Gold and silver prices are down

Rob Boudrie said:
Have the retail investors beaten the market (not the pros, the market) on a long term basis?

The only thing a pro can really do for you is advise to history, what beta means, and that there is no increase in expected reward without increase in risk, and the concept of diversification.
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I think the Fed broke all that. We don’t have markets anymore.
 
Rob Boudrie said:
Not really. Are you certain that you can buy primers and ammo today and sell them for above the Dow rate of return after transaction costs? All you can really know is that ammo and primers have recently spiked in price, not where they will go in the future.

What does come close is Forever postage stamps or pay per throw garbage bags but liquidating large quantities at near the current selling price is difficult or impractical.
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These are way better than most investments right now.

I was not clear. These are short term scores.
 
chris_1001 said:
These are way better than most investments right now.

I was not clear. These are short term scores.
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My point was that they were never "sure thing" investments that could be bought in advance of the price run up knowing that it would happen. There is the next primer , bitcoin or Gamestop in today's market - but, by definition, if it could be spotted a priori the price would already be bid up to a level representing normal returns.
 
Rob Boudrie said:
My point was that they were never "sure thing" investments that could be bought in advance of the price run up knowing that it would happen. There is the next primer , bitcoin or Gamestop in today's market - but, by definition, if it could be spotted a priori the price would already be bid up to a level representing normal returns.
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I think this is generally true, but price can also get incredibly overpriced by momentum trading, trend following, hype, and stocks can be incredibly underpriced by poor sentiment or a misunderstanding of their fundamentals. This is how you can make money, by identifying how those factors are moving a stock.

I like junior mining stocks partly cause nobody is paying attention to them, so you can know things the market doesn’t know.
 
richc said:
Higher rates generally cause a stronger US dollar. And a stronger dollar generally results in weaker PM's.

Certainly other world fears can cause a flight to safety. Generally speaking, though, PM's represent an insurance policy for a weaker dollar.
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Gold should be going up because inflation is sky high and real interest rates are deeply negative. These are historically the two major drivers of gold. (Global instability and fear are only short term drivers of gold.)

Yet gold is stagnant and gold miners are in the toilet despite incredible fundamentals.

Why is this? I think if you can answer why the stock market is massively inflated and ignoring all fundamentals, it’s the same reason. The Fed has destroyed our markets, so things don’t behave like they’re supposed to.
 
Varmint said:
I think this is generally true, but price can also get incredibly overpriced by momentum trading, trend following, hype, and stocks can be incredibly underpriced by poor sentiment or a misunderstanding of their fundamentals. This is how you can make money, by identifying how those factors are moving a stock.

I like junior mining stocks partly cause nobody is paying attention to them, so you can know things the market doesn’t know.
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I have disagreed with B-school stock pricing theory of "Perceived NPV of all future cash flows from the stock" ever since I heard it in class, and think of it as more of a game of chicken, or bookie operation, where people buy and sell not on the estimated cash flow if kept in perpetuity but rather their estimate about how others will behave, if others will pay above that NPV estimate based on momentum, etc.

It's like how poker players with hands that are statistically not likely to win based on odds alone may match a raise, or even raise themselves, based on their perception of how other players will react to the up cards on the table. I would not expect to see a player who played a statistically perfect game win the world series of poker.

It I could figure out a way to express this in a graph and was in academia I could publish a paper, get the graph named after me and get tenure.
 
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djbradles said:
Strangely enough the last 7 rate hike cycles saw gold and PM’s rocket higher right after the very first rate hike of each cycle save for one. I can’t remember the analysis of why but I think it takes away the uncertainty of gold price discovery and hurts capital markets just like we are seeing unfold.
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I think the idea is that the Fed is always behind the curve when they start raising rates, so real interest rates are negative (inflation is much higher than Fed interest rates) by the time the Fed begins to raise, and that’s positive for gold.

Gold has definitely sold off as the Fed has started taper talk (higher rates bad for gold), but has solidified since inflation has started appearing persistent.
 
Varmint said:
I think the idea is that the Fed is always behind the curve when they start raising rates, so real interest rates are negative (inflation is much higher than Fed interest rates) by the time the Fed begins to raise, and that’s positive for gold.

Gold has definitely sold off as the Fed has started taper talk (higher rates bad for gold), but has solidified since inflation has started appearing persistent.
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I’m still buying FSAGX.
 
djbradles said:
I’m still buying FSAGX.
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I think the reason gold and gold miners continue to suck wind is that they are reacting to the Fed taper, particularly the algorithms which are selling, and you don’t have any buyers, so you get low volume selloffs.

When the S&P500 sells off, you have an army of retail investors like my mother in law who still think it’s a buy the dip opportunity, and don’t even know what the Fed is.

Retail doesn’t buy gold or miners and fund managers won’t touch them cause their clients will get pissed. “Why are you buying gold? Tesla is on sale!”
 
Spartan65 said:
If I had looked a little harder…

www.jmbullion.com

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One thing I've learned about buying PM's since the early 1980's is:

"Once you've bought it; don't beat yourself up on the deal"

Just try harder to search out the deals before Paying the Piper...

And then don't hesitate. Waiting even 1 day can add hundreds to a big purchase if the SPOT goes up just a little. Be Firm, Be Informed, Be Ruthless...
 
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Yeah they are. Never bought them before a month ago. Now I'm hooked... 🤔
 
Thanks. I think it's on my end. Every link in NES I'm clicking on is getting that warning. Tried other sites and no warning. Only NES... 🤔
 
Rob Boudrie said:
BU Commemorative?
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Not a commemorative. Annual BU bullion from Austria. The .999 Silver Philharmonic...



This coin has a sexy smooth edge (non-reeded) and is a smaller diameter than the ASE. The smaller diameter makes for a thicker coin, which is beautiful to hold...

giphy.gif
 

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