Gyroscopic Investing

I notice SLV starting to outperform GLD. Is this a good time to purchase some?

Reub wrote: I notice SLV starting to outperform GLD. Is this a good time to purchase some?

To some extent silver and gold are like apples and oranges: silver is both precious and industrial metal and it's price depends on more factors. Just something to keep in mind.

I like silver as a long play, for several reasons.

* All the "easy" silver will be mined by 2020.  After that you will have to have very expensive mining processes to access it.
* Silver is not recycled in the same way as gold, so it is consumed and then goes to a landfill and becomes cost prohibitive to dig it back up.
* Modern society (electronics, cell phones, medical, etc.) use silver increasingly with no viable alternatives.
* There is a 6 month surplus when compared to industrial demand, and the surplus is trending down.
* As China and India become more industrialized 2 billion people will start demanding the high end products that consume silver.

Short Story: Silver will be volatile right now, but by 2020 it could easily be worth more than gold.  Also, I would recommend physical over SLV.

I really like the MACD on both gold and silver, which is approaching levels close to late 2008 (right before the previous big move up).

Both gold and silver have been showing signs of life lately. And I agree that silver could be a very profitable long term speculative investment. I have doubts about owning it physically though. Storage costs for silver storage could be much higher than gold for obvious reasons. Although I am not a fan of closed ended funds for the PP because the premium swings can really gum up your rebalancing calculations, I might take a look at CEF for a VP play.

Reub,

So, did you buy any silver?  It looks like it's up 24% since your original post.

if you can't create more of it with a "Control-P"....its probably a good buy

I prefer platinum over silver.

I think that platinum is attractively priced right now.

I did not buy any silver. I did very well with it a few years ago but I didn't pull the trigger on this one but I sure wish that I did. It is up 24% in less than a month! I do own some PRPFX and a little PERM and they have 5% stakes in silver, so I guess I profited from it that way.

murphy_p_t wrote: if you can't create more of it with a "Control-P"....its probably a good buy

therefore.....PSLV or something to hold in your hand

Reub wrote: I did not buy any silver. I did very well with it a few years ago but I didn't pull the trigger on this one but I sure wish that I did. It is up 24% in less than a month! I do own some PRPFX and a little PERM and they have 5% stakes in silver, so I guess I profited from it that way.

Shitty.  Let us know next time you have a good hunch.  I have a little CEF in the PP (holds 50% gold / 50% silver), which is up 16%, so I'm happy with that one.

Reub wrote: I did not buy any silver. I did very well with it a few years ago but I didn't pull the trigger on this one but I sure wish that I did. It is up 24% in less than a month! I do own some PRPFX and a little PERM and they have 5% stakes in silver, so I guess I profited from it that way.

Don't second guess.  Remember, if Draghi and Bernanke would have chose different routes, you could be down 24% in a month with silver

I thought that Bernanke would disappoint. That would have been a bloodbath!

no correction in metals after the recent run?

http://4.bp.blogspot.com/-0M-xNR_dZp8/U ... -26-12.png

close to a very good time to buy bullion?

what are the strongest counter arguments?

murphy_p_t wrote: what are the strongest counter arguments?

Medium to long term possible bearish signals:

- M2 growth becomes stagnant.

- We see positive real interest rates above 2% (this increases the carrying cost of gold/silver and makes cash more attractive).

- gold/silver experience a bubble, once the bubble bursts gold/silver will become undervalued...they can stay undervalued for decades (ie 80's, 90's).

- dow/gold ratio falls below 2.

- gold/silver is stupid, only stupid-heads invest in stupid silver/gold...it's a freakin rock you dumb dummies.    (although this could be a bullish sign)

As for the short term moves...I have no idea.  They will likely test their 200 day moving averages at some point.

murphy_p_t wrote: what are the strongest counter arguments?

We've started a recession.

Shhhh....don't tell anybody until after the election.