Never sell a bull market position
Justacommeman
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There was an awful lot of giddiness last week by some when silver was knocked down to $33.60. We were told it was headed down to $22. We were told that some were thankful that they sold at $34. We were told that some caught the top. Cool, to each is own..........on the other hand, Franklin Sanders scribed this on Monday. I feel it has merit and I tend to agree.
" Rubbing in what I wrote on Friday about never selling a bull market position -- if you had looked at silver & gold last week, you'd have bet respectable money they were headed lower. If so, & you had sold your long-term bull market position, you'd be keening, wailing, & mourning today. As I said, if you can pick the primary trend and ride it, that's plenty profitable enough. Don't worry about catching the little zigs and zags of trading."------FS
Discuss.
I really don't care.................. really.............................. but silver is near a 30+ year high as I type.
MJ
" Rubbing in what I wrote on Friday about never selling a bull market position -- if you had looked at silver & gold last week, you'd have bet respectable money they were headed lower. If so, & you had sold your long-term bull market position, you'd be keening, wailing, & mourning today. As I said, if you can pick the primary trend and ride it, that's plenty profitable enough. Don't worry about catching the little zigs and zags of trading."------FS
Discuss.
I really don't care.................. really.............................. but silver is near a 30+ year high as I type.
MJ
Walker Proof Digital Album
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
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Comments
Agree, brother. Always try to look at the big picture and not at the daily dips. Don't play the pm game with scared money.
<< <i>There was an awful lot of giddiness last week by some when silver was knocked down to $33.60. We were told it was headed down to $22. We were told that some were thankful that they sold at $34. We were told that some caught the top. Cool, to each is own..........on the other hand, Franklin Sanders scribed this on Monday. I feel it has merit and I tend to agree.
" Rubbing in what I wrote on Friday about never selling a bull market position -- if you had looked at silver & gold last week, you'd have bet respectable money they were headed lower. If so, & you had sold your long-term bull market position, you'd be keening, wailing, & mourning today. As I said, if you can pick the primary trend and ride it, that's plenty profitable enough. Don't worry about catching the little zigs and zags of trading."------FS
Discuss.
I really don't care.................. really.............................. but silver is near a 30+ year high as I type.
MJ >>
I would agree in principle, but also say never say never. Sell if you have to, or if you have a better use for the money.
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
To "fix" this ratio I have reallocated by swapping silver for gold. Two weeks ago I brought my core bullion stack to a Au/Ag of 0.91/1. This trade was at an effective Ag/Au ratio of 42.6/1 (with the spot Ag/Au ratio of 39.5/1, so it cost me something to do this). This past weekend I repeated the exercise. My core position is now at a Au/Ag of 2.4/1. Three positive outcomes occur to me. First, the PM stack value will likely be more stable going into the future (the % drop or rise in gold price is less than that seen in silver during splunges and zzzzzooms); second, my future PM purchases can be done in more financially manageable bite-sized silver purchases as I begin to lower the Au/Ag ratio from 2.4/1 to the target 1.5/1; and third, the strong-box has more room in it and it‘s not as heavy as it use to be, an important consideration as I approach the age of 60. Any thoughts?
–John Adams, 1826
One other thing - who is going to liquidate their whole position all at once? Nobody. That being the case, any mis-steps can be bought back at the higher price if you make a mistake. Call it tuition.
If the fundamentals and the baseline trend are still intact, selling 100% of a bull market position implies one of two things - either clairvoyance or insanity. I rule out stupidity because they wouldn't have bought in the first place if they were truly stupid.
I knew it would happen.
Box of 20
Can a man cast fear aside and let the thick and calloused cajones speak?
At this point, I will visit local shows and support the particpants with my purchases; otherwise, the AP's ATB's continue to be a buy.
Miles
But back in the Fall, when silver blew through the '20's and went from $18 to $31 in 3 months, I was considering selling quite a bit.
I figured the rise in price was almost 'vertical' on the chart and how could it stay at $31?
I was thinking I made a mistake by not selling when the price did drop to $27 to $28 (I think??) for a week or so, but then quickly marched back to $31 and look where it is today!
Things are different today in the silver market.
If this was two years ago, that correction would have dropped silver back to $20 but it didn't happen.
I do believe silver's run-up is going to be steady and of course there's going to be 'zig-zag' movements along the way but it takes a brave man to sell your silver in a bull run to try to buy it back at a lower price.
Better to hold your position.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
<< <i>I still say you can't get hurt taking profits, and if silver continues to rise, I will continue to sell. >>
Your thesis is well taken, except would you consider selling the best hitting ball player on your team if he kept performing well? Probably not, so consider your best positions your best hitters. JMHO.
<< <i>How about buying in this bull run, MJ.
Can a man cast fear aside and let the thick and calloused cajones speak?
At this point, I will visit local shows and support the particpants with my purchases; otherwise, the AP's ATB's continue to be a buy.
Miles >>
Miles, one mans $36 is anothers $63 perhaps. Besides, what else you gonna do with your cash : ). I prefer to average up, not down. It's my compass if you will and it ets me know I'm going in the right direction. Wingsrule said it wonderfully in another thread.
Stackers are a different lot for sure. Right now they are winning in spades.
You know it's a good thread when you can get both Miles and Curly to post to it. Two of my favorite posters.
Steve, I don't agree with your premise but you have plenty of ole school supporters of that rule of thumb. I certainly respect it. I just find it counter intuitive and I can't wrap my head around it at all. But, sleeping weight does make sense to me and we are all wired differently.
Mesquite, I MAYBE swapping silver for gold myself. My silver position which is my spectulative position is over weight. Wouldn't it be a kick in the pants if the ole standbearer gold/silver ratio of 15:1 was achieved with both making all-time highs? Most assumed this ratio might be achieved on the downside. Still could I guess.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
As you climb the mountain and are comfortable with the view, there is nothing wrong with sitting back and enjoying the moment. If you are adventurous and want to see the view from higher up the mountain then feel free to keep climbing. Usually the highest mountains are enshrouded in clouds, so it can be difficult to see the increasing dangers.
As my buddy Cramer always says, "theres always a bull market somewhere".
MJ's tagline says "stay thirsty". Mine would be similar, "stay liquid". Afterall you cant quench thirst without something liquid.
Knowledge is the enemy of fear
The quintessential question. And it needs to be repeated frequently.
As you climb the mountain and are comfortable with the view, there is nothing wrong with sitting back and enjoying the moment.
I knew it would happen.
"Averaging up" and/or "trading up" is a good thing in my book.
<< <i>In another thread Sunday afternoon, I stated silver would hit $37/oz this week. It is $0.03 away as I type and the GSR has a 38 handle on it. Will it last? I don't know. While I unloaded some 90% at a show over the weekend, I immediately sunk a portion of that right back into 10 oz JM bars. I 'lost' a small amount on the conversion, but those 10 ozers are now in the money even before you take any premiums into account. Most of that 90% had been sitting in a corner for quite awhile.
"Averaging up" and/or "trading up" is a good thing in my book. >>
I agree with your price predictions but I have trouble understanding why you would sell silver coin (90%) just to buy silver bars.
Aren't you taking an unnecessary loss on both transactions?
Help me understand.....
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
<< <i>Agree, brother. Always try to look at the big picture and not at the daily dips. Don't play the pm game with scared money. >>
Curly I always wanted to ask you about your icon pic, is that John Lee Hooker???
Actually I intended this as a PM
The initial purpose was to offload some 90%. When I spotted those old, sealed JM bars for a minor pittance over spot, I couldn't resist. Some of the other dealers there were asking for nearly a $3 premium over spot for .999 material.
In the long run, as prices continue to escalate, I see a larger discount to spot for what people would be willing to pay for 90%. Watch some of the ads on the BST and you can see it happening already. Some of the WTB threads are showing 2.2-2.5X under what the theoretical should be (using 0.715 as the multiplier), not to mention wanting the seller to pay for shipping, and in some cases, wait until they receive it to set the sales price AND take a hit on the paypal payment. Tulving's buy and sell numbers for 90% have been trending lower (as far as the absolute $x.xx in relation to spot) but I do not have enough data to put a % on it.
And silver spot is up $0.20 from my last post and currently at $37.17.
<< <i>DE59,
The initial purpose was to offload some 90%. When I spotted those old, sealed JM bars for a minor pittance over spot, I couldn't resist. Some of the other dealers there were asking for nearly a $3 premium over spot for .999 material.
In the long run, as prices continue to escalate, I see a larger discount to spot for what people would be willing to pay for 90%. Watch some of the ads on the BST and you can see it happening already. Some of the WTB threads are showing 2.2-2.5X under what the theoretical should be (using 0.715 as the multiplier), not to mention wanting the seller to pay for shipping, and in some cases, wait until they receive it to set the sales price AND take a hit on the paypal payment. Tulving's buy and sell numbers for 90% have been trending lower (as far as the absolute $x.xx in relation to spot) but I do not have enough data to put a % on it.
And silver spot is up $0.20 from my last post and currently at $37.17.
Thanks....good to know.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Here I am waxing poetic about buying and I realized I already have, by continuing to watch my stack rise in value vs. or in tandem with the dollar.
$1438.fitty and $37. dos dos!! Let the games continue to begin and get ready to shake that first Martini MJ!
Miles
<< <i>if silver continues to rise, I will continue to sell >>
I don't fault you for taking profit but I must ask, if it is still rising after you have eventually cashed out will you buy back in?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Just purchased a roll of Canadian Bears...(never thought I'd be willing to pay those premiums), but on the other hand, I'm continuing to sell silver bullion that were purchased at $19.80....FIFO method >>
This conversion I don't get really outside of just wanting the newest thing. I have a couple rolls of ASE that were $5/oz, not sure I would sell them to replace them with $40/oz ASE or maples or whatever.
Liberty: Parent of Science & Industry
<< <i>Never? Ever ever ever till the end of time? >>
That's why I said "Never say never!"
I've recently had several discussions with my accountant regarding "like kind transactions". As long as you meet certain conditions, you can sell old to buy new and in the process, you can defer your taxes on the gain by folding your old cost basis into the cost basis of your new acquisition.
So, my question for several of you is - are you taking the tax on your gains now when you sell? If so, why would you keep selling old silver holdings in order to buy new silver?
Just askin'.
I knew it would happen.
<< <i>So, my question for several of you is - are you taking the tax on your gains now when you sell? If so, why would you keep selling old silver holdings in order to buy new silver? >>
It's a hobby that keeps me occupied .... I do not subscribe to any SHTF scenarios, nor do I pay any attention to the conspiracy extremist's. PM's are just another avenue to make a buck. Taxes are not deferred. "Uncle will get his cut," whether it's now or 10 years from now, but I suspect the Tax rate will be substantially higher by then.
I suspect you will be proven correct on that, in fact - that was one of my justifications for pulling my retirement funds out when I did.
Excuse me for a sec - I need to clean some junk that keeping piling up on my fan.
I knew it would happen.
Enjoy the AG ride but when the tide shifts...you better be on your toes.
I culled half of my 90% last week and was happy riding from $7-9 to $34.
There are much better things to buy right now than holding a non producing asset as an investment vehicle.
I hope you'all enjoy the ride---to wherever it goes.
With silver this isn't going to be true because silver's price will be decimated when the buying panic
subsides. You're better off selling too soon and then buying back in when people realize the drop
was far too large. Silver is in a long term bull market until the human race decides to move back into
the caves or resume swinging from trees or until we can harvest it from off-world or the ocean.
This is a bull market for the foreseeable future with a drop resulting from the buying panic caused by
the wall street bankers who have caused much of the world's silver to be destroyed.
Edited to add a little disclaimer; There's no certainty that the buying panic is actually underway
and macroeconomic forces can still forestall or delay it. When silver has a multidollar up day then
the panic will be underway.
<< <i>Just purchased a roll of Canadian Bears...(never thought I'd be willing to pay those premiums), but on the other hand, I'm continuing to sell silver bullion that were purchased at $19.80....FIFO method
I've recently had several discussions with my accountant regarding "like kind transactions". As long as you meet certain conditions, you can sell old to buy new and in the process, you can defer your taxes on the gain by folding your old cost basis into the cost basis of your new acquisition.
So, my question for several of you is - are you taking the tax on your gains now when you sell? If so, why would you keep selling old silver holdings in order to buy new silver?
Just askin'. >>
Those like kind transactions are pretty onerous. If I read Oreville correctly on this topic you have to report in writing to the IRS the swap that you did. So now they officially have a record of your holdings. And in the case of items that might not be much more than silver bullion that sounds like a potentially difficult L-K-E to support from either side of the transaction. If one is swapping into a bullionesque silver item with a <15% premium, that to me would be no different than selling for cash. The IRS might think the same. That 15% thumbrule is not set in stone that I know of and probably varies from accountant to accountant and IRS agent to IRS agent.
Proof SAE's bring strong premiums so they could probably be considered collectible. An exchange from silver bars or ouncers into proof SAE's might be considered a qualifiable trade. My question would be why would you since the goal is to stack as many silver ounces as possible? Once in proof SAE's you couldn't go back and trade for regular SAE's or bars again without triggering a potential tax event on any gains. But trading proof SAE's toward a set of MS69 "pucks" at 3-4X bullion price is probably ok. But again, why would you? I'm not sure if circ Morgans or Peace dollars would be considered "collectible" any more rather than just bullion items. VF-MS62 $20's are in the same boat. They all now basically trade within 10% of spot prices. With the large premiums they carried a couple of years ago they would have probably qualified as a collectible item and be traded towards other collectible (ie non-bullion) silver. But maybe BU rolls of Morgans might still be considered non-bullion, though I can see that window closing in time as well. In the same way I believe that a MS64 or MS65 Saint is not bullion to the IRS....at least not yet. But Patriot Act 2 left a foot in the door to use up to 2X intrinsic value to define "bullionesque." Under PA2 those MS64/65 Saints are "reportable" as bullion in that money laundering statute. In fact most generic MS66 $20 Saints probably fall under the PA 2 "bullion" definition. A CAC sticker raises that premium by another 30%. Wonder if the IRS would recognize the CAC premium? The PA2 bullion interpretation is not yet being used in the tax law but it is now on the books as one approved "legal" definition of bullion. It's there for the taking when deemed necessary.
While it wish it were true that you trade "old" 90% silver for "new" 100 oz bars or ASE's, it's still a cash for cash transaction per the IRS.
roadrunner
I knew it would happen.
Oreville's interpretations. He walked through how he handled an LKE in the disposition of one of his major gold coins. He exchanged 1 large collectible for a whole lot of smaller
ones. Those IRS gray areas would concern me since there's no way to know if one's interpretation will ever be denied. You could even run it by an IRS representative who sees no
issues with your interpretation today. And then years or months down the road they backtrack and disapprove it. And if I recall properly, if one fails to turn in the correct document
delineating the exchange, that even if it met guidelines you might have some problems w/o the original declaration. But this is just my understanding based on what I've read from
others. Don't take my word as gospel without discussing with your own accountant or a tax/IRS expert. I do think I have the basics right.
Here are 2 links from the forum. One was on google as well. Some decent references in there. After reading these you'll definitely get the idea that LKE's are a royal pita. And
obviously the IRS would rather just collect from you now than down the road.
CU Forum link 1
CU Forum link 2
I mentioned numismatic lawyer Armand Vartian in that thread. He has written some very detailed articles in CoinWorld on LKE's. His interpretation of all the requirements is stunning.
The information in link 2 above is quite detailed, especially from BigRick. I was surprised that Oreville was using the PA2 50% rule. That's probably the conservative way to go to cover yourself years down the road. But at the same time you're halving your ounces. But obviously you have to give something up to change a position. There are not many silver products that I'd want to buy that have premiums >50%. Those proof Canadian Bears mentioned above are right around the 16-17% level.
I was feeling bad about not selling silver at the peak during the last 2 weeks and "worrying" about seeing it drop a lot. Now I feel better.
Getting tossed off the gold and silver bull will be easy. It's hanging in there that will be hard.
roadrunner
What are these much better things to buy stuff you speak of? Examples please. Hopefully some of them will be tangible as well. TIA MJ
FYI- If anyone wants to unload some salt send it to me in China. It's makes silvers rise look aenemic.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i><There are much better things to buy right now than holding a non producing asset as an investment vehicle>
What are these much better things to buy stuff you speak of? Examples please. Hopefully some of them will be tangible as well. TIA MJ
FYI- If anyone wants to unload some salt send it to me in China. It's makes silvers rise look aenemic.
MJ >>
Right now I am building inventory in my business and pursuing leasable crop producing land.
We have gotten so low in inventory that not only does it make life doubly difficult to satisfy customers, I also feel that we are in for 10-20% price increases in the next 12 months. Better than money in the bank as far as I'm concerned.
Producing land returns minimum 6%. Land prices have remained dormant. This is about to change. Certain land deals in parts of this country are like r/e in CAL in many respects from 76-77 or 82. Makes you wonder why more people aren't locking in these prices. Late 70's/early 80's in San Jose or L.A.---you could drive around town and buy a running
67-8 Camaro convertible for less than 2k or a 64-5 GTO for $500-1000. Very few people saw that as a positive transaction at the time because the cars were out of favor. I like to look at out of favor opportunities.
In certain parts of the country...you can purchase...i.e.---20-40 acre parcels of alfalfa producing cropland for +/-$2000/ACRE and net lease it for a 10% net return. And you still own the land. Beats the bank. Now that's with milk selling for $1.99 gallon. Do you think milk will remain at that price? I don't.
Food is way too cheap in this country. Land produces food. 24 months from now---you will see. The free ride in PM's the last 10 years is over for me. My silver fun is over. I'm happy. I still have my meager collection of better generic and better date gold and minors. I don't care where gold goes or what happens to coin prices up or down.
I'm almost 58 and this is the greatest buying opportunity in my lifetime. I was a commercial r/e broker in the western US from 77-92 until I bought this *&^%# company in L.A.-----
---I am watching so much foreign money pouring into CAL right now buying up what native CALifornians can't hang onto because they didn't save properly. The buying window will be open for awhile because I believe the situation is still deteriorating.
It sounds like you have a great plan. Investing in one's self is the ultimate perfect investment. Love the food/farm angle. I personally wish I knew more about this avenue.
I have friends here in China ( aussies) that bought 6 homes and 11 pieces of farmland in 2009-2010 in the US. Cailfornia and Michigan mostly. I think they will be rewarded one day handsomely.
Thank you for the thoughtful reply and illustration. Well done.
Information like this is what I'm seeking.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Lucky me ,as I have stashed a few away in the cave.
Camelot
Box of 20
Actually in January I took a loan out on my 401K. If you can afford the payments. It will be paid off in 5 years while paying myself 4.5% interest which should make the payoff sooner.
Box of 20
streeter, where is this?
I knew it would happen.
<< <i>Where in the USA is $2/gal milk? Haven't seen that in over 8 years. >>
I was getting a gallon for 1.50 last year. Grains/meat/milk prices would be MUCH LOWER if the G ended subsidies and CRP.
I agree with Streeter. Real estate in the USA is the cheapest on the planet. What a great time for the Canadians, Aussies, Europeans to come to America and buy. The USA is on sale. I tried to buy 50 acres of woodland last year for under 30k, but my bid was a few days late. Farms in my area routinely sell for $1000/acre. Thats why we have had about 20 Amish families more here in the past 3 years.
But aside from that, the median price of an existing home in the US is 159k---same as late 2002. Thats less than 3x median income. Compare that to housing in Europe, Canada, Australia/New Zealand who are pretty much priced out of their own countries. Even Chinese real estate trades at 57x income--although that number is heavily skewed due to an incredible large population who makes very little.
Knowledge is the enemy of fear
<< <i>The trend is your friend. Embrace it.
<< <i>if silver continues to rise, I will continue to sell >>
I don't fault you for taking profit but I must ask, if it is still rising after you have eventually cashed out will you buy back in? >>
Eventually
Liberty: Parent of Science & Industry