Sakata

Gold, Silver Rise on Stress Test Failure

I am slowly coming to the conclusion that I like the way the economy is going. These phantom rallies, these market manipulations, these bad banks: all are playing into the hands of those who have solid positions in the mining and metals sector, A prolonged secular bull market in gold and silver is the inevitable result and those of us who can afford to sit it out are laughing all the way to the vault. (I'd normally say laughing all the way to the bank, but that seems somewhat inappropriate here.)

Of course, I realize that not everyone is as well positiioned as most readers of this article will be. Many will suffer because of the crooked manipulations. But sometimes it is hard to take a altruistic viewpoint when you know that you have made the right decisions at an early stage. I just wish I had got in back in 2000 instead of delaying for a few years.

Bernanke Upbeat for Turnaround, But He's Said This Before

Why do we pay Bernanke such big bucks when we could just buy a parrot?

Gold, silver jump on stress test failure

I am slowly coming to the conclusion that I like the way the economy is going. These phantom rallies, these market manipulations, these bad banks: all are playing into the hands of those who have solid positions in the mining and metals sector, A prolonged secular bull market in gold and silver is the inevitable result and those of us who can afford to sit it out are laughing all the way to the vault. (I'd normally say laughing all the way to the bank, but that seems somewhat inappropriate here.)

Of course, I realize that not everyone is as well positiioned as most readers of this article will be. Many will suffer because of the crooked manipulations. But sometimes it is hard to take a altruistic viewpoint when you know that you have made the right decisions at an early stage. I just wish I had got in back in 2000 instead of delaying for a few years.

Gold Stocks Not Driven by Larger Market

In response to the first two comments:

I bought a bucketful of about 50 pink sheet miners back at the end of October when they bottomed out. So far I have had 17 which doubled and three of those tripled. I had a few losses of course, but I am up 43% on the bucket load.

But am I smug? Not even close! GDX is up even more (do hold a sizeable junk of that also) so I probably could have done better. I also have quite a bit of physical silver and gold and they are up more than the pink sheet stocks.

So what is the point of this post? It really doesn't matter how you are positioned in the mining and metals sector. As long as you are in it then you made a whole lot more than anyone else over the last six months. And you are going to make a lot more in the coming years. So let's not get hung up on small, short-term changes. The wise people are in this for the long haul and don't worry about what happens over a relatively short six-month period.

Gold Breaks Short Term Downtrend

So much for these people who like to jump in and write articles about short term changes. One or two days does not imply a long a switch. At the time I am writing this gold is almost down to where it started yesterday morning.

Silver if holding up pretty well (up $0.80, or 6.7%) since yesterday morning. But I'm not jumping about excited over this. I find it encouraging that the gold/silver ratio is back down around 67, but then it was when gold last hit $1000.

Let's wait until the end of spring at least. Only the long term will tell. But if we waited until then the investment advisors wouldn't have much to write about.

Gold 'Demand' Driven by Investment

Excellent article. I agree with everything you say.

But at the back of my mind there is a niggling thought. We all kow that long term gold (and silver) will show its true value. With that believe I have bought as much of it as I can justify. But the crooks who run the show are a powerful force in world finance. They may just have enough strength in numbers to delay the inevitable for long enough that some of the older ones among us may not have enough time to reap the benefits.

I don't actually think this will happen. If I did, I would not be so heavily into precious metals. But as long as the propaganda machine is able to convince enough people, then there is always the chance.

The flip side of all this is that price is being held back and so is increasing in fits and starts but the overall trend is up. This is to our advantage because it is more likely to stay up afterwards. A sudden quick increase would be less likely to be sustainable.

So my point of view is that let the crooks have their say. They are more likely to produce a sustainable long term price increase in all precious metals.

Gold / Silver Ratio at Code Yellow

Just how many loave of bread are you planning on buying with your gold coin? If you cannot use silver as currency for change then you better be prepared to buy a lot. If you don't need a whole lot more silver than gold to make change with then we are really in trouble because it means inflation will be going up way faster than gold.


On May 04 05:01 PM tallguy wrote:

> Interesting article.
>
> There is another refinement that may be underway, and that is the
> default to one standard, gold rather than silver as the default currency
> in preparation for the inflation that is to come.
>
> Gold is easier to store, weighs much less / $, takes up less space,
> more universally has been a currency, doesn't tarnish, is easier
> to ship, etc.
>
> Silver may be relegated to the commodities pile, with gold in the
> currency pile. China for example is classifying gold as a monetary
> asset.

World Gold Council Throws Water on COMEX Rumors

I buy from them a lot but watch for their sale prices. They have had ASEs, Maples and Philharmonics on sales recently but the big one was the 99 cent sale at the beginnning of the month. I picked up 100 5oz bars for only $12.96/oz. I could sell them on EBay right now for a profit, even after Ebay's stiff fees. If you have the patience, Apmex is the place to buy and they have excellent customer service. I have never had any problems with several order over the last 6 months.


On Apr 30 11:37 PM History Buff 24/7 wrote:

> Doubleguns,
>
> You can get silver coins but there has been a substantial markup
> for as long as I have been tracking them. I ended up paying close
> to $3 extra per coin over the spot silver price when I ordered a
> bunch of Canadian Silver Maple Leafs from a company in Oklahoma.
> I still feel better knowing I have the coins.

Will Silver Start to Outperform Gold?

On Apr 09 08:09 PM drbob66 wrote:

> Well, you can always buy them at a little higher price. As long as
> they're going up in price, it's all good, right?
>

Only if you see it happening and know to buy in at the right time. If you don't see it now then there is a good chance you won't see it when it happens either.

Plus, if you spend $10,000 now, you will have about 800 ounces. If you wait until it is $20/oz you will only have 500 ounces. Once silver hits $50/oz that will be worth $25,000 instead of $40,000.

Gold Bulls Should Stay Away from Gold Stocks

The article is not lame, and it does make some valid comments. But I think the main point is a little off the mark. The scatter plot shows that, even when gold is above $500, gold stocks go up quicker than gold itself. They also go down quicker. All it says is that a random selection of gold stocks has a create volatility than gold. None of this is surprising. Note that the scatter plot is misleading because the scale is different on each axis.

What the author fails to point out (and sharkboy does) is that if you pick the best companies then gold stocks will out perform gold more often than not in a gold bull market. The last year or so has, as a whole, been an exception to this, but the last four months have proven it to be very true. Since the beginning of Decemeber HUI has increase 54% against gold's 28%. My personal portfolio of junior mining stocks has gone up 49%.

Blanket statements about whether or not to hold a certain class of stock are bound to be controversial. An experienced investor knows which ones to pick and will be able to make more with stocks than with gold in a large percentage of cases.

I Think Oil Will Outperform Gold in Near Term

I don't see this as an either/or. I expect both to perform well in the next year or two. I have long held gold (but not GLD) and I recently added USO.

Gold: Not a Bubble

On Mar 15 02:12 PM Mark123 wrote:

> Be careful on ebay... I paid for 10 oz and got NOTHING.. It took
> me 2 months to get a paypal refund..... Additionally, don't forget,
> during the Dec 1979 and Jan 1980 run up to 850, not a dealer around
> would buy your gold back at spot...they were paying well under spot...
> good luck to all

Maybe, but EBay was not around in 1980, and people will buy anything on EBay. Plus, if you bought at $1000 and spot is $2500 then you don't need to sell at spot to make a healthy profit. That profit would probably be more than investing in an index fund.

Gold: Not a Bubble

On Mar 15 01:52 PM jarcom wrote:

> What is the premium vs physical possession if you're long GLD?
> I was under the impression that GLD was the same as having possession
> of the real thing. Other than the ETF fee, what's the difference?

In a famine which would you prefer? A sack of beans in the pantry or a piece of paper which promises to sell you a bag of beans. The latter is useless unless there are beans in the store.

Search SA for articles which question whether GLD actually holds the metal. Even if those articles are not 100% correct I think it is a risk which is not worth taking.

Storing physical gold is not really a big risk: you can store $10,000 worth of old gold coins in a coin tube designed for modern dollar coins. Place that in a safe, or even a strong metal box concealed in the house and you have no worries.

Gold: Not a Bubble

On Mar 15 01:06 PM mr freddo wrote:

> I don't think investors should bet it all on gold. Use it as an
> insurance policy. Think about holding 10 to 20% of your portfolio
> in gold, silver, gold mines and some physical gold and silver.
>

Where else to put it right now? I would say don't put more than 20% in physical metals but I see nothing wrong with putting more in more liquid forms (such as CEF, GTU or GDX, all of which I own). As long as you keep on top of things you can easily liquidate them if you see a turndown. The 20% physical can then be held very long term as an insurance.

Hedge Inflation with the Silver ETF

You say:
"I suggest maintaining a small position in silver with a downside target price of $9.55 - $11 and an upside target price between $16-$19. The reason for a wide range in the target price, and a price target for both losses and gains is due to the inability to assess the impact of cash infusion into the market.

My advice: Accumulate. Enter a stop loss of 10-20% to minimize losses."

I think this is a guarantee to lose money. A stop loss set at 10% is extremely dangerous. Silver is highly volatile, much more so that gold, and the chances of this stop loss being triggered is very high. You should not be in silver if you cannot absorb a loss of at least 30% but, of course, long term you are likely to make a profit of much more than 30%.

Also, I beleive there are better options than SLV, which is coming under a lot of scrutiny recently. While the doubts about it may prove to be false, it is a risk I don't want to take. My recommendation would be to invest in CEF which is approximately 50% silver and 50% gold. It is audited and the metal is guaranteed to be there, unlike SLV.