ALL ABOARD - THE SILVER TRAIN IS MOVING TO HIGHER GROUND!!

[Country]

IMHO, the correction in SILVER has been completed. SILVER tried to hold $27, but could not and went down to as low as $25. We have been rebounding from that correction and will continue higher until we are overbought again in this secular bull market. Since the economy added fuel to the PM fire yesterday with a gloomy unemployment report, I see SILVER well over $30 now that it has broken to the upside past the nominal high at $29.30. It would not surprise me that $30 could be reached on Monday. My guess for this short term leg up is for SILVER to reach $33+ before some profit taking ensues; that would be about a 20% rise from the $27 consolidation level.

The pattern of intermediate term higher highs and higher lows is very constructive and very bullish for SILVER. I'm looking for the Hunt Brothers $51 SILVER to be surpassed sometime by the end of the first quarter of 2011.

Told ya!!! $30.00.

[blackrabbit]

Damn your good. I hope the rest of the prediction is also correct and my silver is worth 50 bucks an ounce this spring! The thought makes me a bit nauseous and giddy at the same time.

[stateofmind]

Since I'm supposed to be clear:
Today, I took some profits on AIB(Allied Irish Banks) and IRE(Bank of Ireland). I still have a large long term position in both.
I added a position equal to 1.5x what my position in Hecla is in AGQ puts which expire on 12/18.
I am convinced that this is a short term bubble which is going to pop by Christmas.
For anyone that has bitten by the silver bug, this short term run up is very exciting. You are making money very quickly, some of you faster than you ever have in investments. This bubble is mainly being fueled by speculation, and in a smaller part fueled by the fundamentals: A decreasing dollar, debt crises around the world, etc.
However, the dollar is not going to crash and burn. It is still the primary reserve currency of the world(60ish%). The United States is not anywhere near defaulting. And silver is an industrial metal -- gold is the only precious metal.
This run up is silver is not natural, and it will soon correct itself.
SLV is up 62% in one year. Contrast this to the Bearish Dollar ETF(UDN) going down 5.3%. Silver rose 62% in one year while the dollar fell 5.3%? And fueled solely by QE2?
Circled in black is the normal behavior of silver. The huge upswing is not normal activity.


I have no idea to the level which silver could fall to. I am predicting a large retreat, however. The RSI of silver is now 73, and the Force Index has grown even higher to 13406592. These are signs indicative of a bubble.

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[Country]

IMHO, the SILVER rise we are seeing is out of the ordinary, it is a historical rise. RSI overbought levels of 73 in a hot bull run can be maintained for quite a long time. While SILVER appears ebullient at present, it is merely catching up to the price level it should have had years ago if it were not for the manipulation that has ensued over many years. The shorts held by the banksters are capitulating. Why not a GOLD/SILVER ratio of 20? Even at $1400 GOLD, why couldn't SILVER be at $70 spot? I think what we are witnessing is SILVER finally breaking the bonds and chains that have constrained its price for many years.

[HelloMeteor]

IMHO, the SILVER rise we are seeing is out of the ordinary, it is a historical rise. RSI overbought levels of 73 in a hot bull run can be maintained for quite a long time. While SILVER appears ebullient at present, it is merely catching up to the price level it should have had years ago if it were not for the manipulation that has ensued over many years. The shorts held by the banksters are capitulating. Why not a GOLD/SILVER ratio of 20? Even at $1400 GOLD, why couldn't SILVER be at $70 spot? I think what we are witnessing is SILVER finally breaking the bonds and chains that have constrained its price for many years.

So what is the "true value" of silver? And what is your basis for this claim?

[Country]

IMHO, the SILVER rise we are seeing is out of the ordinary, it is a historical rise. RSI overbought levels of 73 in a hot bull run can be maintained for quite a long time. While SILVER appears ebullient at present, it is merely catching up to the price level it should have had years ago if it were not for the manipulation that has ensued over many years. The shorts held by the banksters are capitulating. Why not a GOLD/SILVER ratio of 20? Even at $1400 GOLD, why couldn't SILVER be at $70 spot? I think what we are witnessing is SILVER finally breaking the bonds and chains that have constrained its price for many years.

So what is the "true value" of silver? And what is your basis for this claim?

I say - Let the FREE market decide what the price should be...

[Treetop]

However, the dollar is not going to crash and burn. It is still the primary reserve currency of the world(60ish%). The United States is not anywhere near defaulting. And silver is an industrial metal -- gold is the only precious metal.

First to the silver is industrial. Silver is also a precious metal. Has been as long as gold. So both factors are working on it.

As to the dollar being the global reserve currency, this is set to change. when? I dont know, Id bet the big players do. Its been talked about openly. The IMF will be using SDRs to create a new one. Countries the world over are calling for this. It is only a matter of time.....

that said, in most run ups I think your type of stance is warranted, and correct. YOU though, wont know the day the hammer will fall.(unless you have some extremely powerful friends) If your not lucky, you will be standing there holding nothing.

[Thogey]

IMHO, the SILVER rise we are seeing is out of the ordinary, it is a historical rise. RSI overbought levels of 73 in a hot bull run can be maintained for quite a long time. While SILVER appears ebullient at present, it is merely catching up to the price level it should have had years ago if it were not for the manipulation that has ensued over many years. The shorts held by the banksters are capitulating. Why not a GOLD/SILVER ratio of 20? Even at $1400 GOLD, why couldn't SILVER be at $70 spot? I think what we are witnessing is SILVER finally breaking the bonds and chains that have constrained its price for many years.

Thanks Country,

You made me look up word "ebullient". I will be using that word early and often.

Thanks.

[HPMBTT]

I'd like to make a general comment with regards to Country's beliefs that silver will bypass the Hunt brothers level of $51 USD by the end of the 1st quarter. Unless things get much worse and pretty quickly, I think that there is no way we will reach $51 by March 30, 2011.

Here's my thoughts as to why. I've been charting silver yearly, monthly and then more recently, daily since the huge daily swings that started around early September.

Strictly sticking wih the Kitco historical chart prices on the 1st of every month, here's some quick monthly stats for 2010:

Jan-Feb: -5.5%
Feb-Mar: +1.5%
Mar-Apr: +7.3% (nice!)
Apr-May: +5.6%
May-Jun: -2.4%
Jun-July: +2.2%
Jul-Aug: -2.9%
Aug-Sep: +7.5% (nice!)
Sep-Oct: +13.3% (whoah!)
Oct-Nov: 12.3% (whoah!)
Nov-Dec: +16.1% (holy sh** ! What's going on??)

Notice the huge increases per month since September. Now then, sticking with an increase at 10% per month, you get the following (assuming Kitco 28.74 @ Dec 1st):

Jan 1st price: $31.61
Feb 1st price: $34.78
Mar 1st price: $38.25
Apr 1st price: $42.07 (end of 1st quarter 2011)

As you can see, $51 doesn't appear to be realistic. Now then, let's assume a 16% increase , month to month....and so we get:

Jan 1st price: $33.35
Feb 1st price: $38.70
Mar 1st price: $44.90
Apr 1st price: $52.10 (end of 1st quarter 2011)

So in other words, silver would have to make a mind-blowing 15-16% EVERY month for the next four months straight, AND with no corrections. Hmm...in my opinion, that just doesn't seem possible. Unless, of course, the SHTF. Then all bets are off and the sky is the limit (hope you got your PMs in-hand before the crash).

Would love to hear others comment, of course. Feel free.

And remember, if a huge correction does happen.....BUY TONS!

[tebam11]

I think there are too many buyers out there to let a big correction take place. Without some fundamental change in the big picture, the deep pockets are only letting the draw backs fall back a buck or two. Then they start the buying and it seems to consolidate. I'm definately new to this game, and do not know how all these factors will play out. Since I've been in the PM game, I have not seen one of those famouse "shake out the week hands" kind of sell off. Just some of my .02 worth

[Market Harmony]

SOM, aka Greenday43 (yes, I know it is you)

Thanks for the outline of your position, but there are parts to it which I'd like to discuss, and the rest I'll leave to you to own:

Since I'm supposed to be clear:
Today, I took some profits on AIB(Allied Irish Banks) and IRE(Bank of Ireland). I still have a large long term position in both.
I added a position equal to 1.5x what my position in Hecla is in AGQ puts which expire on 12/18.
Your appetite for risk is way beyond prudent investing. In fact, you are willing to risk 1.5X your investment in one stock to own potentially worthless put options in an ETF. You very well could end up owing more than the capital you had to put up for the hedge
I am convinced that this is a short term bubble which is going to pop by Christmas.
For anyone that has bitten by the silver bug, this short term run up is very exciting. You are making money very quickly, some of you faster than you ever have in investments. This bubble is mainly being fueled by speculation, and in a smaller part fueled by the fundamentals: A decreasing dollar, debt crises around the world, etc.
Price action is a reflection of the effects of supply and demand for any particular item. They are making more fiat throughout the world than they are taking silver from the ground. When that fiat becomes worth less, then the demand for alternatives will increase. We are in that period of time, and the demand and static supply are causing price to finding a higher equilibrium. Price action has little to do to what you actually attribute it. "Speculators" are on both sides of the equation. Are you going to attribute a future price decline to "silver returning to fundamentals" or "speculators suppressing the price?"
However, the dollar is not going to crash and burn. It is still the primary reserve currency of the world(60ish%). The United States is not anywhere near defaulting. And silver is an industrial metal -- gold is the only precious metal.
World reserve currency status will have no effect on supply. You may want to argue that having world currency status would therefore be sufficient for wealth preservation and that there is would be no requirement for a substitute, but current events are proving this common thought of the late 80's and 90's to be false. All it takes is for a little faith to be lost, and that compounds quickly and forces people to protect their wealth in tangible assets.
This run up is silver is not natural, and it will soon correct itself.
The supply and demand relationship is natural and exposes itself in the form of price. Price will retract when either supply increases, or demand decreases. Neither of which are currently evident.
SLV is up 62% in one year. Contrast this to the Bearish Dollar ETF(UDN) going down 5.3%. Silver rose 62% in one year while the dollar fell 5.3%? And fueled solely by QE2?
You are drawing conclusions through assumptions of a correlation between the USD and Silver

Greenday, What do you think is a fair price for silver, today? If that is the "fair" price, would you buy or sell? Your answer should be "neither"... You would not want to buy and sell at one price because there is no profit, i.e. no benefit... Speculators make the market because they feel that an asset is overvalued or undervalued at any given time. Based on recent developments, THE MAJORITY OF SPECULATORS FELT SILVER WAS TOO CHEAP at $26, $27, $28, $29, AND THEY STILL THOUGHT IT WAS CHEAP AT $30... They are buying it up faster than new supply is coming onto the market. They are paying up because they think they will be able to sell it for more. Whether their basis for that argument is because of economics, industrial activity, or just plain old market gambling, nobody knows definitively. But, THAT is THEIR bet and THEY will continue to buy until THEY think they can't make any more money on it in the time frame that they initially anticipated... whether that is 1 year or 1 minute, it doesn't matter. How can you make the claims that you know more than them? You are just a simple drop of oil in the machine. Contrarian thinking is GOOD, but actions against trends (especially major trends) is suicide. I'll leave you with a famous quote from Thomas Jefferson:

In matters of style,
Swim with the current;
In matters of principle,
Stand like a rock

I think that suits you well. But you need to work on your definitions of style and principle.

I'll be more interested in your position when silver retreats at least 10% from a high.

[beauanderos]

Jan-Feb: -5.5%
Feb-Mar: +1.5%
Mar-Apr: +7.3% (nice!)
Apr-May: +5.6%
May-Jun: -2.4%
Jun-July: +2.2%
Jul-Aug: -2.9%
Aug-Sep: +7.5% (nice!)
Sep-Oct: +13.3% (whoah!)
Oct-Nov: 12.3% (whoah!)
Nov-Dec: +16.1% (holy sh** ! What's going on??)

I think that you'll find, under circumstances like these, that gains will increase in size, often sequentially, as the price continues to rise. Price rise brings in momentum players with money that wasn't in play at first. One begets the other in a self-reinforcing loop. Your premise that sixteen percent gains are unsustainable seems to be predicated on how unusual it would be for the existing cadre (perhaps 1-3% of investors?) to continue to bid up the price... but you're overlooking the effect of new money coming into the market and accelerating the trend. The more silver rises, the more attention it draws, which draws more speculative money... and the more silver rises. Ad infinitum.

[stateofmind]

SOM, aka Greenday43 (yes, I know it is you)
I've never hidden what my user name used to be.

Your appetite for risk is way beyond prudent investing. In fact, you are willing to risk 1.5X your investment in one stock to own potentially worthless put options in an ETF. You very well could end up owing more than the capital you had to put up for the hedge
Are you familiar with put options? It is impossible to lose more than you originally invested.

Price action is a reflection of the effects of supply and demand for any particular item. They are making more fiat throughout the world than they are taking silver from the ground. When that fiat becomes worth less, then the demand for alternatives will increase. We are in that period of time, and the demand and static supply are causing price to finding a higher equilibrium.
True, all commodities have been inflated by supply and demand. Yet, supply and demand has been taken out of the equation. The price rise in silver would be much more modest if we were hypothetically attributing it to fundamentals alone.

Price action has little to do to what you actually attribute it. "Speculators" are on both sides of the equation. Are you going to attribute a future price decline to "silver returning to fundamentals" or "speculators suppressing the price?"
That could very well happen. There is no one direct causation in regards to the effect speculators have on the price of a commodity. They can "jump on top" of silver while the price is falling, pushing it down farther. When silver falls, I will attribute it to the return of normal price levels. If you a fill a balloon with helium it will eventually pop. How close are we to the balloon popping?

World reserve currency status will have no effect on supply. You may want to argue that having world currency status would therefore be sufficient for wealth preservation and that there is would be no requirement for a substitute, but current events are proving this common thought of the late 80's and 90's to be false.
I would never make such an argument. My argument was that the dollar would not go bust, as it is the primary reserve currency. Until we see the Euro gain a significant foothold we are not anywhere near a dollar crash.

All it takes is for a little faith to be lost, and that compounds quickly and forces people to protect their wealth in tangible assets.
Faith in the dollar has been slowly eroding away for many years now. In the past three months, have we gotten so close to monetary inflation that a 50% gain is justified? No, we haven't.

The supply and demand relationship is natural and exposes itself in the form of price. Price will retract when either supply increases, or demand decreases. Neither of which are currently evident.
As I stated above, this price rise has little to do with supply and demand. In fact, the price of silver is like a fire: originally it was a slowly growing fire. Then someone started piling leaves on top of the fire, which caused a huge increase in the size of the fire. But the leaves burn quickly.
The price has silver has risen above its intrinsic value, and is now rising at an unsustainable rate. The price rises in a bubble are not predictable, and it is impossible to predict the price based only upon supply and demand.

You are drawing conclusions through assumptions of a correlation between the USD and Silver
Is inflation not the driving factor behind the price rise? Owning metals is a hedge against erosion of the dollar. Although silver is more volatile, there is a historical correlation between the price of the Bearish Dollar ETF(UUP) and the Bullish Silver ETF(SLV). What factors is the price of silver dependent upon?

Greenday, What do you think is a fair price for silver, today? If that is the "fair" price, would you buy or sell? Your answer should be "neither"... You would not want to buy and sell at one price because there is no profit, i.e. no benefit...
I have a hoard of silver that I bought at around $20 an ounce. I currently have all the silver that I need. In regards to paper investments, the price of a commodity is determined by the speculators. Speculators all too often, however, push the asset price of a commodity higher than it's actual(intrinsic) value.

Speculators make the market because they feel that an asset is overvalued or undervalued at any given time. Based on recent developments, THE MAJORITY OF SPECULATORS FELT SILVER WAS TOO CHEAP at $26, $27, $28, $29, AND THEY STILL THOUGHT IT WAS CHEAP AT $30... They are buying it up faster than new supply is coming onto the market. They are paying up because they think they will be able to sell it for more. Whether their basis for that argument is because of economics, industrial activity, or just plain old market gambling, nobody knows definitively. But, THAT is THEIR bet and THEY will continue to buy until THEY think they can't make any more money on it in the time frame that they initially anticipated... whether that is 1 year or 1 minute, it doesn't matter.
Speculators make in the market in the fact that they determine the price, yet the market price is a price upon which speculators agree is the fair price(i.e. closest to the intrinsic value). When your majority of greedy speculators fail to realize that the asset price is substantially above the intrinsic value you get a bubble, which will be unsustainable.

How can you make the claims that you know more than them? You are just a simple drop of oil in the machine. Contrarian thinking is GOOD, but actions against trends (especially major trends) is suicide.
I am speculating just as they are. I never claimed I knew more than them, I may very well be wrong. I feel though that I have a better chance of being right as a silver bear than as a silver bull.

[stateofmind]

I think that you'll find, under circumstances like these, that gains will increase in size, often sequentially, as the price continues to rise. Price rise brings in momentum players with money that wasn't in play at first. One begets the other in a self-reinforcing loop. Your premise that sixteen percent gains are unsustainable seems to be predicated on how unusual it would be for the existing cadre (perhaps 1-3% of investors?) to continue to bid up the price... but you're overlooking the effect of new money coming into the market and accelerating the trend. The more silver rises, the more attention it draws, which draws more speculative money... and the more silver rises. Ad infinitum.

Beauanderos, this is indicative of a bubble. Contrary to others, you admit that speculation is a key factor in the price rise of silver. This cannot persist forever, as the market will eventually correct itself. If anyone is interested, there is a book written about the subject(On the Tulip Mania, a commodity bubble in the 1630's in the Netherlands):
It is Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age and is written by Anne Goldar. It is a great read.

[beauanderos]

I think that you'll find, under circumstances like these, that gains will increase in size, often sequentially, as the price continues to rise. Price rise brings in momentum players with money that wasn't in play at first. One begets the other in a self-reinforcing loop. Your premise that sixteen percent gains are unsustainable seems to be predicated on how unusual it would be for the existing cadre (perhaps 1-3% of investors?) to continue to bid up the price... but you're overlooking the effect of new money coming into the market and accelerating the trend. The more silver rises, the more attention it draws, which draws more speculative money... and the more silver rises. Ad infinitum.

Beauanderos, this is indicative of a bubble. Contrary to others, you admit that speculation is a key factor in the price rise of silver. This cannot persist forever, as the market will eventually correct itself. If anyone is interested, there is a book written about the subject(On the Tulip Mania, a commodity bubble in the 1630's in the Netherlands):
It is Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age and is written by Anne Goldar. It is a great read.

I agree that the market will at some point correct, but I feel the prices could easily exceed historical highs before that happens. The faster the parabolic rise, the more likely an ensuing correction. Volatility and magnitude of moves, in both directions, may well increase as we move upwards. The price rise is multi-factorial, and the variables providing a catalyst to this climb are unknowns as to the independent impetus each provides. We have myriad currents of drivers adding to the stream that can readily result in a torrent of higher prices with the eventual price being unpredictable, but in my view multiples of its present level. I think it likely we will see some consolidation occur periodically, and subsequent upside penetration tempered for a time, rather than dramatic pullbacks to much lower levels. Fiat currency disillusionment, intrinsic value predicated in part by demand driven by burgeoning new industrial applications and in part by investor demand (need vs greed), depletion of the above-ground stockpiles of silver, mine supply of a vanishing resource that is failing to meet demand, and many more presumed causative factors I could delineate (the unwinding of the shorts?) are all contributing to this breakout from multi-year managed pricing levels. If there are "corrections," they will only succeed in ensuring exacerbation of the continuing price rise by depleting even more physical (if it can be sourced) at costs attractive to a cohort of buyers reluctant to purchase at higher levels. Eeeek, I sound like Ted Butler. And... the bubble is not in precious metals, but in global fiat currencies.

[Market Harmony]

SOM, you've got to learn that you cannot take supply and demand out of the equation. It IS the equation... all other factors influence either supply or demand, and the equilibrium point of supply and demand is called, PRICE. You will learn this some day.

I have a sneaking feeling that you rather enjoy the bantering back and forth between long and short. Not because you are learning anything, or are able to impart any wisdom, but because you like the attention. Therefore, I choose to no longer respond. You are in way over your head. You have got to learn that you don't know as much as you think you do. I guess you'll just have to find this out the hard way. Either that, or you can re-read and truly contemplate the facts and extrapolations from what has been written in this thread.

PS, I've got more years of experience in the markets that you have candles on your cake (that is if you don't lie about your age) I'm well aware of the strategy of using puts to hedge a position, but never at 1.5X. If your assumption is wrong, then you will own the same number of shares in the stock and lose all of your money in the put. Since you are at 1.5X the stock position = put, then the NET result is your stock now costs more than the initial cost (same number of shares, but expenses outweigh total value) At this point in time, your best option is to either close your put and lick your wounds, or sell puts at another strike in order to hedge your hedge. Any more purchases of options this close to expiration is foolish, as time will erode the value, and you'll gain nothing either way.

[HPMBTT]

This is a good thread and I'm learning a lot. Thank you, everyone, for sharing. Market, you have some good thoughts/insight, especially. I will fully admit that with the exception of doing IPOs in 1999-2001 and some general economic research/study, I'm totally new and clueless on stocks, puts, options, margins, blah blah blah...so I'll stick to my physical PMs and learn from others here at RC. But I am open to learning. One can never learn too much!

On a separate note (a bit off-topic)....my latest research has me trying to figure out the Gold/silver ratio and seeing how I can benefit (if at all). I'm considering starting a new thread on this and perhaps I will.

Keep contributing, everyone. This is good stuff. Thanks, I am learning a lot.

Just picked up lots of CWRs, so I'm gonna go relax and do some sorting.

[PreservingThePast]

SOM.......are you still in high school?

If so, how do you own stock?

Any stock that our son's grandparents wanted to gift to him had to be owned by my husband as it was against the rules for a minor to own stock. So, I am curious.

Thanks for the reply.

[slickeast]

silver saw 30 , I guess it didn't like it. It is running away fast.

[aristobolus]

Late tonight and tomorrow will be a great night to troll Ebay; the newbies will be dissolusioned. However, don't bother for a few hours since everything is bidded up sky high.

[stateofmind]

Supply and demand were never taken out of the equation. Suppose that the supply and demand factor alone on asset price equals a hypothetical x, and all other factors on the asset price stood for x^+z(X to the +Z Power). The asset price of silver equals a hypothetical y.

The equation is not ruling out supply and demand. The equation is showing that other factors currently have more of an effect on the asset price.

If anyone is very familiar with put options, I would like to clarify that I was not hedging against my investment in HL. Both were put options. I did not want to come out and state the monetary value of my positions, so I stated that the capital originally invested in AGQ was 150% of that in HL puts. Neither was a hedge; both will increase in price as silver falls. As foolish as I am, I saw a 40% increase in my invested capital today in IRE, AIB, HL, AGQ. Buying options near expiration makes them cheaper and more volatile(which increases the risk, yet also the reward seen today.) Nevertheless, I was happy with such large gains and sold 1/2 of my position.

Many members here are very intelligent(two come to mind). I feel that it is inappropriate to chastise others in a friendly debate. And for what? Taking risk that some are not accustomed to, and when silver tanks try to discredit them, based on trivial things such as age. You do not magically grow more intelligent solely based on "your number of candles." This type of intelligence is formed through study. Whether or not I start my research earlier than the majority does not mean that I should be discredited when my predictions come to fruition. I never claimed to know any more than any member here on Realcent, and will not do so.

I will also not be responding to any more posts directly as I do not want friendly debate to turn into heated argument.

To be "Clear":
Prediction: Silver will fall even more in price. Five years silver will be up from where it is now. We may trade in a range for 2-3 years. We will not see Hunt's brothers silver levels for many years.
Position(in order of size): AGQ puts, HL puts(will most likely sell for a small loss), IRE LEAPS, AIB LEAPS, RIG, CSCO, JNJ, AMT.

Here is an updated chart of SLV:

[theo]

Although I'm a little surprised at today's sell off I'm not overly concerned. I was reasonably certain that a sell off would occur before silver reached $30/oz. When it did reach 30 I thought it would run another 10% to 20% before consolidating.

Obviously a prime (and some would say convenient) suspect here is JPM trying to prevent Ag from going parabolic. I've read a few articles asserting that despite that attention from the CFTC, JPM is still willing and able to suppress silver prices. Of course we'll have to wait a few weeks for evidence (COT report?) to come in.

A simplier explanation is that silver needs time to consolidate and buyers are not yet ready to pay $30.

However as fresh concerns about the dollar reveal themselves in the not-to-distant future and the realities of dwindling supplies become apparant, these prices won't seem so high.

[beauanderos]

The retracement today was not entirely unexpected, however the magnitude of the pullback did surprise me a bit. There are traders who will try to profit whenever they see too much money seemingly positioned on one side of a trade, however those who do so must be adept at interpreting a plethora of technical indicators, nimble enough with available capital to take advantage of that timing, and bold enough to take the initiative and act upon the courage of their convictions. My congratulations to those who can successfully do so. I do not consider myself wise enough to "fight the trend," and would rather weather the inevitable obstacles encountered in a journey to a destination that, I presume, will eventually be much higher than what we now accept as the "intrinsic value" of precious metals. I'll be the first to admit my own trading philosophy embraces risk as I prefer scoring home runs to hitting singles. This necessitates a willingness to sustain temporary paper losses (no stop-loss orders) on non-margined, leveraged positions (AGQ, PMPIX, DGP, UCO, ERX, DAG) based upon the conviction that "I know the destination,"(hyperinflation) and would like to derive potential gains that outpace the constant erosion in purchasing power attributed to dollar devaluation quickly enough to enjoy any windfalls before our currency is worthless. I feel if you aren't making at least 50% in your trading accounts your gains are likely nominal at best and you are actually losing ground. My reluctance to try and time the markets, even when they occasionally seem overbought, stems from the desire to hold (although not entirely a buy and hold strategy, I do take profits from big winners at times) positions and not be sidelined in cash when they once again are propelled to the upside. Thus, if you are a proponent of capital preservation, you'll likely find my ideas abhorrent. Any pullbacks are welcomed as opportunities to assume further positions in mining equities (the core bullion is never touched) that have been dissected for resilience during previous perturbations. All trading is conducted within self-directed retirement accounts, absent tax consequences that might otherwise shape decision-making.

Full disclosure... I have been accused before of enjoying gambling.

[stateofmind]

Beauanderos, I wish you luck in your investing. How do you feel about the warnings given by many to avoid holding leveraged etf's for the long term because of the daily compounding which affects returns over large time spans? I try to avoid holding leveraged ETF's even in the mid-term. What is your perspective?

[beauanderos]

Beauanderos, I wish you luck in your investing. How do you feel about the warnings given by many to avoid holding leveraged etf's for the long term because of the daily compounding which affects returns over large time spans? I try to avoid holding leveraged ETF's even in the mid-term. What is your perspective?

As you understand, leveraged ETF's do not promise the effect of actual doubling or tripling the commodity they purport to track, but they still seem to outperform (take for example DGP vs GLD, or AGQ vs SLV). As a result, I have taken profits on oil-related instruments, buying low and selling for a swift ten or twenty percent gain, repeatedly in the past. I did well with DBO, before Deutsche Bank eliminated it. The oil ETF's, and we should include DIG, seem subject to variables too numerous to quantify, so for me, they are not "buy and hold." In contrast, despite the caveats leveled at potential investors, I find the performance of AGQ this year quite gratifying. It's my largest holding, and has leant itself to portfolio performance that, year to date, exceeds 100% in several different accounts. I prefer to play the market for gains, rather than to "bet against myself" and play leveraged inverse ETF's. I did try a few (SRS and SKF), but my results were too inconsistent to prove rewarding. There is money to be made during pullbacks, but the time required for the constant, diligent scrutiny of monitoring those positions is more than I care to devote at present. I do believe the overall trend in precious metals is upwards for the next decade, and I am content to play something like AGQ, because from thirty thousand feet you can detect more overall up days than down. The fact that silver inches up, then occasionally plunges by feet, plays to the advantage of holders of AGQ. Any money I have in equities is but a fraction of my core bullion position (which is not traded), and therefore, should I desire to do so, I can go "all in" as I currently am in equities, with no fear of consequences. C'est la vie.