Catch a falling silver knife - Notes on EJ's April 29 silver sell call

[LargoWinch]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

Please re-read my post. I'm fine with what was and is. My question is: so what is next? If I'm supposed to sell silver, what is going to out perform it for the next decade? Or is it just switch to gold for three years and then see what happens?

EJ indicated that the money raised by selling silver was to be allocated in Private Equity ventures.

I indicated early on that for me, the proceeds from selling silver were to be used to buy gold.

[plebeian regime]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

No mystery here.

If you bought silver at $4.25 in 2001 and sold at $48.5 on April 29, 2011 you realized a 11.4x return over ten years.

But if you bought at $4.25 in 2001 and sold at $38, the highest price silver has traded at since April 29, 2011, then you realized a 8.9x return in ten years

For a $100,000 investment in 2001 that means:

$100,000 x 11.4 = $1,141,177

versus

$100,000 x 8.9 = $894,118

If you waited until after April 29, 2011 you left $247,059 on the table, best case.

If you sold last Friday, you left $287,000 on the table.

James Turk's May 9 prediction that "This time I expect silver will take only several weeks before exceeding $49.78, the 31-year high reached on April 25th" did not come to pass.

Please re-read my post. I'm fine with what was and is. My question is: so what is next? If I'm supposed to sell silver, what is going to out perform it for the next decade? Or is it just switch to gold for three years and then see what happens?

[FRED]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

I guess I'm off beat with the trade of the decade thing. I bought in to silver a few years ago and at current post correction/peak prices I will still come out fine if I sell it soon and I would come out up even if it went back to $20, but I really doubt silver will be anywhere near that low in, say five years. I don't doubt my ignorance, but are the prospects for gold over silver really so robust now as to justify the cost/risk of transitioning my physical stash for a few years? What's the new 'trade of the decade' thesis here? Or is that now a quaint notion?

No mystery here.

If you bought silver at $4.25 in 2001 and sold at $48.5 on April 29, 2011 you realized a 11.4x return over ten years.

But if you bought at $4.25 in 2001 and sold at $38, the highest price silver has traded at since April 29, 2011, then you realized a 8.9x return in ten years

For a $100,000 investment in 2001 that means:

$100,000 x 11.4 = $1,141,177

versus

$100,000 x 8.9 = $894,118

If you waited until after April 29, 2011 you left $247,059 on the table, best case.

If you sold last Friday, you left $287,000 on the table.

James Turk's May 9 prediction that "This time I expect silver will take only several weeks before exceeding $49.78, the 31-year high reached on April 25th" did not come to pass.

[plebeian regime]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

buy & hold trade of the decade

I guess I'm off beat with the trade of the decade thing. I bought in to silver a few years ago and at current post correction/peak prices I will still come out fine if I sell it soon and I would come out up even if it went back to $20, but I really doubt silver will be anywhere near that low in, say five years. I don't doubt my ignorance, but are the prospects for gold over silver really so robust now as to justify the cost/risk of transitioning my physical stash for a few years? What's the new 'trade of the decade' thesis here? Or is that now a quaint notion?

[c1ue]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

Look at press clippings that 10 of 12 governors from April meeting are not in favor of raising rates. Bullard's last comment this past week at Rotary in MO is an about face from March where he is now looking at second half of 2012 before he supports a rate increase. The reality of a revised Q1 GDP at 1.8% not taking into account CPI-U is starting to set in.

The Fed is not about economics - nor has it been for decades.

The play right now is political: the entitlement squeeze plus the federal debt ceiling.

[jpetr48]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

The possibility of Fed rate increases is still on the table - and so long as this exists then there exist major headwinds for another PM breakout.

Look at press clippings that 10 of 12 governors from April meeting are not in favor of raising rates. Bullard's last comment this past week at Rotary in MO is an about face from March where he is now looking at second half of 2012 before he supports a rate increase. The reality of a revised Q1 GDP at 1.8% not taking into account CPI-U is starting to set in.

[c1ue]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

Nice call by EJ, but this was just a bull market correction. We will see new highs in silver before the end of 2012 - likely much sooner.

You've made your call, now we'll see if you were right.

IMO - the Empire hasn't struck back yet. What we're seeing now is an unsurprising dollar bounceback, both from a long period of dollar devaluation induced weakness and the resumption of the European debt crisis.

However, the US debt crisis - while it will continue, doesn't show any indication of accelerating.

The possibility of Fed rate increases is still on the table - and so long as this exists then there exist major headwinds for another PM breakout.

[BlackVoid]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

Mexico may monetize silver soon.
Asians are buying both gold and silver.

What we have seen in silver is that hedge funds got involved. Then they panicked and got out.

[BlackVoid]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

Nice call by EJ, but this was just a bull market correction. We will see new highs in silver before the end of 2012 - likely much sooner.

I did not sell any silver and plan to buy more. At the end of all this (debt crisis, Peak Oil), FIAT currencies will experience a major shock, confidence will plummet, economic depression will set in for the long term. Very likely this will mean more wars. (War is the Health of the State).

Maybe gold will outperform silver from now, but I highly doubt that. The silver market is smaller, that is why you see these wild swings. The best in this situation is to own silver, gold and farmland. And some emergency fuel and food supplies.

[Polish_Silver]

Only a flesh wound?

May 28, 2011: Silver is holding constant at $38.

The call was very good from a trading, or profit taking perspective, but the price history looks
more like a correction during a bull market than a top in value.

Haven’t both gold and silver had bigger corrections during the last 10 years?

There are so few alternatives out there.
Consider silver against $USD, GB pounds, Yen, Euro. Any takers?
National debit to GDP is 97.8% today.


Gold is $1535, making the ratio about 40. That is low for recent decades, but still high
Historically. And there is far more gold above ground than silver.


I also question EJ’s assertion that “silver is not a monetary metal.”
Central banks don’t hoard silver, but:
National mints do coin silver and put legal tender values on it.
Coin stores sell it.
Individuals hoard it.

Silver coins were circulating in the US until the mid 1960’s, thirty years
after gold vanished.

Gold is “not monetary” in the sense that McDonalds won’t take it for hamburgers.
Oil is monetary if it backs $USD in the sense that OPEC accepts $ for oil.

Something is somewhat monetary if people are using it for some of the traditional uses of money.

PS

[EJ]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

That must be nice. Unfortunately not all of us have such freedom or capacity. Speaking of which, just what is the nature of this post? It certainly is not a call directed at guiding the ITulip Community that has paid and followed for years looking for this very guidance as much as it is bragging about a call that for all intensive purposes left the majority of the ITulip Community in the dust.

Congratualtions EJ! Great Call! Blah, blah, blah...............next time perhaps you could take a minute to think about the rest of us. Your post reaks of ego and bravado. I for one, am not impressed. Evidently that doesn't matter much as you are certainly impressed with yourself.

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EJ, what initially attracted me to your writings was a level of humility that is essentially non-existent in the financial industry. Is that now gone?

Your writings as of late suggest to me that it is. That's sad.

This call was unlike others in iTulip's 13 year history, except perhaps in March 2000 when I confronted a wall of noise out of the mainstream media promoting the idea of the New Economy as justification for NASDAQ 5000 and beyond. In early 2000 I had to on occasion resort to strident rhetoric to draw attention to my contrarian view.

The sell silver call demanded a higher volume of definitive exclamation than usual. When I decided to announce a time to exit the stock market in Dec. 2007, I was not competing with a hundred sites that claimed that the DJIA was destined to rise to 20,000 and beyond in 2008. Many members already knew that something was amiss in late 2007. Making a definitive "Time at Last to Short the Stock Market" call for a 40% decline in stocks in 2008 gave members a way to evaluate their position against a clear forecast, but they had plenty of time to respond.

My objective in posting this was not bravado but to get the believers to seriously question their assumptions while there was still time. To do that, I had to pound on the table. The sites that promoted the idea of silver as a monetary metal, as "the common mans's gold, as a way to get back at JP Morgan, were as a rock concert at 140 decibels, and iTulip is but a single voice and not much amplified as the more popular financial doomertainment sites are. It's not my style, but I could not whisper and hope to be heard above the din. I had to yell.

The call was not entirely a surprise. I had been laying out my argument for more than a week prior to the call, such as in this answer to a members Ask EJ question on silver on April 21. It was almost too late, and I do wish I'd been able to move a day earlier but meetings and other obligations made that impossible.

Now that the main event of the silver pump-and-dump is over, I look forward to returning to a communications style that is more natural for me. The primary objective of the silver sell call, and subsequent trades on a new forum started for that purpose at the request of members, is to hone our skills for a future exit from gold. It will entail selling when nearly everyone else is buying, but not just because everyone else is buying because there are times when the crowd is right to be buying and there are times when they are not.

[erw698]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

click on new posts. I do that many times every day.

That must be nice. Unfortunately not all of us have such freedom or capacity. Speaking of which, just what is the nature of this post? It certainly is not a call directed at guiding the ITulip Community that has paid and followed for years looking for this very guidance as much as it is bragging about a call that for all intensive purposes left the majority of the ITulip Community in the dust.

Congratualtions EJ! Great Call! Blah, blah, blah...............next time perhaps you could take a minute to think about the rest of us. Your post reaks of ego and bravado. I for one, am not impressed. Evidently that doesn't matter much as you are certainly impressed with yourself.

EJ, what initially attracted me to your writings was a level of humility that is essentially non-existent in the financial industry. Is that now gone?

Your writings as of late suggest to me that it is. That's sad.

[jiimbergin]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

"Five ways that EJ's silver sell call was unlike others you may have read:"

It was unlike other calls, alright. Because I never read it.

How is a subscriber for years supposed to be aware of posts like EJ's "Sell Silver?"

click on new posts. I do that many times every day.

[BillMasi]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

"Five ways that EJ's silver sell call was unlike others you may have read:"

It was unlike other calls, alright. Because I never read it.

How is a subscriber for years supposed to be aware of posts like EJ's "Sell Silver?"

[Camtender]

Re: Catch a falling silver knife - Notes on EJ's April 29 silver sell call

[CENTER]


EJ writes:

"Gold is not a bubble. It may develop into one, but I doubt it because gold unlike silver is a reserve currency, hoarded by central banks as a back-up plan in case the global monetary system breaks down, which it has been in the process of doing for the past decade. If my theory is correct that gold is a currency and will behave like a currency during a bond market and currency crisis, then gold will not become a bubble and will not correct the way a bubble does but as a currency does following the acute phase of a currency crisis. For example, gold may rise to $6000 then decline to $5000 and more or less remain there as the "new" dollar price of gold after the crisis is resolved. Calling that peak price is a non-trivial undertaking that I have been preparing for since I purchased gold in 2001."

Subscribers can click here the original Time at last to sell silver article and thread of discussion before, during, and after the silver market correction that followed.

Full Disclaimer

Hugo Salinas Price

http://kingworldnews.com/kingworldne...struction.html

When asked about how this central bank purchase might influence his proposal to monetize silver Mr. Price remarked, “I think that maybe the central bank would not look upon our proposal with such a jaundiced eye. I mean if they bought gold maybe it would not be unreasonable to hope that they would see the monetization of a silver ounce as a good thing for the country.

I can’t help telling you that we have very strong support in the Congress for the monetization of silver, very strong support. Congress is not in session now and will not be back in session until September, but I have high hopes that when both the upper and the lower Houses reconvene in September that we will see something very good happen.”

When asked if the monetization of silver in Mexico could happen in one, two or three years Hugo Salinas Price replied, “I think it could happen sooner than that, I think that it might happen this year. Things are looking good. Of course I have been saying this for some time, but now I am saying it with more emphasis...The idea is now firmly entrenched and it’s only a matter of time before we see some action.”

Time will tell................