $1,000

     

    Not gold bashing , just reporting what i see in the technicals.. As always things can change but as of now the macro trends in that market along with the macro trends in the equities market seem to be in tandem..
    27 Jun 2013, 11:42 AM Reply Like
  • Tack
    , contributor
    Comments (12762) | Send Message
     
    F&G:

     

    I look at this chart and giggle whenever I think of the condescending remarks from gold worshipers, during its ascendancy, suggesting equity investors were committing suicide by "speculating" in volatile markets with unlimited downside:

     

    http://bit.ly/19FfOw7
    27 Jun 2013, 11:47 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    Tack,

     

    agreed, cant begin to tell you some of the responses i received just a short while ago on exactly what u just stated..
    27 Jun 2013, 11:57 AM Reply Like
  • southgent1951
    , contributor
    Comments (2534) | Send Message
     
    F & G: I am not interested in either gold or silver at current prices. My last silver purchases were in 1995 when the price was less than $7 per ounce. My last gold purchases were made in the mid-to-late 1980s.

     

    At the moment, I am simply looking for a potential re-entry point to buy silver eagles with the proceeds raised from selling junk silver coins back in September 2011 and January 2012. I previously referenced two posts that contain snapshots of those sales:

     

    Recent Gold and Silver Sales (9/15/11 Post):
    http://bit.ly/XqU0Bx

     

    Item # 8 Snapshots of Coin Sales In January 2012
    http://bit.ly/18tKuTV

     

    I realized $2,387.4 from those junk silver coin sales and those funds will be used to buy silver eagles when and if my downside price targets are hit. I did sell one of those 4 piece gold proof sets on 9/6/11.

     

    I am partial to the U.S. mint's gold and silver eagles due to their beautiful design. While it does not make much sense as an investment, most of my gold buying back in the 1980s involved direct purchases from the mint of four coin gold eagle proof sets, which use the beautiful St. Gaudens design. I view them as works of art, recognizing that I was paying a premium to the gold price for the proof coins.

     

    I will simply be patient, as I have always been with bullion purchases, and will simply wait for the price to come to me, either as a buyer or a seller.
    27 Jun 2013, 12:01 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » OPEN TO ALL..

     

    In the grand scheme does it really matter how large the FED'S balance sheet really gets? I heard at 3 trillion were in trouble, now I hear it can go much higher. Does it matter?
    27 Jun 2013, 12:27 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    South,

     

    After learning from your comments here on SA , I have no doubt that your patience & wisdom will serve you well !
    27 Jun 2013, 12:31 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    To me it doesn't really matter. Unlike USG the FED does not borrow money to make purchases, it prints money to make purchases. Since there is no loan, there is no hurry to do anything. The FED can just wait for its bonds and MBs to mature, so interest rates are not a consideration.

     

    What I have always wondered, and there is no information because it has never happened, yet. If it came to default could the FED forgive the debt they hold for USG and just start over from scratch?
    27 Jun 2013, 03:17 PM Reply Like
  • southgent1951
    , contributor
    Comments (2534) | Send Message
     
    NOTRUB: It is easy to make a profit when money has no cost.

     

    As to the Barron's technician who called for a bounce in GLD off $118, I must have missed it. GLD is now testing $116.
    27 Jun 2013, 03:30 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    It

     

    The Fed has only $35B in cash and $3T of liabilities and that's an leverage ratio of about 86......to me it matters.....it doesn't matter until it does; how can we say that a leverage ratio this high matters for banks and it doesn't for the Fed? that's double standard
    27 Jun 2013, 07:54 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    Because the FED doesn't borrow money or use leverage. It prints money to buy things.
    27 Jun 2013, 09:23 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @NOTRUB

     

    That's my point, I really don't think it matters much. I can be off base here as well though..
    27 Jun 2013, 09:28 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Notrub
    thank you, so all the printed money is not a liability on Fed balance sheets in any form or shape
    27 Jun 2013, 09:49 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    Nope. That is why it is known as the bank of last resort for the USG. It was supposed to be a plan to keep USG from printing money. But, we see how that has worked out. LOL, technically, it is supposed to be independent of the Federal Government, I think we all know the truth about that also.

     

    That is also why the FED is able to hold all that junk they bought to maturity and just let it expire. They have no time line for their investments. And, I believe they are smart enough to know the consequences if they were to dump it back on the market. It gives USG time to try and privatize Fanny and Freddy.
    27 Jun 2013, 09:55 PM Reply Like
  • WMARKW
    , contributor
    Comments (10251) | Send Message
     
    So given your comments above - all - then why does the Fed have "capital" in the sense of "ownership" buy in? Conceptually there would be no reason for anyone (member banks) to make an initial "investment". The Fed should just say member banks are member banks. There should be no reason for it to retain 6% of profits, it should return all funds to Treasury and operate as a non-profit.
    27 Jun 2013, 11:39 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @WMARKW

     

    Solid point that I hope some will respond to...
    27 Jun 2013, 11:42 PM Reply Like
  • WMARKW
    , contributor
    Comments (10251) | Send Message
     
    A couple search results before I hit the sack:

     

    Member banks are required to buy shares in their branch. Each bank has one vote. The shares get a standard 6% dividend. They can vote for 6 of their 9 board members. All 'profit' from the Federal Reserve branches are turned over to the Treasury at the end of the year [sic after paying the dividend - WMW]. [4]

     

    •In a traditional corporation, shares are voluntarily purchased and sold.
    •In a Federal Reserve bank, shares are compulsary and member banks are required to purchase shares that represent 3% of their assets.
    •In a traditional corporation, individuals can own stock
    •In Federal Reserve banks, only member banks can own stock. There is a provision in the law for individual private ownership of stock up to $25,000; an inquiry to the Fed on this point indicated that no individual owns Fed stock today.
    •In a traditional corporation, shares are bought and sold on the open market.
    •In a Federal Reserve bank, shares can only be bought and sold with the Bank itself.
    •In a traditional corporation, shares provide the owner with a propotional number of votes.
    •In a Federal Reserve bank, shareholders are limited to one vote, regardless of the number of shares they own.
    •In a traditional corporation, shares represent proportional ownership and can be used as collateral in financial transactions.
    •In a Federal Reserve bank, shares do not convey any ownership, implied or otherwise, against bank assets and cannot be used as collateral in financial transaction.
    •In a traditional corporation, shares change in value as the assets and earning potential of the corporation changes.
    •In a Federal Reserve bank, shares values never change.

     

    Board of Directors
    •In a traditional corporation, shareholders elect all the members of the board with no interference from the government.
    •In a Federal Reserve bank, shareholders can vote for 6 of the 9 board members of which must be approved by the Board of Governors. The other 3 are appointed by the Board of Governors.

     

    Dividends
    •In a traditional corporation, the board of directors determine the dividends to be paid to shareholders.
    •In a Federal Reserve bank, shareholders receive a standard 6% dividend which was written into the original Federal Reserve act passed in 1913.

     

    Profits
    •In a traditional corporation, profits (after dividends) add to the value of the corporation as retained earnings.
    •In a Federal Reserve bank, excess profits must be turned over to the Treasury at the end of the year.

     

    Taxes
    •Unlike traditional corporation, Federal Reserve banks are exempt from state and Federal taxes.

     

    http://bit.ly/13bkHhw
    27 Jun 2013, 11:49 PM Reply Like
  • WMARKW
    , contributor
    Comments (10251) | Send Message
     
    Of course - that doesn't answer my question.
    27 Jun 2013, 11:50 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    Thanks for the reply and research WMARKW. Now you have me wondering too. I'll have to do some research myself. Will post if I find and answer.
    28 Jun 2013, 06:53 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Notrub
    was this established in the fed charter? so now the fed can print and bail out whoever has a stake in the fed...it makes sense to me the stakeholders can print paper but cannot print gold and silver
    28 Jun 2013, 07:38 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    Rin,
    I am a history nut. So most of what I know comes from studying US history. Here are some resources to get you started understanding the Federal Reserve System in the US:

     

    1) Federal Reserve System (FRS)
    http://bit.ly/sa8qXb
    2) History of FRS from non FRS source
    http://bit.ly/128rSR5
    3) History of FRS from FRS source
    http://bit.ly/128rSR6
    28 Jun 2013, 08:58 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Notrub

     

    thank you for the sites and i have to look them up; am i wrong to say that the Fed is like the mafia?
    28 Jun 2013, 09:53 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    If what you mean that the FED and mafia both have "self interests" and will do what they need to do to protect those interests. Maybe not.

     

    But, I don't think the FED sells booze, drugs or hires hitman to protect its interests. I thought it had Goldman Sachs for that kind of stuff???

     

    J/K...:o)
    28 Jun 2013, 10:33 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    I take the GS option
    28 Jun 2013, 11:42 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @NOTRUB

     

    That was a good one !! Brought a chuckle from me... But they do have discounts on booze !!

     

    The hit men are out looking for Snowden right now..
    28 Jun 2013, 12:40 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    IT

     

    booze?? I got some moonshine Italian wine from Coney island
    28 Jun 2013, 12:55 PM Reply Like
  • tampat
    , contributor
    Comments (995) | Send Message
     
    "IMHO --i suggest GLD will travel back to the mid to upper 90's , in tandem with a gold price of approx. $1,000"

     

    F&G,

     

    Then what?

     

    Are you stating that you don't think there are any set of circumstances possible that can occur, lets say, over the next 10 years that could result in gold surpassing its old highs in the $1900 region?

     

    The % likelihood isn't the issue, simply, is it possible in your opinion?
    28 Jun 2013, 02:35 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    Tampat ,

     

    If GLD does in fact trace all the way back to the 90ish area, as with Gold itself in the $1,000 area it will, like any other parabolic event ,find a leveling point and start to form a new base, ups and downs thru cycles that will play out over an extended period of time...

     

    Your question is it possible to get back to 1900 , anything is possible, but IMHO not probable . Regardless of where it settles -1,000 or lower , i doubt it will encounter a "V" shaped recovery.. as with the base that was formed to get to 1800 , it will take time to work off the "excess of that move.. I give the Nasdaq example and can cite other individual equities that show the timeframes that often play out after these types of moves.. Folks are still waiting for another 50% move in Nasdaq to get back to even, 13 years later.. after a parabolic move and "bubble event.

     

    Of course the difference of opinion now will be Gold is not the nasdaq and "circumstances" can alter the price of Gold and we will hear litany's of evidence to that effect.. I chose not to buy into that thesis.. There is a long history of how Parabolic events play out , I believe gold is no exception. According to many , we are still in perilous times , worldwide central bank issues , trillions in debt , yada yada,yada,, the record plays on , please then explain how gold is at the very least not showing stability, instead of crashing. Everything i hear is --things are not better , we are on the verge of another financial collapse.. Why are those circumstances not helping support the price.. ?

     

    I have my thesis and it coincides with a secular bull market,, That is for another time.. but for now that thesis seems to be playing out .. and the collapse in Gold is helping to cement that theory.

     

    Bottom line for me ,, if i believe it will take an extended period of time to rebound , I have to ask why leave "dead "money on the table with no return-- waiting for the "possibility" of an apocalypse ??
    Not only will i get no return,, unless i am a great Gold market timer to catch bounces, i have the possibility of missing what is really appreciating around me--- a double whammy..

     

    I hear the insurance argument and just say to each his/her own,, whatever makes one comfortable. That's the bottom line..

     

    All need to make their own decisions and be comfortable given a set of circumstances.

     

    At the moment, my thesis makes me comfortable..,, I am not short Gold, or GLD , not gold bashing but calling it the way I see it..
    At present prices Gold is totally oversold.. On a bounce to 1250-1300 (if it can get there) , the risk/reward in a short position may present itself.. . IMHO it will be at that time that we will here the cries of Gold going back to the highs. Lets see if that plays.. 
    Best of Luck ---
    28 Jun 2013, 03:28 PM Reply Like
  • Tack
    , contributor
    Comments (12762) | Send Message
     
    F&G:

     

    "At present prices Gold is totally oversold..."

     

    Examine the chart shown, I posted previously, and below. Keep in mind that this chart is inflation adjusted, not nominal values. How can it be argued that gold is oversold? Of course, the price can certainly on any day go up, down or sideways, but the likely trend for the foreseeable future would appear rather obvious.

     

    http://bit.ly/19FfOw7
    28 Jun 2013, 03:38 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    Tack,
    My error, i should have stated on a short term basis ..

     

    I hear ya, was referring to price on a short term basis,, Looking at RSI of GLD as a proxy for the short term it was 15 in April when gold "bounced" --- yesterday the RSI stood at 21. "may" suggest a short term bounce .. Operative word is "may"

     

    Think i professed here and other SA articles where i stand on this situation...
    28 Jun 2013, 04:03 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @RIN

     

    I miss those days in Brooklyn with that moonshine. One glass and I was on my as....never mind. Took the B train into work when I visited family and stayed overnight .

     

    MAN, that was years ago, and one wife ago as well... lol
    28 Jun 2013, 05:18 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    IT wrote:In the grand scheme does it really matter how large the FED'S balance sheet really gets? I heard at 3 trillion were in trouble, now I hear it can go much higher. Does it matter?

     

    If it means our Taxes will go higher again ,just say NO. They are worse than drunken sailors in Wash. D.C. At least a drunken sailor quits spending when he's out of money. The Fed just creates more and charges it to our children.
    28 Jun 2013, 07:21 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    It

     

    Maybe we crossed paths when I was taking the B train too many moons ago
    28 Jun 2013, 10:12 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @RIN

     

    Maybe, I slept at my ex wife's familys house on 86th street I believe. It was between 20 to 25 years ago. Had my daughter back then and my ex would stay there with the family and my little one while I would grab a hot bagel, cup of tea. Then head on into my business in Mid town. I believe it was the second to last stop coming back.

     

    Or going into the city it was either the first stop or second one if that makes sense.. I think I got on the train and it was the first stop as I remember no one on the train.

     

    I really forget if 86th street is right. I know we got off the BELT Parkway right after where they use to fly the kites. I came though Staten Island and over the bridge. If you know the exits it might ring a bell. Been years though,,
    28 Jun 2013, 10:35 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    IT

     

    Oh crop!! we were almost neighbors then; I lived on 26 Ave& Bath Ave but moved to NJ 30 years ago for job but still go visit family in area; yes I remember the kite area right by the Verrazzano Bridge, Ft Hamilton, and VA hospital; the exit you referring about is Bay 8th St, driving Belt parkway East
    29 Jun 2013, 01:52 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @RIN

     

    If you get off that exit and make a left then go under the B train then that was it. I believe there was a toy store at the end of that exit? On the right near the water??

     

    But I still am not sure if it was BAY 8TH or not. Even if you said it I probably would not remember. I just remember it being the first or second stop on the B train going into work.. MOST likely the second stop.. I am confused !
    29 Jun 2013, 02:58 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    IT

     

    It has been good talking to you but I don't want get off topic and too much of your time
    29 Jun 2013, 09:29 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @RIN

     

    Just PM me , I have no problem with that !
    30 Jun 2013, 01:50 AM Reply Like
  • extremebanker
    , contributor
    Comments (1683) | Send Message
     
    SG51:

     

    Gold and silver are two of the asset classes I track. There relative strength is 5 and 2 respectively. This is out of a possible 99.99. At this time I have no allocation to either based on their relative strength. Weak relative strength of gold and bonds has to impact the permanent portfolio.

     

    http://bit.ly/1cqDaFd;s=RSf|desc&t=6&am...
    27 Jun 2013, 11:00 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @EXTREME

     

    So would you suggest people who bought silver at $15 per ounce and gold at $800 per ounce to sell?

     

    Trying to understand your thoughts

     

    Thanks!
    27 Jun 2013, 12:23 PM Reply Like
  • southgent1951
    , contributor
    Comments (2534) | Send Message
     
    Extreme: My only long term allocation to a security that invests in gold and silver bullion is to the Permanent Portfolio (PRPFX):

     

    http://on-msn.com/ZZWJUh

     

    The original investment was made in 2006.

     

    The recent decline in gold and silver has cut my unrealized gain in that mutual fund by about $1,000 but I will stay with it.

     

    There is an ETF that attempts to implement Harry Browne's permanent portfolio, offered by Global X, which has also declined significantly:

     

    Sponsor's Site for PERM:
    http://bit.ly/X3dF8n

     

    The ETF and the mutual fund are compared in this SA article published in May 2012:

     

    http://seekingalpha.co...

     

    There are parts of my portfolio that exist for a reason and I will just leave them alone except for 1 or 2 $250 adds per year. The Permanent Portfolio mutual fund is one of those parts.
    27 Jun 2013, 12:30 PM Reply Like
  • extremebanker
    , contributor
    Comments (1683) | Send Message
     
    IT:

     

    I rotate my allocations to growth assets based on their relative strength. Gold is considered a growth asset because it certainly is not an income asset. It doesn't pay any dividend or produce any income other than an increase in the price. I would avoid holding an asset with relative strength this weak.

     

    http://bit.ly/s1EI16
    27 Jun 2013, 12:53 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @EXTREME

     

    Thanks for the clarification..
    27 Jun 2013, 05:26 PM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    Using a current trend to evaluate something like silver or gold doesn't mean much to me. Using a sports analogy, if I know my Red Sox have enough talent and potential to win the division this year (which they surely do) but are stumbling for a while (as they did early in the season), their "ratings" based on the trend of say a month of games will be poor. That doesn't mean their team is not as good as I know they are... rather they are in a slump or downtrend. The good thing about baseball (and my own silver investment) is that its a long season and one month (or year for silver) does not a season make.
    Fortunately for my team the early season lag ended pretty fast and they are now have the third best record in the major leagues (first in the AL). I believe silver is in that "lag" period and all the "analysts" are naturally going to call it a dog, but stating the obvious during bad times isn't valid to me. Opinions offered about silver and gold now are based on a last place team and those same writers will suddenly jump on the bandwagon when the team gets hot. I have seen that frequently in both sports and the markets. I am patiently waiting for that to happen to silver. Question is, can it come back hard and fast or is this climb back up for silver into the 30s and 40s a long, long ride???
    28 Jun 2013, 02:13 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4552) | Send Message
     
    Rich,
    Your comment
    "Question is, can it come back hard and fast or is this climb back up for silver into the 30s and 40s a long, long ride???

     

    parabolic moves like the one that is displayed in the charts, rarely are resolved by "turning" and spiking back up.. These moves take years to resolve . Just as it took years to base and then develop into that spike..
    Same will apply on the downside..

     

    Some things to ponder...
    its been over a decade since the nasdaq "spike" , here we are in year 13 and Nasdaq has to climb another 50% to get back to high reached in 2000 . For those that say commodities , etc, are different -- please think again !!

     

    Best of luck
    28 Jun 2013, 09:07 AM Reply Like
  • Tack
    , contributor
    Comments (12762) | Send Message
     
    F&G:

     

    I am going to post this link, once again, for all those who have gotten caught in gold with their pants down and suggest that they remove the gold-worshiping blinders and examine what the chart vividely demonstrates: http://bit.ly/19FfOw7

     

    One can examine the entire history of gold and see that it doesn't "grow" at all, in a predictable sense, and is not an "investment." It makes no more sense than trying to "invest" in the VIX. Both only make violent upward excursions when terror strikes and the fearful conclude that the world is ending. It never does, of course.

     

    Looking specifically at the chart, what do we see? We see three violent upsurges -- Depression, gold allowed to float in '70's, and the Great Recession -- after each of which is a continuous, even precipitous, decay back to more normative values until such time as the next wave of hysteria strikes. And, who could possibly predict when that will be? So far, it's been about forty years between spikes.

     

    And, if we examine gold's normative performance on an average basis over lengthy periods, not limited to short hysterical upward spirals, it can be shown readily that it's a downright terrible overall investment. In fact, as can be demonstrated by looking at historical compound returns, the equity market has completely trounced gold by many hundreds of percent.

     

    For the immediate moment, what this history suggests is three things: 1) if you played the spike perfectly, congratulate yourself and count your Vegas-like winnings; 2) if you held too long, but still have gains, be glad your still in the black and bank it; and 3) if you got seduced into gold, buying late, and you're under water, take the loss, redeploy the capital and learn a big, if painful, lesson.
    28 Jun 2013, 10:26 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ Tack

     

    Some excellent points for me to tuck away. If the world does end, I'm moving in with my family that has land, & livestock, not eating gold.

     

    Still it's good to have some jewelry or metal for if war comes & you have bribe your way to safety.

     

    I really like that chart & your comments of what an "investment" IS.
    28 Jun 2013, 11:32 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @CURLS

     

    What makes you won't need silver or gold in your possession in your scenario? If you need supplies what would you use?

     

    You might not eat gold or silver but it may be used as barter. Please don't think I am suggesting this scenario but this is what books I have read say may happen

     

    Just sayin..
    28 Jun 2013, 12:44 PM Reply Like
  • tampat
    , contributor
    Comments (995) | Send Message
     
    curls,

     

    I have heard that argument before that you can't eat your gold or silver, which I think is kind of silly.
    If there were to be a monetary collapse, you can't eat those stock certificates either and your cash may or may not be worth much.

     

    In that case, one should have cash, some gold and silver, food, water, a generator, gun and ammo, some medicines and bandages and perhaps a short wave or battery powered lanterns, radio, etc.
    Basically, one should be prepared the same for a possible disaster like hurricanes, earthquakes, riots, etc.

     

    Hope for the best but prepare for the worst.
    I rather be prepared and never need to use any of those things than to have something like that occur and not be prepared.
    28 Jun 2013, 01:17 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    Tack what would be the difference between Gold "going Up" and The Dollar and the markets "Coming down" ?
    28 Jun 2013, 02:54 PM Reply Like
  • Tack
    , contributor
    Comments (12762) | Send Message
     
    coins:

     

    I guess I don't understand your question, specifically. Perhaps, you can explain further your point.
    28 Jun 2013, 03:06 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3539) | Send Message
     
    @ IT

     

    Actually I expressly included using gold as a barter in my scenario & that it's needed. My father's life was saved by a bribe.

     

    I really do think that even gold may be less than helpful as currency in survival settings... and that basic living off the land or whatever is left of the land, would be necessary. You get what you need by bartering. The standard long before gold, silver or it's predecessor, salt. (There's a reason salt is very similar to king in phonetician & early semitic languages.)

     

    This is all postulating though. Once you have some, it's up to each of us to add whatever more we feel is needed in our views of such situations.

     

    @Tampat

     

    I certainly wasn't suggesting cash or stocks as the alternative to gold, lol. I was suggesting material supplies would be most valuable on a black market.

     

    ...just my view, IMHO. No one has to agree at all.
    28 Jun 2013, 03:13 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    @ Tack
    When we have an economic crisis and investments are worth 1/2 of their previous value(Like the Stock market in 2008),having money available is key . During this crisis , at the same time frame Gold & Silver (Which have no dividends), stays the same price. You have not made a profit ,you have preserved your resources ,and this is different than a profit. It's not the same as a profit ,but puts you in a favorable position since you have been spared the losses . If you use it as cash to invest with , while the markets are down ,you have allocated your money well haven't you? Allowing a person to profit .
    This is a scenario that illustrates what I believe Doug calls "Insurance".
    http://bit.ly/11INMA2
    28 Jun 2013, 03:46 PM Reply Like
  • Tack
    , contributor
    Comments (12762) | Send Message
     
    Coins:

     

    All I can say is that those who spend disproportionate time planning for the next crisis, don't seem to make money, overall. Not only are many of them inclined to miss the up-trending markets (the next crisis is always just around the corner, you know), but they don't take advantage of the downswings, either, as the same mentality often leads to extrapolating markets to zero. Then, when markets do turn and head northwards, it's back to "next-crisis" planning.

     

    That's why I have found that staying invested and altering allocations gradually to favor undervalued and unloved sectors produces a better overall result than rushing in and out to cash, speculating in metals, or trying to guess market timing.
    28 Jun 2013, 04:05 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    No market timing advocated here. What I am saying is that I and many others have a large % of our money NOT being invested. In my Vanguard I have nearly 90% of my resources in MM . It's doing nothing except losing to inflation ,even at the bogus announced govt. rate. What I do have in cash I use for buying and selling Gold.I remember what Ray Kroc of McDonalds fame told an MBA class at UT many years ago.He asked the class "What did I do to become wealthy"? Virtually everyone answered "Sold hamburgers" .He said "No I sold hamburgers to make money and provides jobs.The way I became wealthy was I owned one of the best pieces of real-estate in every town I had a store." That's the way I see Gold & Silver,it's a means to an end,and at the same time provides great insurance along the way.
    28 Jun 2013, 04:17 PM Reply Like
  • Tack
    , contributor
    Comments (12762) | Send Message
     
    Coins:

     

    If you can consistently make money trading gold and outperform the equities market and you think the risks are less, not more, then you should keep doing what you're doing.

     

    Keep in mind that the statistics demonstrate that equities crush gold over the longer haul. And, the recent excursion to gold fantasy land appears to be over.
    28 Jun 2013, 04:24 PM Reply Like
  • WMARKW
    , contributor
    Comments (10251) | Send Message
     
    Tampat - You bring to mind an interesting topic. When people ask be about gold as an insurance policy they always say they would rather have cash, guns, ammo, food, etc. And those things are fine if you are looking to get through and event to the other side. The question is, what happens on the other side?

     

    To that question, I recently saw a show covering art that was stolen by the Nazi's from the Jews in WWII. There were numbers of people who are striving to identify and return such art works to rightful owners (generally heirs). The point is, that for some of those heirs, the return of something like that could mean the difference between poverty and plenty. A simple piece of art.

     

    So back to my question - what happens on the other side of the "event". IMHO, having a portion of one's assets in precious metals, diamonds, art, land, farm land, apartments, etc. is a way to provide for that post event recovery.
    28 Jun 2013, 04:50 PM Reply Like
  • tampat
    , contributor
    Comments (995) | Send Message
     
    WMARK,

     

    I'm not sure, but did you answer your own question in your last paragraph? Anyway, I would agree about that.
    And thanks for adding land, I left that out of my original post of things to have, though there are probably a few more items also.

     

    As to what happens on the other side, it depends on the nature of the event. If its a short term thing like a natural disaster such as a hurricane, having those things will make life much easier, relatively speaking, compared to those who did nothing to prepare.

     

    I can personally attest to that. Having lived all over the US, I have lived through earthquakes, blizzards and hurricanes that shut down an area for days. Our generator alone has been worth every cent paid for it. Its a big momma capable of running multiple heat/AC units and all the electricity for all appliances. Its wired directly into the main breaker panel so if the power goes off it automatically kicks on in about 2 minutes and runs on a 225 gallon propane tank. It would work for months, depending on usage time.

     

    Now, the most difficult would be a scenario resulting in some form of societal breakdown, economic collapse as that would last a lot longer. But if one had all those things previously mentioned they would be in much better shape to 'live long and prosper' compared to those who don't. If not and it got that bad, I'd suggest just get out of dodge ASAP if possible. I live in a very rural area, which I consider a plus as well.

     

    Oh, one more thought, when they announce on the news that something is about to happen, that isn't the time to prepare, thats too late. The time to prepare is when everything is hunky dory.
    28 Jun 2013, 06:43 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    Well the last 10 years I have paid for a building and done very well for my family .We have NO car pmts. and are 1/2 way to owning a 5 year old house that appraised for 25 k more than we paid for it. NO PMI .I'm happy with Gold & Silver ,but i have plenty of other investments. Pizza can be bad for some people but I know a few Papa Johns owners and they did very well in the last 10 years investing in Pizza sauce and dough.It's all in how you work it . You can delete your fantasy when the paper goes to vapor.I'll have the real thing!
    28 Jun 2013, 07:30 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @PAWS

     

    You might like this article about preparation for disasters. My mom just put in a generator as a severe snowstorm in Upstate NY can cause a week of no electricity.

     

    Hers runs on natural gas so we will all bunker down at her house if we have another bad winter. This article comes with disclaimer I am no dooms day prepper, but I do have a few of these items Just in case,,

     

    http://bit.ly/R4p7wn
    28 Jun 2013, 08:37 PM Reply Like
  • CoinsK
    , contributor
    Comments (2746) | Send Message
     
    Now would be a good time to load up on Gold & dump paper .If you do you can sell when it's retraced and get your original investment back and hold the rest as insurance for free, The best way for you to make real money ever invented. Own your own money for FREE. No Bernie Madoffs in this plan,No counter-party risk.
    29 Jun 2013, 03:28 PM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    June 27, 2013, 10:00 a.m. EDT
    Pending home sales jump to six-year high in May

     

    http://on.mktw.net/19F...
    27 Jun 2013, 11:18 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    I read a report that Russia evacuated fron its base in Syria...maybe fireworks??!!
    27 Jun 2013, 11:19 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    US natural gas supplies grew last week
    | June 27, 2013

     

    http://bit.ly/19FeLw7?World_Business_News=
    27 Jun 2013, 11:28 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    June 26, 2013, 2:00 p.m. ET
    U.S. 5-Year Treasurys Sale Draws Weak Turnout

     

    http://on.wsj.com/19Ff1el
    27 Jun 2013, 11:30 AM Reply Like
  • Notrub
    , contributor
    Comments (343) | Send Message
     
    Kansas City Fed’s Manufacturing Survey for June (Text)

     

    http://bloom.bg/19xUXOz

     

    SELECTED COMMENTS
    “We are automating production and minimizing hiring due to increased costs related to employment.”
    “The financial impact of increased health care costs on our employees will cause significant stress and will put pressure on our company to absorb more of the costs, which would need to be passed on to customers.”
    “Several of our licensees had their businesses damaged or destroyed by recent storms.”
    “Power outages have reduced production output and created increased costs.”
    “Violent electrical storms created production outages resulting in delayed or lost sales of approximately five production days.”
    “A wet spring has slowed construction in the midwest.”
    “A tornado hit our Oklahoma City plant, causing roof damage.”
    “Business continues to be slow. No improvement in sight.”
    “The Fed is pushing on the gas and the ACA and Dodd-Frank are pushing on the brakes. ACA is tremendously detrimental to medium-sized companies.”
    27 Jun 2013, 11:34 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » Rich...

     

    Interesting, we have posts that say sell your silver, posts that say buy silver, hold it at this point.

     

    This is why we have a successful blog. Every idea can be discussed and every individual can decide what is best for them..

     

    I feel you should have exposure to the metals as a % of your portfolio. It DID make money owning them for the last 10 years and some own it as *insurance*. I am ahead yet I won't sell it.

     

    That is a concept some really don't understand. Yes, right now if you bought it a couple of years ago you can be underwater on it. But I would not suggest selling it now. I also feel it just became a long term hold that's all.

     

    Taking that much of a loss might not be prudent. Just the next buy may be better to diversify that's all. I agree that we have other areas that are making money. Some just don't want to learn now for fear they cannot risk the losses. Mutual Funds can be the answer then.

     

    But we did go though a 10 year period where the S&P was flat didn't we??
    27 Jun 2013, 11:39 AM Reply Like
  • richonsilver
    , contributor
    Comments (245) | Send Message
     
    I agree IT. At this point it would be foolish for me to sell at such a loss unless I didn't believe silver will rebound. I have no doubt it will but how long it will take to get me back to my original investment level is the big question. Do I lower that buy price by averaging down or sit patiently while it comes back over time while investing elsewhere. I have given myself five months to learn and make that final decision. I am restricted by availability of funds so these five months are a big learning experience for me. I'll probably change my mind and swing back and forth several times but these months will hopefully educate me so I will make the right decision when it counts. Right now, in late June I am leaning toward averaging down provided silver prices do not rebound much during my waiting period. if it soars quickly, my decision is easy.. let the price come back and invest in something else. Time will tell.
    28 Jun 2013, 02:20 AM Reply Like
  • BlueSkyForever
    , contributor
    Comments (1416) | Send Message
     
    Rich, I was in a similar position back in 2009 while I watched all my investments spiral down. It was awful. My husband wanted to sell everything, right now! My brother was talking about the DOW going to 3,000 when it was around 6,000. I held fast, telling my husband that if we did sell, then our losses would be real. Instead I firmly believed that the markets would go back up, in time. And they did, and because my portfolios were diversified, and I held bonds that never lost value, my portfolios were back back to even by late 2010.

     

    Now here's where hindsight is 20/20. Let's say we had sold everything except the bonds. I could have invested that money in the companies that we knew would come back, because they are great companies. This strategy would have been even better than my hold strategy. Let's take a few examples. (MCK) bought at $40 is now worth $115. (SBX) could have been bought for $10 now worth $65. (HON) at $25 now worth $80. Just pick 10 companies, and you can see how much money could have been made. It was a once in a lifetime opportunity. Heck If I'd sold the bonds and bought a few more companies, the returns would have been even greater.

     

    I figure at the lows, we were down about 50%. Starting over, it's not outside the realm of possibility that I could have had returns of 300%.

     

    The one good thing that happened was I was buying on the way down & the way up with cash from the bond income and with new money allocated to IRA's.

     

    So now every time the markets slump I go shopping. Normally I like to be 10 % cash to take advantage of bargains. Right now I'm about 30% cash. With bonds thrown in, about 50% cash.

     

    Good luck to everybody, may we all do well investing.
    28 Jun 2013, 10:19 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    Sure are a lot more gold naysayers on SA these days. Most with just a few comments. http://seekingalpha.co...
    27 Jun 2013, 12:31 PM Reply Like
  • WMARKW
    , contributor
    Comments (10251) | Send Message
     
    You are right Doug.... I have taken to asking them what's their motivation in being there? I don't go to the real-estate section of SA and complain about managing tenants or CAP rates, or whatever. I kinda consider them like the remora's that ride along on sharks.
    27 Jun 2013, 01:19 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    Haha Mark... Would be interesting to hear what replies you have received, or simply more sophomoric mocking. Like the remor's/shark comment.
    27 Jun 2013, 01:26 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » "The Fed rolls out yet another speaker to reassure the market its candy won't be taken away. Governor Jerome Powell tells an audience spiking bond yields are larger than can be justified by any "reasonable assessment" of the path of FOMC policy. No doubt an accomplished man, Powell's bond fides as a fixed income trader are unknown. Earlier: Dudley."

     

    Why so much damage control being done AFTER BB spoke last week? Makes me wonder...
    27 Jun 2013, 12:35 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    It is unreal how many articles I have read with the word "tapering" in them, as if it is gospel from the Fed.

     

    They ignore reality. As I wrote in my article, a 1/2% move up in interest rates equates to $500 billion more in interest payments (if my calculations are correct). The Fed can't let that occur hence all of the "speak" by the board members. Rates seem to be coming down some with the 10 year down to 2.47.
    27 Jun 2013, 01:12 PM Reply Like
  • Freddy Hutter, TrendLines R...
    , contributor
    Comments (3738) | Send Message
     
    With present rates of turnover and expiry, a general 1/2% increase in rates would add about $13 billion to the annual Deficit. If rather the avg on the gross debt rose by1/2%, the effect would be $85 bil.

     

    Debt Wall outlook chart: http://bit.ly/vIM1wQ
    28 Jun 2013, 05:54 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2727) | Send Message
     
    That's actually right Freddy...$17 trillion x 1% is $170 billion/2 = $85 billion. Thanks! I think I calculated $500 billion @ 4.5%. I also think I am brain dead and ready for a nice quiet weekend! I saw your site before. Looks interesting.
    28 Jun 2013, 07:20 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10166) | Send Message
     
    Author’s reply » @FREDDY

     

    Thanks for joining us an adding some calculations to the mix..
    28 Jun 2013, 08:39 PM Reply Like