Zeal: Gold Stocks on Fire!

it begins collapseGold stocks have been on fire this year, blasting higher to 2014’s pole position of best-performing sector.
And this powerful rally’s internals are looking as good as its headline gains.  The recent months’ gold-stock buying has been on big volume, with large capital inflows. 
This is very bullish behavior revealing a sea change in sentiment and strong conviction among returning gold-stock investors and speculators.


Submitted by Adam Hamilton, Zeal:

Naturally price action is the most important technical indicator, exposing underlying supply-and-demand trends for anything.  The shares of precious-metals miners and explorers have surged this year because investor demand exceeds supply.  The capital flowing into this beaten-down sector is overwhelming the number of shares sellers are willing to part with, bidding up stock prices and driving their sharp rally.

 

But the strength of rallies isn’t fully apparent through just their price moves.  Trading volume, how many shares change hands daily, is a critical secondary indicator.  The strongest rallies advance on big high-volume buying, showing widespread investor interest and broad capital inflows.  The more volume that drives any rally, the greater its momentum, staying power, and ultimate gains.  Volume reflects vigor.

 

One of the many problems plaguing this past year’s Fed-driven general-stock-market levitation was the low-volume buying that drove it.  Low volume shows low conviction, traders begrudgingly buying shares in moderation since they doubt a rally’s durability.  Low-volume rallies are often more the result of a lack of sellers than any meaningful buying.  Thankfully this certainly isn’t the case for gold stocks in 2014.

 

Stock capital has been flooding back into gold stocks and silver stocks at large to unprecedented rates, resulting in some of the highest trading volumes seen in their entire secular bull!  As a long-time student of the markets, I’m just amazed.  You couldn’t ask for a better high-volume rally to reflect the universal shift in sentiment now underway.  Traders are flocking back to 2013’s most-hated sector, hunting big gains.

 

For better or for worse, the stock markets are becoming increasingly dominated by exchange-traded funds.  Many investors and speculators love the convenience of ETFs, preferring to let professionals do the individual-stock research and picking for them.  The ETFs’ diversified holdings greatly reduce the company-level risk, but at the expense of the far-larger gains won by buying the best individual stocks.

 

The flagship gold-stock ETF is Van Eck Global’s Market Vectors Gold Miners ETF, better known by its symbol GDX.  GDX currently holds 36 gold and silver miners, including all the elite majors and many of the bigger mid-range producers.  It is well-constructed and a great proxy for the precious-metals sector.  With more and more traders choosing GDX over individual miners, its volume also reflects this sector’s.

 

Unfortunately comparing raw trading volumes over long periods of time tends to be misleading.  Back in late 2011 around their record highs, gold-stock share prices were high.  And wallowing in epic despair near the end of last year, gold-stock share prices were very low.  So the same daily trading volume in December 2013 reflected far less actual investor interest and buying than it would have in September 2011.

 

The solution to making trading volume comparable over wide share-price ranges is a simple construct called capital volume.  It multiplies each day’s trading volume by its closing share price, showing how much money actually changed hands that day.  These capital flows are comparable over time regardless of big swings in share prices.  GDX’s capital volume this year reveals surging investor interest in gold stocks.

 

Zeal022114A

 

GDX’s raw daily capital volume is rendered here in red.  Trading volume is extremely volatile, especially in gold-stock land.  It’s not uncommon for precious-metals stocks to see massive volume spikes running at 10x to 20x their 3-month averages on big news days!  This makes analyzing raw volume difficult, as the signal-to-noise ratio is usually low.  Moving averages can distill this great volatility into usefulness.

 

The yellow line above is the 21-day moving average of GDX capital volume.  Why 21 days?  That’s the average number of trading days per month, so it’s effectively a 1-month average.  That smoothes out the wild extremes in trading volume, yielding a dataset much easier to interpret.  And it reveals the incredible internal strength behind this year’s sharp gold-stock rally, with some of the highest volumes of this bull.

 

Before we dig in further, realize that trading volume is a direct function of prevailing sentiment.  Traders buy and sell most aggressively when they are the most emotional.  Greed and fear are the two extremes, with sentiment swinging back and forth between them like a great pendulum.  But these emotions are certainly not symmetrical.  Greed builds gradually over a long period of time, while fear flares rapidly.

 

So selloffs, particularly the material and sharp ones, always witness higher volume.  When stock prices are falling, traders desperately stampede for the exits in a frantic frenzy.  Thus volume spikes in selloffs are a given, always expected.  But rallies are an entirely different story.  Since greed grows slowly, the resulting buying is spread out over a longer time span.  Thus rallies tend to be lower-volume events.

 

So high-volume ones really stand out.  For most of the last several years, the 21dma of GDX’s daily capital volume meandered sideways in a consolidation trading range.  This ran from roughly $450m on the lower support side to $900m on the upper resistance end.  This is very small for an entire sector, but remember that most individual gold-stock trading still happens outside of this one GDX gold-stock ETF.

 

Gold stocks peaked at all-time highs in early September 2011, when GDX’s price briefly exceeded $65.  Leading up to that top, the highest the 21dma of GDX’s capital volume climbed was $990m.  You can see the spike above $1b in this chart, but that was driven by the subsequent sharp selloff.  So the high-water mark for high-volume buying in gold stocks’ entire secular bull is essentially $1b in GDX 21dma terms.

 

Just this week, this same gold-stock volume proxy surged to $960m!  This is truly mind-boggling when you think about it.  Back near their all-time highs a few years ago, prevailing gold-stock sentiment was quite bullish.  While mainstream investors didn’t care about this obscure sector, contrarians generally loved it.  In the post-2008-stock-panic period at least, gold-stock sentiment has never been more favorable.

 

Fast forward to the end of last year.  Gold stocks were all but obliterated in one of their worst years ever, crushed by a wildly-anomalous down year in gold.  Thanks to the Fed-driven stock-market levitation igniting epic differential selling pressure in the flagship GLD gold ETF, gold and silver both plummeted to their worst annual losses in 32 years.  Gold’s 22.8% free-fall in 2013’s Q2 was its worst quarter in 93 years!

 

The cratering precious metals led to wildly-overdone gold-stock selling.  Last year alone, GDX’s price plummeted a gut-wrenching 54.5%.  Gold stocks have never been more hated than they were late last year.  As I was pounding the table about at the time in mid-December, gold stocks were trading at fundamentally-absurd lows relative to the gold price that drives their profits and hence ultimately stock prices.

 

The flagship gold-stock index is the HUI, and late last year it had fallen to levels first seen over a decade earlier in August 2003 when gold was merely trading around $365!  With gold nearly 3.3x higher near $1200, it made no sense at all for gold stocks to be so ridiculously cheap.  Their prices weren’t the result of fundamental problems, but the most overwhelmingly bearish sentiment I’ve ever seen plaguing any sector.

 

So in stark contrast to September 2011 when gold stocks were in favor if not loved, they were universally despised in December 2013.  That exceedingly-rotten sentiment heading into this year makes the high-volume gold-stock rally we’ve seen recently all the more amazing.  In GDX capital-volume 21dma terms, investors were buying gold stocks nearly as aggressively as they did heading into 2011’s record highs!

 

This big-volume rally shows widespread buying, including from hedge funds.  They are out looking for the highest potential gains in 2014, and thanks to 2013’s extreme selling gold stocks are it.  The best-performing sector in any given year is often the worst laggard of the previous year (assuming that its underlying earnings fundamentals remain sound).  Gold stocks are poised for a massive rebound upleg.

 

Big-volume rallies also reveal high conviction among the investors and speculators buying the shares.  Despite loathing gold stocks just a couple months ago, traders are now convincing themselves that this new rally is something very different.  They have to believe the bullish fundamental case for gold, or else there is no way they’d be buying gold stocks so aggressively.  This rally has a very different character.

 

Interestingly the GDX capital-volume 21dma trend actually began to shift in early 2013.  The extreme and relentless gold-stock selling led to increasing capital flows out of gold stocks.  This culminated in the absolutely massive distribution witnessed early last autumn.  While it’s not clear in this chart, by the time GDX peaked in mid-August’s sharp short-covering rally, its capital-volume 21dma managed to hit $950m.

 

The giant spike up to $1420m in 21dma terms came in the subsequent selloff.  Gold-stock investors and speculators almost panicked when the mid-2013 rally collapsed.  They believed all the bearish hype and assumed the bottom was about to fall out of this sector as the year’s brutal carnage reasserted itself.  So they sold at unprecedented rates, driving the biggest volume spike the gold stocks have ever witnessed.

 

Provocatively this actually peaked on a rare major up day for gold stocks.  On September 18th, 2013, GDX rocketed 9.0% higher.  Its daily capital volume exploded to a dominating record $3.2b that day, literally off the charts!  What happened?  That was the day the Fed surprised by not starting the QE3 taper as stock traders widely expected.  This ignited enormous relief rallies in gold, silver, and their miners’ stocks.

 

But from a major-rally perspective, the sustained GDX capital volume we’ve seen in recent weeks is nearly the best of gold stocks’ entire secular bull.  If gold stocks continue higher in the coming weeks without a pullback, odds are this 21dma will easily eclipse $1b to hit a new rally record.  It is nothing short of extraordinary to see such big high-volume high-conviction buying after December’s total despair.

 

Being in the newsletter business, I’m blessed with endless feedback that helps me shape and refine my trading theses.  Back in December when I was screaming about what an epic buy the gold and silver stocks were, I was being ridiculed mercilessly in a withering stream of e-mails.  People were convinced I was an utter fool for being brave when everyone else was afraid, for buying cheap when few others would.

 

But as usual, that hardcore contrarianism proved wildly profitable.  As of this week, the last 3 stock trades in our monthly newsletter added since November were up 113%, 33%, and 44%.  The new stock trades added in mid-December to mid-January in our weekly newsletter were up 53%, 58%, and 37%.  Gold and silver stocks have just soared since those hyper-bearish lows late last year, growing our subscribers’ wealth.

 

Just 2 months later, this week I’m getting increasing numbers of e-mails from investors and speculators worried they have missed the boat!  Sentiment has shifted dramatically away from the extreme fear and despair of December, and greed is starting to creep in.  This mounting don’t-leave-me-behind mindset is even more apparent in the high-flying junior gold stocks.  Their volume spike has surged to all-time records!

 

GDX’s little brother is Van Eck Global’s Market Vectors Junior Gold Miners ETF, better known as GDXJ.  This flagship ETF for small gold and silver producers and explorers currently holds a whopping 68 stocks!  This includes all the major gold and silver juniors as well as many smaller ones, some of which are not even traded in the US and Canada.  GDXJ’s capital volume this year is gigantic, defying belief.

 

 Zeal022114B

 

There are probably words beyond loathed and despised, but my command of the English language is insufficient to know them.  If gold stocks in general were hated last year, the smaller ones were left for dead and abhorred.  While GDX plummeted 68.8% at worst since its 2011 high, GDX’s 81.4% drop dwarfed that.  The junior golds were so demolished that my business partner likened it to Alice’s rabbit hole.

 

Logic and fundamentals no longer applied, juniors were ultra-hated no matter how awesome their projects or production happened to be.  Share prices cratered so low that GDXJ’s custodians actually decided to execute a 1-for-4 reverse stock split right in the middle of 2013!  In my decades of trading, I’ve never seen anything like last year’s epic junior-gold carnage.  It was so ludicrous we probably won’t again.

 

You can see stock capital, the lifeblood of junior explorers, getting relentlessly sucked out of this sector in recent years in the downtrend in GDXJ’s capital-volume 21dma.  The selling wasn’t abating, but there were fewer and fewer traders left to sell so the capital volume dwindled.  By early December this metric of junior-gold-stock interest had fallen under $40m per day, a rounding error in nearly every other sector.

 

But when gold stocks started rallying as 2014 dawned, investors and speculators quickly started to grow interested in the abandoned juniors again.  The GDXJ capital-volume 21dma soon started surging in a massive way, shattering its multi-year downtrend.  And volume kept on rising, with this 21dma metric blasting to $136m this week.  There was also a record trading day with $267m of raw GDXJ capital volume!

 

Note above that both GDXJ’s capital volume and its 1-month average have never been higher since the birth of this ETF!  Investors and speculators are returning to junior golds in a huge way, they’ve never bought this forgotten sector at such high rates before.  This year’s volume spikes in GDXJ are just stunning.  I knew they were big before I built this chart, but my eyes popped out once I saw the actual data.

 

Within the space of 2 months, not very long in the grand scheme, gold stocks have catapulted from despised zeroes to rising heroes.  Investors and speculators alike are flooding back into big and small gold and silver stocks at high to unprecedented rates.  This high-volume buying can’t just be coming from the relatively small fraction of contrarian investors, it has to be from big funds and even some mainstreamers.

 

And it is likely just starting.  The main reason high-volume rallies are so exciting is they reveal great internal strength, which translates into momentum and staying power.  The higher gold stocks are bid, the more traders want them.  And the more traders want them, the more they buy.  Thus the virtuous circle of prices rallying that high-volume buying drives is very exciting and exceedingly profitable.

 

And despite the huge gains in gold and silver stocks already this year, they have vast room to run yet.  2013’s once-in-a-lifetime selling anomaly forced this sector to fundamentally-absurd levels that will take a long time to mean revert out of.  While GDX is up 30.3% since mid-December, it would have to rally another 75% from here merely to regain the ground lost in 2013!  The best is still yet to come for gold stocks.

 

GDXJ’s prospects are even more bullish since these junior stock prices were battered far lower last year.  Though it is already up a staggering 52.7% since late December, GDXJ would have to climb another 80% just to hit its end-of-2012 levels.  And those weren’t great.  Regaining its all-time split-adjusted high would require another 253% of gains from here!  The upside on precious-metals stocks remains vast.

 

While GDX and GDXJ are fine, at best they’ll merely yield sector performance.  At Zeal we’ve long done deep research to carefully handpick the elite individual gold and silver stocks with the best fundamental prospects.  These fantastic companies’ ultimate gains will multiply their peers’, giving far more upside for investors and speculators to reap.  Finding these needles in the haystack is hard work, but well worth it.

 

We share the profitable fruits from our ongoing labors and decades of experience in comprehensive fundamental reports on our favorite gold and silver stocks.  Once every few months we start with a population usually exceeding 100 companies, then research heavily to whittle them down.  Our dozen favorites are profiled in fascinating reports, available for $95 or less.  Buy yours today and learn about the best stocks!

 

To stay abreast of the markets from an invaluable contrarian perspective, subscribe to our popular weekly and monthly newsletters.  In them I draw on our hard-won experience, knowledge, wisdom, and ongoing research to explain what is happening in the markets and why.  And we recommend specific stock trades as appropriate.  All 664 stock trades recommended in our newsletters since 2001 have averaged stellar annualized realized gains of +25.7%!  Join us today for just $10 an issue, a steal.

 

The bottom line is this year’s new gold-stock rally is exceptionally high-volume.  Big capital is starting to flow back into gold and silver stocks, quickly catapulting their battered prices higher.  Capital volume in the flagship gold-stock ETFs ranges from nearly the best seen in any rally in this secular bull to new records.  Such strong internal strength in this rally can only mean funds and mainstreamers are starting to return.

 

And this is just the beginning.  The wildly-anomalous gold-stock selling in 2013 was so extreme that this entire sector was hammered to fundamentally-absurd levels.  So the gold and silver stocks still have vast room to rally merely to reflect today’s prevailing gold and silver prices, let alone the nearly-certain large advances these metals will make this year in their own mean-reversion uplegs.  Don’t tarry and get left behind.

 

Adam Hamilton, CPA

 

1 oz Silver Buffalo As Low As 79 Cents Over Spot!

 

So how can you profit from this information?  We publish an acclaimed monthly newsletter, Zeal Intelligence, that details exactly what we are doing in terms of actual stock and options trading based on all the lessons we have learned in our market research.  Please consider joining us each month for tactical trading details and more in our premium Zeal Intelligence service at … www.zealllc.com/subscribe.htm

 

Questions for Adam?   I would be more than happy to address them through my private consulting business.  Please visit www.zealllc.com/adam.htm for more information.

 

Thoughts, comments, or flames?  Fire away at zelotes@zealllc.com.  Due to my staggering and perpetually increasing e-mail load, I regret that I am not able to respond to comments personally.  I will read all messages though and really appreciate your feedback!

 

Copyright 2000 – 2014 Zeal Research (www.ZealLLC.com)

Comments

  1. Hope the stocks will lead Phyzz higher then…..only part of news on Stocks I care about.
    Long Long Long Long way to go until I’m not underwater on PM’s….so any up move is nice to see.
    Still won’t hurt my feelers to keep adding at these lower prices….

  2. LOL…OH BY THE WAY..ANDREW MAGUIRE IS CALLING FOR SILVER TO SKYROCKET ANY DAY NOW. I THINK THIS THE THIRD OR FOURTH TIME HE HAS MADE THESE RIDICULOUS CALLS ON SILVER AND GOLD AND HE HAS BEEN ABSOLUTELY DEAD WRONG. WHY KING WORLD NEWS KEEPS USING THIS GUYS TALKING POINTS WHEN HE HAS YET TO MAKE ONE SINGLE RIGHT CALL. HOW MANY TIMES HAVE THESE GUY CALLED FOR THE COMEX TO DEFAULT?? OR THAT DECLINING COMEX INVENTORIES ARE BULLISH FOR GOLD?? THE INVENTORIES HAVE DECLINED AND SO HAS THE PRICE OF GOLD!! 

  3. If you like a gamble, look at JNUG. It’s a 3x leveraged long on a bunch of American gold stocks if I understand it right. The short is JDST.
    JNUG went as low as 12 or 13 recently and has now seen 40. Yes, it triple as gold went from high 11′s to low 13′s.
    Both JNUG and JDST started about half a year ago around 40. At time, if you had one of each, you’d be on profit, and sometimes on a loss. This dynamic alone is very interesting in my book.
    See if stocks move for one to go up double in price, the other will half. You’ll have 2.5 in stead of 2.0. Interesting self-hedging strategy. And when one has brought a gain, you could take the wins and re-invest into the opposite side.
    Right now JNUG is close to its 2014 highs, but if it should drop back sharply, I will consider it.
    I will offer my view that any paper (and that includes full stock in name) are a risk in the light of rumoured systemic crash. All’s fair in love and war, and this world economy sure is at war.
    I like phyz so much I can’t bear to invest anything in paper, but in a way, I should try with a modest amount (relative to stack size). I know various ways to do it, and mining stocks are the least appealing to me, as mines are subject to nationalizations, drug cartel invasion, exploding wage and oil costs, environmental constraints, and especially dropping ore grades. Gold may do well the next years, but that guarantees nothing for the mines, let alone their stocks.

    • @XCSkater
      “…I will offer my view that any paper (and that includes full stock in name) are a risk in the light of rumoured systemic crash.”
      When you find miners you like and plan to keep, buy through your brokerage then Direct Register them.  That gets them out of the system and then, take the next step and once you convert them to share certificates, your counterparty is now the mining company itself and not the DTCC (banker system).  I am using this strategy on some explorers and juniors that aren’t really in play today but will be in the future.  Keeps you out of margin too!
       

  4. hromano1030  Are you still living in Thailand?  Are you and your family safe?   I’ve been reading that there is a lot of rioting and civil insurrection in Thailand lately.  What is the cause?

    • @AGXIIK Rice farmers being raped by Thai puppet Govt so I’ve heard … Rice farmers in the North pissed at Lin-Wat-Shina-Shill who’s probably trying to send them all bankrupt and sell their land to Western Large GMO Agra Business.
      Someone lobbed a grenade into a market and killed some innocent children, so maybe the White House have worked out that they can capture some more USD flight capital into US Treasuries if they burn up Thailand as well… a few grenades to catalyze the clash of two large groups of South East Asians already set to butt heads is a small investment for Western Finance Oligarchs, it’s also getting closer to China, so if it goes spastic Hagel can justify a mainland invasion on a new bridgehead to warm up for the China take down??? These people be crazy enough, even though we didn’t win Vietnam, we didn’t have excuses to use nukes back then … and didn’t have automated swarms of Military Drones fitted with aerial spraying nerve gas tech. Dronebama is itching to send out the Locusts.
      Next I expect the White House will set off a small nuke in India and fake that Pakistan did it … then London can shut the physical Gold deliveries off because of ‘unseen circumstances’ in world security… Gold and Silver Paper Ponzi can live a few more years.
       
      There is no coincidence on all of this world unrest climaxing at this particular point in time.
      “We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent.”
         — James Paul Warburg, February 17, 1950, appearance before the U.S. Senate Committee on Foreign Relations.
      Warburg’s (Kuhn Loeb) funded Bolsheviks AND Hitler… after they were key in the construction of the Federal Reserve.
       
      We are simply witnessing US and UK joint Foreign Imperial Policy. The Grand Chess Match is getting close to the inevitable board smashing karate chop; not Stalemate, but FAILMATE!!! Epic Fail!

  5. A thought occurred to me this AM.  It seems that most people, whether large scale investor or small, are rotating to just about every investment model except precious metals. Yes, appearances may be deceiving but they are appearances. This is not apostasy about precious metals; just an observation.
     The stock market is all the rage today, no matter that the fundamentals do not support the present prices.  
    US bills and notes are still attracting hundreds of billions into those malinvestments.
     Bitcoin is off 65% from its peak of $1,200 per BTC but it still gets coverage.
     Now gold stocks are getting run up:  And not because of their fundamental strengths.
    When will silver and gold get some respect?
    Precious metals are like democracy.  They’re like the Rodney Dangerfield of investments.  No respect, at least in the West.
    “Precious metals are the worst form of investment,  after we’ve tried all the others.”
     I do wish that we Americans  would “Chose the right investment after we’ve tried all the others’.
      Maybe we’ll get it right soon than later and get into the best form of investment.
    Now that I’ll screwed up the phrases, let’s see what else we can come up with
    Yeah, I know precious metals are not investments; they are insurance against the worst forms of investments. But still they are the dogs of the investment world.

    • @AGXIIK
      Smart eastern money has responded to the discount in metals. Smart western money is silently joining in.
      But dumb western money, which is the big bucks, responds to risen prices to buy rather than the other way around. This is why stocks keep getting support. Support the winning team.
      Some stackers got broken under $26 and have given up. Some of them may be back in the game now, but above $26 it could get pretty wild in terms of bullion demand. And $50 will unleash hell. Dumb money loves ATH’s. It’s a sign of strength rather than imminent crash to them. No way in hell I will buy mainstream stocks now. My (or any) country could be next to be “tapered” by the FED. This dynamic, would it mean that the US will be the last market to be crashed by means of taper? If the derivatives market somehow holds up, it will be a chance of a life time to short it, or simply any of the emerging markets about to be tapered. But who really is THAT smart?

    • “US bills and notes are still attracting hundreds of billions into those malinvestments.”
       
      AG, I posted this  http://americansabroad.org/issues/fatca/fatca-bad-america-why-it-should-be-repealed/  along with a portion of the article in the post about how China fooled the world.  Things will change starting July 1st, as far as U.S. markets attracting foreign monies into our markets.
       
      Definitely a possibiliity of causing a market downturn.

    • @AGXIIK
      “…It seems that most people, whether large scale investor or small, are rotating to just about every investment model except precious metals.”
      Never underestimate the power of the most POWERFUL price manipulator in the marketplace.  MEDIA COVERAGE.   Remember that most people get their investing ideas from this media.  The slams against gold and silver are absolutely and masterfully choreographed, and with excellent results here in the West.   Realize too, the percentage of people who use financial advisors, mostly brokers/representatives ar their stock brokerage firms.  These guys are absolutely committed to their fiat paper-based book.
       
      I had an interesting experience about a month ago.  I have an online brokerage account with Scottrade.  When I get checks to deposit, I personally take them down to the brokerage to deposit them personally.  Last time I went in, my old branch manager, who knows my opinions on what’s really going on had been replaced by a new guy… a veteran broker with a CV with all the top names on it and an attitude to match.
       
      So, one day, after market close, I head in there and meet the new boss… he immediately pulls up my portfolio and starts to try to work his ‘book’ with me… (to the extent an independent has a book) and start picking apart my strategy…  one of the other brokers in there rolls his eyes (he knows what’s coming next) as I asked innocently,  “Well, Cory, what would you suggest I should be invested in???”  He spouts off a half-dozen suggestions.  The setup is completed with my next comment:  “So, Cory, it sounds like you are fully onboard with the expanding recovery thesis eh?  He precedes to agree and offers a couple of lame ‘Money Hunny Talking Point’ justifications for it.  So, now, in a mildly louder than conversational tone so the whole row of brokers can hear me, I precede to give him chapter and verse on just why ALL HIS perspectives are crap.  This starts a conversation among us all that goes on for about a 1/2 hour.  With the exception of one guy who has been there long enough to have heard my rants before, all the rest of these guys are hearing it for the first time…
       
      The crowning moment comes when one of the newbies asks, “Why is it that we never hear about this stuff you’re telling us?  I had NO IDEA they are propping up the markets???”  The BS that comes out of the morning squawk box in that industry is mindblowing… (At Scottrade, it’s not a audio system, evidently they have a daily info page they get every morning.)
       
      So, I’m not at all surprised that most people in this country are in the crap paper investments.  Remember that this is what TPTB want.  They don’t want any moneyed independence out there they can’t control…  Dependencies are crucial to their implementation of One-World Government.  Money can be broken with precious metals.  Energy is a little tougher, but that’s one I am up to my ass in right now… every time I DON’T have to stop at a gas pump brings me a step closer to independence…

    • @Sovereign Economist
       
      Interesting story about Scottrade, SE.  Like you, I also have accounts there as well as accounts for my Mom, step-Dad, and wife.  Other accounts are at TD Ameritrade and Vanguard.
       
      But I do not look to any of these custodians for advice.  I use them only to buy and sell stocks, mutual funds, and ETFs and to do some research on what I need to buy or sell.  The last thing that I need from any of these folks is advice.  I particularly do not want them cold-calling me with their “ideas”.  Most of those will no doubt make them some money but not necessarily me any money.  Such is the nature of the beast known as a “broker”.  I have long chuckled at the thought that they are so named because that is what most of their clients become.
       
      As to physical gold and silver vs. brokers… yeah, these guys hate phyzz.  They do so for good (to them) reasons.  First, every dollar that goes into PMs leaves the account they profit from, reducing their income.  Next, money that goes into PMs rarely ever returns.  Last, they get no commissions from PMs because they do not sell them.  All this adds up to a better portfolio for those who diversify into some PM holdings and a lower income for their brokers.  Yes, these guys do have their uses but they also tend to be over-used.  I am thoroughly convinced that financial success in this world stems from minimizing the contact that one has with bankers, brokers, and lawyers.  That’s my story and I’m sticking with it.  :-)
       

    • I have several accounts with an array of online trading outfits.  Scottrade is my  ‘transactional’ account into which I pool a 10% portion of the holdings in order to take advantage of their banking option and draw cash to live on.  What started the convo with Cory was when he asked me if I had other accounts and would consider consolidating them into this one (THAT is their “Book” they never try to sell me anything except when I call them i.e.  he suggested that I had to have other accounts because he couldn’t possibly imagine there would be only one account with that mix of assets…. LOL!  HA!   That told me all I needed to know about his bona fides!   When he asked if I had any diversification, I told him I diversify at the company level so each company gets an asset class.., “That way, when one of you trading houses goes tits-up and bails-in, a la MF Global, I don’t lose more than what I’m willing to place with any one firm.”  So next, he goes, “Why don’t you keep your shares in “Street Name” with us?”   WHY?  So you can hypothecate them to be shorted against my own positions???”
       
      It’s like that.  I do my own research and help a lot of people work out the ways to get themselves out of brokerage-sponsored “muppet positions” that will leave them financial road-kill on the brokerage commission highway.   Shoulda seen the comedy show with a Morgan Stanley Smith Barney broker and a dear old lady friend of mine when she tried to get them to sell her muni-bonds in favor of withdrawing the proceeds to buy physical gold…  what a HOOT that was!!!  It’s a challenge in this day of QE liquidity that levitates the stock market, but hey, the battle for truth is getting a little easier to fight now that things are getting a little more crowded under the rug…
       
      Yeah, these sharks are spawned on Wall Street, but they are no less predatory out in the several States!!!   Geez, Louise!!!!

    • @AGXIIK >>>When will silver and gold get some respect?
      Gold may get respect if Central Bankers decide that they need to crucify the world on a Cross of Gold to keep the fiat fractional debt Ledgers intact, but SILVER will get no respect until every Central Banker on Earth is driven out of town or they die.
      Silver is Bankster Enemy #1 for 200+ years … Warewolves hate the silver bullet!

  6. copy that   @X C Skater   What is or are ATH’s?
    When the Fed tapers the rest of the world crashes.   When the Fed is in session, like most governments, no one is safe
    Many times I’ve read @willnotbeaslave and @sovereigneconomist talk about the nexus/alliance between DC and the City of London.  In my opinion, they will kill the whole world before allowing their positions to be taken down.  It would take something as large as a Coronal Mass Ejection or High Altitude EMP enhanced nuke to stop them. Or maybe just a direct hit while all members are in session.  After that the world might be safer.
     I am a bit extreme in my thinking but extremism in the pursuit of liberty and freedom is not unwise.
     I believe Putin might be thinking the same thing given that the EU, IMF, Fed and ECB are charging straight into his homeland.
    Ukraine is direct access to Russia.
     Da Alexi?
    Best idea we could all have is stay calm and stack on.  cheers  :-)

    • ATH = “AT The HIGHS”  corollary…  BTFATH = Buy The *ucker AT THE HIGH”
      Started out with the predecessor which was soon obsoleted in the land of QE to Infinity:
      BTFD = “Buy the *ucking Dip!”  or, as I liked to call it, “Bartiromo Talk For Dummies!”

    • @AGXIIK >>>It would take something as large as a Coronal Mass Ejection or High Altitude EMP enhanced nuke to stop them. Or maybe just a direct hit while all members are in session.
      Actually, the $7 Trillion+ since 1995 that has gone ‘missing’ at the Pentagon above their almost already Trillion Budget has been well spent on special tech to protect DC, NYC, and London (strategic ‘alliance’) … so no need to worry AG, when the CME arrives, the Beast will still function, but everything else will be in the sh*tter :P I’m glad the tax money has been spent for required protection of the Plantation Owners … too bad for the workers in the field.
       
      Interesting side note about the Chemtrails people talk about (you know … ‘kooky’ talk) is that they are known to contain high levels of Barium Isotopes and other metallics that can dissipate high levels of highly spread electrical charge in the sky … like large wires. I’m convinced that this technology has been developed to protect sensitive ground based electrical infrastructure (like cities or military bases/bunkers) from a major CME Event and/or EMF weapons (HAARP like tech that Russia and now China also has, or special EMP burst ballistics which I am sure someone has worked out by now in some Govt lab somewhere on Earth).
       
      Short Term Prediction: Crimean War Part II … deja-vu.
      Putin looked PISSED at the Sochi closing ceremony … I think he half smiled only once. Too bad for Poland, it was really starting to get back on its feet since WWII, SOROS money helped a little, but alas, to no avail!
       
      Long Term Prediction if Russia backs off: Mickey Says: ”May you live interesting times” … visit Chinese Disney World some day soon :P
      …when Disney has been off-shored we will really know hard times are nigh.
      The Fed has no Lever left to pull to fix the Disney Offshore Economic Indicator Index…a.k.a Dumb Sh*t Apathy Index.

  7. @Feed me the Bull  I wonder about how the FACTA and FBAR regulations will affect Americans with offshore accounts. If someone does not file these and has over $10,000 in foreign banks, the penalties and fines start at $50,000-100,000
    I doubt if there will be much repatriation of offshore funds.  Since these forms were rolled out, most banks refuse to accept American bank accounts.  Way too much risk. The heavy hand of the USG comes into play.
    The banks that accept these accounts can be smashed by the IRS and banking regulators for allowing ‘illegal offshore accounts’.  Since then the FBI and IRA has done major damage to the Swiss banking system, making it anything other than secret. Most foreign banks are scared of the FBAR.  They prefer to launder money the old fashioned way for the usual suspects like drug lords, the CIA, terrorists etc., paying a billion here or there in fines for their laundering efforts.
    The Average Joe stands not a chance to get his money out of the US banking slaughterhouse. That is why I like precious metals.
    I was thinking more along the lines of monies held by central banks, foreign banks, governments, private equity funds, investors and private persons in the trillions of dollars who want to leave emerging markets, kleptocraptic regimes, war lords, war zones, either due to capital risk or due to QE tapering, with the fear of being invested in overpriced equity funds, bonds and the like.
     We may be a stinking ugly near-dead horse but to those who must find safe haven or are expected to keep the boss’s money safe, we are still be best looking horse destined for the glue factory.
    Like @EdB said, today it’s not so much trying to find a ‘risk free return’, it’s trying to find a ‘return free risk’; one with known or unknown risks that is still possible to accept.
    When served a turd sandwich, it’s best to take small bites. You never want to go all in with that delicacy.
    Some people still operate under the delusion that the US bond and stock markets are a good and safe place—for now. But hot money is flowing to the US despite what we understand to be some real systemic problems, given the nature of the overall criminal nature of the banksters and their political allies in this country. We may be seen as the least criminal in the wide world of thieving bankers. The rule of law still sort of applies. Sort of.
     US Treasuries are 2.75% and if rates don’t rise too much, most offshore investors consider that a reasonable return despite the Fed’s plans for bail-ins of any accounts, foreign or domestic.  One very telling indication of this plan to ringfence and then expropriate foreign investor funds is the fact that JPM has pretty much shut down outgoing wire transfers. The FIAT checks in but it can’t check out.
    Welcome to Hotel Kleptofornia.
    6 month treasury bills pay 0% return and are just a near term cash parking lot.  But that beats sovereign debt that is ugly or worse in the intermediate term.
    The Fed has not gotten around to stealing investors monies yet. The UST is not quite ready to default on the debt obligations. Not quite yet. More ringfencing is in order before they lower the boom. Maybe 1-3 years before that happens In the meantime there is still time for the US/UK markets to hoover up more investor funds before the door closes

    • @AGXIIK
       
      The gaping hole in all this FUBAR FATCAT (sp, lol) nonsense is that Americans can buy land in any country that permits us to do so and there are no financial regulations on the US books about it.  It is a terrific way to get money outside the US and keep it there.  At the appropriate time, the land can be used by the owner or sold off and the money kept in that country or converted to PMs, if allowed.  The US is not the only country that is aggressive at collecting taxes or at making up a host of arcane financial laws, rules, and regs, however.
       
      “The Fed has not gotten around to stealing investors monies yet.”
       
      No, they have not.  In fact, they are doing all they can to fatten up investors with juicy capital gains on stocks.  I’m sure that you see this (and perhaps correctly) as merely the fattening up before the slaughter.  That could well be the case.  But never underestimate the agility or the intelligence of many small but crafty investors.  The fact that we are not behemoths means that we can and do move VERY quickly when such moves are indicated.  As a stampede begins, the safest place is at the front of the herd.  Just be sure to run like hell and don’t trip.  ;-)
       

    • @AGXIIK
      “…Some people still operate under the delusion that the US bond and stock markets are a good and safe place—for now. But hot money is flowing to the US despite what we understand to be some real systemic problems,”
      It’s important to realize that the Fed KNEW DAMNED WELL that tapering would disrupt the emerging markets, forcing them to raise their interest rates to arrest capital flight, while correspondingly smashing their economies from the resulting higher interest rates.  They knew further that this would then cause billions to flow back into the Dollar and prop it up for yet another day!!!  That’s the ugly back story  to the taper… as it shows how desperate they are to prop the dollar up now, and they’ll blow the US economy into oblivion to accomplish this.  The chaos this has spawned everywhere is scaring the money back into the least ugly horse in the glue factory, the US dollar but it’s key to the globalist plans to prick the world bubble right now… this should give the thinking man a real insight into where the banker’s power is truly centered… right where their wagons are circling…

    • @Ed_B
      “… In fact, they are doing all they can to fatten up investors with juicy capital gains on stocks.”
      I think there is another piece to this puzzle — and it doesn’t get much play in the ordinary conversation and awareness..  Those gains you allude to benefit a tiny group of folks countrywide.  But the stock market serves a greater purpose for the optics it provides.  If they don’t give people SOMETHING to point to to suggest that  things could be getting better, they are deathly afraid people might rise to revolt.  Seriously, look at what’s going on all around the world now vis-a-vis social unrest.  Argentina, Turkey, Thailand, Venezuela, Greece, Portugal, and several others my flouride-addled brain has spaced at the moment… (I exclude Ukraine, as that one is more a political issue than financial, at least at this moment although it can certainly morph into a financial morass in a heartbeat)  Most of this is financially based and took root in the heyday of QE.  The only reason we are so calm in the US is because our dollar is the world’s reserve currency… i.e.  all that gasoline we’ve put in our cars since 1973 HASN’T BEEN PAID FOR YET!!!  (It’s in treasury paper we gave OPEC — so we STILL OWE FOR IT!)  So, we can afford the food price increases…

    • @Sovereign Economist
       
      “I think there is another piece to this puzzle — and it doesn’t get much play in the ordinary conversation and awareness..”
       
      I agree completely.  In fact, I would be VERY surprised if there weren’t several other pieces to this puzzle.
       
      “Those gains you allude to benefit a tiny group of folks countrywide.”
       
      Now this is something with which I cannot agree.  MANY people own stocks via their retirement plans.  A rising market lifts their spirits considerably just as a falling market dampens them.  What was the amount in 401K and other retirement plans?  $21T as of mid-2013?  Something like that.  That money represents a LOT of stock ownership and is surely is not all at the top.  In fact, for a 401K plan to be IRS approved, such ownership cannot be concentrated at the top of the pay scale.  Granted that this money is not all in stocks and is tied up for the long term and unavailable for short-term consumption, it still belongs to those invested in their plans and a considerable amount of it is in stocks.
       
      “But the stock market serves a greater purpose for the optics it provides.  If they don’t give people SOMETHING to point to to suggest that  things could be getting better, they are deathly afraid people might rise to revolt.”
       
      Agreed.  Additionally, those whom TPTB consider as friends and allies, as well as themselves, virtually all of them are invested in the stock market, so feathering their own nests at the same time has to have considerable appeal.  My own market analysis is that stocks are currently about 50% over-valued based on the usual metrics associated with companies and the valuation of their stock.  If so, then the level for the Dow 30 and S&P 500, respectively, would be around 8,000 and 900.  This is where I would expect them to be today given a free market that was not being manipulated by either the US Gov or the Fed.  Not that this is likely to occur, of course, but in an economic collapse, manipulation will very likely reach a maximum and then very rapidly decrease as the Gov and Fed find that they simply cannot maintain their control over the market.
       
      “Seriously, look at what’s going on all around the world now vis-a-vis social unrest.  Argentina, Turkey, Thailand, Venezuela, Greece, Portugal, and several others my flouride-addled brain has spaced at the moment…”
       
      I have looked at that and VERY seriously indeed.  When people are squeezed out of the food market via bankster caused inflation, which is much worse in poorer countries than it is in the US, UK, and most of the EU, they cannot feed their families even though they are working hard for a lot of hours per week.  They feel as if they are already doing all that they can and yet they still are doing very poorly.  Worse yet, how they are doing is getting worse with time and not better.  This creates hopelessness, then anger, and finally rage that boils over into violence.  This is especially common in places where there are only a few uber-rich and MANY who are very poor.  A thriving middle class is a terrific cushion against social instability, so very wealthy people are well and strongly advised to do what they can to promote not only the strength of the middle class but the mobility among the lower class to join that middle class in order to receive those benefits.
       
      “I exclude Ukraine, as that one is more a political issue than financial, at least at this moment although it can certainly morph into a financial morass in a heartbeat”
       
      That seems entirely appropriate but I fully expect Ukraine to become a financial morass before this is all settled.  It hasn’t yet, due to the obvious political problems, but give it some time and it very likely will move in that direction.  When it does, will this be due to bankster influence tilling the financial soil there in preparation to planting Western style central banking?  Perhaps.
       
      “The only reason we are so calm in the US is because our dollar is the world’s reserve currency… i.e.  all that gasoline we’ve put in our cars since 1973 HASN’T BEEN PAID FOR YET!!!  (It’s in treasury paper we gave OPEC — so we STILL OWE FOR IT!)  So, we can afford the food price increases…”
       
      Yes, that and a very generous welfare state that subsidizes those of low income such that they can buy food, even as prices rise significantly.  If we reach the point wherein rejection of the US dollar as a form of international trade settlement becomes common, then UST bonds, which are denominated in dollars and which pay interest in dollars, will also be of no value.  Without considerable financial system change, this will happen.  It’s really only a matter of “when” and not “if”.  While this could be a long time happening, it has been happening for a while now and none of us knows how much longer it could run before some very bad things happen. The discussion here on this point shows that all but a very few of us know that it will happen but not when.  So, as Charlie is fond of saying, KEEP STACKING!  And not just PMs, either but everything that we need to sustain ourselves and our families during a prolonged period of financial and social instability, if not outright collapse and chaos. 
       

  8. @Sovereign Economist   that is a great story.  I never had the knowledge to counter my broker’s BOOK   Not that I realized he had one but I did have a broker who managed my portfolio many years ago.
    Once I figured out that she could care less about my recommendations except that she could make a commission on them, contrary to her BOOK, I fired her and went it alone with Fidelity and self traded. I fired Fidelity 2 years ago when Warren Pollack discovered that Fidelity rehypo’s every shred of stock shares. Ann Barnhardt was also very convincing after her experience with MF Global and disclosures that our portfolios are just as vulnerable.
    One begins to see that one’s broker is not looking out for one’s interest, even to the extent that she would allow me to make trades that were downright stupid (I realized that shortly after the trades went sideways). That really hacked me off. She could give a raat’s ass if I made money.
    I made and lost a lot of money over the last 30 years but kept enough to eventually fire all the sons of bitches who wanted me to invest with them.  Now gold and silver are my best friends in the ‘investment field’ 
    Today I look at these self professed experts with the same regard as I look at some homeless person,  trying to tell me why they want me to give them a dollar AND they will work for food.
    Come to think of it, the last homeless person I saw WAS my former investment broker
    No dollar for you Ms. Smarty Pants.
    I can wash my own car.
     Thanks for nothing.
    The MOPE and disinfo regarding precious metals is so thick you can cut it with a knife, notwithstanding the MSM precious metals shills screeching about how silver will explode tomorrow.  Those ads haven’t changed in ONE Freakin’ word since 2011.  
    Sheesh.
    Today I do pretty the exact opposite from anything the MSM suggests would be prudent.  Just sayin’ but I’ve gotten some painful and expensive lessons and have worked hard to make up for lost time

    PS   Should I log your guess on the total number of bankers in the DEAD BANKER POOLS as 1 banker per $5 rise in  gold price.
    I think the price was about $1,320 when you pinged that message to me.
    Coincidentally the dead banker count is 1 at present time and gold prices are up about $6,  so you are on track.
    That Banker Mort happened on Fed 18.
    May 18 is the close of the contest.
    I just mailed the tied winners of the first banker to assume room temperature to Endthefed2012 and Jcctghf (that’s as close to his blog handle as I can get)  Each will get a 1 ounce AG buffalo.
    RGR (19) and Hayduke (15) have their DBP guesses in as of a few days ago. 
     

    • Good story on your broker experience as well, AG.  The simple fact is that NOBODY cares as much about our money as we do.  WE are the ones who will benefit or suffer when good or bad decisions, respectively, are made with our money.  Finally, investing really isn’t all that difficult.  It is something that anyone of average or better intelligence can learn to do successfully… and much more cheaply than can be done if someone is taking a slice of our accounts every time we make a move and sometimes even when we don’t.  A list of the fees that some of these custodians have dreamed up is ridiculous… inactivity fees?  Give me a break!
       
      Speaking of such things, I once had an on-line account at a brokerage house that wanted to charge me $50 when I went to close the account.  Whiskey Tango Foxtrot?  I took everything out of that account but the minimum of $5 in its money market segment and never looked back.  About a year later, they sent me a letter asking me to please close the account because it was costing them money to keep it open.  I smiled as I shredded that letter.
       

    • @AGXIIK
      “… I never had the knowledge to counter my broker’s BOOK”
      Heh heh, it’s what I did on my radio show every week for almost 3 years.  Lest anyone foolishly believes the brokerage “book” is confined within individual firms, it’s amplified by the “Money Hunny, CramerCrap MSM” and, YES, it IS THAT COORDINATED!!!!, My object was to counter the MSM parroting of Wall Street’s BOOK!!!   And when Chapman and I would get going, we took no prisoners.
       
      “…PS   Should I log your guess on the total number of bankers in the DEAD BANKER POOLS as 1 banker per $5 rise in  gold price.
      I think the price was about $1,320 when you pinged that message to me.”
      In a word, YES! So, when we get to $1400 on gold that’s 16.  After $1500 gold may rise faster than the reporters can keep up with the bodies. Cheap at twice the price and, maybe I’m a bit overzealous, but I really think that the gold price is going to be the ‘gas guage’ and instrumentation that best tells us how goes the implosion… ya know what ‘ah mean there, jellybean????
       

  9. Hamilton:  “Back in December when I was screaming about what an epic buy the gold and silver stocks were, I was being ridiculed mercilessly in a withering stream of e-mails.  People were convinced I was an utter fool for being brave when everyone else was afraid, for buying cheap when few others would.”
     
    Indeed.  Wise men who professed to be gurus in the mining sector have been beating the drum long and loud in this very way.  Those who followed that advice got screwed, blued, and tattooed over the past couple of years.  They watched in horror as mining stocks that were at all time lows only succeeded in getting ever cheaper.  It is no wonder that they are resistant to the suggestion that they should put even more of their hard-earned money into this money-pit spiral.  Yes, mining shares can recover and they can go on to make lots of money for those who bought them at the right price and who bought the right miners.  But they can also lose a lot of money for those who are unlucky… and if it wasn’t for BAD luck, the miners would not have had ANY luck at all in 2012-13.  If this is now turning around, that’s a good thing.  I hope that those who were lucky enough to buy in at the right time make lots of money.  Heaven knows, they will be doing it on the backs of a great many financial corpses… which is to say those who were not so lucky.
     

    • @Ed_B
      “…Those who followed that advice got screwed, blued, and tattooed over the past couple of years.”
      Ed, you could make a case for the lost opportunity of money better invested for a period in the stock market overall, but, the simple truth is that no one got screwed, blued, and tattooed, unless they were forced to sell, either because they got scared and lost faith or, because they got forced out due to margin calls.  In which case, I’d observe that they have only themselves to blame for failing to follow the rules…  “Sit tight and be right”  My miners have a basis a little higher than their value today, but I don’t regret holding them in the least, even as I have to admit to being thankful that the overall markets haven’t imploded… which is mostly a love-of-humanity compassion and a concern for everybody’s quality of life.  See, I really think that $7000 gold and $100 or more Silver is going to be a MIXED blessing… it will be worth a lot when the world around is worth a lot less… and there’s only cold comfort there. That said, without phyzzz, there’d be no “comfort” at all…
       
      Yes, people could have used the money in the general market and would have made more money, but, at what risk???  I couldn’t take that gamble, knowing what is really holding those markets aloft.  Sleeping well at night is something this old fart considers a necessity to his well-being, not to mention his curmudgeonly attitude in the face of sleep deprivation…

      I am reminded of Ben Graham’s allegory of Mr. Market.
      Mr. Market is often identified as having human behavioral manic-depressive characteristics, it:

      Is emotional, euphoric, moody
      Is often irrational
      Offers that transactions are strictly at your option
      Is there to serve you, not to guide you.
      Is in the short run a voting machine, in the long run a weighing machine.
      Will offer you a chance to buy low, and sell high.
      Is ‘frequently efficient…but not always.

      This behavior of Mr. Market allows the investor to wait until Mr.Market is in a ‘pessimistic mood’ and offers low sale price. And the investor is free to purchase at that low price…

    • @Sovereign Economist
       
      “Ed, you could make a case for the lost opportunity of money better invested for a period in the stock market overall…”
       
      Yes, I could but that was not my point.
       
      “…but, the simple truth is that no one got screwed, blued, and tattooed, unless they were forced to sell, either because they got scared and lost faith or, because they got forced out due to margin calls.”
       
      Well, that’s ONE version of the truth.  It seems to be yours but consider that not everyone who invested in mining shares had experiences that were anywhere near as good as yours.  Any number of the junior miners, for example, had losses of 80-85%.  That is a serious whack off of their investment.  Now, a nerves-of-steel investor, such as yourself, might not have a problem with that but I would think that most people would.  I know that I would.  There is a limit to how much of a drubbing people are willing to take before they surrender their position and get out.  Me, I would have used stop loss orders and been stopped out long before that time but not everyone who invests uses these.  I can see people selling their shares at large losses simply because something changes in their life and they need money… NOW.  Or they get cold feet.  Or whatever.  You may not think that they got screwed, blued, or tattooed but, ask them what they think of it.  I am sure that you will get more than an ear-full.  Now, I am not saying that any of these folks were premier investors or fault-free in their investing by any means.  They listened to people whom they trusted to know what the situation was and invested their money accordingly.  I’m not in that position and probably never will be but I do sympathize with those who are. 
       
      “In which case, I’d observe that they have only themselves to blame for failing to follow the rules…  “Sit tight and be right””
       
      Which is just fine if one can do that.  Some can’t, for any number of reasons, and my comments addressed their position.  Clearly, that is not your position and I am glad that it isn’t.  :-)
       
      “My miners have a basis a little higher than their value today, but I don’t regret holding them in the least…”
       
      Well, that’s good.  I am happy that your mining shares have done better than some others.  With a minimal loss and the potential for significant gains, why wouldn’t you be satisfied with their performance so far?  Again, my comments were addressed to those who have lost well over half of their money if they had to sell and noting that this is why they are gun-shy about investing even more money in miners on the word of yet another stock-touting guru… and one who seemed surprised that people didn’t jump in with both feet at his nod.  If they can hold on for better days, then clearly, they should do just that.  You and I have both done that.  I had large paper losses in 2001 and again in 2008 but have never sold a share during such times.  Because of this, I’ve had minimal real losses and substantial gains during market turnarounds.
       
      “See, I really think that $7000 gold and $100 or more Silver is going to be a MIXED blessing… it will be worth a lot when the world around is worth a lot less… and there’s only cold comfort there. That said, without phyzzz, there’d be no “comfort” at all…”
       
      I think that this sentiment is fairly common among the older people on this web site.  Yes, we have a decent amount invested in PMs and they are our financial insurance against hard times / dollar default / currency devaluation but we will be MORE than happy if the only role these ever have will be as inflation fighters in our portfolios.  If my kids and grand kids can have healthy, happy, and prosperous lives without a serious monetary collapse, that would be worth WAY more than all the PMs in the world, let along the small bit that I have collected.  As you say, though, even cold comfort is better than no comfort at all.
       
      “I am reminded of Ben Graham’s allegory of Mr. Market.”
       
      Indeed.  Mr. Graham is one of the great investors of all time and Warren Buffet’s mentor.  He is the father of value investing, which I consider a more reserved and perhaps better over-all method of investing.  Growth and Value investing styles tend to return similarly over long periods of time with Value investing having a somewhat smoother ride during that time.  The bulk of my own portfolio is invested in mutual funds and ETFs that are either blend or value shares with some leavening of small / mid-cap growth issues for a little extra zip in market turnarounds.
       
      But I leave investing in miners to those who have the knowledge to do so successfully.  Apparently, you either have that knowledge or pay someone for it.  Either is fine.  But there are many areas of investing and I am in a number of them.  I do not need to be in all of them.  Cheers and good luck with your miners.  May they pay off as well as you hope they will.
       

  10. I know folks wince when I say things like this, but Equities are only really attractive where their gains and dividends are in real money, the value of which can’t be depreciated or utterly destroyed by any government decree.

    Desires to ‘become wealthy’, even by falsely self-delusional means, drives folks into crushing debt and mis-calculated ‘investment’. Such is the evil of credit-’money’. It corrupts everyone at all levels.

    Paper Rots, Coin Does Not.

Speak Your Mind