What were you all saying about silver again?

[facebookdigg123]

can believe i sold slv when it was at $25

[JBinKC]

Yeah it has been a great run with the price of the physical metal however what is worrisome is there appears to be a decoupling of silver prices from many of the silver miners.

[Scanner]

JBINK,

Yeah, I noticed that too - someone big with a lot of influence is doing something with the silver mining stocks.

I am wondering (as I can be a paranoid conspiracist as much as the next guy) if the physical metal is becoming more immune to manipulation so they are trying something with the miners.

All the mining stocks have dropped (that I watch) in the last 3-4 weeks as I have watched silver soar.

Doesn't make sense.

[JBinKC]

Scanner- I think it is the prelude for the next correction in the market. The main driver for the strong commodities market have been from money printing and investment banks having no place to put this excess cash except market speculation but the quantitative easing program is about to end.

Remember in 2008 when crude oil went straight up but the oil stocks did nothing I think we are in a similar period until deja vu it all implodes again.

[Scanner]

JBINK,

I think that's a respectable analysis. Thank you.

Gambler,

You know what is so dramatic about this run-up - it's a classic "Investor Vs. Trader" war, only magnified. For every time a trader wins, an investor loses. And let's face it - 2000-2010 was the Decade for the traders like you.

Could it be the Investors are about to get their due and the traders lose?

Stay tuned. . .same Bat-time, same Bat-channel.

[Scanner]

400 for Scanner. . .500 for Scanner. . .600 for Scanner. . .heh, heh, heh, hehhhhhhh

*Puffing on cigar*

[JBinKC]

Scanner-

That is great but honestly I think I am at percentage limits in exposure to precious metals and precious metals stocks and commodities. For about a month now I have been desperately looking to find exposure in bonds derived in NOK AUD NZD or CAD with my cash and at a dead end. Discount brokers don't sell them and open ended mutual funds are either too stupid or in a conspiracy not to offer such a product to protect average people and I am not quite as keen in purchasing a closed ended fund. I saw one that has some Aussie exposure and another Canadian fund on the TSX.

With all of this "globalization" and all of these supposed brilliant minds in the industry -not why are we still stuck with crappy investment alternatives.

Another question that baffles me is why aren't there any money market funds products derived in foreign currencies?

[gambler2075]

JBINK,

I think that's a respectable analysis. Thank you.

Gambler,

You know what is so dramatic about this run-up - it's a classic "Investor Vs. Trader" war, only magnified. For every time a trader wins, an investor loses. And let's face it - 2000-2010 was the Decade for the traders like you.

Could it be the Investors are about to get their due and the traders lose?

Stay tuned. . .same Bat-time, same Bat-channel.

I don't actually look at it as "investor vs trader" but more like "trader vs trader". At least in the sense that any money I make trading is usually from people who are buying greed and selling at times of fear... The investor doesn't really care because they are there for the long haul (although as you point out in the lost decade of 2000-2010, the buy and hold guy didn't make much...) I do agree that there are times when buy and hold are great strategies, for non-traders, such as from Mar 2009 until now. And there are clearly times where buy and hold is a terrible strategy... oh, how about some time around 2001... or 2008... But if you look at my returns as a trader, I did even better than buy and hold types in 2009... YTD returns were: 2009 ~540%, 2010: ~125-150%, 2011 (YTD for now, ~60% for the first 5 months). My strategy of trading hopefully does better than buy and hold, even in bull markets, and in bear markets it has been at least flat.

I would say that by being in silver you are not really being an investor, but more akin to a trader. Well, at least that depends upon how much of your portfolio you put into SLV, percentage wise. If it is a small amount, say ~10% then I would say that you are looking at silver more as an investment than as a trader. If it is 50% or more, then I would say that is more akin to a trader mentality.

Gerald Loeb said that as a trader gets more and more experienced and successful, he should actually diversify LESS, and concentrate his positions more. The reason is that he may have only a few good trading ideas per year, and if he were to put only 10% of his portfolio in each, the effect of being right in those trades would be diluted by the rest of his portfolio.

I would also comment that someone can be a trader and hold a stock like SLV (or rather an ETF like SLV) for a year and still be a trader, and not an investor. One of the greatest lessons I learned about trading is that there are times to try to trade, and there are definitely times to hold your positions for long periods of time (up to a year) when you are playing for a major move, and not just fluctuations. With SLV it was clearly better to buy and hold for the past 6 months, rather than trying to catch little fluctuations. Jesse Livermore stated it best in "Reminiscences of a Stock Operator"

And right here let me say one thing: After spending many years in Wall Street and after
making and losing millions of dollars I want to tell you this: It never was my thinking
that made the big money for me. It always was my sitting. Got that? My sitting tight! It
is no trick at all to be right on the market. You always find lots of early bulls in bull
markets and early bears in bear markets. I've known many men who were right at
exactly the right time, and began buying or selling stocks when prices were at the very
level which should show the greatest profit. And their experience invariably matched
mine that is, they made no real money out of it. Men who can both be right and sit tight
are uncommon. I found it one of the hardest things to learn. But it is only after a stock
operator has firmly grasped this that he can make big money. It is literally true that
millions come easier to a trader after he knows how to trade than hundreds did in the
days of his ignorance.
The reason is that a man may see straight and clearly and yet become impatient or
doubtful when the market takes its time about doing as he figured it must do. That is
why so many men in Wall Street, who are not at all in the sucker class, not even in the
third grade, nevertheless lose money. The market does not beat them. They beat
themselves, because though they have brains they cannot sit tight. Old Turkey was dead
right in doing and saying what he did. He had not only the courage of his convictions but
the intelligent patience to sit tight.
Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can
catch all the fluctuations. In a bull market your game is to buy and hold until you believe
that the bull market is near its end. To do this you must study general conditions and not
tips or special factors affecting individual stocks. Then get out of all your stocks; get out
for keeps! Wait until you see or if you prefer, until you think you see the turn of the
market; the beginning of a reversal of general conditions. You have to use your brains
and your vision to do this; otherwise my advice would be as idiotic as to tell you to buy
cheap and sell dear. One of the most helpful things that anybody can learn is to give up
trying to catch the last eighth or the first. These two are the most expensive eighths in
the world. They have cost stock traders, in the aggregate, enough millions of dollars to
build a concrete highway across the continent.

There are definitely times to be a trader (when the markets were essentially stagnant over many years) and there are definitely times to buy and hold for extended periods of time. Certain sectors like precious metals had times where buy and hold were clearly superior to trying to catch daily fluctuations... and you played your hand in SLV exactly right (so far). But I still stick with my thesis that you are being a silver trader, and not a silver investor... you are just doing it over a longer period of time than most traders.

I am also confident that a good trader will make tons of money in a bull market, and less money (but will still make money) in a bear market. And that is what separates the good traders from people that happened to start trading in a bull market, and ascribed their gains to trading skill, rather than the truism that 'a rising tide floats all boats'.

g

[Scanner]

No, I am a silver investor, because I just don't have the penchant to be a trader like you. I just don't think like you. Even now, at $47.00. . .I think. . .fundamentally, should someone invest in silver now? (I would say it's a NO BUY, SELL depending, HOLD depending)

That being said, every investor has to sell and make "moves" sometimes (other than sitting). Even now, I think, "What would a good investor do in my situation? What would an owner who was sitting on a stockpile of it?" I try to think like an owner. You, you are a trader. . .you think more like a peddler. . .what lies at the next town. . .is there a market for it?

I guess I have looked at my investments a bit back asswards as an investor in the past 5 years.

What is an appropriate diversified portfolio? You make the standard thesis - "Anything above 10% in precious metals is too exposed" and therefore relegates you from investor to trader.

I am not so sure about that hard and fast rule, although it's not a bad rule.

I think you have to think about our devalueing fiat currencies and macroeconomic trends to appropriately diversify. I know I felt appropriately diversified when I was 33% silver, 33% domestic and 33% international. I think you need a stronger hedge in precious metals nowadays when you are storing your wealth - yes, even you have to store your wealth. You can do it in the dollar, of course. . .but what happens when YOUR portfolio is flat and you are having years when you are losing trading?

Even JimOhio has been a fan of Permanent Portfolio mutual fund, which I beleive is 33% precious metals, 33% blue chip stocks, and 33% Treasury bonds and corporate bonds. It's track record is pretty good, even during crashes like the one we just had.

No, I am an investor. . .now, please place those 100's in my hands. . .up another 3% today. . .400. . .500. . .600. . .heh, heh, hehhhhh. Nice and slow, trader.

[gambler2075]

but what happens when YOUR portfolio is flat and you are having years when you are losing trading?

No, I am an investor. . .now, please place those 100's in my hands. . .up another 3% today. . .400. . .500. . .600. . .heh, heh, hehhhhh. Nice and slow, trader.

Hehe... as I said before, a good trader will make money in a bull market or a bear market... If he is long-biased then he should just make more money in a bull market. So I am not worried about my strategies when the next bear market comes along.

As far as the source of your money, I agree, there are SOME traders who went short silver way back when and are now puking their shares back by covering much higher, but as far as you taking money from me, personally, it isn't happening as I am not exposed to precious metals in any way. I would actually argue that the people that you are essentially going to be taking money from (when you finally sell your position) are the people that are the worst traders, namely, the people that formerly were investors who saw silver going up, up, up, and finally decided that they were going to sell their boring Vanguard fund and get into silver at 50$... Those people are still investors in my mind, and they will be the ones to suffer most when silver implodes. So you are really going to be taking money from other investors... they just don't know it yet

g

[Scanner]

Ehhhh. . .heh, heh, heh, heh, hehhhhhh. . .ehhhh. . .heh, heh, heh, hehhhhhhhhh

[Scanner]

, and they will be the ones to suffer most when silver implodes

Excuse me?

[JBinKC]

I have to agree with gambler that we are in the latter stages of this leg of the rally for precious metals given how persistently poor the junior sector is acting which should be the leader in a healthy market. About 4 weeks ago I sold down to my core with exception to one name in my favorite juniors and sold all of my holdings in other names and added to physical precious metals expecting a blow off rally that I intend to lighten up my position and FAX because I think the foreign treasury market will outperform most stocks when the fed stops QE2.

By no means do I think the secular bull market will be over for the precious metals after the impacts of the likely attempt to drain some excess liquidity from QE2 given the poor outlook long term trend for the dollar, national debt and nonexistent interest rates. Once QE3 comes around I expect a surge to higher highs.

[gambler2075]

Excuse me?

You should sell your SLV shares and convert it all to 60$ and 65$ calls for the Aug-sep timeframe... just think of the profits you will make when SLV goes to 80$ per share...

What are you doing holding any mutual funds or stocks other than SLV? your dollars are just being inflated away by the FED... You have already missed out on that huge run to 47, now what are you waiting for? 60? 65? before you buy?

options by expiration - Google Finance

g

[Scanner]

Well, not a bad idea per se, Gambler. . .take my profit now as an investor and then use the leverage of options/futures to make my silver play.

The problem with that is my Roth IRA/Schwab brokerage doesn't allow for options/futures trading on that kind of level.

In the meantime, I just raise my trailing stop order as it rises.