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 Replies: 46 / Views: 4,894 |
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Valued Member
United States
206 Posts |
Ok, so I'm not an Economist by trade... But I do work in the financial/banking industry and I do hold a Masters in Economics. With that said I'd like to offer my perspective on the great silver rush of 2011.
First, I'm seeing far too many people on this board who are really quick to offer up "buy buy buy" advice to anyone who asks. Without knowing someone's financial situation, risk appetite, and general personality it is really dangerous to offer financial and investment advice to someone. (Especially if you aren't trained/educated/licensed to do so). I think as members of this great forum we owe it to all of our new members a little discretion in what we say and tell them they should do.
Second, there are too many people who are basing their silver buying strategy on bad data and hear-say investment advice. How many people here have really put in the time to learn and understand the market fundamentals of a commodity like silver or gold? (or platinum, or wheat, or oil, etc) Everyone is saying "Silver to $50, silver to $100, gold to $3000," but no one is citing their reasoning why they believe so.
What we have on this board, and on others, is a very dangerous cycle of repeated information. Person A says silver will hit $100 an ounce because person B said so, because person C said so, because person D said so... and so on. We've turned complicated investment strategy into a game of he-said, she-said with no thought on the implications of playing in this type of game.
I myself am a buyer and holder of silver and gold. They make up about 5% of my total investment portfolio. That is it. Regardless of how many ounces I actually hold, it's still only 5%.
I'm not saying it's impossible for silver to go to $100 an ounce, or even $500 an ounce. But we need to understand the true core principals of what is reflected in the spot price of silver. It is a lot more complicated than the Fed just over-printing money. (Though it certainly plays a large part)
I'm not looking to give investment advice of my own - I have my own rules that I follow and my own reasons to follow them.
But please take a moment to reflect back on the housing bubble (and subsequent crash). We all got so caught up in the profit circus that was created that we stupidly convinced ourselves that housing could never collapse. House prices would NEVER return back to their previous levels. It was up up up and only up.
Until 2008...
Let's apply our lessons learned in real estate to silver - nothing goes up forever. Hedge your silver buying with something else and be weary of taking investment advice from a stranger on a web board.
I love this forum - always have. I'm sorry if I offended anyone with my rant.
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Valued Member
United States
384 Posts |
This is very true. Thank you for putting it in words. I have noticed this in the forums recently as well. I understand people arguing about price is one thing, but I see a lot of people who are new to commodities coming to the forums and getting adviced that to get in now because silver will go to a $1,000 or something. And most of the advice given is without source, or justification, just plain opinion. That's just not prudent.
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Bedrock of the Community
United States
10045 Posts |
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But please take a moment to reflect back on the housing bubble (and subsequent crash). ..or the pump-and-dump of (worthless) dot-com stocks. If silver/gold are another bubble, timing is everything. Since timing is dictated by the big players, I gave up trying to play their game--I checked out when silver was $25.  Oh well. |
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Valued Member
United States
309 Posts |
You know, some of the best advice I got when I joined this forum was to just buy coins that I love because I love them. That took a lot of stress off of me immediately. I still watch what silver prices are doing because it does effect coins that I buy, but I don't just have to buy silver coins either. The ones that are silver, great; the ones that aren't, well that's great too. But, now my coins instrinsic value is determined by the collectors that make up this type of forum as opposed to how the market wind blows over spot price of any commodity.
Of course all that really has noting to do with true "investing" and all the stuff that photoeric was talking about but at least I have no worries in regards to that either. Silver could crash to $0 and my collection would still be worth exactly the same as it is to as it was this morning, you know?
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Valued Member
United States
309 Posts |
And one more thing...
I would say that people who come to a coin collecting website seeking investment advice, well...they get what they pay for.
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Pillar of the Community
United States
3345 Posts |
DVCollector is right. Timing is everything. There's still a risk but if you don't go in over your head, you may turn out a nice small profit. Just don't get carried away, because what goes up must come down. Especially silver n' gold.
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Pillar of the Community
United States
1150 Posts |
I would hope that people have the common sense to know their own situation. When they ask for opinions and advice, we give it. Not one person on this site has a crystal ball.
With that said, it is undeniable that the dollar is being destroyed before our very eyes. Any prudent person would therefore want some protection of their hard work and labor in the form of hard assets. So in that sense, I don't see anything wrong with anyone's advice to 'buy, buy, buy.'
It is all only opinions, one way or the other, and I'm sure folks have common sense enough NOT to sell their home and put it into precious metals. If they did, well, that would be their problem, wouldn't it?
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Valued Member
United States
71 Posts |
Although you make some good points, I'd also point out that this message board isn't really any different than any other in that whole "recycled rhetoric" stuff.
Message boards by nature are places where people voice their opinions, read other people's opinions, and decide if they agree or disagree with them.
I actually ask people for their advice on here. Mainly because I'm relatively new to the PM game and I value and wish to learn from some of the long timers here. That being said, I also understand that any advice I take or don't take is ultimately up to me and I alone am responsible for my actions (or in-actions as it might be).
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Pillar of the Community
United States
1064 Posts |
Hear, Hear Eric! I don't think we take the buy/sell up/down advice on CCF too seriously; with the grain of salt, at least. We just like to hear what others think (the FORUM part), but still make (and live with) our own decisions. I think a LOT of what goes on in the PM chains is 'how do you DO these various things, how DO YOU buy and sell, and WHERE'. In my case, I really like to hear what all these folks do, be it buy, sell, collect, favorite food, occupation, hang outs, pet pictures, WHATEVER! But, I'm an adult, and would never blame anyone associated with CCF for my financial decisions; I've made lottsa bad ones w/o any help!
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Pillar of the Community
United States
4008 Posts |
Quote:
But please take a moment to reflect back on the housing bubble (and subsequent crash). We all got so caught up in the profit circus that was created that we stupidly convinced ourselves that housing could never collapse. House prices would NEVER return back to their previous levels. It was up up up and only up. You seem to be doing the same thing that you are protesting. Quite a lot of us here never got wrapped up in the housing bubble or any other bubble for that matter. I own a home. It's a nice home but it is one that I can afford and I never looked to "flip" houses or get a liars loan. Some people did do that but then some people are always doing something that they shouldn't.  As to recommending buying PMs? Why would those of us who HAVE done the research on this topic and are enthusiastic about the long-term potential of PMs not recommend them? This IS, after all, a PM and coin enthusiasts web site.  If your point is that there is no one size fits all in investing... of course. That much is obvious, even to the newbies. At least, I would hope that to be the case. If it isn't, then perhaps your message will be useful to them. That would be good. |
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Pillar of the Community
 United States
2448 Posts |
Finally a voice of reason.
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Pillar of the Community
United States
1150 Posts |
There are a lot of 'reasonable' voices on this site. As a matter of fact, a few of them have posted on this thread.
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Valued Member
Cyprus
349 Posts |
I keep hearing a lot about people stating that precious metals are not considered an investment> I also hear a lot about people saying you should restrict precious metals to 5% of your total portfolio given you are the average investor.
Why is this figure 5%?
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Valued Member
United States
294 Posts |
I think Eric is saying to just use some discretion. Keep in mind that when you offer advice, it should be based on knowledge and experience. I personally, would not follow advice I got from an anonymous poster on a message board without following it up with further research. But that's me. Look at the age range of the members of this forum. They range from 13 to who knows how old. Also look at the substance of some of these posts. 13 year olds making themselves out to be experts (not limited to here, it happens all over the place). Posts talking about how someone lost money and getting out of the hobby, or how someone got ripped off through ebay. Basically looking for sympathy and justification for a screw-up. Then you have those who do offer these posters indiscriminate advice, without qualification. Yea, I know, you could be Alan Greenspan, but in this situation you are simply an anonymous poster on a message board, with no true way to prove who you are and what qualifies you to make your statements. I could tell you I'm a hot supermodel, and while you may doubt the statement, you have no real way to prove I'm not. I think Eric makes a good point, but it should be more directed to those that seek the advice, not those that offer it. You can't stop so-called experts and Internet tough guys from posting (there is no offense intended here, nor is that statement directed to anyone here), but you can advise the less sophisticated among us to use more discretion when taking this advice. |
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Pillar of the Community
United States
1285 Posts |
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I think Eric is saying to just use some discretion. Keep in mind that when you offer advice, it should be based on knowledge and experience. Well said.I see the same misinformation posted here and else where "repeatedly" on a daily basis. Unfortunately, a lot of folks are in this trade without any of their own DD and for the wrong reasons. As per the mis info -- I try and catch what I can but don't have the time to read all posts etc.... But I am glad to see others starting to post and correct the misinformation. Just look at the ETF question topic posted by SDC. Not to offend anyone but Think before you post. |
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Bedrock of the Community
United States
10045 Posts |
What I took from the OP is that bubbles share similar psychology. If there's a common thread I've seen to bubbles, it's that old rules don't apply, prices have reached a "new plateau", old fundamentals don't matter, and we'll never see those prices again. Just an observation--not investment advice. In closing, here's a Currier & Ives cartoon from 1875, on the subject of bubbles. At the time, mines and railroads were the tech stocks of our late '90s.  |
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Replies: 46 / Views: 4,894 |
Posted 05/10/2011 2:38 pm
