Fundamentally, its very difficult to call a bottom - I've never been very good at it and don't know many (any) with solid track records at either timing them or noting the specific number - and frankly, it's even hard to know when it is truly "going back up". What I have been good at it trends, and even though I have been frustrated a couple of times as trends I have successfully called have resulted in my having to sit on the sidelines while the market continued up for many, many months (irrationally, I believed - and was eventually proven right). What I have learned from all this is that timing is out of my control. But I've learned to trust my gut on trends, and our trend now is inevitably down for the larger market/economy.
Regardless, this is far more than a pure value call, or an investment. My fundamental objective over the past 18 months has been to convert FRNs - which have no fundamental basis of value and which will eventually be seen as worthless - into things of relatively lasting fundamental value to both my family and to others, which are some mix of various desirable attributes of either capital creation or recognized wealth. In so doing I recognize that I am both learning how to do this as I am going along, and doing it in a way that I will see in hindsight was not perfectly efficient - but I don't know any other better trustworthy way to do it. I would prefer to buy as low as possible, but the process (at least my process) is inherently inefficient. My belief is that the price of what I have acquired will eventually rise to the point where my relative inefficiences at this stage will be overcome.
I also have a fundamental concern/belief that the market will literally dissolve overnight one night, and I have no idea when that day/night will be. It could have been last night. It could be tonight. So my decision making includes a preference to buy and have physical in hand now versus some possibility of a slightly lower price tomorrow which may not happen and which may result in me postponing the buy for too long.
It's not my objective to be "rich", but to protect what I have. For me the "risky" commodity holding is silver, versus gold. For primary wealth preservation I hold gold. For a mix of preservation with some hope/belief in additional appreciation, I hold silver. Those that desire to be wealthy should not be quick to follow any of my advice.
Posted: Tue May 15, 2012 2:45 pm
