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

[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?

[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.

[santafe2]

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

I prefer long term trading to buy and hold. There have been 3 distinct bull movements in silver since the bottom in 2001/2002. I'm not sure if my trading will allow me more profit than your strategy but I do know it suits my personality and I'm sure it's produced an equal result over the last 10 years. My concern with this thread is that it encouranges a buy and hold strategy which has no place in the modern investment market. As I regularly document online, I still hold a 25% of my original 2001 stake in silver and will advance that position as silver comes down in price. I disagree with the idea that this was a 10 year run with a perfect exit point.

[jk]

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

i sold all my silver a few hours before ej posted his sell recommendation, but i am open to the idea of buying again if prices go low enough. in the meantime i movedthe majority of the proceeds into gold, the rest into cash.

nice to see you posting again, santafe2. welcome back.

[santafe2]

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

i sold all my silver a few hours before ej posted his sell recomm endation, but i am open to the idea of buying again if prices go low enough. in the meantime i movedthe majority of the proceeds into gold, the rest into cash.

nice to see you posting again, santafe2. welcome back.

I've no interest in making an investment point on iTulip with regard to silver as I've sold in and out of it since 2000 with good success and that is not the iTulip POV. I've sold the majority of my silver into this run up but I'll be a happy buyer if it moves into the 20s. EJ and I are different investors. He's a buy and hold investor and I'm a trader. Both work well but trading has little respect here.

Thank you for the welcome back. If it works, I'll continue to post, if not, I'm OK with that too, and I'll read the mostly excellent comments.

[charliebrown]

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

i did not get into silver at 4.00 and oz either. I have been trading it since 2009, with good success. If you are in a 4.00 you can take a longer term view. I've been underwater on silver twice. I did sell 30% into the last rally. I now have an average cost of under 20.00 I will hold that and add to it if we see silver back in the 20's. I also sold all of my junk silver into the rally (sterling commeratives).

[drom]

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

It seems to be back to normal with silver trading in lock step with gold but at a higher beta

It is currently sticking around a ratio of 43, its hard to imagine it crashing under $20 at this point. Is this still the expectation?

[Down Under]

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

It is currently sticking around a ratio of 43, its hard to imagine it crashing under $20 at this point. Is this still the expectation?

I don't think EJ said it'd crash below $20; I think he said mid twenties.

[jiimbergin]

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

I don't think EJ said it'd crash below $20; I think he said mid twenties.

he said "Did I catch the exact top? Probably not. Prices may go higher, but I expect a correction to under $20 later this year"

http://www.itulip.com/forums/showthr...me+sell+silver

[drom]

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

What jimber replied with is what I am referring to, but on 5/8 he also said:

"I believe that if no bubble had occurred, silver would today trade around $25. As bubbles tend to overshoot on the way down, a dip below $20 remains a strong possibility."

http://www.itulip.com/forums/showthr...96808#poststop

I am not trying to be hyper critical here as EJ has a lot of great work, just seems unlikely to even get below $30 at this point unless gold takes a dive since it is in lock step with gold now.
EJ did also call for a dip in gold as QE takes a breather, but it looks like more recent Eurozone problems may have prevented that dip and brought out more gold buyers.

[Down Under]

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

he said "Did I catch the exact top? Probably not. Prices may go higher, but I expect a correction to under $20 later this year"

http://www.itulip.com/forums/showthr...me+sell+silver

Thanks Jim, for the correction. That'll teach me to be lazy and not bother looking up what EJ said.

But, if it does go below $20, most likely I'll be a buyer; it will depend a little on where the Aussie's also at, at the time.

[jiimbergin]

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

Thanks Jim, for the correction. That'll teach me to be lazy and not bother looking up what EJ said.

But, if it does go below $20, most likely I'll be a buyer; it will depend a little on where the Aussie's also at, at the time.

I will be a definite buyer. I have never sold all of my silver and probably never will sell it all. I have had some physical gold and silver since 1979.

[jk]

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

I have never sold all of my silver and probably never will sell it all. I have had some physical gold and silver since 1979.

me too.
that was the last time the currency was in doubt, though for different reasons.

[shiny!]

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

Thanks Jim, for the correction. That'll teach me to be lazy and not bother looking up what EJ said.

But, if it does go below $20, most likely I'll be a buyer; it will depend a little on where the Aussie's also at, at the time.

If silver drops a great deal you can expect the premium on physical will go up a lot. You won't find it on the street for spot, if you can find it at all.

[metalman]

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

time to check in on all the silver price rocket scientists before & after ej called the top of the silver bubble & sold silver apr 29...

jimmy rogers same day...

Posted on 29 April 2011 with 4 comments from readers
Decade-long commodities bull and billionaire investor Jim Rogers explains how parabolic price rises will always collapse but he does not think silver at $50 is in a bubble.

If silver hit $100 this year he says that would change his mind. But Mr Rogers hopes that will not happen, and that gold and silver will continue on a relatively steady uptrend for some years into the future.

james turk 3 days before silver crash...

April 26, 2011

James Turk - Silver Still in Backwardation, Headed Higher

With gold and silver surfing the wave of volatility, today King World News interviewed James Turk out of Spain. When asked about the reason for the increased volatility Turk stated, “There are some earthshaking events coming, that’s what the precious metals are telling us. That’s what the dollar chart has also been telling us and that is why I am expecting a waterfall decline in the dollar index. The dollar has a unique position as the world’s reserve currency and as people lose confidence in it they will go to other moneys they consider safer.”

james turk again a week after silver crash...

May 9, 2011

James Turk - “Silver Will Hit New Highs in a Matter of Weeks”



Silver’s Correction – We’ve Been Here Before

By James Turk, Founder of GoldMoney.com

May 9 (King World News) Silver’s price drop last week has been variously called historic, extraordinary and unprecedented. It was none of those, as is clear from the following chart (above). We’ve been here before, note the four red ovals. All four outline similar drops in price over short periods of time.

This chart is prepared on a log scale so that the distances shown on the chart can easily be compared in percentage terms. In other words, last week’s drop in the silver price from near $50 is essentially no different in percentage terms from the drop that occurred once $15 was approached in 2006 or the drop after $8 was reached in 2004. In both of these prior instances, silver bottomed after the drop, marking a level from which it climbed to eventually make a new high.

The drop in silver’s price in 2008 was different. Silver continued lower, breaking down from the red oval, but we all know why that happened. Lehman Brothers had collapsed, and in the subsequent rush for liquidity, every asset class was hit – even gold and silver. It was a classic example of the ‘baby being thrown out with the bath water’.

So what is ahead for this current correction? Repeats of 2004 and 2006, or another 2008? My guess is none of the above. It took several months after these three previous corrections before silver climbed above the high price that preceded the correction. This time I expect silver will take only several weeks before exceeding $49.78, the 31-year high reached on April 25th.

eric sprott 2 weeks after silver crash...

Tyler Durden
Zero Hedge
May 17, 2011

Eric Sprott, who according to some catalyzed the initial move lower in silver following his sale of PSLV units, to be followed by a bullish clarification that he transferred all proceeds into other silver holdings, was on Max Keiser late last week in an interview that anyone interested in the silver market should listen to.

Among the key summary highlights: “I will be a buyer of silver today. I will be a buyer of silver tomorrow. We have not lost any faith in what has happened to silver.” As for what happened with that instantaneous $6 dollar drop in silver on May 1:

“In my mind it was just one of those raids that we experience from time to time. There was no particular reason for it. And then we end up with 5 margin rate increases. It just reeks of someone manipulating the price of silver down. I have no fear of silver here. Yes it will be parabolic, but it’s going to be way more parabolic than what we have today… I believe that gold today is the de facto reserve currency. It’s outperformed everything for 11 years. Silver has always been a currency, people are now treating it as a currency, and it’s a very, very small market. There is no way that with roughly $50 billion of silver inventory around that we can make it a currency, so I see the price going much higher.” And on the ridiculous recent trading volume in silver: “One of the things we should look at is the trading of silver in the paper markets, I mean the Comex and the SLV. Last week it averaged 1.2 billion ounces per day. There is only 700 million ounces mined in a year. There is only 33 million ounces of physical silver that is available for delivery by the commercial shorters. If something like 3% of the people that were trading silver in one day demanded physical delivery, there would be no silver on the Comex…. The key market is the physical market. I don’t think this raid is going to work.”

derp derp....