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 Replies: 15 / Views: 1,854 |
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Valued Member
United States
228 Posts |
As I write this, silver is trading at $31.77! It has just today broken a major support level of $31.97 - with next support at about $27.00. Beware going long with leveraged ETFs at this time! Nowone is more bullish than me on the LONG TERM prospects for silver, but now is not the time to bet the farm on short term LEVERAGED speculations! I know that many forum members are big silver bulls, (myself included), but I want to stress that is possible to be right long term, and get CLOBBERED short term! Let's review a bit. On July 15th 2008, silver closed at $19.30 per oz. It was smashed down to it's close of $8.88 per oz. on October 24th 2008. That's a 54% drop in three months & nine days (about 71 trading days)! On March 2, 2010 silver closed at $14.93 per oz. It zoomed up to its recent closing high of $48.70 on April 28th 2011 ! That's a 326% move up in just under 14 months! Now (just 5 months later) at under $32 an oz. - it's lost a full third of its' value. (All prices London Fix in U.S. dollars from http://www.Kitco.com.) It could drop further, on Monday or Tuesday! Silver is the most treacherous, and manipulated market that exists,(with the possible exception of the FOREX markets). We know, that major players (like JP Morgan, and HSBC), have in the past - been instrumental in using the COMEX to manipulate the silver market lower. For more info on long term silver prospects, plug the names Ted Butler or Jason Hommel into any search engine - and enjoy. If you want to read about recent silver market manipulations - try Andrew Mcguire + silver, or just "silver market manipulations" etc... We are in a time of a shifting of paragigms. Debt is on the way to repudiation. But when the U.S. credit rating can be downgraded, and we see Treasury Note yields go DOWN on that news, because the world (or large parts of it anyway), view U.S. debt as a SAFE HAVEN - we know that we are not there yet. Please dollar cost average, into silver (and gold), as they are treacherous beasts - and especially avoid the double and triple leveraged ETF funds on silver! OK - had to get it out of my system!  Best, LastGold |
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Pillar of the Community
United States
931 Posts |
Good advice. I have a feeling that we have a ways to go down on Monday. A lot of people are going to be sweating it out this weekend if they are on margin and hoping for our own version of the twist.
Edited by junior e
09/23/2011 5:52 pm
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Pillar of the Community
United States
1064 Posts |
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Pillar of the Community
United States
2424 Posts |
if you buy small tomorrow, and it falls MORE on MOnday, you didnt get hurt that bad. just buy more monday! and if it goes higher monday, then glad you bought a little and came out on top
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Valued Member
United States
304 Posts |
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Pillar of the Community
United States
642 Posts |
Yes, silver markets are scary.... There are too many factors for it to act like a traditional PM market. Gold on the other hand usually has more staying power, but all in all the PM market has been anything but predictable for the past 3 years.
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Pillar of the Community
Canada
1502 Posts |
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if you buy small tomorrow, and it falls MORE on MOnday, you didnt get hurt that bad. just buy more monday! and if it goes higher monday, then glad you bought a little and came out on top Agree completely. Multiple smaller purchases spread over time works better than betting on the moving peaks and troughs. Quote:
Yes, silver markets are scary That's the reason I'm shifting focus into gold a bit more now. It would suck if something really unexpected came up and I had to sell silver at a time like this, even though I'm still bullish on silver long-term. |
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Pillar of the Community
United States
1150 Posts |
Thank you for caring enough to write the post. ;)
Long term physical...BUY BUY BUY silver, and bye, bye fiat (eventually).
14.whatever trillion and counting...
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Valued Member
United States
302 Posts |
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Yes, silver markets are scary Not scary at all - just a BIG opportunity. Silver is VOLATILE. And that is why it is such a good commodity to buy and sell. Volatility = Wide AND fast price swings = Very high potential profits. Of course, the reverse is also true. Done the wrong way, it could spell very high ACTUAL losses. For example, using small numbers: If you buy 10 ounces of silver at spot every time silver drops 10% and sell 9 ounces of silver at spot every time silver goes up 10%, over time you will accumulate lots of "free" silver and/or cash. Whatever you do, you MUST HAVE ENOUGH CAPITAL TO BUY ALL THE WAY DOWN and you MUST BUY ENOUGH SO YOU NEVER RUN OUT OF SILVER TO SELL ALL THE WAY UP. These numbers and percentages were pulled out of my hat, but the principle works regardless of percentages and numbers PROVIDED YOU CONSISTENTLY PLAN YOUR WORK AND WORK YOUR PLAN. Note the word "CONSISTENTLY" - deviate from that and YOU WILL LOSE YOUR SHIRT. We don't need half-naked silver wannabes running around on the forums. At today's prices it would work like this. You buy 10 ounces for $300 ($30 x 10), you sell 9 for $297 ($33 x 9) and 1 for $36.60 for profit of $33.60 or 11.2% ROI. It is never that simple, but you get the picture - you make your money on the spread. Do it long enough and you get rich. Change the numbers, and the ROI can be huge over time. Be consistent and you will never be in the poor house. The nice thing about the volatility of the silver market is that your strike percentages could be higher. The volatility of most markets is so low that 10% is the reasonable max. You cannot do the above in a non-volatile market like gold - it simply takes too much money to buy in during the down legs and you run out of gold to sell in the up legs. Gold does have wide swings, but when gold is moving it tends to go the same direction for a long time making it very hard to use the above example. There are numerous other mathematical algorithms that can be used to milk a volatile market like silver. This is just one example. |
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Pillar of the Community
1028 Posts |
Speculators drove the prices of silver and gold to the prices they reached. When they "get scared" and sell off the price goes down, because so many investors and of gold and silver are looking at short term. You can get technical with derivatives and beyond, and obviously there are economic factors and reasons for price changes, but in essence, the masses are controlling this volatility. Therefore, the greatest predictor right now of if silver and gold will go up or down short term is if the majority thinks it will go up or down. Silly, but true
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Pillar of the Community
1028 Posts |
Well, that and the dollar :)
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Bedrock of the Community
Australia
21788 Posts |
The reason for the sudden drop in the silver price, and a lot of other investment caterores as well, is the the Feds. have just bought $400 billion long term bonds with a higher interest rate, and have sold an equivalent $400 billion value in short term bonds with a much lower interest rate.
The current markets are very sentiment sensitive just now, and have reacted by buying into what is seen as a safer place to keep money for the short term, that is, short term Treasury Bonds, and so have sold down all shares, base metals, and commodoties including PM's.
The Australian dollar has dropped from $U.S. 1.07 to U.S. 0.97, in a few days, because it is seen as commodity related, due to high bias into coal, iron, gas, base metals gold and other mineral exports.
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Pillar of the Community
 United States
4618 Posts |
Amy and I sold more than 90% of the low grade raw coins we were working on for a friend about 10 days ago when the price of Silver was around $41. I was checking the collection for the widow of one of our very good friends. He died about 6 months ago, so the coins were in his. She had no idea of what they were worth. I've been hoping that the price of silver would move UP, but the fact that we're moving forced us to go ahead and sell before we get caught up in our move. She was happy that I got the price I did because of the poor condition of most of his coins. He had them in a floor safe in a building that reaches 130+ during the summer.
I stopped checking silver prices after the sale, so I was shocked to see how far it dropped this week. We were lucky that I held out as long as I did and got her a price she could live with!
I was doing this for free, but she gave me about $25 in AU to BU copper cents rolls that he had collected between '65 and '82. I haven't even opened them. I only looked at one roll and found that the coins are in great shape with a great date range for cherry-picking. I'm saving them until after the move. I can't wait to see if I hit anything good.
ANA ID: 3203813 - CONECA ID: N-5637 Clean a coin that may be worth collecting? Please DON'T! When in doubt, leave it dirty!! 
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Pillar of the Community
United States
2168 Posts |
Yes and with silver I Always buy physical no paper or stock. I buy for the long term and am not a betting person but I have been taking my chances with silver and a small amount of gold. When silver was in the low $40s I felt the 5 quarter silver proof was a good deal at 39 95 since the junk was pretty much the same cost. So I ended up with proofs (at the time) for the cost of junk coins. I feel if silver goes down the proofs will hold value better than junk silver
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Pillar of the Community
United States
667 Posts |
You can say beware on any type speculation. I know some like to call PM's investments but really they are not. What you are doing is speculating. Your financial action simply does not promise safety of the initial out lay of capital. What you are doing is - assumption of risk in anticipation of gain but recognizing a higher than average possibility of loss.
So the price of silver is down and yes if you bought during the rise your speculation may not have went so well. However even at that if you added silver prior to one year ago you have still made a 41.8% return. That means if you have 100 oz of silver you made $887. Cash it all in on Monday and walk away with a smile.
Silver is not doing anything that you wouldn't expect in the PM market - it goes crazy one way or the other then it still has power to surprise you.
If we look at history how do you want to define it. If we look at 2008 then history would tell you to sell the house and buy silver because in two short years you will make a killing.
This word has been out there for many years - diversify. Use it and don't worry about the rest. You have a better opportunity to achieve your goals with this word.
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Pillar of the Community
United States
4008 Posts |
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because the world (or large parts of it anyway), view U.S. debt as a SAFE HAVEN Yeah, there's that knee-jerk reaction again. The US debt instruments out there have been sold for a long time now and they always have been safe investments. Lots of people apparently are running on auto-pilot in this regard. Considering the state of the US economy and the low interest they pay on bills and bonds, it seems a very poor investment to me and I am sure others on this site. Consequently, I do not have any money invested in US Treasury bonds or bills, nor do I expect to have any for the foreseeable future. Quote:
I know some like to call PM's investments but really they are not. What you are doing is speculating. One could look at it that way but IMO, buying PMs is investing as long as one is in it for the long haul and is not popping in and out of the market all the time. High frequency buying and selling is speculation to me. Not that there is anything wrong with doing that if it works for you. It doesn't for me so I don't do it. As was mentioned by the OP, dollar cost averaging is a great way to build a solid long term position without worrying about all the ups and downs that occur in the PM markets. Quote:
The reason for the sudden drop in the silver price, and a lot of other investment caterores as well, is the the Feds. have just bought $400 billion long term bonds with a higher interest rate, and have sold an equivalent $400 billion value in short term bonds with a much lower interest rate. Maybe. In a lot of cases, the drop in PM prices is due to market turmoil that causes people to SELL some investments in order to cover shorts or other options. When this happens, they have to sell what they have and what can be sold at a decent price. In quite a few cases, this is gold and all of the PMs suffer when large amounts of gold are sold off to raise cash. |
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Replies: 15 / Views: 1,854 |
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Posted 09/23/2011 4:15 pm
