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Old 27th April 2011, 12:02 AM   #161
Puppycow
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Anyone remember what happened in 1980?
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Old 27th April 2011, 06:08 AM   #162
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Originally Posted by UWdude View Post
either

1: when the government stops being retarded

or

2: I need the cash to survive.



I bet 2 will come first. And I am confident, when it comes, the price will be much higher than it is now, because 1 will never happen.
That's what I figured. I asked "where" and you offer an ambiguous answer for "when".
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Old 27th April 2011, 07:10 AM   #163
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Originally Posted by Puppycow View Post
Anyone remember what happened in 1980?
Using Francesca's logic that she uses against me with Treasuries, I take it you're shorting the silver bubble then with all the other haters of sound money?
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Old 27th April 2011, 07:23 AM   #164
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Originally Posted by Puppycow View Post
Anyone remember what happened in 1980?
Went up and up and then came crashing down.

Wasn't that due to some weird scheme by the Hunt bothers?
I'm not sure that one can compare that with the current market.

ETA: from wiki

Quote:
Silver manipulation

Main article: Silver Thursday
Beginning in the early 1970s, Hunt and his brother William Herbert Hunt began accumulating large amounts of silver. By 1979, they had nearly cornered the global market.[6] In the last nine months of 1979, the brothers profited by an estimated $2 billion to $4 billion in silver speculation, with estimated silver holdings of 100 million ounces.[7]
During the Hunt brothers' accumulation of the precious metal, prices of silver futures contracts and silver bullion during 1979 and 1980 rose from $11 an ounce in September 1979 to $50 an ounce in January 1980. Silver prices ultimately collapsed to below $11 an ounce two months later. The largest single day drop in the price of silver occurred on Silver Thursday.[1]
Hunt filed for bankruptcy under Chapter 11 of the Federal Bankruptcy Code in September 1988, largely due to lawsuits incurred as a result of his silver speculation.[1]
In 1989 in a settlement with the United States Commodity Futures Trading Commission, Nelson Bunker Hunt was fined US$10 million and banned from trading in the commodity markets as a result of civil charges of conspiring to manipulate the silver market stemming from his attempt to corner the market in silver.[1] This fine was in addition to a multimillion-dollar settlement to pay back taxes, fines and interest to the Internal Revenue Service for the same period.[1]
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Old 27th April 2011, 10:26 AM   #165
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Originally Posted by djpar View Post
That's what I figured. I asked "where" and you offer an ambiguous answer for "when".
stupid me. I thought you actually meant like "where" on the chart or at what price point, when you said "where".

If you meant physically "where" in the world would I actually sell the silver....

...on ebay, or at a coin dealership. You know, same place where I got it.
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Old 27th April 2011, 12:39 PM   #166
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Originally Posted by UWdude View Post
stupid me. I thought you actually meant like "where" on the chart or at what price point, when you said "where".

If you meant physically "where" in the world would I actually sell the silver....

...on ebay, or at a coin dealership. You know, same place where I got it.
Yes, stupid you.... I meant where as in price, not when as in circumstances or time (timing is okay), or who as in who you sold it to.

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Old 27th April 2011, 02:36 PM   #167
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silver back over 47 today while gold hit all time highs.
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Old 27th April 2011, 03:02 PM   #168
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Originally Posted by djpar View Post
Yes, stupid you.... I meant where as in price, not when as in circumstances or time (timing is okay), or who as in who you sold it to.
silly me, I didn't know I had to choose a price to sell at. My silver, I can choose the circumstance to sell it at. Which happens to be, "when I need the money"

Sorry that isn't the way you would choose to decide when you would dispose of your investments. Lucky for you, I am the one who owns my silver, and therefore, *I* choose the requirements to sell, and not you.
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Old 27th April 2011, 03:42 PM   #169
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It is humorous that my gold and silver are becoming a larger and larger portion of my portfolio without doing anything. Not that I own a lot of it.
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Old 27th April 2011, 04:46 PM   #170
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Originally Posted by Puppycow View Post
Anyone remember what happened in 1980?
Brillant question, and so pertinant to accurate analysis:

Wait....

Anyone remember what happened in...

1998 1979 1951 1946 1999 1976 1966 1943 1832 1872,,,

I'll stop.

You get the point.
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Old 27th April 2011, 04:49 PM   #171
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Originally Posted by mhaze View Post
Brillant question, and so pertinant to accurate analysis:

Wait....

Anyone remember what happened in...

1998 1979 1951 1946 1999 1976 1966 1943 1832 1872,,,

I'll stop.

You get the point.
He's making a reference to the Hunt Brothers, as if there is a single large speculator out there driving the markets higher.

These days, the bubble is in bonds, not metals.
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Old 27th April 2011, 05:19 PM   #172
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Originally Posted by michaelsuede View Post
He's making a reference to the Hunt Brothers, as if there is a single large speculator out there driving the markets higher.

These days, the bubble is in bonds, not metals.
Oh, you know I was just joking. And there is of course a single large speculator out there....driving....the....markets.....<<Answer 1>>>

And the speculator is <<Answer 2>>

Now, who can guess what #1 and #2 are?



I'd like to buy a gourmet hamburger and 22 ounce frosted mug of beer for one silver dollar from the stash.

.....

No...wait...that's so....yesterday....


Today....I'd like a 16 ounce prime ribeye with Cabernet Savignon for that silver dollar.

Thanks.

PS: No matter that the CPI judges me as having made a consumer choice and assigns no credit to the choice of yesterday's steak for today's hamburger....wait....that's US dollar scheming....

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Old 27th April 2011, 05:36 PM   #173
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Originally Posted by UWdude View Post
silly me, I didn't know I had to choose a price to sell at. My silver, I can choose the circumstance to sell it at. Which happens to be, "when I need the money"

Sorry that isn't the way you would choose to decide when you would dispose of your investments. Lucky for you, I am the one who owns my silver, and therefore, *I* choose the requirements to sell, and not you.
stupid is as stupid does, sir.

~ Forrest Gump
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Old 27th April 2011, 08:17 PM   #174
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Originally Posted by djpar View Post
stupid is as stupid does, sir.

~ Forrest Gump
I know! I feel sooo stupid. Why oh why did I buy silver when it was $14!? What a gamble! Oh, I could have lost so much money, but instead, I have more than tripled it.

It stabs... it stabs!
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Old 27th April 2011, 08:28 PM   #175
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Originally Posted by UWdude View Post
I know! I feel sooo stupid. Why oh why did I buy silver when it was $14!? What a gamble! Oh, I could have lost so much money, but instead, I have more than tripled it.

It stabs... it stabs!
You FOOOOOLLLLL!!!!

You could have put it into TBills!

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Old 27th April 2011, 08:48 PM   #176
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Originally Posted by Tippit View Post
Using Francesca's logic that she uses against me with Treasuries, I take it you're shorting the silver bubble then with all the other haters of sound money?
Nope, I'm just staying out of it because as Keynes said, "the market can stay irrational longer than you can stay solvent."
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Old 27th April 2011, 10:41 PM   #177
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Originally Posted by Puppycow View Post
Nope, I'm just staying out of it because as Keynes said, "the market can stay irrational longer than you can stay solvent."
And clearly it's the holders of timeless metals that are irrational, and not the teeming hordes and followers of Chairman Ben. Clearly.
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Old 27th April 2011, 11:28 PM   #178
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Prediction:

When the inevitable correction in the price of gold and silver comes, the gold and silver bugs posting to this thread will have claimed to have sold their entire (large) holdings at the peak of the market.
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Old 28th April 2011, 12:02 AM   #179
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How The Comex Lost 20% Of Its “Registered” Silver In One Week
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Old 28th April 2011, 12:12 AM   #180
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Originally Posted by The Don View Post
Prediction:

When the inevitable correction in the price of gold and silver comes, the gold and silver bugs posting to this thread will have claimed to have sold their entire (large) holdings at the peak of the market.
I probably will, and it will probably correspond with your capitulation buying. I started buying in 2000.
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Old 28th April 2011, 12:27 AM   #181
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Incredible the logic in this thread... silver was not a good investment regardless of the fact that it has increased 154% in the past year. Nevermind this, what matters is the fact that holders of silver will surely be too stupid to sell it before it plummets. The present returns that could be cashed in today don't matter. INCREDIBLE I TELL YOU.
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Old 28th April 2011, 12:36 AM   #182
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I agree with the basic idea that currencies are looking bad and that gold and silver are good inflation hedges.
I also think that silver can climb quite a bit higher.
(I stupidly cashed in yesterday morning, thinking it would dip further before picking up again)

But I find the pro-silver camp weirdly ideologically driven.
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Old 28th April 2011, 01:07 AM   #183
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Originally Posted by corbin View Post
Incredible the logic in this thread... silver was not a good investment regardless of the fact that it has increased 154% in the past year. Nevermind this, what matters is the fact that holders of silver will surely be too stupid to sell it before it plummets. The present returns that could be cashed in today don't matter. INCREDIBLE I TELL YOU.
You can be derisive all you want, but the hallmark of a good investment is predictable returns. As opposed to speculation.

For example, let's look at Enron. Sure, in hindsight we can say it was a terrible investment, but what about when the stock was going up and business was booming? Good investment? No, because their quarterly and annual reports were impenetrable, which meant you had no idea what was going on, which meant all you were doing was witnessing a stock go up, buying a superficial story, and deciding to hitch a ride. Which worked great, until it didn't. As for anyone that sold for a profit, good for them, but I would not use the term 'investment' - they got lucky. We know this is so, because the reports were both opaque and a lie. So, profitable, but a bad investment decision.

Likewise with silver/gold. Surely it has gone up, and good for the people who have profited. I would not at all be surprised if it continued to go up for some time, and again, good for the people holding it. But, given that it produces nothing, and experts in the field differ on their predictions of future price trends, it is nothing but a speculation. It's worth noting the market is currently in backwardization - future deliveries in silver are selling for less than current deliveries.

If I win big at the roulette table, I don't go running around telling everybody about what a great "investment" I made. Profit != good investment.


------------
Here's a tip. In broad terms, an investor gets excited when prices fall, not rise. Because they have a well formed thesis on the value of what they own, and the falling price allows them to buy more, and confirms for them that they understand the business better than the world does. OTOH, a speculator crows when prices go up, because price is what they use to value a position. Of course prices must eventually correct, and the investor then sells and goes and buys the next undervalued price.

---------
In any case, enjoy your profits. I think there's a good chance you'll continue to do well, but as I've said above in this thread, I shall not join you, because prices can go down as well, and in metals all you have is the price that another person is willing to pay (the utilitarian value of silver is not anywhere near $45, IMO). I'll never take a piece of that action, thanks (and that's what it is, action, not investment).


edit: as just one example, here are some experts hedging against the possibility of silver falling.

edit2: people are telling interesting stories about silver vs inflation, but the reality is that except for very recently silver and gold have always increased during deflation, and lost value during inflation. The factors are extremely complicated, certainly beyond my expertise, and so far as I can tell the expertise of anyone posting here. I assert without proof that I think it is beyond any human to predict future trends because of the chaotic conditions.
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Old 28th April 2011, 02:35 AM   #184
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Originally Posted by roger View Post
You can be derisive all you want, but the hallmark of a good investment is predictable returns. As opposed to speculation.

For example, let's look at Enron. Sure, in hindsight we can say it was a terrible investment, but what about when the stock was going up and business was booming? Good investment? No, because their quarterly and annual reports were impenetrable, which meant you had no idea what was going on, which meant all you were doing was witnessing a stock go up, buying a superficial story, and deciding to hitch a ride. Which worked great, until it didn't. As for anyone that sold for a profit, good for them, but I would not use the term 'investment' - they got lucky. We know this is so, because the reports were both opaque and a lie. So, profitable, but a bad investment decision.

Likewise with silver/gold. Surely it has gone up, and good for the people who have profited. I would not at all be surprised if it continued to go up for some time, and again, good for the people holding it. But, given that it produces nothing, and experts in the field differ on their predictions of future price trends, it is nothing but a speculation. It's worth noting the market is currently in backwardization - future deliveries in silver are selling for less than current deliveries.
In other words, precious metals "speculators" are akin to gullible Enron dupes, and unlike real investors such as yourself. Apparently we can only get "lucky", and are unable to benefit from sober analysis.

Quote:

If I win big at the roulette table, I don't go running around telling everybody about what a great "investment" I made. Profit != good investment.
Since roulette carries a -5.26% expectation, if you have played roulette at all you're a complete idiot, unless your enjoyment of the game offsets the cost of playing what is one of the worst casino games next to Keno (which would still make you an idiot). Equating precious metals investing to casino gambling as you have done indicates fundamental ignorance of the metals and how they're valued, to go along with your condescending hubris.

Quote:

------------
Here's a tip. In broad terms, an investor gets excited when prices fall, not rise. Because they have a well formed thesis on the value of what they own, and the falling price allows them to buy more, and confirms for them that they understand the business better than the world does. OTOH, a speculator crows when prices go up, because price is what they use to value a position. Of course prices must eventually correct, and the investor then sells and goes and buys the next undervalued price.
Your assumption fails miserably, because you fail to distinguish the important qualitative similarity between speculation and investing, which is the forecast. The fact that stocks allow you to quantify past cash flows doesn't necessarily mean that you can accurately forecast future cash flows, or know the proper rate at which to discount them, which makes your "investing" simply another form of speculation. That your stock may be highly likely to generate positive cash flows in the future, and that it may sell at a discount to your own speculative valuation is offset by the fact that if your forecast isn't more accurate than Mr. Market's, you're likely to lose money (or if you failed to forecast that the S&P would be trading lower in terms of gold, and thus, purchasing power). Many of the same quantitative elements of fundamental analysis such as supply and demand, market share, foreign exchange risk, systemic risk, as well as qualitative elements apply to commodity valuation (or foreign exchange valuation, since I view gold and silver as alternative forms of money, not strict commodities).

Quote:

---------
In any case, enjoy your profits. I think there's a good chance you'll continue to do well, but as I've said above in this thread, I shall not join you, because prices can go down as well, and in metals all you have is the price that another person is willing to pay (the utilitarian value of silver is not anywhere near $45, IMO). I'll never take a piece of that action, thanks (and that's what it is, action, not investment).
I've seen my silver holdings languish below $10 for the better part of the last decade even as gold appreciated, and I slept like a baby, because I knew this day was coming. You haven't seen anything yet. I will enjoy my profits when I begin to realize them (not very soon from now), just like I realized my profits from the 90's stock market boom. You make sure to enjoy acting as though you're smarter than everyone else because you've read a few books about Warren Buffett, or the Capital Asset Pricing Model. I will take the ridicule to the bank, just as I've always done.
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Old 28th April 2011, 05:24 AM   #185
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Originally Posted by roger View Post
You can be derisive all you want, but the hallmark of a good investment is predictable returns. As opposed to speculation. << rant snipped>>>

I assert without proof that I think it is beyond any human to predict future trends because of the chaotic conditions.
If what you say is true, then the general issue of investing in commodities versus common stocks cannot be evaluated. But fortunately, what you say is false. Yes, it is nice mumbo jumbo and quality double talk. Yes, it might fly by in an mba class quiz. But it doesn't pass the test of real world practice.

Yes, there may be such a thing as a speculator. But of the people on this forum who have been discussing metals, in several years, they exhibit characteristics of serious long term investors. Post 2008 crash, they were smeared, called conspiracy theorists, ridiculed, and endured all kinds of nonsense. They simply tried to explain their point of view on the ACTUAL NONSENSE going on with the FED and Obaby.

But they won.

The reality of the market says that.

That's really all that needs to be said.
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Old 28th April 2011, 05:25 AM   #186
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Originally Posted by The Don View Post
Prediction:

When the inevitable correction in the price of gold and silver comes, the gold and silver bugs posting to this thread will have claimed to have sold their entire (large) holdings at the peak of the market.
Since evidence shows that one of them lied about getting into gold in mid 2009 (see below), that prediction is not particularly out there.
Originally Posted by Francesca R View Post
Originally Posted by mhaze View Post
[ . . . retreat/backtrack/squirm . . . ]
Now that you've been caught lying about fabricated trades in an endeavour to prop up a conspiracy theory that you can't support with logic or evidence, there remains nothing of your credibility left to shred.

Should you attempt to resurrect your nonsense from hiding in the future, I'll just reference back to here.
Originally Posted by mhaze (17 April 2011) View Post
Your post was June 2009. I bought gold at just about that time 880-950.
Originally Posted by mhaze, (8 June 2009) View Post
Yes, some sort of correction in GOLD is definitely in order. Perhaps it should get in line and behave with the other commodity metals? Now what would that mean regarding past and future pricing?
Good day
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Old 28th April 2011, 05:56 AM   #187
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Originally Posted by Tippit View Post
In other words, precious metals "speculators" are akin to gullible Enron dupes, and unlike real investors such as yourself. Apparently we can only get "lucky", and are unable to benefit from sober analysis.
That may be what roger meant, I don't know. I have had arguments in the past where roger would not admit that he timed markets or made predictions (here's one I can find), which to me was mostly an ideological stance to maximise the distance between value investing and other things. Of course active investing (anything that is not "buy at any price and hold forever or until you need cash") involves speculating. I don't think commodities are assets in the sense of being capital goods, because they don't generate income streams without being consumed in the process, whereas equity claims on business do, in aggregate, in a productive enterprise system. But being able to successfully extract a return higher than some long run average of the market's risk premium involves speculating. In commodities, being able to extract a return above zero involves speculating too.

I was market-timing and speculating when I posted this:
Originally Posted by Francesca R View Post
I'm not keen on "over/under sold/bought" As for which stocks in the MSCI World Index that are cheap to fair value, approximately all of them
Originally Posted by Francesca R View Post
I bought FTSE futures last Wednesday, and again last Friday. I did it because I thought the futures price was attractive. If I had not bought on Friday then it's unlikely I would have made the second trade, because if not done on that day, the price would not have been where I wanted to buy. Sure feels like timing to me.
.
Originally Posted by Tippit View Post
Equating precious metals investing to casino gambling as you have done indicates fundamental ignorance of the metals and how they're valued, to go along with your condescending hubris.
I am sure it is possible to make above-average predictions about supply/demand of metals in a way that would be a virtual impossibility with a roulette wheel. Personally I have no expertise in that area and I have--for reasons different to roger's--never traded commodities in any fund I have managed, nor in my personal account.
Quote:
Capital Asset Pricing Model.
Just as an aside, I believe roger detests the CAPM with some passion. I quite like it though.
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Old 28th April 2011, 07:51 AM   #188
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Silver has broken 49 today and is on track to break its all time high.
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Old 28th April 2011, 07:58 AM   #189
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Originally Posted by Francesca R View Post
Since evidence shows that one of them lied about getting into gold in mid 2009 (see below), that prediction is not particularly out there.
Strategy #2: If a good investment consistently results from an economic model you find unreasonable, simply deny that such investment ever took place. (preferably by cherry picking a single case)
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Old 28th April 2011, 08:05 AM   #190
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Originally Posted by Tippit View Post
In other words, precious metals "speculators" are akin to gullible Enron dupes, and unlike real investors such as yourself. Apparently we can only get "lucky", and are unable to benefit from sober analysis.
You know, when someone changes the subject somewhat to shed light on the issue, they are not claiming the two situations are identical. I was drawing a distinction between investing with known information, and speculating without known infromation. Since silver is so contentious, I switched the topic to something everyone knows about, and that has a known outcome.


Quote:
Since roulette carries a -5.26% expectation, if you have played roulette at all you're a complete idiot, unless your enjoyment of the game offsets the cost of playing what is one of the worst casino games next to Keno (which would still make you an idiot). Equating precious metals investing to casino gambling as you have done indicates fundamental ignorance of the metals and how they're valued, to go along with your condescending hubris.
Once again, I was not equating the two, I was shedding light on a distinction - this time that crowing about making profits is notproof that one made a wise investment decision, which was the claim of the poster I was responding to.

I'll shed light in another way - no need to tell me this is not identical to silver, it is not. Say I'm a very good poker player, one with positive expectation. Is it a good investment to play poker? No. Why? Because the variance is large. You have professional poker players that some years have 3 house and 5 100K+ cars, and then a year later are living at the YMCA. Good profits, bad investment.



Quote:
Your assumption fails miserably, because you fail to distinguish the important qualitative similarity between speculation and investing, which is the forecast.
That seems like a very strange comment, given that I pointed out how horribly people have forecast silver prices, and how the experts in the field are sharply divided on where they are going next. The people with the most skin the game, and the most experience, miners, are hedging strenuously against a sharp decline. All we are getting from silver advocates are polemics, polemics that go against 300 years of pricing trends of silver. You could be right - I do not deny that, as I pointed out in the post I responded to. But any claim along the lines of "the price went up, my reasoning is correct" is baseless. Again, experts in the field consider prices unpredictable.


Quote:
You make sure to enjoy acting as though you're smarter than everyone else because you've read a few books about Warren Buffett, or the Capital Asset Pricing Model. I will take the ridicule to the bank, just as I've always done.
Ad hom. Presenting an argument becomes "acting smarter"? All your response was is misreading followed by an assertion that you are right. That is not an argument. And I have no idea where you came up with CAPM - I neither raised the issue or think it is valid.

In general, if you want to have a discussion with somebody, it helps to address their points, not accuse them of saying things they didn't say, not using ad homs, and using arguments, not assertions.

So, back to reasoned discussion, I've seen nothing in this thread that convinces me that profits from silver exceeds the risk of it falling and the risks of variance (I'm ambivalent on discussing risk re variance, as sometimes variance is a great thing, sometimes not). If you can present something beyond "I'm right", or "inflation is coming", or whatever, I'll listen. But your game is going to have to be better than the experts in the field, and at the moment I'm not convinced you have the wherewithal to do that (I could be wrong, I'm unaware of your professional life).
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Old 28th April 2011, 08:10 AM   #191
michaelsuede
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There is no risk.

We know the Bernankistan will not cease printing money.

Ergo, there is no risk in metals.
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Old 28th April 2011, 08:18 AM   #192
Eddie Dane
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michaelsuede,

Do you hold physical silver?
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Old 28th April 2011, 08:20 AM   #193
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yes
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Old 28th April 2011, 08:25 AM   #194
Eddie Dane
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Originally Posted by michaelsuede View Post
yes
Out of curiosity,

How do you do that?

I've had physical gold.
I could fit a fortune in small bag.

When I wanted to buy some silver, I changed my mind because I just didn't want to carry that much weight to my car.

If you're willing to share this kind of information, of course.
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Old 28th April 2011, 08:27 AM   #195
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Originally Posted by Francesca R View Post
I have had arguments in the past where roger would not admit that he timed markets or made predictions (here's one I can find), which to me was mostly an ideological stance to maximise the distance between value investing and other things.
Oy vey. Are you ever going to let that go? "Timing the market" is understood by everyone that speaks financial language as meaning making short term predictions about movement of prices, not waiting for prices to fall to a point that we find desirable. If my neighbor ever drops their propertyto 300K I'll buy it because it is worth 400K to me - that is not "timing", that is "waiting". If I claim that I think it is going to 400K in 6 weeks or so, that is timing. We agree exactly on the concepts in each case, but you want to use timing in a way the rest of the financial world (at least on this side of the pond) doesn't, and then use that as a club to beat me. It makes no sense.


Quote:
I am sure it is possible to make above-average predictions about supply/demand of metals in a way that would be a virtual impossibility with a roulette wheel.
There's the meat. Do we have any evidence for this? I mean, silver producers don't feel they can make these predictions, but of course they may be wrong/poorly educated. If you want to make the case for investing in silver, you (you generic, not you Francesca) need to present this evidence. In this thread that evidence is lacking.

And that is the distinction I am making, and most of the world makes, with the terms investing vs speculation. A good poker player (warning: subject change, not equivalency) has data showing he is skilled enough to beat the poker variance in the long term. He is not "speculating", though he is risking a lot re getting beat down via the variance. An Enron buyer, lacking data, is speculating. A buyer of Kraft, seeing decades long slowly growing returns, and a current price 50% lower than the current cash flows (i.e. not building in a 2-3% growth) is making an investment. Of course there is risk - the CEO could burn the office to the ground tomorrow, there could be a disclosure that all their food is laced with arsenic, or whatever. And of course it is a continuum - there is no perfect or complete information about the future. But we have over a century of data that buying at a 50% discount of future cash flows in a robust company is a prudent investment, despite the occasional failure.

So, what I am asking is, where does silver lie in that continuum? Given silver does not produce cash flows (I'm distinguishing that from it's industrial use, which does produce cash flows, of course), we are largely restricted to predicting future monetary policy of governments, how investers will respond to economic news (remember the seventies when everyone was predicting how investors would react to silver - except they didn't), what direction inflation is going, how that will influence silver, what regulations might be enacted in the future re things like shorting the silver market, all that jazz. Seems to me that you need a crystal ball more than a pricing model, though the space for correcting me for that is vvvvv right down there vvvvvvvv.


Quote:
Just as an aside, I believe roger detests the CAPM with some passion. I quite like it though.
It is probably roughly right for people investing billions in active accounts - it fairly accurately describes broad behavior. It is a terrible way to buy a single company that you understand inside out - would you buy or not buy a barber shop based on CAPM? No, you'd buy on the asking price, traffic in the area, competition - expected future cash flows. Calling an investment 'risky' because it sold for 20% lower or higher last year is insane in that context.
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Old 28th April 2011, 08:31 AM   #196
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Originally Posted by Francesca R View Post
Since evidence shows that one of them lied about getting into gold in mid 2009 (see below), that prediction is not particularly out there.
I've done you the favor of pointing out your repeat of a lie, and done you the favor of reporting you again, to the moderators for incorrect behavior.

Since you don't get it:

A comment about a "correction being in order" does not provide evidence for or against trades being placed, either in a unique fashion or as part of a steady investment plan.

Wait...that's obvious to any that are not bone headed.

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Old 28th April 2011, 08:39 AM   #197
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Let me address investing/speculating in another way. Warning - topic change is not saying new topic = silver.

VC tends to look for fairly sure things. For example, I want to buy my neighbor's property for 300K, and go to VC for the cash. They ask for a business plan. I explain that I am starting a greenhouse, show them a signed contract with Whole Foods with 10 years of future prices fixed, show them my current costs of production, and prove that unless world war iii starts they'll get their money back + 30% in a year. That's an 'investment' as I use it, despite Francesca pointing out that we are 'speculating' that World War III doesn't start.

A bank making me a car loan when I put up my house as collateral is an investment. If I stop paying, they can take my house, asteroid impacts nonewithstanding.

In contrast, if I go to VC wanting to start a wolf sanctuary, and my business plan is "everyone loves wolves, and I had a dream last night that told me to do this", that's speculation. No data, no strong evidence of return on investment.

Likewise, if the bank loans me money for a car when I've defaulted on every loan I've ever taken, am up on charges on forging checks, I have no savings or assets, and owe 500K in back taxes, that's speculation.

Again, to make this clear: these are extreme examples; nowhere did I say silver is the same as any of these examples. They are distinctions drawn to illustrate a concept, and my use of words. Furthermore, an extreme example is not an argument that every use of that term is equivalent. If you don't know what "crime" means, and I use the example of a serial killer, I am not saying that petty theft, which is also a crime, is equal to serial killing. I'm shocked that I have to explain this.

Finally, if you dislike my use of words, so be it. But do not use your use of words and force them into my argument, and then argue that my argument is wrong because it doesn't work with your usage of the words.
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Last edited by roger; 28th April 2011 at 08:47 AM.
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Old 28th April 2011, 08:41 AM   #198
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Originally Posted by roger View Post
If I win big at the roulette table, I don't go running around telling everybody about what a great "investment" I made. Profit != good investment.
How many times have we told you naysayers why we are buying, and bought silver? How many times? Obviously not enough. Because you all keep saying it was a gamble. No it wasn't. It was a calculated investment based upon observation of the monetary system.

That's it, period. And we win. When I bought my silver, I had NO DOUBT in my mind it would skyrocket. NO DOUBT, that is why I put ALL MY EXTRA MONEY into it. ALL OF IT.

Originally Posted by michaelsuede View Post
There is no risk.

We know the Bernankistan will not cease printing money.

Ergo, there is no risk in metals.
exactly. If money is going to be continued to be created, without actual growth in the American economy and industry to back it up, the only logical result is inflation in commodity prices. PERIOD.

It's not gambling to bet a ball is going to fall when it is thrown up in the air. WHta is funny is a bunch of people on here claiming that we were just betting on the ball falling back to the earth, and it was a stupid bet, and the laws of physics don't exist, and that the ball could levitate, or that the ball will continue to hang in the air... ..or that the ball is not falling, even though clearly, to anyone who looks around, inflation is skyrocketing. F the CPI.

Quote:
Prediction:

When the inevitable correction in the price of gold and silver comes, the gold and silver bugs posting to this thread will have claimed to have sold their entire (large) holdings at the peak of the market.
Like I said, I am going to sell my silver, when I need money. It is kind of like my car, which I no longer drive. I will sell it when I need money. But right now, to sell either would feel like I was unnecessarily getting rid of an asset I want to keep.

Silver makes me feel safe. It makes me feel like I can do something about the reckless money printing of the Federal Reserve.

And let's not be fooled either. No matter how much they "cut spending" in D.C., it will never be enough to scratch the surface of American debt, because they really will not touch the biggest expenditures, like defense spending. So the American dollar is simply going to continue to lose value. The question is, when does it lose it's world exchange status?

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Old 28th April 2011, 09:13 AM   #199
roger
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Originally Posted by UWdude View Post
How many times have we told you naysayers why we are buying, and bought silver? How many times? Obviously not enough.
No, not enough. Perhaps I'm dense. All I know is that I read old financial papers (FT and such), and they are filled with articles predicting commodity movements that do not pan out. I read "inflation is going to ..." and it is wrong. I read current papers of the behavior of silver experts in the field, and they are sharply divided, and often argue the opposite of what we see in this thread. I see conditional reasoning in this thread: if A happens, then B happens, which means C, then D, the Fed will X, which means Y, investors will Q, leading to M, ..... PROFIT!!!

The more conditions in your chain, the lower the chances of it being right. (edit: I also see a lot of things written about the silver market not included in that chain, which increases the probability of error).

The more experts sharply disagree with you, the more I (a non-expert) am likely to doubt the obviousness of your argument.

I snipped the "I profited, therefore I'm right", as it's a specious argument.


Silver is speculation to me, because I don't have a crystal ball, or economic model, that shows me what inflation, fed actions, investor actions, are all going to do in the next year or two. I haven't seen anything in this thread that convinces me that your models are obvious and correct - they are not obvious to the silver miners, who hire the best analysts in the business. That is not an argument that you are wrong, merely that I don't see that you've proven your argument.

If you are right, and I don't say this to be snide, you have a multi-million dollar a year career as a silver analyst awaiting you. I do say it, however, to point out that the current analysts are not crowing about how easy and obvious it is to predict silver prices over the next year or two, which casts considerable doubt in my mind. It is not proof - we are all aware of "analysts" that are puppets for trading desks - but it adds to your burden of proof because I'm not aware of any such puppetry in the silver mining business. I've left space VVVVVVV to correct me on this point.
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Last edited by roger; 28th April 2011 at 09:18 AM.
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Old 28th April 2011, 09:43 AM   #200
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Originally Posted by roger View Post
So, what I am asking is, where does silver lie in that continuum? Given silver does not produce cash flows (I'm distinguishing that from it's industrial use, which does produce cash flows, of course), we are largely restricted to predicting future monetary policy of governments, how investers will respond to economic news (remember the seventies when everyone was predicting how investors would react to silver - except they didn't), what direction inflation is going, how that will influence silver, what regulations might be enacted in the future re things like shorting the silver market, all that jazz. Seems to me that you need a crystal ball more than a pricing model, though the space for correcting me for that is vvvvv right down there vvvvvvvv.
I think you are looking at it wrong.

Silver is money.

The only thing that one needs to concern themselves with is that people are waking up to this fact.

As the fiat banking systems of the world hurtle themselves toward a fiscal implosion, people will revert back to sound money in a reverse of Gresham's Law (Thiers' Law).

Obviously, it is advantageous to buy up the real money with fiat first before people begin to refuse to conduct business in fiat.

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