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Elgrey
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Expat finance professional living and working in Hong Kong.
  • Addition To April-2013 Strategy 0 comments
    Apr 10, 2013 11:57 PM

    I want to make an addition to my April plan. Usually I do not do that but it looks like an emergency case. If anyone ever reads my blog they should notice that I am not a fan of precious metals. I personally believe that this market is for dumb gamblers cause all you hear is noise from media - last year it was Buy, buy, buy and this year it is Sell, sell, sell. So I prefer to turn it off.

    Now I want to make an exception. For last several weeks silver has dropped significantly and so position of speculators did. Simply speaking speculators were selling silver short and closing long positions. As of last COT report I notice that they have reached the point they have not been at since 2003 when silver began its last bull run. They are incredibly short. This can mean two things - either bull market is dead and bear market has begun or it is a bear trap and large speculators are shaking the boat to scare weak bulls away before taking their seats for a major bull run.

    I have read different opinions but I follow the same old rule - follow the commercials. They are incredibly long. They have not been that long in both absolute and relative amounts since a long time. Also look at latest developments in the World - Greatest Cyprus Robbery, numerous upgrades to debt ceilings, Yen devaluation, slow Chinese exports and huge equity market bubble. There is not recovery, governments run out of tricks and print money and steal money and equity markets will notice that soon and retreat. And where will the money flow from a stock bubble? Precious metals is one of the most possible directions.

    I bought silver last week, I bought it this week and I am going to buy more as soon as I see market turning positive. I also bought protective puts just in case. If I am right I will lose only a small fraction of profits. If I am wrong I will save my investment.

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