Crunching The Numbers

303
Tue, Nov 27, 2012 - 4:04pm

Lately, it seems that a day doesn't go by without me receiving a comment or an email from somebody complaining about how they're "still getting their butt kicked in silver because they bought in April of 2011". Since I've consistently advocated the regular stockpiling of physical metal for over two years now, I thought it might be fun, and worth the time, to crunch some numbers to see just how bad it could be for some folks.

First of all, I don't think that anyone whose only purchases of silver came in April of 2011 is still a regular reader of this site. Additionally, that this disgruntled, non-reader of the site would then take the time to email me seems a little far-fetched. Nonetheless, let's roll with it.

Below is the hard data. I began this blog/site on 11/11/10, so, let's measure two things:

  • A Turdite who decided, based upon my strong convictions, to purchase a tube of eagles every two weeks, regardless of the cost.
  • A Turdite who decided to take $500 out of his/her paycheck every two weeks to purchase as many Eagles as $500 would buy, based upon the current price.
  • I have not included premiums or sales tax. I'll let you adjust and figure that out for yourself.
  • DATE PRICE TUBE COST OR OUNCES BOUGHT COST

    11/12/10 25.94 $518.80 19 $492.86

    11/26/12 26.70 534.00 18 480.60

    12/10/10 28.58 571.60 17 485.86

    12/24/10 28.88 577.60 17 490.96

    1/7/11 28.66 573.20 17 487.22

    1/21/11 27.42 548.40 18 493.56

    2/4/11 29.06 581.20 17 494.02

    2/18/11 32.30 646.00 15 484.50

    3/4/11 35.32 706.40 14 494.48

    3/18/11 35.06 701.20 14 490.84

    4/1/11 37.74 754.80 13 490.62

    4/15/11 42.57 851.40 11 468.27

    4/29/11 48.58 971.60 10 485.80

    5/13/11 35.01 700.20 14 490.14

    5/27/11 37.86 757.20 13 492.18

    6/10/11 36.33 726.60 13 472.29

    6/24/11 34.64 692.80 14 484.96

    7/8/11 36.54 730.80 13 475.02

    7/22/11 40.11 802.20 12 481.32

    8/5/11 38.20 764.00 13 496.60

    8/19/11 42.43 848.60 11 466.73

    9/2/11 43.02 860.40 11 473.20

    9/16/11 40.78 815.60 12 489.36

    9/30/11 30.04 600.80 16 480.64

    10/14/11 32.14 642.80 15 482.10

    10/28/11 34.07 681.40 14 476.98

    11/11/11 34.67 693.40 14 485.33

    11/25/11 31.01 620.20 16 496.16

    12/9/11 32.17 643.40 15 482.55

    12/23/11 29.04 580.80 17 493.68

    1/6/12 28.65 573.00 17 487.05

    1/20/12 31.65 633.00 15 474.75

    2/3/12 32.73 654.60 15 490.95

    2/17/12 33.20 664.00 15 498.00

    3/2/12 34.48 689.60 14 482.72

    3/16/12 32.57 651.40 15 488.55

    3/30/12 32.47 649.40 15 487.05

    4/13/12 31.38 627.60 15 470.70

    4/27/12 31.35 627.00 15 470.25

    5/11/12 28.86 577.20 17 490.62

    5/25/12 28.37 567.40 17 482.29

    6/8/12 28.46 569.20 17 483.82

    6/22/12 26.66 533.20 18 479.88

    7/6/12 26.89 537.80 18 484.02

    7/20/12 27.28 545.60 18 491.04

    8/3/12 27.79 555.80 18 500.22

    8/17/12 28.00 560.00 17 476.00

    8/31/12 31.37 627.40 15 470.55

    9/14/12 34.60 692.00 14 484.40

    9/28/12 34.52 690.40 14 483.28

    10/12/12 33.63 627.60 14 470.82

    10/26/12 32.01 640.20 15 480.15

    11/9/12 32.59 651.80 15 488.85

    11/23/12 34.11 682.20 14 477.54

    If you had purchased a tube of Eagles every two weeks since this blog/site began, you would now own 54 tubes or 1080 ounces of silver. This would have cost you $35,524.80 and your average cost per ounce would be $32.89.

    If you had decided to, instead, buy $500 worth of Eagles every two weeks since this blog/site began, you would now own 810 ounces of silver at an average cost of $32.29.

    If you came late to the party and only began your tube-every-two-weeks extravaganza on 4/15/11 with the price at $42.57, you'd now own 860 ounces at an average cost of $33.50/ounce.

    What if you only bought a tube on 4/15/11 and 4/29/11 and then took the summer of 2011 off? You were then lured back in by the S&P downgrade of 8/5/11 but scared off again after the steep drop in September. Convinced we'd seen the lows by late 2011, you then bought a tube every two weeks in 2012. If so, you'd have 600 ounces of silver at an average cost of $33.23/ounce.

    Maybe you did precisely as above, buying only six times and on those exact same dates in 2011. Then you only restarted buying just as price peaked in late February of this year. You'd now own 520 ounces at an average cost of $33.49/ounce.

    And what if you're just the unluckiest sap on the planet. Dumb as a box of rocks and easily duped into buying only when ole Turd gets over-the-top excited. You made just 12 purchases and you bought on 4/1/11, 4/15/11 and 4/29/11, 8/5/11, 8/19/11 and 9/2/11, 2/3/12, 2/17/12 and 3/2/12, 8/31/12, 9/14/12 and 9/28/12? In that case, you'd be the proud owner of 240 ounces of shiny silver at an average cost of $37.78.

    Feel free to fiddle with these numbers as much as you'd like. Construct your own best case and worst case scenarios. Add in an acceptable dealer premium and your local sales tax. Whatever. Have fun with it. The point is this:

    Your best strategy is to be consistently buying physical metal, either gold or silver, regardless of price. Sometimes you'll buy high and sometimes you'll buy low. Most importantly, however, you'll be slowly accumulating a sizeable position in the only assets guaranteed to protect your savings and purchasing power against the constant devaluation of the dollar, brought upon us by our politicians and bankers.

    BTFD or BTFR, it doesn't matter. Just buy.

    TF

    About the Author

    Founder
    turd [at] tfmetalsreport [dot] com ()

      303 Comments

    Mr. Fix
    Nov 28, 2012 - 9:32am

    Sometimes waking up just sucks!

    It's one of those days.

    boatman
    Nov 28, 2012 - 9:34am

    1698 gold

    is the bottom of the trendline channel since july

    but i defer to TF.

    JimmyTheHand
    Nov 28, 2012 - 9:34am

    Well kiss my grits...

    I was planning on buying two tubes of Silver Eagles at lunch today (Thank you yearly bonus), now it looks like I might be able to pick up an extra ounce! Maybe the FUBM can wait till after lunch?

    Niklaz
    Nov 28, 2012 - 9:36am

    Fat Finger?

    Seeking Alpha Currents - 9:18 am

    If it's a fat finger, it's not immediately being lifted. So far, gold hasn't bounced a dime from a quick $20 sell-off an hour ago. Chatter says the move was due to a contract rollover that accidentally became an outright sell. Silver has moved in concert, SLV -2.1% premarket. Oil and copper, both lower by more than 1%, complete the picture for key commodities.

    Sisyphus
    Nov 28, 2012 - 9:37am

    It's much colder now.

    Where's all that wool I used to have around my person? Bah!

    I mean baaaaahhh.

    clueless one
    Nov 28, 2012 - 9:37am

    man o' man..

    so I says to myself... "self, what do you think is going on?"

    hmmm....

    just another sell off?? just another covering before expiration??

    dunno...

    but I'm off to my LCS to sell it all...as soon as I can fish it out of the lake...

    brrrrrrrrrr!!!!!! that water is COLD!!!!!!!!!!

    Indenture Mantis
    Nov 28, 2012 - 9:37am

    Bankers Achilles Heel

    Mantis: Of course the evil bankers hate silver. That is why the centralbanks of the world hold gold on their books. They allow the masses to play with physical silver while they suppress it's value with all the fake paper they can print. The gold is just a side show, the central banks only hold it to fool the public. Gogo Silver.

    Fr. Bill
    Nov 28, 2012 - 9:38am

    Blame it on me, Sisyphus, and Bollocks

    We just HAD to go purchase stuff yesterday!

    hsofiak TF
    Nov 28, 2012 - 9:39am

    Re Check this chart

    We're looking at it.

    Silver Alert
    Nov 28, 2012 - 9:41am

    Turd

    While we're all pondering this latest of smackdowns - how do you see the "fiscal cliff" playing out for gold N silver?

    There is a lot of anticipation, and it appears to be starting, that assets will be sold off so profits can be locked in before tax-rate hikes kick in.

    And even if someone wasn't planning to sell, they may face margin calls if the markets drop and they have to raise liquidity. It always seems PM's are the first things to get thrown out with the bathwater.

    Just to throw a little gasoline on the smoking embers, there has been speculation that TPTB, now that the elections are over, will want the markets to drop. They need cover to nationalize people's retirement accounts and gain access to the trillions that are socked away. Another market crash will let them claim that retirement accounts invested in anything but treasuries are too risky and they will save us from ourselves.

    ratioarbitrage
    Nov 28, 2012 - 9:42am

    Revisiting the curve

    That is the positively parabolic support curve. Very clearly evident on the weekly candle chart. Support curves usually evolve negatively, except prior to an explosion. The curves are close together so it easy to flick back and forth.

    It just fattens up the 4-month ellipse and obviously does not affect the parabolic rising resistance line.

    Someone is standing on the beach shouting "back" or perhaps splashing around in the waves. One dot? Cluster of three? Who cares?

    PS edit: everyone panics, but if you don't visit the thing, it isn't there. It's a great curve.


    Nov 28, 2012 - 9:45am

    Options

    Just who is getting screwed in options today? No one!

    All of the Dec options expired yesterday. All of my calls are now Feb gold and March silver. Though I wish I had some cash to buy more on this discount, the action today is meaningless.


    Nov 28, 2012 - 9:50am

    And furthermore

    This is all just manipulative bullshit. The likely cause of the drop was the deliberate and manipulative unwinding of a Dec position, probably a spread trade. The manipulator takes the long side off all at once and then looks to cover the short side at a later time after price has been driven $20+ lower. In this case, the manipulator gets the added benefit of the momo-HFTs chasing price lower because of the breach of the 50-DMA. Now down $30, the manipulator can begin to cover the short side for considerably less money than it would have cost if he had done the whole thing instantaneously.

    Soon (later today or tomorrow) we'll get an FUBM where actual buyers pick up the discount and price rallies further on the back of the physical orders that were filled on the drop.

    Fuck em. Just be patient, hang in there and buy the dip.

    GoldMania3000
    Nov 28, 2012 - 9:51am

    Wrong tuRD

    The action today is not meaningless. it means you can buy more for less. BTFD:) i learned something from this web site.

    TechTrade
    Nov 28, 2012 - 9:52am

    Action Today is Very Meaningful

    This is not the action of a bullish market. The rally is dead. Daily sell signal generated. Sure, we'll rally a bit, just to get everyone excited again, perhaps to 1725-1735. Then odds are good we're going under 1700 again. This type of big selloff is just the initial phase of the decline. As soon as Franklin Sanders the Moneychanger predicted gold at $2700 by spring 2013 and silver at 90, I sold all my positions and hedged my physical. He's the kiss of death to these markets. Dropping through 1733 sealed the fate of the market. Figured they would hold gold under 1750 for option expiration yesterday, but it then should have risen once the pressure was off. Think I'm done with believing and waiting for "the big rally". Obviously it's not going to happen. Glad I'm hedged on my physical, otherwise it would be a world of hurt. Enjoy the pain, stackers, much more to come.

    Sisyphus
    Nov 28, 2012 - 9:53am

    Amputate all fat fingers!

    Do algos have fingers?

    The Fat Finger writes; and, having writ,
    Moves on: nor all thy Piety nor Wit
    Shall lure it back to cancel half a Line,
    Nor all thy Tears wash out a Word of it.


    Nov 28, 2012 - 9:55am

    And with 1705 having held

    And with 1705 having held AGAIN, I sure wish I was sitting on some cash here!

    truthseeker
    Nov 28, 2012 - 9:55am

    What about Crude Oil?

    There was a corresponding drop in crude oil to match gold. (Both down about the same %).

    Do they manipulate the crude market to the same degree?

    Or did they time the smackdown to take advantage of the drop in crude?

    TechTrade
    Nov 28, 2012 - 9:57am

    Well, you know what they say...

    ..about opinions and assholes...


    Nov 28, 2012 - 9:57am

    Turd, your analysis was dead on- made me $

    Some people just don't listen- you freaking SAID that things were primed to go sideways or down this week, you warned that there would be selling pressure related to Op Ex on Tuesday, then first notice day on Friday. You even outlined how rolling contracts over from Dec. could create a short-term selling pressure. I was shifting positions from CEF to PHYS aqnd PSLV this week (better premium to NAV), and shifting a swing trade from USLV to AGQ... but I sold and waited, went all cash based on your analysis, planning on buying back on a raid or on weakness by Friday. Dude, you clearly identified the forces at work this week, weakness in the metals, etc. Check is on the way from me, you saved me some fiat.

    boatman
    Nov 28, 2012 - 10:02am

    action today is not meaningful

    silver is STILL at the top on my paid Ph.D. guys algo list......and one step in the RSI wilder from being a flatout months long trade.

    and gold will follow days later.

    1675 gold would call this into question for now.

    GS_PHYS TF
    Nov 28, 2012 - 10:02am

    How can you be so confident

    How can you be so confident ?

    Whadya think of Inverse HNS now ?

    ivars
    Nov 28, 2012 - 10:03am

    Look at 15:30 GMT (10:30

    Look at 15:30 GMT (10:30 NYT) - if below 32,9 may continue at 17: 10 GMT (12:10 NYT). Downside.

    If flat (32,9 ) at 15:30 GMT (10:30 NYT) or above 32.9, it may be over! The sellof.

    If lower, than 17:10 GMT ( 12:10 NYT) - if flat or above 15:30 GMT level ( 10:30 NYT) , its over.

    Off to gym, this is painful to watch. But keep

    Cleburne61
    Nov 28, 2012 - 10:04am

    Hammer of Thor

    Thank God for this Hammer of Thor.

    Thanks to those fine two-bit thieves at JPM, I was able to buy nearly another 20 oz with the same cash this morning, that I could've done just 90 minutes prior.

    You'd best believe the big $ in Asia knows what we know, and that huge orders of tonnage have been filled this very morning.

    Turd, I sure hope that those "who will take matters into their own hands" don't tarry long....

    Swing low, sweet Chariot!

    ancientmoney Silver Alert
    Nov 28, 2012 - 10:05am

    @Silver Alert re:

    "Just to throw a little gasoline on the smoking embers, there has been speculation that TPTB, now that the elections are over, will want the markets to drop. They need cover to nationalize people's retirement accounts and gain access to the trillions that are socked away. Another market crash will let them claim that retirement accounts invested in anything but treasuries are too risky and they will save us from ourselves."

    -------------------------------------------------------------------------------------------------

    I can see this scenario . . . they want the people to feel much pain, so much the peeps beg for help. The govy rides in on a white (black?) horse, and has a plan to make everyone whole again!

    Lost 60% in your 401-k? How about we take all your investments at current value and replace them with a government annuity, that statistically will pay you out (over your expected lifetime) 100% plus 2% of what you had before the market crashed? Government guaranteed!

    Now would be a good time to cash in 401-k plans, etc. pay the tax and use proceeds to buy physical--to get out from under a repressive government's greedy thumb.

    Xeno
    Nov 28, 2012 - 10:05am

    Why We Stack

    Earlier a poster wrote;

    "Silver and Gold will likely not increase your real wealth at all, it will just protect your wealth"

    That is actually the 2nd reason we stack, to protect our wealth. The primary reason is that the metals are soooo undervalued because of manipulation that when the manipulation ends we will have our wealth increased - then because we stack, it will be preserved.

    This beat down is to punish all the itm option holders who took delivery of futures contracts. The time has come for all futures traders who say they trade so they can stack with the profits to man up and stand for delivery. Last chance to stack before the FTD's in Dec.

    ratioarbitrage TechTrade
    Nov 28, 2012 - 10:05am

    @TechTrade

    Sounds like wishful thinking, but would you care to elaborate? What exactly is bearish about a snap back to an upward-curving support line amidst a failing shallow downtrend in a clean multiyear exponential curve? Is it the speed (typical of bull trend BTFD moments)? Or is it the suddenness (action from a one minute bar, typical of single-trader or algo-driven moves that get reversed)? Intrigued. If this picture is bearish, show me something bullish.

    PS: historical examples of upward-curving supports (with free added seasonality)

    October 2003

    September 2005

    October 2008

    Not exactly bearish moments in the history of XAG.

    clueless one
    Nov 28, 2012 - 10:08am

    just wondering...

    but on smacks such as this...

    has anyone ever considered that those that are kicked out of positions, then have their monies tied up for a few days due to clearing...

    seems that they can get small traders out easily, as they probably don't have a lot of dry powder on the sidelines. The price drops, stops are hit, and now a certain percentage of traders' funds are locked up until cleared.

    yeah, I know that there are much bigger players and such, with almost unlimited cash...but those, I would think, are the greedy bastards that don't want the little guy to make a buck...and can move the market at will.

    It's becoming increasingly difficult to establish a return on investment without substantial inherent risk being applied. Those that are "day traders" are being weeded out. Also, it SEEMS that the O' regime is going to put the hammer down on markets regarding regulations....so that only those with insane amounts of cash will be able to play...

    no prosperity for anyone...lest you take the oath and sell your soul to the one who controls it all..that can't be seen. Hell, look at TV, Film and Music industries.

    that's fine...

    I'd rather die broke, knowing that I didn't do wrong by anyone, and that I didn't submit.

    and frankly...what good does all this speculation in the markets bring to society???? A lot of good it's done so far, eh? Things are so peaceful and happy these days...ya know? Perfect...

    I'm sure I'll catch hell for that comment...but think about it, before you blast away. Trading is one thing...it's a absolute necessity in certain arenas. However speculation, with HOT money, in commodities, is only hurting the lower and middle classes. Just like they wanted to do...and had planned. Therefore, I choose not to be a part of my fellow mans' demise.

    Sure, one could make the argument that they are just "following the trend" or "tagging along"... whatever.. it's still a bunch of bullshit that brings nothing good to the masses of humanity.

    Greed is causing the downfall. One needs to look deep...most won't. Oh well. If you can't clearly see and feel it...I feel sorry for you. I really do. Life is too precious to play this game...with your soul as the wager.

    enjoy your day...they're in very limited supply.

    Capt. Willard
    Nov 28, 2012 - 10:09am

    Looks quite similar like the down move in early November

    And it looks like the rising wedge (bearish bias) resolved to the downside at $1738 and the H4 setup just turned into a rising channel (bullish bias). Can somebody more experienced in pattern recognition please comment on this?

    treefrog
    Nov 28, 2012 - 10:10am

    floodwaters

    the flood of red ink is receding a little, and small islands of green are peeping above the surface. hl, pvg, calvf, others...

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