Okay, as it turned out keeping your powder dry proved to be true.
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HI Nick,
Thanks for your insights. I agree with you completely and I am happy that I purchased Silver Quest when I did.
By the way, are you the Nick who I consider to be an old friend?
Best,
Big Al
Yes, it is, Al. As always I am thankful for the all the hard work that you, Trader Rog, and your guests do for this show. I am also thankful for the input that your listeners provide for the show.
Do you know what the outcome was of todays court date between Aurcana and Sprott?
HI Dave,
I will be interviewing Lenic at the Silver Summit.
I have been out of touch since about noon today so I do not have the answer right now. I will find out; however, and let you know.
Best,
Big Al
I am 60% invested in gold and silver and at much higher prices. I have been ridiculed for not getting out with a loss to preserve capital by friends and relatives who do not believe in holding pm. They continually point out to me articles and interviews from hedge fund managers who state that they are shorting the metals because the metals are finished. Combine this with the recent activity and one does pause to think. Do I rethink my position or do I stick with my beliefs that the gold and silver bull market is far from over. After hearing all the negativity regarding the metals on a daily basis, your show and interviews are a welcomed change.
You are right to hold. Selling now would only crystalize your loss. All of us have made, and will continue to make, less than perfect entries. From experience, I can tell you that you do not want to compound your mistake with a bad exit (sale). Only if you believe the bull market for gold is over, should you sell. Otherwise, hold on, look forward, and do not beat yourself up for something that happens to the best of us. Regardless of what happens over the next 3 days or 3 months, I am VERY confident that you will be happy you held your positions. The important thing is your confidence.
For what it’s worth, my friends and relatives were convinced gold was dead when it “crashed” from $730 back in ’06!
Matthew,
Your are SOOOOOOOOOOOO right!
Marc
HI Matthew,
You make a very good and valuable point.
I can say the same thing about silver. I had listeners laugh at me when I purchased it at about $14/oz.
As the old song goes, “Who’s Sorry Now?’
Thanks for your opinion.
Big Al
Matthew, this is reminscent of the infamous wisdom of Jessie Livermore….
great minds do think alike…
One must know that you are in a major bull market, and to exit would only
cause you miss out on the exposive massive gains ahead.
In other words “” you aint seen nothing yet””or” this is the calm before the storm”.
How’s your week going.
HI Jerry,
I agree with you that we ain’t seen nothing yet.
I am convinced that the fundamentals spell this out quite clearly.
Big Al
Hi Jerry, my week is going well. Hope yours is too!
My question is a variation of Jerry’s:
When Roger (or anyone) says ” keep your powder dry” I assume they mean keep cash handy (or does it mean don’t change your portfolio now?) Assuming it means keep your cash and wait for a better entry point, if you don’t have any cash, should you move out of mining stocks or CEF into cash.
In my case for example, I had 30 or 40 thousand dollars sitting for most of the year, then right around Labor Day thinking September would be a great month for mining stocks I fully invested teh cash. Now I have stocks but no cash.
Should l sell some stocks to have cash(powder) ready?
Hi Austin,
Again, I cannot give investment advice.
Let me just say that I am not selling anything right now.
Best,
Big Al
just to clarify the phrase, “keep your powder dry”…this dates from the earliest days of firearms and more particularly, flintlock muzzleloading shotguns and rifles. Not only did these guns have a main gunpowder charge in the bore to propel the shot or ball, but they also had a finely-granulated priming charge that was ignited by the spark of the flint on the steel when the trigger was pulled and the hammer fell; this ignited the main charge and the gun fired. These blackpowder gunpowders were (and still are) very susceptible to moisture, and if they get damp, they don’t fire.
Then maybe the bear eats you, vs. you dining on bear.
Hence, “keep your powder dry” is very good advice
Austin,
You may need to go and read some information from Jessie Livermore,
concerning trading or holding when in a great bull market, as to what to do,
or not to do…
I’m learning slowly. Wlhile I do sell and switch stocks at times, mainly I’m holding and bettng on gold and silver; and on mining stocks through the ups and downs.
Now I don’t know what “keep your powder dry” means when it comes to investing. Does it mean don’t make changes in your portfolio now? Does it mean don’t buy any investments now? Does it mean get into cash now?
Austin,
What it means to me is, “don’t get excited and emotional”.
Big Al
keeping your powder dry,,,to me,,is reserve some cash for a better buying opportunity at lower levels….Remember,,no one knows exactly where this market is headed,short, medium, …but, most all bulls believe, based on different info..it is going higher and this is just a correction along the way.
Hi Jerry Marbie,
Do not take this as investment advice. It is only my opinion.
Unless you purchased gold and silver fairly recently, you can’t possibly be down that much. Gold is up $293.60 for the year. Silver has been all over the map, so I can’t comment on your position in silver.
Remember, that my wife and I are diversified and I have always made that clear. We have never put all our eggs in one basket. Doesn’t make sense to us.
Best,
Big Al
there is another quote,,,PUT ALL YOUR EGGS IN ONE BASKET, AN WATCH THEM LIKE A HAWK…(CHICKEN HAWK)
Okay Jerry, but I still believe strongly in diversification.
Big Al
Hi Jerry Mabie
I also have a high percentage of my investments pm, physican and mining and I sleep very well at night. As the currencies are being devalued pms will still buy what you need. Gold will always have intrinsic value and a silver dime still buys a gallon of gas.
Thanks Karen,
Good points.
As you know, I think that precious metals make a very good foundation for a portfolio.
Best,
Big Al
Jerry M, you’ve come to a website with a lot of PM holders, so obviously, few people here would agree with your friends. But many here have been in the exact same situation as you are, either right now or in the past with equities or some other holding. Here’s my 2 ounces worth:
* Why did you buy PM’s? A trade or an investment or a hedge?
The latter two essentially offer the same outcome…hold. If you’re trading short term, and I doubt you are given your story, then you typically preserve capital and get out of bad trades as they go against you. As Matthew says, no one makes a perfect entry and really no one ever can, so don’t knock yourself out on this. And if you’re worried about having something of value if/when currencies lose their value, or if you think PM’s and companies that mine them have the ability to make further capital gains, then holding them makes sense. It’s what I’m doing, and I’m firmly committed to that.
* What is the investment track record of your family and friends?
It may sound like a joke, but I’m actually quite serious with this question. It might be they are all millionaires, but I doubt it, as most people with assets are not in such a hurry to dismiss any asset class. If they’re looking at their mutual fund returns over the last 3 years, that’s meaningless as far as I would be concerned. A short term gain in equities, such as from March 2008 to July 2010, was a 1 time event after the financial freeze, and not a sign of a recovering economy or a continuation of what’s to come. The US, Canadian, Australian and European stock market indices are all stuck at 3 year old resistance and on a 10 year chart (if you’re into that sort of thing) are unquestionably in a decade-long bear market. Using technicals or fundamentals, I see no reason for them to go higher, and a whole bunch of reasons for them to eventually go lower.
* 60% allocation
It’s a pretty big pie slice, and no one here can tell you fully what you should or must do. If I were in your situation, I would not ‘double-down’, as there is some uncertainly right now and having some cash and/or diversity is probably a good idea. That said, the PM technicals seem to be heading up in price, slowly but surely, at approximately the same slope as before the correction 3 weeks ago. The trend is currently in your favor, and it is somewhat indicative of what the markets think PM’s will do as Greece get’s it’s next handout this weekend.
* Ridicule/Articles and interviews – These are all probably the worst sources of information to make investment decisions on (no offense to family members out there!) I’ve also read some articles that PM’s are done-for. None of them are based on any fundamentals of the world’s economics improving, but rather, on the derision of precious metals because of some dodgy belief that they don’t deserve to go up in price. Maybe that’s because writers of such articles don’t own any?? Europe’s debts are getting worse every ‘solution’ that is implemented, as it’s all based on borrowed money. I can see the stock markets recover if and when the latest Greece solution is announced, because it gives some kind of a visual milepost that something’s being done (good or bad), but we’ll be back in this boat in 6 months, just as surely as California and Illinois will have another budget crisis next July.
I’m guessing you probably already knew most of the above. I’m glad you posted your question because there are many people here who visit and don’t read comments, but have the exact same question. The last thing I’d want to do is tell you to hold metals just because I am (for some misery-loves-company moment if they were to go down). As Trader Rog says, I eat my own cooking. I tell any of my interested friends what I’m doing, and help them if they request it. Eventually there will come a day when things start to improve and PM’s are so high that people will cash out, crashing the market for good. But that’s on the other side of the hump we have to get over first.
Sorry for ‘the book’, but I thought you’d like to hear it full volume from someone who’s not in your immediate sphere of influence.
John,
Thanks for the explanation. I need more “books” like yours for the friends and relatives. I will take your post to the next dinner party and educate the pm haters. On a side note it appears that my wife and I are the only conservatives in the group. May have a bearing on the pm view. Again, thanks for taking the time to respond in detail.
Good Morning Jerry Mabie,
Not sure if you and your wife are the only conservatives in the group.
Politically or investment wise is the question.
I am pretty conservative in both areas. Witness my continual stressing of the concept of diversification in the area of investments.
Thanks for the comment,
Big Al
Big Al,
Need to clarify my comment. When I referred to the group I was referring to my group of friends outside this forum. I should have clarified that. I am conservative both socially and fiscally and find this forum more to my liking than the group of friends I associate with. This forum and the individuals commenting provide information, clarity and instill a sence of confidence in this dangerous market.
Good Morning John W,
Many thanks for all of your insights.
Please keep them coming. Enough said,
Big Al
just remember ,, those guys want your gold….
Hi Jerry,
Very interesting point!
Big Al
Commenting on Oct 23, Treasury Secretary Geithner warned the EU that they better get it right or they and the whole world could face ” cascading default”, “bank runs” and “catastrophic risk”.
HI cfs,
And, so far they don’t seem to be getting it right, do they?
Big Al
Big AL,
They are now comparing the investment potential of Silver to what APPLE was years ago.
I completely agree. There was a huge article last year stating that “Silver will be the investment of the decade”. Again, I completely agree..watch…as the song goes…”We have only just begun!”
Marc
Thanks Marc, as everyone is aware, I completely agree.
Best,
Big Al
I invest in PM’s for many reasons. One being, for my children and their children.
At this point in time, I cannot think of a better asset to leave to my children than gold.
HI Paul S,
I still like to be diversified and that is definitely not to say that I don’t own precious metals.
Best,
Big Al
What do you think of the news that the CFTC voted to approve position limits?
Hi Tex,
Note Trader Rog’s comment from this morning’s show.
Big Al
WARNING:
Bank of America just recently moved $53 trillion of derivatives from its holding company into a subsidiary that holds about $1 trillion in customer deposits and is FDIC insured. When the derivatives system blows up, as Bob Moriarty predicts, while much of the derivatives are offsetting, the loss of the $1 trillion deposits could not be handled by the already troubled FDIC. Conclusion: ALL american bank deposits will be in serious trouble with any derivative failure because the government cannot save FDIC!
HI cfs,
It certainly is getting more tenuous every single minute isn’t it?
Big Al
When the CFTC writes the new rules, they will probably give several months to the naked shorts to reduce their positions. Also one may expect a legal challenge to the new rules to delay things further, but it does appear that in the foreseeable future precious metals and especially silver will be MUCH higher, as a direct result of the CFTC finally reducing the ability to manipulate the comex.
HI cfs,
Interesting point you bring up and probably very true.
Big Al
if a person put gold coins inside a tire and drove his car across the canadian border, you could sell the gold at a vancouver B.C. coin shop for canadian dollars. uncle sam need not know. so how are the powers going to stop us citizens from taking capital [gold ] away ???
great idea,,,,now you have let the secret out,,,now Obama will have the Rubber Tire Act
new govt workers required …A new agency will be formed NTSA , national tire sniffer agency,
there will be a new tax also,,,this will be charged everytime you change your tires.
Tire installer, will be required to look for gold residue left behind from any potential gold smuggling activity, this will be part of the new gold confiscation act of 2013,
maybe Al Gore…could head this agency
No Jerry,
He is still busy improving his invention of a few years back. I am sure you remember it. It is called the internet.
Big Al
HI Scott,
Maybe not effectively stop these actions, but certainly make them illegal.
Big Al
Scott,
They have a requirement that anything over $10,000 be declared when crossing a border. If you are carrying over $10K and get caught, they
can confiscate the $10K and/or put you in prison.
Hi cfs,
I have made it a point to never carry anything that exceeds that value across the border. There is about a one percent chance that you could get caught and that is one percent too high for me.
No need what so ever to break the law.
Big Al
I had no idea how to approach this beoe-ornfw I’m locked and loaded.
I haven’t taken physical money of that amount over a land border crossing, but I have wired it where it gets automatically reported (it’s an anti-money laundering reporting thing — you can decide if there is anything more sinister going on). If you’re a person, you fill out a form. If you’re a business, you fill out IRS Form 8300. But there’s no need to not report it…they just want to make a record of it and then send you on your way (unless you really are a money launderer).
Scott brings up a good point in that, I’m not sure Canada has the same reporting requirement, so if you started from the US and took gold into Canada, I’m not sure you’d have to declare it (someone correct me if I’m wrong, and I could be).
Morning John W,
I believe it is $10K each way.
I agree completely with your other comments. Wiring is simple and regarding certificates, if they are negotiable better to transfer via courier.
Absolutely no point in messing with the authorities.
Big Al
I think you both make very good points. One thing I have noticed is that though the mining shares have taken a beating there is no lack of mergers in the sector. Silver Quest Resources (SQI) announced yesterday that they were being bought out by New Gold (NGD) for $1.32/share and .09 of a New Gold share.
New Gold also bought out Geo Minerals (GM) for .16/share and one common share of a new exploration company for every 15 Geo Minerals shares. This is the latest in a series of mergers that has gone unnoticed by market analysts. This proves that though the market is tossing away the shares of most mining companies industry insiders know these companies have a great long term value.
It is only common sense to say that the resources and deposits found by a mining company have been around for millions of years are not going anywhere. There may short term ups and downs in the markets but in a world with an ever increasing population, which will reach 7 billion this year, natural resources will be critically important. The New York Times has an article on the current world population at this link:
http://www.nytimes.com/2010/07/30/world/30population.html