Thursday, April 21, 2011

When to Sell Gold and Silver

Almost time to head out for Antigua. I may have a little something up tomorrow night if I have some time. I think the following post is not the post I would want to write before I go on vacation but I am going to let it rip anyway. You know how it goes when I let it rip, right?

When to Sell Gold and Silver
For weeks now I have seen consternation like I have hardly ever seen about the metals gold and silver. While most of the discussion has been about silver, for the purpose of this post I will just say "The Metals" and you should know what I mean. In places where I mean more one than the other I will make note.

Ok, everyone wants to know when to sell the metals. Let's just cut to the prices and then I will get into my main theme.

Are you ready? Here you are:
-Sell Silver at $50
-Sell Gold at $1550
Got it? And dump all those laggard miners, I stopped that crap back in 2005 on any scale, they suck. Write it down if you have to. Feel better? Oh, you want to know why? Well that gets interesting.

If you are so worried about the metals being in a bubble then it is time to let loose. I have no idea where you bought yours, but a hefty profit should come around the $50,$1550 mark. Take it. Move on.

If you are watching the prices daily waiting for that epic moment when "the top" is in you should know how that goes. Take the money and run. If you are leveraged, overextended, or losing sleep then it is time to move on. May I suggest some other equity candidates that Kid Dynamite highlighted in a great post (which triggered this one) to try out:
-LULU
-OPEN
-SINA (on sale today!!!)

If you are making money for clients and are way up, take my targets and tell them Economic Disconnect told you to do it. If metals go crazy from here you still booked a huge win (blame me), if it collapses you will be a hero. What is not to like?

So, I am selling all mine at that point, right?

Wrong.

The time for debate is over, I am not trying to sell you anything (but I would LOVE pageviews! lol) or convince you of anything. I quit that a while ago. I am not selling because I believe my reasons for owning the metals are a long term structural issue that is not going to resolve either soon or without changes to the wonderful system we all know and love.

I am not selling because, to use a conversation from a favorite film "No Country for Old Men":


The series of dialogue is especially fitting:
Wells
We don't have to do this. I'm a daytrader. I could just go home.
Chigurh
Why would I let you do that?
Wells
I know where the money is.
Chigurh
If you knew, you would have it with you.
Wells
I need dark. To get it. I know where it is.
Chigurh
I know something better.
Wells
What's that.
Chigurh
I know where it's going to be.


Sometimes you have to put the charts away, ignore the candles, and forget the latest analyst calls. If you want to know where the metals will be this week, next month or even by years end, take the above prices and walk. I only care where they are going to be. I think they will be higher. Much higher.

Time frame? Long term. I know it's a hard concept. Long term I see things that firm my belief that silver and gold will be higher. I could get into it, but I have spilled virtual ink here for years explaining why. I would summarize that the notional value of money took a hard jab to the nose in the Dot Com bubble and suffered a Micky Ward body shot during the banking crisis and ongoing debt issues the world over.

I was buying the metals aggressive from 2002-2006. I never really looked at them until the 2009 panic (wow those metals really were a hedge against the end of the world huh? NOT!) and then I added more. I play some trading positions from time to time and those I watch, but that's a different game.

It was not until this week that I had an idea why many stock players hate the metals but go all starry eyed over a name like LULU. I think it is because the metals are an outside idea that Wall Street (I am using this loosely; I think you know the type) has no control over. When you buy (long after they do) and when you sell (right after they do) many stocks will be largely influenced by what major players tell you. Not so with the metals. Crazies do what they want.

The metals don't need anyone to do their IPO for big bucks (I am leaving out the newer paper ETF's and such; demand created them not a desire to sell them. Subtle but a difference). The metals don't give a shit, just like our beloved Honey Badger. Wall Street brought you the Nasdaq bubble and wonderful Mortgage Backed Securities and spread them the world over. The metals just showed up without an invite. I think this is a key point.

I think maybe Wall Street thinks people may know something they don't and that bugs them. No worries guys, it is just an idea. Maybe my type will go bust on this call. Then I buy AAPL.

Have a good night.

48 comments:

David Batista said...

Hmmm, I'm suddenly overcome with the strong urge to buy metals. Too bad I have no idea how to go about doing that. Or, rather, doing that RIGHT I should say.

Hey, have a good trip! Lucky bastard. :)

getyourselfconnected said...

Well David, if you want to talk about it, we are email buddies after all!

getyourselfconnected said...

This post may be the best post I have ever written.

David Batista said...

Yes, it is pretty awesome actually. I was even able to follow along this time! :)

I think I get the same sense that you have, about our long term outlook I mean. Certainly the financial fallout over the last several years has sobered me up to the realities of our paper money system.

I'll definitely take you up on the e-mail offer sometime. If not right now, then definitely in the future when I settle some things first.

Jennifer Hillier said...

Interesting post. Even though I've never bought any metals, your argument is pretty persuasive.

Looks like David and I are getting a bit smarter... ;)

Kid Dynamite said...

very very interestingly astute Chirgurh quote from No Country For Old Men!

Anonymous said...

"If you are making money for clients and are way up, take my targets and tell them Economic Disconnect told you to do it"

LOL! Reminds me of trading spaces.

"Mortimer, tell our clients we are revising our call on pork bellies to $38.50. Tell them, Mr. Valentime has set the price..."

getyourselfconnected said...

JH,
I try to open minds and entertain. Glad you liked!

Kid,
I thought it was the perfect exchange for sure.

Anon,
thats right, GYSC has set the price!

watchtower said...

Honey Badger FTW!

getyourselfconnected said...

I had a special treat today, will post in a bit.

sell gold coins said...

Thanks for the tip. sell silver a the time when its value is higher.

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