PM Risk

[Jonflyfish]

I know most people here say they don't care about the price of gold or silver.
But for those who do, you may want to mind your risk if you haven't already.
Another wave of USD strength seen on the horizon and heading for shore.
Cheers!

[tractorman]

Yay!! Cheaper prices!!!

[BamaJoe]

I hope your right there Jolly. I'm looking at making a major purchase in the next few weeks.

[rsk1963]

Thank you for the warning.

You are the great oracle from realcent (as I've seen time and time again you call the most incredible shots)...

that being said, you've made me want to hole up for a day or two and drink sullenly.

[Jonflyfish]

Yay!! Cheaper prices!!!

Some who are short (lacking physical supply) obviously like lower prices and those who are long, not so much (unless they hedge).
To me, it is what it is. I'm Delta & Gamma neutral.
Risk management for large positions is the norm and perhaps someday others will protect their hoards as well.
Cheers!

[barrytrot]

Jonflyfish is great at timing these things, but it's funny that by the time I looked silver was flying straight up

For those not moving super large piles of investor money, ala Jonflyfish, pick a strategy that you believe in and move in that direction. Pick a price and play off it. I.e. if you think silver is a buy at 30 and a sell at 35, then buy it at 30 and sell it at 35, don't play mind games trying to wait for that extra 10 cents.

I've thought for a year or so that silver at 31 was a great deal and very minimal long term risk. So I've loaded up at 31 constantly, primarily with the "fake stuff" leading the way. And it's proven a pretty good deal thus far.

[Jonflyfish]

You guys are too kind. I can be 100% wrong just like any other. What I'm looking at are a collection of "markers" that are increasing the odds for another significant round of USD strength in the coming sessions. Always DYOD and mind your risk.
Cheers!

[Rodebaugh]

Hey JFF,

A stronger USD..... Whats driving that? Byproduct of some other Country(s) softer currency? Or something internal? or chart stuff?

[fasteddy]

Dang, JFF, i was hoping for a PM takeoff....My 25th wedding anniversary is looming and I told the wife I would take her on a cruise with the silver found in circulation....well, as HCBTT writes.."just sort more", I need to.

[ggg]

I thought quantative easing was back on the table? Then not back on the table? Then back on the table? Then off? Last I heard it was back on? Wouldn't quantative easing weaken the U.S. dollar? Or at least the fear of it? I also heard that gold has been in the tightest trading range in a long time. I'm guessing the uncertainty of possible easing or not easing and the tight gold trading range are relative to one another. Maybe I can tilt the gold market one way or the other. All I have to do is start buying all the gold I can and the market will drop the next day. Or if I start selling all my gold the market will go to a 52 week high by the end of the week . I will announce whether I'm a net buyer or net seller and all you have to do is take the other side of the trade and become wealthy.

[My2Cents]

While I try to avoid buying silver at higher prices ($35+), any strength in the USD will surely be felt at the PM level. But like it was said earlier... cheaper prices are always a good thing. I'm not in it for a short term $5 buy/sell spread. More like a buy and hold mentality until I desperately need the cash.... which has never happened.

[tractorman]

Yay!! Cheaper prices!!!

Some who are short (lacking physical supply) obviously like lower prices and those who are long, not so much (unless they hedge).
To me, it is what it is. I'm Delta & Gamma neutral.
Risk management for large positions is the norm and perhaps someday others will protect their hoards as well.
Cheers!

I don't mess with risk. I consider buying and stacking just a hobby, a collection. If the price of silver falls to zip, I'll be OK. As long as silver stays above zero, I'll outperforming almost every other hobby I've ever had.

I get what you are saying about risk though. One member of this site in particular comes to mind. Some of you may remember him, his timing was horrible ... right at the edge of the cliff at $40/oz, right before the $10 haircut ... he was posting things like "How can I convince my girlfriend to let me max her credit cards to buy my silver?" I still cringe thinking about that poor guy. He doesn't come around anymore, I hope he's doing ok.

[Cu Penny Hoarder]

I know most people here say they don't care about the price of gold or silver.
But for those who do, you may want to mind your risk if you haven't already.
Another wave of USD strength seen on the horizon and heading for shore.
Cheers!

Man I hope so, I need to convert another 10K of fiat paper to real money.

I was hoping that recent trip to $30 was not going to hold. Oh well, looks like I gotta wait a little longer.

[deacon]

A falling price would be good for me. I've only just started collecting PMs.

I understood from the Wednesday Fed announcement that current interest rates will continue until 2014. Which means the dollar will be weaker against PMs. Are you speculating that the Euro (or other currencies) will be significantly worse? (which would mean relatively stronger US dollars)

[Z00]

Risk? What risk?
IMHO the only "risk" associated with PM's is not having any.

You want risk, go play in the paper market and leave your "money" in a brokerage account for the electronic bytes to rip it away at a moment's notice (if Jon Corzine doesn't get it first)

[Jonflyfish]

Hey JFF,

A stronger USD..... Whats driving that? Byproduct of some other Country(s) softer currency? Or something internal? or chart stuff?

Could think of several reasons why the reserve currency is poised to rise. Equity selloff, Euro as a reserve falters and USD gets re-allocated afresh. US interest rates rise. The fed spoke of leaving rates low into 2014 but that is to position the market. The Fed doesn't know what they'll be doing in the future. They never do.
However, I just use the charts. It's all in the price as price is the ultimate indicator. Enjoying the comments here however i.e. Jon Corzine and paper I guess a few tungsten filled gold bars never hurt anyone either- just the same as someone having their hoard stolen
Moderation in all things.
Cheers!

[Jonflyfish]

Risk? What risk?
IMHO the only "risk" associated with PM's is not having any.

You want risk, go play in the paper market and leave your "money" in a brokerage account for the electronic bytes to rip it away at a moment's notice (if Jon Corzine doesn't get it first)

Risk? There is a whole lot more risk than "not having any".
For example- there is plenty of risk for "having any". What are the goods and services priced in that you consume? Do you use paper to pay for that or gold chips?
I know a guy who sold all of his IRA assets and bought silver at $46 just before he was laid off. Now he is sucking wind as he liquidates because paper rules commerce. I hope it always does too (backed by something real and tangible would be best) . Selling my physical or trading it off in bits for goods and services would be the last resort. I hope that never happens.
Best to you
Cheers!

[Jonflyfish]

All I have to say is mind your risk.
Accept it or ignore it but it will not ignore you!
Cheers!

[Oakair]

What are your thoughts on the best leveraged inverse silver etf?

ZSL is what I'm looking at...

[Jonflyfish]

What are your thoughts on the best leveraged inverse silver etf?

ZSL is what I'm looking at...

I don't have much of an opinion on any leveraged commodity ETF's other than to say that those that are structured using futures are fatally flawed by design and tend to dwindle away in contango rolls. What are your thoughts?
Cheers!

[68Camaro]

I know a guy who sold all of his IRA assets and bought silver at $46 just before he was laid off. Now he is sucking wind as he liquidates because paper rules commerce. I hope it always does too (backed by something real and tangible would be best).

Yeah - that would have sucked... You can't put all your eggs in one basket!

[Oakair]

What are your thoughts on the best leveraged inverse silver etf?

ZSL is what I'm looking at...

I don't have much of an opinion on any leveraged commodity ETF's other than to say that those that are structured using futures are fatally flawed by design and tend to dwindle away in contango rolls. What are your thoughts?
Cheers!

I didn't mean to imply a valuation in my statement (if it was even the case you read it as such), simply meant to ask what your pick would be from among the available instruments for the average investor to capitalize on this drop you are predicting...

Your statement steers me away from leveraged etfs...although, while conceding their longterm inviability, their short term performance is guaranteed as they are they only available means by which to invest (even if indirectly) in these commodities, but granted, they rarely accurately reflect the performance of the underlying asset...

As to my thoughts, I have none...not anywhere near educated enough, just wanted your opinion

[everything]

Gfriend gave me this tip a few weeks ago. But, she got it from some CPA banker types, who told her PM prices are going to be taking another hit yet. Something to do with rates going up in 2014, debt overhang is going to become more of a substantial problem (of some kind), as if we did not already know. Hard to believe about the dollar strength, should help mask inflation some.

[John_doe]

short term stability seems to be the common outlook, its just a matter of how long does it last?


dollar and the dow are showing growth, the problem being that it is artificial growth. its smoke and mirrors.


its all part of the cycle.

[SoFa]

The dollar is relatively strong because the Euro is expected to collapse first. So the dollar is more attractive.
Of course, the dollar has its problems as well and that's limiting its rise.
As the gov't handouts are drying up, factory orders and jobs growth are coming under pressure.
The next recession is around the corner.
My guess is when the dollar gets sufficiently strong and the economy slows enough we get further stimulus from the Fed followed by the recession and then everything goes down including PMs.