Damnit ... silver

[Mr.Positive]

I agree 100% Danger.

I'm not purchasing at these prices. I am saving some money to make a purchase this summer. I think we'll see low 30's, maybe even in the 20's.

The last silver purchase I made was a small one, a 10 oz bar, that cost me $345. I cringed then at the price, and haven't purchased since. Actually I am very tempted to sell some silver and buy back later this summer...but, the dollar is falling off a cliff, and nobody really knows for sure what is going to happen.

Searching, I'd wait if I were you. Patience is good. But, do your own research and don't listen to us completely, everyone's situation is different. Do what is right for you.

 

[Quiksilver]

Even I will call bs on the silver market right now. There will be a hangover coming soon. Nothing rises that fast.

Currently at $47.50.

Expect market suppression, increase in margins, short term sellers, or something to correct the COMEX soon. Or see the COMEX crash

If I see a correction down to the low mid $30s Ill be contacting my broker for a fairly substantial investment.

Long-term I think property is a better way to go for building wealth, but theres easy and relatively low-risk money to be made in PMs right now.

Would suggest anybody not currently in the market (physical or paper) to do a little 1 year experiment with silver trading. Don't invest what you aren't prepared to lose, but keep in mind you are losing by keeping your money in a savings account.

And for anyone curious as to my qualifications, I'm fresh out of Uni and managing clients investment portfolio in a boutique real estate investment firm. They give me permission to manage large sums of their money ($100,000+), and I have suggested to clients to do some research into the silver market, and many have subsequently asked to diversify their portfolio with commodities. I all also tell you it's sad to see how much money these people have invested in stocks and the amount they're losing. For some this is their only retirement money and they're getting absolutely killed in the stock market when you factor in CPI. I'm seeing growth in some portfolios, but those with low positions in commodities and mining are losing money to inflation and cost of living each year.

Your investments have to be well in the green just to retain your purchasing power these days. Look at the rising food/energy prices ... Your investments have to keep up with these rises or else you come out in the red overall. A slow descent into lower standard of living and quality of life ...

No one can tell you what to do except you, but I know for myself once we see the hangover from this upturn, I'll be increasing my position in silver. And yes am prepared to lose every cent I invest.

Edit: I would wait for a correction to invest, search1ng. Silver is inherently 2 steps forward 1 step back. We are currently watching it take 4 steps forward, and are thus expecting 2-3 steps back. That is the simplest way to describe it. However if you invest now, you won't feel stupid when it hits $75 or $100 or $200/oz. Personally i would consider doing what some analysts suggest and selling some silver now and reinvesting it in gold. Then when silver cools down over the summer, reinvest that capital back into silver. Effectively dodging the inevitable silver correction that's coming, and even increasing the amount to put back into silver by riding the more stable gold bull.
-----


See you when silver hits $50.

 

[Mr.Positive]

No one can tell you what to do except you, but I know for myself once we see the hangover from this upturn, I'll be increasing my position in silver. And yes am prepared to lose every cent I invest..

Quiksilver, you are extremely bright and way ahead of the game at your age. I wish I was as plugged in at your age as you are.

Quiksilver/Danger, we need to keep this thread going and put our heads together, find out the best time to buy this summer. I'd like to increase my position as well, physical silver.

Also like to point out, over the past couple of years, until late last year...I was purchasing small amounts of 90% silver coins, old US quarters, dimes, etc on ebay. A little here, a little there, over time. I'd just dump them in a coffee can and forget about them. This last week I got curious about how much was in there. Turns out I've got 64 ounces of silver, worth around 3K, in that little coffee can. Amazing how a little bit here and there over time adds up.

 

[azanon]

Azanon,

Define "short term speculation". Silver has gone from $4 to $44 in ten years, however I would not consider that the short term.

And you consider that making up for its pitiful perform from 1900-1999? Even the sun shines on a dog's ass some days, or one decade. Give it time, the 0% long term return will be maintained.

Hell, anyone who kept just 0-5% of gold and silver in their portfolio over the last ten years would have been decimated. Even worse, they would be oblivious to the fact that they had been financially raped.

I would hardly call ~ 4% positive average annual return being decimated (my IRR for the past 10 years). And I held no precious metals. Anyone holding a generic "lazy portfolio" did 3-4% IRR. This is quickly confirmed with cursory google skills.

You are basically one of the proponents of dividends versus capital gains, and there is nothing wrong with that sort of investing. However that does not mean that capital gains is a bad kind of investment. Many of the "income" instruments over the last ten years have not done so well.

That would be a negative. I hold 100s of stocks within my mutual funds, many of which partially, if not exclusively, realize growth only through capital gains. I also hold REITs which (partially) realize growth through capital gains.

 

[azanon]

Danger, Azanon refuses to get it. The days of silver being used as an inflation hedge (0% real return) are a thing of the past.

Think about this, every tomahawk bomb we drop on Libya has over 500 ounces of silver in it. Poof...gone

You think 75,000 ounces of silver is a lot in the grand scheme of things? (150x500). Before answering, recognize the question is rhetorical.

Every laptop, cell phone, solar panel, heck pretty much any tech gadget has silver it it.

You left out "traces of" after has.

There is no top on silver. Silver could go to a $1000 an ounce, what could stop it? Wait until the economy turns around, if it does, and we start consuming even more.

Hey man, I'm winking right with you. That's exactly what I'd say if I owned silver. You're playing the "greater fool" game. Just don't wait too late to sell, because the suckers are almost bought in.

 

[azanon]

I agree 100% Danger.

I'm not purchasing at these prices. I am saving some money to make a purchase this summer. I think we'll see low 30's, maybe even in the 20's.

The last silver purchase I made was a small one, a 10 oz bar, that cost me $345. I cringed then at the price, and haven't purchased since. Actually I am very tempted to sell some silver and buy back later this summer...but, the dollar is falling off a cliff, and nobody really knows for sure what is going to happen.

You're not even a beginner investor. You don't realize that it would be no more foolish (or smart, depending on your opinion) to buy silver now than it would be to own it? An investment is either good or it is not. The price is the same whether you're buying today, or already own it and are in a position to sell it - at the same dam* price as the person buying it! (minus a negligible commission)

abc's positive!

(edit) Look, I realize shows like Cramer, or stock recommendations often have 3 categories: Buy, hold, or sell. But in practice, there should be only two; buy and sell. It wouldn't make sense to be of the opinion that holding is a good idea, but buying isn't. To argue that makes sense, is to say that the commission justifies holding. But commissions are usually so small, especially when compared to the volatility of an speculative investment like precious metals, that it would hardly justify a recommendation to hold, but not to buy. It either makes sense to own gold/silver, or buy gold/silver today, or it does not. There is logically no middle ground.

 

[Mr.Positive]

You're not even a beginner investor. You don't realize that it would be no more foolish (or smart, depending on your opinion) to buy silver now than it would be to own it? An investment is either good or it is not. .

What makes you assume I'm not investing elsewhere as well? This thread is about silver, not stocks, there's plenty of threads on stocks. Silver/gold make up a portion of my investments, not all.

I was buying silver when it was around $10 an ounce, now it's over $46 an ounce...over 4 times what I bought. Are you saying that's a bad investment?

Honestly, I don't know why you are getting so upset over this thread. I've don't a lot of research on silver, I've made a good investment because of it.

I've stated several times in this thread I am not buying silver right now, nor recommending to. I think, and others as well, the price is going to go back down.

I'm hoping we can pool our knowledge, collectively, and find the best time to buy more at the lowest price.

As far as the "greater fool" think internationally, China is buying silver like madmen now. Most folks in the US are clueless when it comes to metals, that or they just get plain mad when they hear about the prices rising (like yourself).

 

[Mr.Positive]

(edit) Look, I realize shows like Cramer, or stock recommendations often have 3 categories: Buy, hold, or sell. But in practice, there should be only two; buy and sell. It wouldn't make sense to be of the opinion that holding is a good idea, but buying isn't. .

It makes perfect sense to hold gold and silver. Gold and silver are assets, there is no liability attached to them, the value is honest.

A basic understanding of how money (fiat) works. Every digit in your broker account, and bank account, is debt, it was borrowed into existence. If you have 10K in there, you are owed 10K worth of goods or services, you just haven't collected on it yet. It only becomes tangible, when you collect on the debt owed you.

Why you don't hold dollars, the value keeps going down thanks to Keynesian economics. Your money has to grow constantly to keep up.

You don't count your gold and silver in dollar amounts, you count them in ounces.

Let's do some math..roughly. The government needs about 4.6 trillion a year to operate. The gov takes in 2 trillion from taxes from us, issues 2 trillion worth of treasuries, foreign investors, etc. That's 4 trillion. 1 trillion goes to servicing our existing debt (14 trillion). That leaves a 1.6 trillion dollar money printing from the fed reserve.

Inflation is on the way, and is here now. As long as this fiscal policy continues...gold and silver will go up. That's logic. This is what is happening.

 

[Franky Four Fingers]

Waiting for pullback might be a good idea. Then again it might not be a good idea.

There are times when a person waits for a pullback just to get left behind.

I waited for a pullback to $25-26 in January/February. It went down to 26.50 range. Guess who got left behind on that one?

I purchased recently in the low 30's, mid 30's and recently in the 40's.

If it actually does correct down to the 30's I may buy more but there are a host of well long term successful people in the investment field saying it will go above $100/oz in the foreseeable future because of money printing / US debt, inflation, etc.

I think it will get there so I'm taking a position now regardless if it pulls back or not.

 

[Mr.Positive]

Good luck Franky.

Before you pull that trigger, remember that many of the greatest investment minds have often been wrong about things, Warren Buffet especially.

Those people you refer to above are correct that it will go that high, but they have their timing wrong. It will not be this year.

Well said Danger....and good luck Franky. I understand where you are coming from. It's very tempting to want to buy, especially if you have a decent amount of money sitting around just waiting for the right time.

You could always dolllar cost average, that's what I was doing. Buy a little here and there regardless of the price.

Here's a very good article regarding everyone's natural reaction that silver is in a bubble. This guy says yes....but not the bubble we all think it's in. Good article.

http://paperempire.net/2011/04/22/silver-is-a-bubble-but-its-not-what-you-think/

 

[Franky Four Fingers]

Thanks for the input.

I've been dollar cost averaging as I've said since the 30's so it isn't like I'm buying in all right now at a current high. If it dips I will probably dollar cost average some more at a lower price.

Things is it isn't just inflation and money printing/currency debasing etc., it's China and India buying big as well. If they are loading up due to fiat currency uncertainty etc., that's two MAJOR buyers of silver. Much higher demand because of them so then price will increase. They make momentum investors look like a a tiny spec.

Regardless someone somewhere that's Big is buying up a whole lot of silver beyond just moment investors. We didn't get to this level just by momentum investors.

You can get a good idea of a bubble breaking after a big run up over months/years then a stock/commodity rises around 10% in one day on no particular news.. Then you get the major sell off days of 10% not long after.

Just my .02c

 

[Mr.Positive]

Things is it isn't just inflation and money printing/currency debasing etc., it's China and India buying big as well. If they are loading up due to fiat currency uncertainty etc., that's two MAJOR buyers of silver. Much higher demand because of them so then price will increase. They make momentum investors look like a a tiny spec.

It was just last year that China started allowing their people to buy physical silver. It was forbidden from the government before that. Then the government openly recommended silver. That's 1.4 billion possible new silver investors, imagine if each one just bought one ounce of silver...poof, bye bye, no more silver to be found. China is a major producer of mined silver as well, and what I've heard, is they are not letting it leave the country.

The comex apparently will not deliver physical silver if you try and take delivery, they add a 25% bonus to the contract to not take delivery. A cash payout. Makes you wonder how much physical they actually have in their warehouses.

The whole silver thing is a fun investment to follow, it really feels like anything could happen. It's not for the weak at heart, it could tank one day, then explode the next, etc.

 

[Mr.Positive]

You know...I've been thinking a lot about silver the last few days, and where it's going to go in the short term, and would like to share some thoughts. Hopefully, get some comments on these thoughts...

I'm starting to seriously question whether we are going to get a price dip this summer. The only thing supporting a dip, is the fact that silver has gone up so high so fast.

Regarding that article I posted, about silver coming OUT of a bubble. The bubble being price suppression...we know the big banks short silver.

Take the supply side. Historically, silver was priced at 1/16 that of gold...for the simple fact that there is 16 times more silver in the earth than gold.

So, with gold at ~$1500 an ounce, silver should be at $94 dollars an ounce right now. Just on the supply side, but it's not, it's less than half that.

This supports the thought of silver coming out of a price suppression bubble.

Now, take the demand side. People are losing faith in currencies worldwide, due to massive amounts of monetary creation, you have China buying up silver, added on top of that all the technological demand for silver...you have demand far exceeding supply.

Back to supply, since tech has gobbled up who knows how much silver, and the big banks do not hoard it...nobody really knows how may ounces of physical silver there is. Lot's of speculation, some people believe there's actually more gold than silver.

So, silver to me looks like it's finally being unleashed to return to it's true value.

At a minimum, it should be $94 right now, just based upon geological knowledge of 1/16 that of gold...at a minimum.

Thoughts?

 

[Alle_Gory]

Technological demand, for what? What is silver used for and how much is that industry growing and projected to grow?

So far your reasons are very vague. Figure out what the hell it is, how much there is and how fast it's produced, and why people want it.

 

[Mr.Positive]

Technological demand, for what? What is silver used for and how much is that industry growing and projected to grow?

So far your reasons are very vague. Figure out what the hell it is, how much there is and how fast it's produced, and why people want it.

Dude, silver is in every tech gadget you own...from your ipod, ipad, tv..down to your electric toothbrush. (Don't know about the toothbrush, but hopefully you get the point).

I'd love to find out exactly how much physical silver is out there, but it is very vague. Nobody knows, do you know how much silver I have? No, I'm not telling either. How much sterling silverware is in households?

See my point? I guess I'm saying silver should at least be valued at $94 right now, 1/16 of gold. That's the only concrete fact anyone has, it's been proven, there is at most 16 times more silver.

 

[Mr.Positive]

To answer the question of what silver is used for industrially...I copied this out of an article I read:

Silver is the indispensable metal. Next to oil, silver is the most widely used commodity ever and has more than 10,000 uses. As technology progress and expands, silver’s usefulness will explode even further. Its unique characteristics are unlike any other commodity in the world.

• Most Reflective of all Metals

• Greatest conductor of both Heat and Electricity

• Strongly Resists Corrosion and Oxidation

• Second most Malleable and Ductile Metal (Next to Gold)

• Recently Discovered to be a Very Effective Anti-Microbial/Bacterial

It is used in…

• Batteries

• Bearings

• Brazing and Soldering

• Catalysts

• Clothing (My new washer uses silver to clean clothes better with less water and energy.)

• Coins (Wait until you see the demand skyrocket when the rest of the world wakes up from their Fiat dream)

• Electrical

• Electronics (Cell Phones, Computers, TVs, etc.)

• Electroplating

• Photography

• Medical Applications (Hospitals use silver extensively for its Anti-Microbial/Bacterial qualities)

• Jewelry and Silverware

• Mirrors and Coatings

• Solar Energy (Peak Oil will raise demand for silver until we get Peak Silver)

• Water Purification (Clean water is the most basic element to human life and yet clean water is becoming rare.)

http://dont-tread-on.me/the-silver-bullet-and-the-silver-shield/

 

[Poonani Maker]

• Recently Discovered to be a Very Effective Anti-Microbial/Bacterial

I take this stuff called "Sovereign Silver" every time if feel a cold coming on, and *poof* no more sickness.

 

[Mr.Positive]

Mr. Positive,

You have a good list of the strong fundamentals for the silver bull market, however you are making the mistake of applying that to the short term movement which is strictly based on emotion at this point.

Remember....

Fundamentals = Long-term (which I consider to be about 20 years).
Emotions = Short-term (a more vague term but certainly a 100% return in 6 months is short term emotionally driven).

I hope that helps clarify how to "game" the markets a bit better.

The fundamentals support a triple digit silver price. But Rome was not built in a day, nor does the value of any tangible or stock rise to it's true value all at once. It takes time. Now is not yet that time.

Danger, thank you. Good point, this is where I'm in error.

At some point though, the long term fundamentals won't be so long term...they will kick into high gear. Could take years however.

In the mean time, I'm setting aside some cash each month to make a purchase in the short-term. Try and time this dip, hopefully silver will drop in the 20's again. If it does, I plan on jumping on that opportunity.

By far, out of all the investments I've made over the years, silver is the one I enjoy the most. Not only is there a huge upside, but holding it in physical form makes you appreciate things that are tangible, not just digits on a computer screen.

 

[Mr.Positive]

$49.00 as I type...we broke $49!! If we hit $50, all bets are off, it's off to the moon!

 

[Franky Four Fingers]

$49.00 as I type...we broke $49!! If we hit $50, all bets are off, it's off to the moon!

At $49 apmex.com must be selling 1 oz silver bullion at around $52-53.

Yeah, this is why I take partial positions dollar cost averaging each month on the way up. I try not to take full positions though. that way if theres a pull back there is some cash in reserve for a buy on a pullback but I also don't get left behind on the way up if a pullback never happens to the level you hope for.

What happens if a pullback happens when it gets to 75, then it pullsback to 55 ? Thats about a 25% pullback. But if you waited for it to pullback to the 20-30's it might never happen.

The only way to cover both bases is to buy partial lots on the way up and keep the other half on the sidelines in case it does pullback. Or until you run out of sideline money with your partial buys on the way up, which ever comes first.

I know woulda coulda shoulda is useless but can you imagine buying when it was below $20 or $15 or $10? Oh those silly fantasies.