gold to $650, silver to $9.80

[Jim Nickerson]

Re: gold to $650, silver to $9.80

wait a minute... doesn't it depend on where you started counting? i seem to recall you're saying you had a big drawdown after the tech bubble busted?

counting unrealized gains and losses as realized gains and losses strikes me as a dubious measure. let's try this.

i'm up 530% since 1999. you?

Since 1/3/2000 I am down 5.36% in liquid assets, that is no accounting for personal effects, property, etc. That equates to a compounded annual
?gain? of -0.52% or -$86,925.82 before I will have regained the nominal wealth I had on 1/3/00. My drawdown on my maximum ever liquid wealth is -5.36%.

I was hoping you wouldn't pick up on that, and then I was facing the dilemma of bringing it to your attention or not. You can accuse me of dishonesty if you like, but it was a mistake in my thinking because of the way I keep up with all this. Back to 2000 is fairly painful to think about, so I don't spend much if any time lamenting it. I have primarily focused on what has happened from my personal max drawdown that existed on 10/9/02 when I reached my nadir with a drawndown of -67.17%

Anyone can elaborate on "drawdown" as they please, and please do, but I don't think the concept of drawdown is dubious or invalid as a means of comparative measure. Whether it is escapism or not, my spreadsheet column that tracks drawdown is computed from max gains since 10/9/02. I have to do some other stuff when I account it back to 2000, and I only do that periodically.

So the bottom line is my drawdown from my maximal gains in my lifetime in liquid assets is -5.36%. My drawdown since 10/9/02 is zero today.

What is your present drawdown?

I went back and checked by computations. Max drawndown on lifetime high is -4.42% not -5.36%.

2nd edit: don't even get into inflation adjustments. I can't handle it.

[jtabeb]

Re: gold to $650, silver to $9.80

wait a minute... doesn't it depend on where you started counting? i seem to recall you're saying you had a big drawdown after the tech bubble busted?

counting unrealized gains and losses as realized gains and losses strikes me as a dubious measure. let's try this.

i'm up 530% since 1999. you?

HA! Rimshot!

[metalman]

Re: gold to $650, silver to $9.80

Since 1/3/2000 I am down 5.35% in liquid assets, that is no accounting for personal effects, property, etc. That equates to a compounded annual
?gain? of -0.52% or -$86,925.82 before I will have regained the nominal wealth I had on 1/3/00. My drawndown on my maximum ever liquid wealth is -5.35%.

I was hoping you wouldn't pick up on that, and then I was facing the dilemma of bringing it to your attention or not. You can accuse me of dishonesty if you like, but it was a mistake in my thinking because of the way I keep up with all this. Back to 2000 is fairly painful to think about, so I don't spend much if any time lamenting it. I have primarily focused on what has happened from my personal max drawdown that existed on 10/9/02 when I reached my nadir with a drawndown of -67.17%

Anyone can elaborate on "drawdown" as they please, and please do, but I don't think the concept of drawndown is dubious or invalid as a means of comparative measure. Whether it is escapism or not, my spreadsheet column that tracks drawndown is computed from max gains since 10/9/02. I have to do some other stuff when I account it back to 2000, and I only do that periodically.

So the bottom line is my drawdown from my maximal gains in my lifetime in liquid assets is -5.36%. My drawndown since 10/9/02 is zero today.

What is your present drawndown?

whatever criticisms i've ever had of you, dishonesty ain't one of them.

again, if by drawdown you mean since 1999 peak value of invested capital versus today, i'm up 530% but could be at 600% if i'd dumped by gold and silver at the latest top. if your definition definition means at any moment the delta between all the gain on all of your investments since a certain date to today plus or minus what it could have been at the peak?

i guess our brains work differently. i go for the roger's philosophy... first don't lose money. second, try to make money. third, try to keep your gains. my sense is that you are very focused on #2 and #3.

i don't lose money. ever. i make money and mostly keep my gains but don't try to keep every penny. i try to identify the big thing going on and my time frames are the length of the event going on... tech bubble, reflation, dollar depreciation. now i'm trying to play the death of the fire economy... alt energy boom or wwiii or whatever the fuck happens when the fire econ blows up and a generation of entitled boomers goes crying to the president and congress for a war to go get 'em some more money.

[Jim Nickerson]

Re: gold to $650, silver to $9.80

whatever criticisms i've ever had of you, dishonesty ain't one of them.

again, if by drawdown you mean since 1999 peak value of invested capital versus today, i'm up 530% but could be at 600% if i'd dumped by gold and silver at the latest top. if your definition definition means at any moment the delta between all the gain on all of your investments since a certain date to today plus or minus what it could have been at the peak?

i guess our brains work differently. i go for the roger's philosophy... first don't lose money. second, try to make money. third, try to keep your gains. my sense is that you are very focused on #2 and #3.

i don't lose money. ever. i make money and mostly keep my gains but don't try to keep every penny. i try to identify the big thing going on and my time frames are the length of the event going on... tech bubble, reflation, dollar depreciation. now i'm trying to play the death of the fire economy... alt energy boom or wwiii or whatever the fuck happens when the fire econ blows up and a generation of entitled boomers goes crying to the president and congress for a war to go get 'em some more money.

Thank for your equanimity with the honesty issue.

I have no idea how often you track the value of your liquid investments which in my book would include any physical PM's one might possess. I update my portfolios daily since 1986. At some point recently, probably around when gold hit its highs in mid-March, I presume if you figured or can figure your wealth at that time, and you had a sizeable allocation to precious metals your computed wealth including all the assets in your brokerage account on that day might have been say 1,000,000 bonars if you could have liquidated them at that days closing price--which of course one cannot actually do. I also assume, perhaps wrongly, that your portfolio likely reached its maximum valuation when gold, etc. hit their highs in March, but depending upon all your allocations that may be wrong. As of today's closing price what would those assets be worth? Don't tell us, but subtract their worth now from the value on the date they were highest whenever since 1999 that date was, and the difference divided by their highest value is the drawdown.

Regardless of whose philosophy you or I or anyone follows, and regardless of how much you have made and I have lost over any time period, what is your drawdown from your maximum valuation on the day your portfolio of stocks, bonds, cash, precious metals, short sales, options, etc. were at their highest valuation?

Is it possible for you to compute that and divulge it?

Edit: I guess I can guesstimate your drawdown. 600% is an amazingly round number, but using it and subtracting 530% =70% -70%/600% = -11.67%. So within the realm of correctness of 530% and 600%, your drawdown is -11.67%. I guess it depends upon how individuals wish to assess the performance of their investments, but if what you wrote as a decrease in your gains were applied to my portfolio, I would consider that I had lost 11.67% from my maximum gains. In my own instance, I guess were I really compulsive, I could go back and not count the value of my portfolio maximum value on 1/3/2000 as the starting point from which I should calculate all future gains and losses. It woud be way too complicated to take out the "paper gains" and only consider real gains, and personally I think I would be fooling myself by doing that.

[Slimprofits]

Re: gold to $650, silver to $9.80

Anybody else got a call on whether the USD busts out over 80 here? Or you all figure it's a slam-dunk that it's going to "behave" and resume it's downtrend like a good walking-dead dollar is supposed to do?

No, it won't.

Bloomberg

Platinum futures in Tokyo rallied and palladium had its biggest gain in two weeks, following advances in oil and other commodities, on expectations rising inflation will drive up investor demand for precious metals as a hedge.

Platinum futures rebounded from yesterday's one-year low after the U.S. Labor Department reported a 9.8 percent surge in July producer prices, the biggest advance since 1981.

``The fundamentals are now swinging back toward more favorable conditions for commodities,'' Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said today by phone. ``The figures out in the U.S. yesterday show you've still got to look for inflationary concerns and so people will continue to buy gold and platinum.''

Dollar got a little boost from EUROland second quarter GDP numbers, oil price coming down and the dollar intervention Bart tuned us into.

Inflation worries appear to already be tamping that boost.

Dollar could get another little boost when the U.S. 2nd quarter GDP preliminary report is released on August 28th. (Rebate checks)

After that, it is back into the doldrums for the rest of 2008.

On 09/11, the U.S. international trade report will show exports hurt by trading partners suffering from recession. On 10/30 the advance 3rd quarter GDP numbers will bring very bad news.

[raja]

Re: gold to $650, silver to $9.80

IMHO, this debate between Jim and MM comes down to this:
MM says invest in the long-term trend for the greatest profits, while Jim says it's possible to make more money by investing in short term ups and downs.

Despite MM assertions and EJ's calculations to the contrary, Jim is theoretically correct. One simple example . . . if you bought gold at 800, sold it at 1040, then rebought it at 790, you'd make more money that the guy who bought at 800 and held it.

The reason this debate can go on to infinity and never be settled is because the possibilities are infinite. What has happened to Jim and MM with their personal portfolios cannot settle this question. It also cannot be settled by EJs previous calculations, since alternative scenarios can be created that would show an opposite effect (as in the example I gave above).

The only partially satisfactory answer would be one of probability, but even that could be picked apart because there are so many real-world variables . . . .

[Jim Nickerson]

Re: gold to $650, silver to $9.80

IMHO, this debate between Jim and MM comes down to this:
MM says invest in the long-term trend for the greatest profits, while Jim says it's possible to make more money by investing in short term ups and downs.

Despite MM assertions and EJ's calculations to the contrary, Jim is theoretically correct. One simple example . . . if you bought gold at 800, sold it at 1040, then rebought it at 790, you'd make more money that the guy who bought at 800 and held it.

The reason this debate can go on to infinity and never be settled is because the possibilities are infinite. What has happened to Jim and MM with their personal portfolios cannot settle this question. It also cannot be settled by EJs previous calculations, since alternative scenarios can be created that would show an opposite effect (as in the example I gave above).

The only partially satisfactory answer would be one of probability, but even that could be picked apart because there are so many real-world variables . . . .

That's not an unfair assessment, but my argument, I don't think, is not that I or anyone necessarily will make more money attempting to trade trends, but that attempting to trade trends is how I have evolved to attempting to make my liquid wealth grow, and as you point out if one could perfectly trade any trend then certainly one would make the maximum profit in that asset, but that is impossible.

The success of any method will vary over time between individuals and within individuals. To attempt to determine money managers' successes the most frequent methods I encounter are statements of gains/losses on an annualized basis from various times past, or year to date. For managers whose results are public, i.e. mutual funds, one can determine their drawdowns at any time by looking at current NAV and 52wk high or the all-time high. For me personally, I look at my annualized gains for comparison with not infrequently posted statements in the MSM about how various managers are performing over various periods.

Check out your own gains against so-called "Sir" Warren Buffet (for all I know, maybe Buffet has been knighted), and ask yourself if you were invested with the Oracle of Omaha, would you be pleased with the management of your money right now. I would also ask myself how can one prevent sustaining such losses (-23% as of close 8/19/08) as he has currently? My answer is to employ stop losses.

Actually, my purpose is asking metalman and Lukester to state their current drawdowns is most like sticking my thumb in one of their eyes as a malevolent form of "fun." If they have been as heavily invested in PM's as I surmise (and I have NO actual knowledge of their percentage allocations of their overall portfolios to PM's), then they have taken a "hit." I think its "fun" to see if anyone will admit to just how big has the "hit" been. My assessment so far is it is hard to get people to "fess up" about their drawdowns, which is fine by me.

EDIT: One other thing I mean very sincerely, anybody who has losses in their investments, I hope they fully recover and continue to do well over their lifetimes.

[drumminj]

Re: gold to $650, silver to $9.80

Jim -

I don't know that I've ever posted here before. I've been reading for a while, and know that you've certainly made wise decisions in the past regarding timing (JPY and PMs, from the discussion here). One thing I've not seen you really discuss is what led you to sell the positions when you did? It's easy to sit back and say "hey, I banked some $$$ - you guys shoulda sold" (I admit it's nice to feel that way and be able to say that), but it would certainly add to the discussion to not just poke at Lukester and MM's eyeballs but also to hopefully add to the collective wisdom as to what signals you saw that you responded to.

Another comment I'd like to make that's more relevant to this discussion is that picking the macro trend and investing based on it requires a lot less effort than trying to keep up to date on a daily/hourly basis regarding all the indicators in the market, central bank actions, new gov't programs, etc.

My neighbor across the street from me is retired. He has an immaculate lawn. Why? Because he has the time to be out there every day mowing, pulling weeds, working on flower beds, etc. Because I work during the day, I'm pretty happy that my grass is mostly green and my trees and shrubs get trimmed back when necessary.

From what I understand, you're retired, which puts you in a much better position to be able to do the research and acquire the knowledge to identify each of the smaller trades within this big trade. For me (and likely others), it's feasible for me to check in at regular intervals and make sure that my intermediate to long term investment theses still hold. There's no way I could keep an eye on it every day while working 50+ hours a week, taking time to train my foster dog, working on home improvement projects, and making a point to get out and be social so as not to turn into a hermit.

I agree that one could potentially make more money by trading the smaller moves. But those of us who don't aren't just silly saps who don't know any better, as I feel you are implying to a degree.

[Jim Nickerson]

Re: gold to $650, silver to $9.80

Jim -

I don't know that I've ever posted here before. I've been reading for a while, and know that you've certainly made wise decisions in the past regarding timing (JPY and PMs, from the discussion here). One thing I've not seen you really discuss is what led you to sell the positions when you did? It's easy to sit back and say "hey, I banked some $$$ - you guys shoulda sold" (I admit it's nice to feel that way and be able to say that), but it would certainly add to the discussion to not just poke at Lukester and MM's eyeballs but also to hopefully add to the collective wisdom as to what signals you saw that you responded to.

Another comment I'd like to make that's more relevant to this discussion is that picking the macro trend and investing based on it requires a lot less effort than trying to keep up to date on a daily/hourly basis regarding all the indicators in the market, central bank actions, new gov't programs, etc.

My neighbor across the street from me is retired. He has an immaculate lawn. Why? Because he has the time to be out there every day mowing, pulling weeds, working on flower beds, etc. Because I work during the day, I'm pretty happy that my grass is mostly green and my trees and shrubs get trimmed back when necessary.

From what I understand, you're retired, which puts you in a much better position to be able to do the research and acquire the knowledge to identify each of the smaller trades within this big trade. For me (and likely others), it's feasible for me to check in at regular intervals and make sure that my intermediate to long term investment theses still hold. There's no way I could keep an eye on it every day while working 50+ hours a week, taking time to train my foster dog, working on home improvement projects, and making a point to get out and be social so as not to turn into a hermit.

I agree that one could potentially make more money by trading the smaller moves. But those of us who don't aren't just silly saps who don't know any better, as I feel you are implying to a degree.

Last things, first. I try not to "imply" anything, and I have not implied nor thought to myself that anyone who doesn't trade is a "silly sap."

Not all my decisions are wise, maybe none are, fortuitous or lucky would generally be a better description, and at time just down right dumb.

In deciding, in general, when to get out of positions--in recent years--I use stop loss points on new positions and from maximun gains in a position. I am not always paying strict attention and sometimes move too late or later than I prefer, but this is life. I sold some DZZ the other day, in part because I had ~20% profit in two weeks, and in part because I think Gold will bounce, at least bounce in here. I've locked in that profit, and redeployed into DGP, but now it remains to be seen how that will do.

I use charts with RSI and MACD indicators--basically the default parameters on those two indicators as exist in bigcharts.com. You will have to read a book or something if you don't understand the potential of using those, and there exist many other, indicators. Some people spit on such technical analysis as useless, everyone can and does think in those ways that most meet their needs.

I don't think I have ever sat back and made any comments about my trading that suggests I was "smart" and others are "dumb." I put up the trades when I have time and think I comment on whatever seems appropriate. Actually, I am not smart. I try to be attentive to the things I think I may understand, and I don't always succeed.

I have a real luxury of time (which grows ever dearer) to spend trying to make money in the markets, not because I have to, but because I really like the challenge. Young working people with families, commitments, duties do not have my luxury, and with regard to investing the opportunitie for you are different than they are for me.

Read Harry Browne book(s) on diversification, and if you must put money into to something then diversify it and periodically rebalance the allocations. The big thing is save money as you go along through life regardless of whether it does the best it could possibly do, or does as well as your neighbor says his is doing, just make sure you pay enough attention not to let an asset go to zero, as I have recently done with DCR. The more you learn along the way, and the more you have saved, the greater will be your opportunties at some point.

If I left something out, please get back on it.

[jk]

Re: gold to $650, silver to $9.80

1. re the dollar. the best discussion i've seen of short-intermediate trajectory is today's at macro man http://macro-man.blogspot.com/2008/08/buck-up.html his feeling is that a sideways move is likely for the next months/quarters.

2. re drawdown. take your high water mark, i.e. the highest value your portfolio has ever attained in the history of the universe. subtract it from your current portfolio value. unless you are at this moment at your high water mark, this will produce a negative number. then divide this number by said high water mark. this is your current drawdown. it is the percentage you are down from your high water mark. this calculation is a common one in the world of money management, and e.g. hedgefunds will always be able to document their largest drawdowns. past drawdowns are a shortcut way of assessing risk, as people think past performance will predict future results; boilerplate warnings to the contrary are uniformly ignored.

3. #1 above refers to what someone thinks is "likely," while #2 above refers to "risk." probability and risk are what it's all about.

re the dollar- i'm really unsure, because in recent history currencies are an ugly contest. so i've got about 25% in u.s. dollars and 25% in [mostly asian] currencies, and i don't have a clue.

re trading versus long term positional investing - my personal concern is that i don't "blow up." money managers are said to "blow up" when they sustain losses that lead to them having to close up shop. i'm interested in avoiding big losses. i'm currently on an 11% drawdown, the worst i've sustained in recorded history. [of course i only began recording history, weekly at least, about 8 years ago. i can't vouch for what i might have experienced in the foggy days of my prior investing.] i am not happy with this drawdown, which i can pretty much ascribe to the sell off in pm's. i console myself with the fact that i'm flat ytd, while pm's are actually down, so i'm adding some value in other spheres.

i'm willing to ride with the moves in pm's, or at least have been willing to date, because of the conviction i have about them. it leads me to think that the risk is low relative to the likely reward. i've also outsmarted myself in the past trying to trade the pm's. specifically, i had a large position in cef when gld became available but slv had not yet come on the market. cef was at a premium, and my assumption was that the premium would be arbitraged away once slv became available. i therefore cleverly decided i would sell my cef, buy some gld and wait to buy slv once it became available, and avoid the loss of the arbitrage. it was at this juncture that silver rose from about 12 to over 15. and i missed that move, and in size in that i had a substantial position i had traded out of. so that was an opportunity cost, and taught me i'm not as smart as i'd like to think i am. and since then, btw, cef has maintained its premium because, i learned, as a closed end fund it is eligible for capital gains treatment, unlike gld and slv which are "collectibles."

4. re risk management. jim's short term trading approach exposes him to the risk of being wrong. he'll counter and say that this risk is limited by his stop loss orders- either placed or mental. i'll counter by saying that event risk raises the possibility of markets blowing through stop losses, by going to sleep with the price at one place, and waking up to the price being at a very different place indeed. but he'll counter that by pointing out that he controls the size of his positions, and keeps a big chunk in cash. and he'll be right. controlling the size of his positions is his most important risk control. what's yours?

[Jim Nickerson]

Re: gold to $650, silver to $9.80

1. re the dollar. the best discussion i've seen of short-intermediate trajectory is today's at macro man http://macro-man.blogspot.com/2008/08/buck-up.html his feeling is that a sideways move is likely for the next months/quarters.

2. re drawdown. take your high water mark, i.e. the highest value your portfolio has ever attained in the history of the universe. subtract it from your current portfolio value. unless you are at this moment at your high water mark, this will produce a negative number. then divide this number by said high water mark. this is your current drawdown. it is the percentage you are down from your high water mark. this calculation is a common one in the world of money management, and e.g. hedgefunds will always be able to document their largest drawdowns. past drawdowns are a shortcut way of assessing risk, as people think past performance will predict future results; boilerplate warnings to the contrary are uniformly ignored.

3. #1 above refers to what someone thinks is "likely," while #2 above refers to "risk." probability and risk are what it's all about.

re the dollar- i'm really unsure, because in recent history currencies are an ugly contest. so i've got about 25% in u.s. dollars and 25% in [mostly asian] currencies, and i don't have a clue.

re trading versus long term positional investing - my personal concern is that i don't "blow up." money managers are said to "blow up" when they sustain losses that lead to them having to close up shop. i'm interested in avoiding big losses. i'm currently on an 11% drawdown, the worst i've sustained in recorded history. [of course i only began recording history, weekly at least, about 8 years ago. i can't vouch for what i might have experienced in the foggy days of my prior investing.] i am not happy with this drawdown, which i can pretty much ascribe to the sell off in pm's. i console myself with the fact that i'm flat ytd, while pm's are actually down, so i'm adding some value in other spheres.

i'm willing to ride with the moves in pm's, or at least have been willing to date, because of the conviction i have about them. it leads me to think that the risk is low relative to the likely reward. i've also outsmarted myself in the past trying to trade the pm's. specifically, i had a large position in cef when gld became available but slv had not yet come on the market. cef was at a premium, and my assumption was that the premium would be arbitraged away once slv became available. i therefore cleverly decided i would sell my cef, buy some gld and wait to buy slv once it became available, and avoid the loss of the arbitrage. it was at this juncture that silver rose from about 12 to over 15. and i missed that move, and in size in that i had a substantial position i had traded out of. so that was an opportunity cost, and taught me i'm not as smart as i'd like to think i am. and since then, btw, cef has maintained its premium because, i learned, as a closed end fund it is eligible for capital gains treatment, unlike gld and slv which are "collectibles."

4. re risk management. jim's short term trading approach exposes him to the risk of being wrong. he'll counter and say that this risk is limited by his stop loss orders- either placed or mental. i'll counter by saying that event risk raises the possibility of markets blowing through stop losses, by going to sleep with the price at one place, and waking up to the price being at a very different place indeed. but he'll counter that by pointing out that he controls the size of his positions, and keeps a big chunk in cash. and he'll be right. controlling the size of his positions is his most important risk control. what's yours?

Worthwhile input, jk, thanks for it.

I don't put in stop loss orders, preferring mental stops, which has taken me a long time to develop a means of how to keep up with max gain and then losses for every position. Finally devised a spreadsheet that updates everytime I import real-time quotes. One limitation is size of screen to be able to see all positions and to try to maintain actual awarenes of what they are doing. Another thing I have gravitated to believing is correct is to minimize the number of positions one has because it is easier to be attentive to fewer things, at least for me that is true.

[drumminj]

Re: gold to $650, silver to $9.80

jk - your description of drawdown with regards to evaluating risk, if I understand correctly, would show the max % loss one can assume to be exposed to (if past performance has bearing on future results). Did I get that right?

I see the value in that. The metric in an of itself appears to indicate how good one is at capturing potential gains in the investments one has chosen. It doesn't take into account the actual investments themselves, and whether there were better(or worse) opportunities available.

I'd rather be up 100% with a -20% drawdown then be up only 50% with a 0% drawdown. As such, I think discussion of such a number can be misleading, unless (as is the case here, for the most part) we're speaking of a specific investment - namely PMs or silver.

As far as my risk control....I'm relatively new to this game. My positions are small, and for the most part I'm sitting in cash and treasuries (yes, that is a "position" as well, I suppose). At times I use stop losses, which have mainly worked against me, and mental stop losses, which also have worked against me. So I won't claim to have a cohesive policy at this point. I try to take gains when I can, often selling too early, and cut my losses rather than riding the elevator all the way down.

[Guest]

Re: gold to $650, silver to $9.80

Babbittd -

Thanks for providing the only post here that stayed squarely on topic. I really would like to get some opinions on whether the dollar is going to make a channel busting move here. JK mentioned it - everybody else seems blind to this, or considers it irrelevant. It's not - it will have a massive impact on anyone still holding inflation hedge investments who is not a trader. Any other answers?

No, it won't. Bloomberg Dollar got a little boost from EUROland second quarter GDP numbers, oil price coming down and the dollar intervention Bart tuned us into. Inflation worries appear to already be tamping that boost. Dollar could get another little boost when the U.S. 2nd quarter GDP preliminary report is released on August 28th. (Rebate checks) After that, it is back into the doldrums for the rest of 2008. On 09/11, the U.S. international trade report will show exports hurt by trading partners suffering from recession. On 10/30 the advance 3rd quarter GDP numbers will bring very bad news.

[jk]

Re: gold to $650, silver to $9.80

drawdowns are a rough measure of risk, but you need to be careful and not really rely on them for that purpose. that's what i meant when referring to people's blithe assumption that past performance can predict future results. e.g. bill miller got famous for beating the s&p for [i think] 15 years running. now he's down big time, and worse than the index.

[Jim Nickerson]

Re: gold to $650, silver to $9.80

JK - your description of drawdown with regards to evaluating risk, if I understand correctly, would show the max % loss one can assume to be exposed to (if past performance has bearing on future results). Did I get that right?

I see the value in that. The metric in an of itself appears to indicate how good one is at capturing potential gains in the investments one has chosen. It doesn't take into account the actual investments themselves, and whether there were better(or worse) opportunities available.

I'd rather be up 100% with a -20% drawdown then be up only 50% with a 0% drawdown. As such, I think discussion of such a number can be misleading, unless (as is the case here, for the most part) we're speaking of a specific investment - namely PMs or silver.

As far as my risk control....I'm relatively new to this game. My positions are small, and for the most part I'm sitting in cash and treasuries (yes, that is a "position" as well, I suppose). At times I use stop losses, which have mainly worked against me, and mental stop losses, which also have worked against me. So I won't claim to have a cohesive policy at this point. I try to take gains when I can, often selling too early, and cut my losses rather than riding the elevator all the way down.

If you could succeed wouldn't you rather have a 100% gain with a 10-15% drawdown? I would.

Nobody I've known hits more than an occasional top and sells, if that many, and no one has much luck at buying at exact bottoms. In fact neither selling at perceived top or buying at perceived bottoms is the best way to try to play.

There are no perfect answers of which I have ever heard or read.

Bernard Baruch commented: I made my money by selling too soon.

I think trying to gain understanding of one's emotions of greed and fear is also worthwhile. One reason I read iTulip daily is to attempt to gather some sense of jubilation or despair as posters may reveal in their comments. When or if everyone is ecstatic, it might be time to consider selling, and vice versa. Of course, there is not so much gain from the flurry in geopolitical threads at the moment.