Playing By The Numbers

Numerology is the idea that numbers control our lives, and that, for example, changing your name to one whose letters "add-up" differently can change your life.

I'm not going to bore you with it or some advanced theory, but let's see if a little numerical "common cents" will predict the future of PM.

Let's forget who's buying, selling, and why for the moment. As much as possible, let's ignore the product, we're looking at something deeper than that.

PMWhite. Current numbers say 44. Recently it was 50, then dropped into the 30s. Seers have crystal balls, but pawnbrokers have brass balls. says you maximize your return at 48-49.

But it's gone 50 before! Forget 31 years ago, half of you weren't even born then.

Round numbers are magic. No matter how well we know that $9.99 and $10.00 are essentially the same price, the people who get the big dollars for having smart brains tell us to price things at $9.99.

The same magic works with selling. "When it gets to fifty, I'll sell." Nice round number, easy to remember and calculate. Might as well say "When it hits $50, I'll get in line with the 90% of other sellers who are considering selling for under $100, if I remember."

So when do you sell? Before everyone else does. If you have steel nerves, 49.5. If you're more conservative, 48.5. You give up 1-3%, but even if you bought at 44, you still make 10.2-12.5%. CDs won't do that!

When do you buy? When it gets near 30 again. A few % higher, not exactly. You'll see that "natural" range several more times in your life.

PMYellow. Just passed 1900 and seems to be holding, making new record highs on an almost daily basis. The market has never been like this before. Between you, me and the wall: SELL

It's hard to sell when you're looking at higher prices daily. It's even harder when buyer interest is gone.

Remember that magic number 50? Numbers don't get much rounder than 2000. People who bought at 200 will sell at 2000. Ditto those who bought at 1000, 1500, and 1900. If you think it's gonna hit 2000 and stay there while you gather your goodies, get in line behind the paperboy.

Most likely, it will go over 2000 for less than a day, then drop as low as 1200, then bounce back to 1500 and struggle for months to get to 2000 again.

But what about government buying, new buyers, 24-hour printing, and all the other reasons? That's long-term, and in the long term, we're all dead. Here's another secret. It won't stay over 2000, because there's no good reason for it to be there in the first place. In order to maintain a record high, you need a reason. The value of the dollar dropping 10% doesn't justify a 1000% price increase.

We're looking at numbers now. Not digging costs, weekly sales, etc. Raw numbers and the emotions they cause. If you buy now, you might make 5%, from 1900-2000. If it bottoms out to 1200, you lose 37%, seven times the potential gain.

Long-term? 2500, 3000, even 5000, easy. Do you want in at 2000, or 1200? I don't gamble with 7-1 odds against me.

PMGrey For roughly the last 40 years, this PM has sold for more than PMYellow. There are times it is slightly less, but its normal condition is slightly higher to much higher. This presents a different numbers game: If you see yellow priced significantly higher than grey (and we're getting close), sell yellow and buy an equal amount of grey. Reverse the trade when their prices resume their traditional positions.