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Are We Running Out of Silver?
(Excerpt from the Casey Research 2011 Silver Investing Guide)
Silver has been on fire over the last three years — substantially outperforming its spotlight-grabbing cousin, gold.
Because we believe this bull run is far from over, we advise investors to always maintain exposure to the precious metals markets. Even if you haven’t yet participated in the run-up of both gold and silver, I’m glad you’re ready to take a look at the investment potential of silver.
The question every investor faces in a bull market is: Do I buy now, anticipating prices will continue higher — and chance getting clobbered if a correction arrives? Or do I wait for a pullback and possibly miss out on big gains? There’s risk either way.
Our goal in this report is to suggest various ways you can invest in silver, while underscoring the importance of patience and discipline. Investors must remain patient to avoid chasing silver, overpaying, and draining their cash. Instead, we recommend that you use temporary price declines to steadily accumulate the best silver stocks and your preferred form of bullion. Continue reading
Test Your Knowledge of Silver
Silver is a hot topic these days even with the recent sell-off. So how much do you know about the metal and its underlying fundamentals? What caused its price increase? Mine production? Household use? Government holdings?
In this article Jeff Clark, Senior Precious Metals Analyst for Casey Research and Big Gold, “the best precious metals newsletter for the prudent investor” tests your knowledge of silver.
Can You Pass the 2011 Silver Quiz?
CPM Group recently released their 2011 Silver Yearbook, one of the industry’s most comprehensive sources of information on the silver market. Though mostly a reference book, I uncovered some interesting facts that paint a decidedly bullish picture for the metal going forward.
If you’re a silver investor, or are concerned about the recent selloff, you may find the following data very compelling. It provides an inside track on the market and will certainly make us all more knowledgeable investors.
For fun, I put what I read into the form of a quiz. See how many you can get correct… Continue reading
Government Eliminating Freedom Left and Right
This week two major court cases chipped away at our 4th amendment rights one by the Indiana courts and another by the U.S. Supreme court. Pretty soon they might as well just cross out the 4th amendment because it will be totally meaningless. In the Indiana case the court ruled that it is against the law to resist officers trying to enter your residence even if they don’t have a warrant and are entering illegally. In the Supreme Court Case they ruled that officers could enter a house without a warrant and subsequently arrest the occupants if they heard noises that made them assume that evidence was being destroyed.
In the following article David Galand addresses the herd mentality and why we as freedom loving Americans are putting up with this, how it affects our investments and what we can do about it. Tim McMahon, editor. Continue reading
Is Gold in a Bubble?
In his May True Wealthnewsletter, Steve Sjuggerud said,
At the peak of an asset bubble, prices go “parabolic.” In a bubble, the asset’s chart goes from “humming along nicely” to “straight up.” A good example is the NASDAQ back in 1999-2000. In less than six months, the NASDAQ just about doubled before it peaked in March 2000. That was the parabolic stage for the Nasdaq.
Gold is still in the “humming along nicely” phase. It hasn’t gone parabolic yet. And then he went on to give some interesting statistical and some anecdotal evidence to prove his point.
However, In the following article Patrick W. Hejlik CEO of Fourth Quadrant Asset Management presents his arguments as to why Gold is in a bubble. As many long time readers know we have been bullish on Gold for a while. Patrick is a pretty smart guy managing assets to minimize risk while maximizing profits and I respect his investment acumen so it is interesting to note that he is currently holding gold puts (i.e. he is betting gold will decline sharply). So in the interests of presenting both sides of the debate I am presenting his reasoning here. Tim McMahon, editor.
Gold is in a Bubble
By Patrick W. Hejlik
Like many Wall Street expressions, the term bubble has been so tossed about in recent years that suggesting an asset class is in a bubble is akin to the boy who cried wolf. In an effort to set the record straight, a bubble in asset prices is when speculative forces overtake the fundamental underpinnings of an asset and drive prices to levels that are unsustainable when related to those fundamentals. Based on that definition, it is our opinion gold has reached this classification.
Do You Need to Know Financial Trends to Plan for Retirement?
By Tim McMahon, editor
When planning for retirement, most financial planners make a lot of assumptions about financial trends and how much money you will spend per year. They estimate the average inflation rate, the average return on your investments etc. all in order to estimate how much you will need in order to retire. The problem is that they are all guesses… and it is hard enough to guess what the inflation rate will be next year let alone five, ten or even fifty years from now. Continue reading
How to Buy a Vacation Home
By Jeff Clark, BIG GOLD
For most people, there are some surefire luxuries that signify wealth, a few pearls of conspicuous consumption that say you’ve made it. For me, it’s always been a second home. My grandparents owned a vacation home in Arizona and then Florida when I was a kid, and it was an annual highlight to travel there every year.
But something happened on the way to my generation’s version of the American dream. Of all the people I knew that had second homes, only one acquired it through their own hard work and success. The rest inherited them.
With high unemployment, shaky business conditions, desperate governments, weak real estate demand, and a suspect stock market, owning a vacation home is not even on the radar these days for most Americans. Paying their existing mortgage is the primary concern, something millions of homeowners still aren’t able to do. So, how is it that I can suggest a way to buy a vacation home in these conditions?
Trends in the U.S. Dollar, Stocks and Gold
Today we have Chris Vermeulen “The Gold and Oil Guy” to tell us a bit about where the massive deficits will take the Dollar, Stocks and Gold. ~editor
Gold and Stocks Heading Higher with GDP Crashing
As most investors and traders are aware, the U.S. Federal government has run up significant deficits and the long term debt burden is becoming a drain on Gross Domestic Product. That being said, most economists are discussing the possibility of a major decline in the value of the U.S. Dollar going forward as inflationary monetary policy begins to strangle growth. While that view point may prove right over the long haul, in the short run most traders are not likely expecting the U.S. Dollar to rally.
The U.S. Dollar is expected to reach a multi-year cycle low in the near future. From the cyclical low, I expect the U.S. Dollar to regain a strong footing and work higher against the crowd. This is not to say that the U.S. Dollar will not eventually decline, but financial markets do not work that easily. Shorting the U.S. Dollar is a crowded trade and Mr. Market punishes crowded trades quite often by pushing prices the opposite of what the herd is expecting. Should the U.S. Dollar find a strong underlying bid, precious metals and domestic equities would feel the brunt force of such a move. While it remains to be seen if the U.S. Dollar rallies, if it does it will catch many traders and economists by surprise and the unwinding of the short dollar trade could unleash a wave of buying that we have not seen for quite some time.
Let’s take a look inside the market…
Rebalancing Act for Your Portfolio
Has the latest pullback in precious metals and related stocks given you a sickening feeling in the pit of your stomach?
If so, then consider rebalancing – because that sinking feeling is a good signal that you are probably overinvested in the sector. I’ll have more on that topic in a moment, but first to the question of where to invest, if not in precious metals and resource stocks? That is a question we get quite often.
For the time being, as least for those without international obligations, the carrying cost of cash is very low. Thus you can reduce your near-term risks, albeit at the cost of forgoing upside. If at one end of your portfolio “barbell” you have a 20% to 33% allocation to precious metals, having the same sort of allocation to cash on the other end of the barbell brings overall risk down while giving you the liquidity to act as additional opportunities arise. Continue reading
Investing in Extreme Markets Video
Wild swings are occurring with unprecidented regularity in various markets across the spectrum. One minute you have 98% bullish sentiment in one market and the next minute it is 92% bullish in an entirely different market, (often in the extreme opposite market), So what does this mean for the overall investing community?
In the video below, Robert Prechter talks to Yahoo! Finance Tech Ticker host Aaron Task and Henry Blodget about how “People have fallen in love with Buying” and since the FED funds rate is almost non-existant people are chasing yields and going all over the place looking for somewhere to put their money.
Get Up to Speed on Robert Prechter’s Latest Perspective — Download this Special FREE Report Now.
(Note: This interview was originally recorded on September 20, 2010)
The Next Investment Disaster
By Susan C. Walker
When money market funds, mutual funds and CDs yield next to nothing, the old itch to find higher yields kicks in. That may be why Bloomberg has had a field day reporting on the latest attempts to find higher yields. For example, from an October 7 story: Private-equity firms are taking advantage of record demand for high-risk, high-yield debt to pay themselves dividends, saddling their companies with additional loans and bonds. … Shareholder payouts funded with bond and loan issuance climbed to $24.2 billion this year, more than triple the amount for all of 2009 and the most since the Standard & Poor’s 500 Index peaked in October 2007, according to S&P’s Leveraged Commentary and Data. (Bloomberg, 10/7/10) The yield may be high today, but Robert Prechter warns that it’s a dangerous game to play. He sees it as tomorrow’s next investment disaster. Read more
