PM Daily Market Commentary – 02/25/2021
I was all excited about the “silver squeeze” a few weekends ago. At this point, I would need to see well reasoned argument to believe that it is real. A week ago, my wife reminded me that we have actual gold and silver for when the system bites the dust. Until then, I am predicting that it will go a little up and a little down and a little up and a little down, but not much real action. I’m starting to wonder if I could buy and short the paper stuff over and over again, but I don’t have any experience shorting.
For example, I just purchased PHYS at 13.78 when comex gld is at 1728. Let’s predict that paper gold (comex gld) will go back into it’s little home in the low 1,800 in the next week. I then sell and short it. Couldn’t I make some money doing this over and over again.
Reminder, I know almost nothing about this stuff.
It might be smart to buy this first so that you can know the exact moments the market is going to turn. That way you won’t bet wrong and lose money. PM me and I’ll give you a good deal. (Disclosure: It is gently used)
I think embedded in your sarcasm there is a some advice, but since you appear more interested in lifting yourself up by putting me down, I won’t bother looking for any wisdom in your post.
Honestly, I’m ready to change course. I thought I was following the Peak Prosperity core principles. I followed just about every one of them, but now I look back and just about everyone else is well on their way to a good retirement and I’m still waiting for doomsday.
I’m tired of money in my bank account that goes nowhere. I’m tired of the debate of deflation or inflation or kaBOOM. It’s seem pretty clear. Inflation.
So, any advice or wisdom that comes my way, I would love to hear it. I love to learn. I’m okay making mistakes. Save the sarcasm for those that have been investing all along. They have the time and money to waste on it.
Oliveoilguy I’ve been looking for one of these for years. It works, right?
I was curious about graphene a few years back. I read up on it a fair bit. It was very expensive to produce from graphite at the time, but apparently now it is much cheaper and its applications are endless.
There are ways to examine the fine mesh for microscopic flaws now, without causing damage. That tech has just recently been tested out, like recent within the last week or so. So it’s worth checking this material out, as well…particularly if you are looking at graphite already.
Whoknew79, Yeah, ouch…it smarts when posters make remarks without knowing the particular circumstances of a fellow poster.
I think the main point is that pms are so impossible to predict, nobody can give advice about it with any degree of certainty.
Unfortunately, like you and many others my husband and I operated from the logic of how things should play out. In my case, my sister bought a place in West Vancouver that is now worth multi millions of dollars.
My husband and I passed on getting anything similar because we were doing the sensible thing and wanted to have money left over in the bank after we bought a place.
Everyone who leveraged themselves to the max to buy real estate did the exact financially wrong thing, but it turned out to be the right thing, because the trend was their friend. Oh, that and hot Asian money and low interest rates.
So yeah. I understand wanting to tear your hair out.
And yet…right now it looks like cash may be king at some point. If the pendulum ever swings the other way, interest rates finally go up, cash is exactly where you want to be. Ordinary people will be able to afford modest life styles without going berserk from stress, retirement will be an affordable goal and there will be affordable places to rent.
I always try to remember that if my gold/silver go to zero because shit got fixed, I would happily take that deal. I’d rather leave my son a functioning world than a bunch of gold coins and instructions on how bribe border guards.
It’s always about making the best of the situation rather than scheming for how you are gonna make out like a bandit when the situation unravels. I scheme too, but I try to keep it in check. I’ve raised a child for 8 years now, and during most of that time, precious metals have kicked me in the balls every time I looked at them.
Glad I ‘ve gotten something else done in the meantime. Also Chris was warning last year about a complete collapse in US oil production and there is a general rotation into commodities happening. Seems like a chap could make some money there.
What’s an easy way to buy PSLV now that Robin Hood banned it?
What effect are folks predicting the $1400 stimulus checks to have?
…A week ago, my wife reminded me that we have actual gold and silver for when the system bites the dust. Until then, I am predicting that it will go a little up and a little down and a little up and a little down, but not much real action. I’m starting to wonder if I could buy and short the paper stuff over and over again, but I don’t have any experience shorting.
So you are predicting sideways moves in the market. Let’s assume you are correct. Next move is up 5% (low 1800s). So, put in a limit order to sell PHYS 5% above the current price.
Once that happens, put in a buy order for 1730 again.
I recommend not shorting. Its a bit dangerous because – you could be wrong about sideways movement. (Let’s assume you have a 50% chance of being correct.) If you look back 5 years ago, gold was trading at 1050. Look back and see where you would have gone “short”. Maybe 1300? Then look what gold did next? It jumped up to 1600…and then once more to 2000! You would have lost a ton of money if you were short.
While the sun rises and sets in a predictable manner, prices of commodities do not act in the same way. Sometimes they drop for a long time. Sometimes they move sideways. Sometimes they rally for quite a distance. We must be humble in the face of future price movements. We simply don’t know where things will go.
If you think the current 1730 price will move back to 1800, and then oscillate within that range, a low risk plan would be to sell the move to 1800, and then wait for a move back down.
You must always ask, “what happens if I’m wrong?” (That’s the “humble” part – you assume you are not all-knowing, with perfect knowledge about the future). If price never goes back down to 1730, you will still make that 5% on the move to 1800. But you will then be in cash as gold moves higher. If you are ok with this, then that’s a great plan.
Of course if you are wrong, and it goes through 1800 and moves back to 2000, you will have sold at 1800 and be looking at cash – perhaps for years. But at least you won’t actually lose money, as you would if you were short.
So – to summarize – when you plan a trade, you must imagine two scenarios. “What happens if I’m right!” As well as “what happens if I’m wrong.”
Many people do not consider what happens if they are wrong.
Here’s trading boiled down to the simplest concepts I can think of.
Prices move in one of three ways.
See the chart above. Prices in an uptrend move higher in a rough band that is usually only visible AFTER the trend has changed. Once a few years have passed, you can look back and draw all these nice lines and see exactly when the trend changed. (I helpfully circled those points).
However, in real time, things are much, much less obvious.
So we guess, and we hope we are right – but we also acknowledge, we might be wrong too.
Today, I *believe* we remain in a gold uptrend. Price has dropped to the edge of the lower band. If my guess is correct and gold remains in an uptrend, then today was a good time to buy. One holding period might be – until price touches the top of the band again. Maybe 2200? Gosh that would be nice – a 27% gain!
Of course, if reality bites, and prices start moving sideways, I will be disappointed. I may end up losing money.
So, when you make a trade, the first question you must ask yourself is, “what’s the trend?”
As I said, I believe we are still in a gold uptrend.
I could be wrong. We might have transitioned to a “sideways” pattern. If I am wrong, then my trade will be much less likely to make money. And if we’re moving into a downtrend, then its practically guaranteed my trade will lose money.