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

[kduffey]

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

I will probably buy some at $25 and alot at $20. Look forward to further discussion with you fine folks.

[Jay]

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

The only problem is last time silver made it's lows in 2008, it was hard to get a hold of physical. There are a lot of people that are waiting to back up the truck. If people see the slightest hint of a shortage, I think they're all going to run for it. Apmex's SE's supply is already looking a bit sad.

You can buy a proxy instead and then sell it once you can get hold of physical at the price you want.

[Jay]

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

by the way for us short term speculators, if you have any slv, pslv etc, you may want to consider a move to CEF.
people are scared out of it because it has silver??? It is down nearly as much as SLV, and PSLV. yet it is only 54% silver.
So you would be selling silver to buy gold at a discount. If you have paper gold, you could sell that to keep your gold/silver
ratio the same.

I sold my CEF position in my IRA and bought GTU the day after EJ's call. I will buy CEF again once silver hits 25. If it doesn't I will sit tight.

[gnk]

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

Doesn't anyone use Bullionvault here? I started selling my silver position a few weeks ago. I first started selling my SLV holdings, and then the silver in my Bullionvault account.

Point.

Click.

Done.

Unlike my SLV holdings, which I could only sell during US market hours - with Bullionvault, it's 24 hrs during the weekdays - beginning late Sunday night. I have nothing to gain from mentioning Bullionvault here - but I have to hand it to them. It's a great service.

By the way, unlike EJ, I scaled out of my position. I started early, but averaged my sell price up. EJ's call was confirmation of my opinion, but I had already started selling at $39.00... it's tough picking a top - and hats off to EJ for getting darn close - really darn close. But anyone that follows markets should know that a straight line up is not a good thing.

[FRED]

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

Doesn't anyone use Bullionvault here? I started selling my silver position a few weeks ago. I first started selling my SLV holdings, and then the silver in my Bullionvault account.

Point.

Click.

Done.

Unlike my SLV holdings, which I could only sell during US market hours - with Bullionvault, it's 24 hrs during the weekdays - beginning late Sunday night. I have nothing to gain from mentioning Bullionvault here - but I have to hand it to them. It's a great service.

By the way, unlike EJ, I scaled out of my position. I started early, but averaged my sell price up. EJ's call was confirmation of my opinion, but I had already started selling at $39.00... it's tough picking a top - and hats off to EJ for getting darn close - really darn close. But anyone that follows markets should know that a straight line up is not a good thing.

is the only service we advertise, since 2006.

[llanlad2]

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

Doesn't anyone use Bullionvault here? I started selling my silver position a few weeks ago. I first started selling my SLV holdings, and then the silver in my Bullionvault account.

Point.

Click.

Done.

Unlike my SLV holdings, which I could only sell during US market hours - with Bullionvault, it's 24 hrs during the weekdays - beginning late Sunday night. I have nothing to gain from mentioning Bullionvault here - but I have to hand it to them. It's a great service.

By the way, unlike EJ, I scaled out of my position. I started early, but averaged my sell price up. EJ's call was confirmation of my opinion, but I had already started selling at $39.00... it's tough picking a top - and hats off to EJ for getting darn close - really darn close. But anyone that follows markets should know that a straight line up is not a good thing.

Totally agree. I did have and sold all my silver from Bullionvault ( it's the only silver I had). Like you I started selling mine early in the run up in the 40s, a large chunk after EJs initial post on silver and the rest of it on the Friday night of the call at 11.40pm out of hours of normal trading and so managed to avoid the big drop on the Monday. Dead simple. I am now glad I never went the "actual physical in hand" route of ownership.

As an aside I would like to thank EJ for the clarity of the call and the explanations behind it. It made my decision to get out completely much easier especially as a number of other "smart" investors on the site had seemingly come to the same conclusion in the discussion that followed. Much appreciated.

[aaron]

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

I wish I would have pulled the trigger and sold.

Which is why I bought physical in the first place --> I make incredibly bad choices like selling low and buying high. It takes a lot of effort to sell physical silver as opposed to paper. Plus the coins are pretty.

Is silver dead forever?

[rogermexico]

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

Bullionvault is secure, allocated storage and by far the best single way to own gold or silver if you want to actually own the metal. As you say, it is highly liquid and has 24 hour accesss. I sold by BV silver at a price within mere pennies of the all time high - at about 1 am central time.

It is not the most tax-advantaged form, however.

I also did not mention BV in my prior post because I was addressing physical metal held as coins and how to hedge them, and because when you report any gains from trading in BV, they will be taxed as ordinary income if held for less than one year (as much as 35%), and collectible rate of 28% if held more than one year. The futures rate of 23%, for assets of any duration beats both rates.

So in summary, here is my strategy for minimizing the tax hit on gold:

Long term holdings in GTU or PHYS - file form 8621 and max cap gains rate of 15% if you hold more than one year. (vs 28% for BV or coins)

Short term trades - use futures contracts and only pay 23% tax (vs options or trading ETFs where you pay up to 35%)

MY BV holdings serve several purposes: Political and country diversification and hedging against the very unlikely risk of default or fraud in canadian trusts. As the tax rate is higher, I try to keep just some of my gold this way. If gold is re-monetized, I might sell all my paper gold but keep some coins and BV as a residual political insurance.

[EJ]

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

It's been a week since April 29 when I announced to iTulip subscribers that on that day I'd sold at $48.50 all of the silver that I purchased in 2001 for $4.25.

I continue to expect silver prices to decline to $20 as shown in the chart that I posted for subscribers on May 1, the day before the crash began, and don't expect silver prices to recover to the previous peak for several years.

The collapse was more immediate and rapid than I expected. I thought we'd see $35 in a few weeks, not in one week. At $34.80 as I write, silver prices have collapsed 30% from the $49.80 peak on April 25 and 28% since I sold last Friday.

Congratulations to all here who also dodged the silver bullet.

Surprisingly, I continue to be asked if I think this is a silver price correction or a silver bubble collapse. You have to be in denial to not see that a 30% price decline in a week is a bubble collapse.

To those who got caught in the trap, you have all of my sympathy. I've seen this movie before, in tech stocks in the late 1990s when I started iTulip.com and in housing from 2002 to 2006. It's all too easy to get caught up in the arguments to justify a bubble when it's rising and we're all getting rich.

The moral of the story is that bubbles can occur in precious metals as in stocks and houses. Some day we may see a bubble in gold. Let's keep our wits about us and avoid getting caught up in that if it happens again as it did in the late 1970s.

[lektrode]

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

ej made an uncharacteristically harsh comment on apr 21 in ask ej in reaction to members who were arguing with him... 'Buy silver at $50 and enjoy your pump-and-dump asshanding by JP Morgan'

which was - precisely - for me and a bunch of others, presumably - The Most Memorable Phrase in recent discussions on the topic and tho i was planning on selling upon return from my mainland excursion to pay bills, that post _ended_ any reservations that lingered, as to whether to drawdown cash or liquidate AG - and i dumped on the 22nd.

i dont even pretend to know much about all this stuff, but i do know enuf to know the
bottom line: he who discounts/ignores The Boss' empirical evidence and observations displayed here is nuts

[lektrode]

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

... I've seen this movie before, in tech stocks in the late 1990s when I started iTulip.com and in housing from 2002 to 2006.

one things for SURE: your movie reviews are a lot more interesting than ebert's

It's all too easy to get caught up in the arguments to justify a bubble when it's rising and we're all getting rich.

The moral of the story is that bubbles can occur in precious metals as in stocks and houses. Some day we may see a bubble in gold. Let's keep our wits about us and avoid getting caught up in that if it happens again as it did in the late 1970s.

altho i dont think it's going to be a good news event...

how about a TOAST TO THE COMING BUBBLE IN GOLD

and may we all be on _that_ train before it leaves the station...

[lektrode]

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

What an incredibly timed call! Well done.

I look forward to EJ's future thoughts on where to allocate capital preferably for the little guy who doesn't have millions to invest.

+1, and raise +1

[lektrode]

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

I don't remember the 20% unemployment call, but I would venture to guess
that if we had honest numbers it would be at least 19.0%+.

And though I did pick cotton as a youth, I've never picked a cherry.

grew up in the north, so the only cotton i picked was what was coverin/hiding the cherries... ;)

and funny how in the span of a couple of paragraphs we see such conflicting data?

http://online.wsj.com/article/SB1000...829385166.html
Private companies ramped up their hiring in April to the fastest pace in five years, helping to allay fears that a sputtering U.S. recovery would hamper job growth.
Nonfarm payrolls rose by 244,000 last month, as the private sector posted the strongest employment gain in five years, the Labor Department said Friday in its survey of employers. Data for the previous months was revised up to show an increase of 221,000 jobs in March and 235,000 jobs in February.
However, the unemployment rate -- which is obtained from a separate household survey -- rose to 9.0% last month from 8.8%

[lektrode]

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

[QUOTE=pianodoctor;196503]EJ wrote that if he were to invest in silver again, it would not be 1921 silver dollars, though he enjoyed owning them. Is that just because paper silver investments have become available and are preferable, or does he have another physical form in mind?

good question - any one for a show of hands/comments on where and how they will go back in to to silver?

FRED wrote: "Some day you all will undrestand the mechanism of iTulip's remarkable record" Ooooo- such a tease! :-)

methinks "the mechanism" is all of our collective observations and the consensus that develops around EJ's points of view (after all the buts/rebuts and arguing is done ;)

[lektrode]

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

by the way for us short term speculators, if you have any slv, pslv etc, you may want to consider a move to CEF.
people are scared out of it because it has silver??? It is down nearly as much as SLV, and PSLV. yet it is only 54% silver.
So you would be selling silver to buy gold at a discount. If you have paper gold, you could sell that to keep your gold/silver
ratio the same.

interesting movement today: