Silver™

What are the odds of this happening? Is it 100%?

Moog-Type-S

Let's just say I got into precious metals back when silver was about 4-5 bucks and gold was around 300 bucks.....many many moons ago.

It's not the bulk of my portfolio...not by a long shot.....but they have always been a part of my "investments".

Everything rises and falls...that's a given, but people screaming about the commodities "bubble" for the past 2-3 years is nuts. They missed the boat.

Sure it will come down at some point....but it makes zero sense to me looking back 2-3 years ago that anyone wanted to stay away from commodities....and not just precious metals either.

Silver™

Who are these people you keep referring to that have said to stay completely out of commodities for the last 2-3 years?

And how much do you allocate towards precious metals? 20%, 30%, ?

Ken1997TL

Same here. Throw in some Ford stock and Norwegian/Canadian oil stocks and lets just say I did well. Hell, we need a thread entitled 'Tell us a little about your portfolio'

Gold has its purpose. The people who were smart and bought up some early in the game almost certainly have no regrets.

Silver™

That would be about as worthwhile as a penis size comparison on the internet

Everyone is Warren Buffett on the internet

Moog-Type-S

.... Have you been looking at my portfolio?!?!?!?

Moog-Type-S

I'd dare say you have been arguing against commodities & precious metals for the past couple of years in various threads....no?

How much is my allocation for precious metals?....well it varies depending on my considerations of market conditions. I move up and down in allocation....just like everyone else.....there is no set percentage.

Silver™

No.

I think we have discussed oil and corn and China's role in rising prices in R&P. But I haven't said much about commodities until this thread last year. And I certainly wouldn't wouldn't say that anyone should stay completely out by any means.




Todays approximate percentage?

YeuEmMaiMai

without a doubt.........

Fibonacci

Moog's got big balls!
Ken's got big ball's!
But who's got the biggest, balls of them all...

Moog-Type-S

LaCostaRacer

Wow a quick 3 months and an annual price target for SLV has already been met. Yikes, but not a huge surprise with current monetary policy.

SLV ( now at 41.84) just met my year price target of $40 in just 4 months while I was away on a nice family cruise this past week.
GLD(145.51) is still on track to meet the 160 year end objective though and seems like the better value possibly. I'm actually buying more gold these days than silver since gold is likely to catchup at some point. The .1oz coins seem like a great deal at today's prices. So it's not too late for anyone with no exposure even at these extended levels IMHO.


I'm now raising my target for SLV to be $48 and will hold the GLD target of $160. There will always be a debate on bubble status and I will continue to argue that it's not so much gold/silver in a bubble as the dollar being in a slump- this is holding more true as the weeks and months go buy. Anyone notice that the Dollar index broke 75? This index was around 81 a year ago. I think this index could test 70 before year end if trends continue.

I have about 30% on investable assets in gold/silver/oil commodities in some form or another and will hold this exposure for some time longer. My main price target is the Dow/Gold ratio and that needs to come down a lot lower before I contemplate selling anything- it's only at 8.3 at the moment. I have a target for the next two years of 5.0 so I would be a fool selling now and so would anyone. If 5.0 hits, it means gold is either going higher or the Dow has some correcting to do or a little bit of both scenarios which is my hunch.

I love hearing the experts on CNBC talk about Gold being in a bubble because they are dead wrong now and will continue to be in the foreseeable future.

DCdonDubby

Good luck with the Investments, hope you hit the mark.

LaCostaRacer

I have been getting lots of emails on my thoughts about a price target for an ounce of Silver, so I thought I would share this info with you guys as well since it seems like a topic of interest these days. Most of this email are from friends or acquaintances that know I'm bullish on gold/silver and are inquiring on if it's going to continue going up. Naturally they don't want to buy and have it crash on them. Meanwhile prices continue to go up and they're starting to think it's too late to invest. I keep telling them not to worry and just do it.

The price targets I'm looking at are: $75/ounce by May 2012 and $100 by May 2013. Read further if you want to understand my rationale, otherwise those are my numbers.

Rationale:
Silver has historically traded with a 20:1 ratio to gold. When the U.S. was on a gold standard we had $20 gold pieces and Silver Dollars- hence 20:1. With gold trading now at $1500/oz, Silver would need to trade at $75. I think it will take a years time before the historic ratio materializes. The ratio has been out of whack for a long time and was as high as 80:1 in recent years- now it's 35:1 so it has moved closer to target and quickly. Things will probably snap to historic ratios in a year's time.

The longer term $100 target is based on the simple observation that gold is also going up, but a lot slower than Silver at the moment. I figure gold will hit $2000/oz in two years and silver will be snapped to the 20:1 ratio. I'm factoring gold going up about 40% in two years time which seems very plausible considering the move that Silver has done in 5 months time: 90%.

I guess these are numbers that I'm pretty confident in seeing occurring. I have been known to be overly conservative in my forecasting, so we could see much higher numbers too. It's anybody's guess at this stuff, but that's the best working data I have at the moment and I'm definitely LONG in this market.

For those of you thinking it's just a bubble, ask yourself how many people you know that actually buy Gold & Silver? At my work, I'm the only one that I know of in a 50 person small company. I would need to see half the people I know be actively buying gold and silver before I would think of bubble status and that is not the case. No neighbors are buying, only my brother, father, and cousin are buying bullion and they are very happy with the results they are seeing. My Wife is also very happy too because I convinced her to put some 'her' account money into Silver in November and that has almost doubled. So there you go- I know of only 4 people in the 100's of people in my domain of influence that are doing this on the sly or not buying (yet) until it's painfully obvious that they're missing the boat.

I love these forums because now you have my targets and we'll see how accurate they prove to actually be.

Fibonacci

Up until this thread, where is your posting of wealth creating genius? You don't strike me as a cheerleader for The Greater Fool Theory, so why start now?

You of all people should know and recognize that gold doesn't provide any cash flow. Its only a gain when you monetize. Albert Einstein didn't call gold the eighth wonder of the world, but he did allegedly say that about compound interest.

Dude we all get it. Uncle Ben is a bit punchdrunk right now, he'll get sober eventually - and when that happens, easy money asset bubbles will burst just like they all do.

YeuEmMaiMai

Gold is not meant to give you wealth, it's meant to maintain your purchasing power especially when Intrest rates begin to rape the populace......just as is happening now........

Fibonacci

I agree with you 100% Near zero short term interest rates caused by Uncle Ben forces investors to speculate with enhanced fervor and reduces the incentive to hold dollar denominated assets. We can't stay here forever though, just sayin...

LaCostaRacer

I've posted in other threads too, but this one seems the most obvious in terms of the 'bubblist' being wrong on the trade- that's all. We have been debating back and forth for two years and both Gold and Silver have continued to go up. I do appreciate the remarks on Gold/Silver preserving wealth too because in the long run it's very much true. In these times, you can actually accelerate your wealth because other prices are not increasing as rapidly as silver or even gold is: oil is not, housing is not, stocks are not, bonds are not and the list goes on.

I would say the last two other worthwhile threads I have started or contributed to are:
1. Millionaire Next Door- next page of postings
2. Tips for trading stocks on line.

You do those things described in those threads and you will become wealthy- might take 20 years, but you will become wealthy. Gaining wealth is as much having discipline as having luck or good stock picking abilities.

Regarding Bernanke (and even Geitner), I would say those two guys are lost causes and they will never sober up on their own. I think parties outside of the U.S. are going to sober them up and that is a bad thing. Come on, Geitner has the arrogance to say this week that there is no way the U.S. is going to default on the debt? Really, no way the U.S. can default? . It's looking more and more like a default every month we go since the debt is only rising and not dropping like it needs to. At least Greece is making some hard decisions and doing something with their debt- we are not.

Meanwhile gold will increase in value and the dollar will decrease in value while the snooze button is continuously pushed. I'm sensing a push of the snooze button soon when the debt limit increases.

dmikon

Be careful with that statement...

http://pragcap.com/is-gold-really-an-inflation-hedge

Fibonacci

http://online.wsj.com/article/SB1000...814611444.html

And as for your views on a pending fiscal crisis...

S&P warning on U.S. debt could make bonds more attractive

One reason that traders say Treasuries have looked surprisingly stable is the belief that S&P's move could spur action in Washington to tackle the country's debt.

http://www.latimes.com/business/la-f...0,302188.story

Fibonacci

I agreed with YeuEmMaiMai in the sense that Gold is an (expensive) insurance policy for loose Fed action, not in the sense that Gold is a perfect hedge for inflation. A broader basket of commodities makes more sense, but probably not anywhere close to 30% of your supposed portfolio, UNLESS you truly believe we're at imminent risk of losing our reserve currency status or at imminent risk of a major fiscal crisis (neither of which I believe will happen soon). If our policy makers can't get their shit together, we're probably looking at a slow motion train wreck.

To put it in layman's terms, in the Goldilocks scheme of things:

Deflation, a little to cold.
Hyperinflation, a little to hot.
Stagflation, just about right.

YeuEmMaiMai

considering what companies are doing to hide inflation, I am not going to change my mind any time soon......


have you noticed that a lot of food (chips for example) used to come in 1 lb bag and now it's more like 12-14oz- for more money....inflation is here and it is large and in charge.......won't even get into the weakening of the USD......

LaCostaRacer

^Amen- this should be an interesting week when Bernanke speaks on Wednesday. You can not ignore the weakness of the USD dollar index- it is taking a beating. Food inflation is very present now in packaging changes. I'm wondering how much longer the .99 cent only store will be able to stay named this way because products are likely to become more expensive now.

The U.S. Bond view points are all over the map now. Generally inflation is bad for bonds- I'm short these bonds at the moment and will be until there is some clarity as to what is really going to happen with the budget. Are politicians going to continue to make claims of savings over 12 years or actually make cuts that are realized in the next year ? The short term cuts have more impact on a fiscal issue than long-term cuts.

dmikon

My point wasn't to question inflation, but rather how good gold is/was as an inflation hedge.

Professor

Say what you want...
purchase an 08-08-08 Prosperity Set for $1799 about 2 years ago...
have a slew of UHR gold coins MS70's around $1631...

Go to eBay and see the profits.

Fibonacci

Is that where NuttyPro goes to shop for his nubian queen collectibles?

Fibonacci

Lets separate deficits and the debt issue from the gold debate for sec. Friedman said "inflation is always and everywhere a monetary phenomenon" - NOT inflation is always and everywhere a fiscal phenomenon.

BTW, I'm not picking on you, merely playing :devilgrin 's advocate since you seem so highly confident in your 'predictions'. You must not be much of a hockey fan because Toe Blake famously said "Predictions are for gypsies".

So do us all a favor and tell us when to hit the bid. After all we wanna see your length AND girth! :wink:

Fibonacci

Debunking Anti-Gold Propaganda

http://www.caseyresearch.com/article...old-propaganda





Why We See Gold Going Lower Long-Term

http://seekingalpha.com/article/2650...rm?source=feed

LaCostaRacer

Here's a nice chart, comparing 1971-82 gold prices to 2001-2010 along with the Nasdaq. Enjoy!




here's the link to article:http://www.istockanalyst.com/finance...back-in-prices

dmikon

It seems they just superimposed the charts to make the current scale lower?

I plotted the price of gold 2000-now, real estate 1997-mid 2006, and NASDAQ 1990-2000. They all seem pretty similar to me...

LaCostaRacer

Oh Fib I don't mind the playing at all. I'm not sure what you really meant regarding 'hit the bid' though. I have been buying Silver ishares since 8/08 so this trade is not new to me. I didn't get into bullion until later 4/2009. I have been telling you guys that Silver is a good deal for some time- what more can I say?

My guess is silver will dip a bit because it has gained a bunch recently- not a prediction just a hunch that I'm prepared to trade in and yes I'll be buying if it should dip notably.

My Commodity Almanac mentions silver historically dipping from 5/13 - 6/24 with a 64% success rate- I have learned to trust it because these things tend to prove out. So would I be buying now? Probably not. In June- quite possibly. There you go consider yourself forewarned on my buying intentions for silver.

I don't think I'll be selling, but who knows I might want to unload my 390% gain 11/2008 SLV position for bragging rights possibly, but the taxes would kill me, so probably not.

LaCostaRacer

Here's another decent article about Silver and why it might not be in a bubble (yet). The author points out some body builders talking about silver in the gym so the cat might be out of the bag.

Here's the link: http://www.robertsinn.com/2011/04/24...-bodybuilders/

doopstr

Buyers Beware: Silver Crashed 11% in 24 Hours
http://www.cnbc.com/id/42726288
click link for full story.

Silver™

I was talking to someone about this the other day, serving sizes getting smaller.

One thing that came up is that it is likely going to cause some people to eat healthier and be less likely to get sick/chronic diseases related to obesity.

As healthcare costs having been one of the biggest contributors to overal household inflation, it might have an overal positive effect in the long term.

Just interesting how there can be unintended consequences...

Silver™

Remember you supposedly called the housing bubble back in 2001-2002, so you of all people should know it can take a while for the bubble to pop




Everyone and there grandma weren't trading dot-coms. The overall percentage of the american people actively engaged in trading those stocks was comparatively small. You don't need a huge population of investors to create a bubble.

But look at how gold has changed in just the last few years with ETF's. The ability to trade gold has dramatically increased. Millions of more people are trading gold. And have you seen a jewelry store now without a sign declaring that they will buy gold. I was in one store browsing with my wife and talked to the owner who said nearly half his business is now buying gold.

Gold is being driven in large part by FUD.

Fear - The dollar will collapse, the world economy will collapse, the banks will all fail

Uncertainty - No one knows where to put their assets. Which bubble will pop next.

Dollars - Hundreds of billions of QE2, Chinese stimulus, etc... chasing limited returns.

Moog-Type-S

Then it jumped back up 5.5% today.

It will continue to rise.

doopstr

I get worried when every Tom, Dick, and Harry want to buy something and right now that's silver.

I gotta give LaCostaRacer credit though, he's been pushing it for years and probably made a ton of $.

Moog-Type-S

I've been in it for years.....it's paid off quite well.

I believe there is more upside as well for commodities in general.
There are many things that can effect it, however.

I'm not a doom and gloom end of the world "Glen Beck" guy....the sky is not falling IMHO....but there are some serious troubles with Fed policy and the world economy at large that lead credence as to why many are putting their $$$ into commodities, and why the prices are rising.

Professor

LaCostaRacer... what taxes??? I know eBay isn't Wall Street, but if you have the bullion or coins in hand, how do you get taxed?

LaCostaRacer

I have both bullion and SLV- SLV is what I'm talking about- gains get taxed at your tax rate and not the 15% LTG rate that you would expect. The bullion is not the issue. Believe me, I'm not complaining about paying taxes. I would much rather pay taxes than not because it means I'm making money which is better than losing money.

Good luck to all involved with Gold and Silver- there is still some more money to be made for all the reasons I have mentioned in this thread. Nothing has changed except the price.