Alt Media Quality Discussion

63
Sun, May 4, 2014 - 7:56pm

Last week Trader Dan made a post on cults and precious metals websites. He went on to point out many cultish similarities with the TFMR site in particular, as a criticism of the advice to buy and hold PMs during a prolonged bear market in same.

https://traderdannorcini.blogspot.ca/2014/05/the-gold-cult.html

The comments which followed his post were interesting, and many came from ex TFMR active members.

Now I’ll bet that there are several who wish I was not choosing this particular subject as my topic for today ( Turd's not one of them BTW). You see, there really are a small group of people who post at TFMR for whom I agree with Trader Dan that his criticism does apply. But there are a lot of others to whom I think it doesn’t apply. That would be the majority by far.

Does it apply to Turd? I will say this: Turd espouses a buy and hold PMs as a bet against the debt, and he took a big one on the chin during the last 16 months as the 2012 rally turned out to be a bear market rally which was retraced to the downside, and more. Nobody's perfect.

I must say that I do not know what Mr Norcini was suggesting as his own readers' trades in PMs during the same period, and whether this turned out well or adversely, as I only look into his site every now and again. I have no desire to go back to check as it would not add anything to my own skills or expectations. So I will say this is not about Dan, not a criticism of Dan who has his reasons and own forum to look after. Nor is this intended to refute Dan’s comments, but to add my 10 cents.

I raise this point: if buying to trade - it is illogical and costly to hold when the market goes against one’s position. Get out fast, and try again to buy later and lower, and hope that works better that time than this time. Basic trading 101. And that would be Trader Dan’s timeframe, and mode of business I expect.

But what about the core stash which is in physical? This is not practical to buy, and sell, and buy back again many times, taking wide margins on the chin each time. Churning physical holdings is not practical or wise. So what if an averaging in process is done, buying regularly and regardless of the market price on any given day? It's not my way to do things I assure readers, but there are many out there, who advise such a strategy with eg Exxon, Coke, and other blue chips, and gold while it does not pay a dividend is a sort of “blue chip” I suggest. Like blue chip stocks, Gold comes back over time.

Now if one buys at the top, and gold then begins to decline for a year and a half, and “say” it takes a year and a half to make a comeback before moving onwards to new highs, then what? There is an opportunity cost incurred, because if the money was invested in TBonds instead, a loss of interest would follow during the gold holding period. Aaah, but interest rates are on the floor now. Not much loss there so.

The next problem is that there is opportunity cost by buying gold high, presumeably on the averaging cost basis with money which could have been alternatively employed in buying stocks which are rising over the period gold was falling.

But I feel it needs saying that if I were to give up buying at lows and instead choose to average cost buy my assets, then I would be averaging into gold, and at the exact same time I would be averaging into bonds, commodities, TBills and stocks too! One half goes up while the other half goes down, it’s a balanced portfolio. So what’s the problem, so long as one does not sell at lows after averaging in at every price? So long as one does not divest at lows, averaging in works in any inflation proofed asset which returns to fashion later.

So it is clear that the greatest losses were suffered by those who bought and held at a high of 2011 or 2012. They had to buy overweight. They had to have no counter balancing asset to move in a contrary fashion to act as a hedge. In short they had to believe the world was going to end or near, and that right soon after their purchase. That was the setup belief system for the greatest losers in the recent or current PM bear market. Oh yes, another thing: they also probably leveraged up to the eyeballs too. After all “the world was going to end. Gold is tame, deal in silver. Silver is not volatile enough, go for the mining stocks and get 5x leverage to silver”. Or options ....

Unfortunately the world did not end, and it’s not about to. And even if empires are to fall, those things take decades if not lifetimes to work their way out. And this is not rocket science.

Now I mentioned near the start of this article that there are some who will wish I didn’t bring this up. I really wish those readers will please consider the paragraph above this carefully. Prepping is all very well. But aliens arriving tomorrow, nuclear detonations in the backyard, and the implosion of the entire western financial system in a week – these are not items on my list of immediate concerns – and the sources who these people quote, and to be fair and totally clear about this, Turd is not who I have in mind here, they are purveying far out terror porn. Like Dan I will not mention names but the alt media has an oversupply of wacky far out doomsters that do not help people all that much, and that's putting it mildly.

But I like TFMR which has only a small clique of over the top doomsters, and they are not on my ignore list. I want to see the latest shout of coming annihilation or whatever, just so I can reconsider my own premise and scenarios. Every “source” has a track record of success or failure. Every source’s track record is going to improve or disimprove over time. It is good to remember that and take it into account. Many people are wiser now than they were a couple of years ago. I posit that trading in the stock market would teach the same lessons over time as the PM market has taught in the past 16 months, or 3 years depending on entry date for buy and hold long positions.

But here is the big deal. To buy physical, it is not a good idea (in my humble opinion) to average in, despite the many voices who advise this. Dan does not address this point as he buys and sells.

So with an illiquid asset like physical PMs, which has high transaction cost, what is best to do? Simply put, it to do the majority of buying after a substantial decline, and then hold for the long term and amortize the high transaction costs over time. This works for Coke, Exxon, and Gold. It is tried and tested with the other great but even more illiquid asset – I mean land. We all know this.

And the people who got hurt knew that all the time. Deep down inside they knew it. What made them disregard it was a fear to miss out on the imminent end of the world. They bought into the doom alt media and disregarded reality and the inherent stability of even declining systems and structures.

Many months ago I posted a blog article making the case that the Dollar is an institution and wasn’t going away, overnight, or in a very long time, which goes to the heart of this matter. That blog article was posted here at TFMR in August 2013:

The Institution of Money.

In October 2013 I posted this article about groupthink in internet fora and websites. :

Financial & PM Websites & Internet Fora - Are They Specialized Information Repositories or Merely Sources of Groupthink?

Those are just examples that come to mind at the moment. Of course I was not contributing at TFMR in 2011, but started early 2013.

So did Dan bring anything new to the table not discussed before? Not to me, given I've already raised these issues at TFMR, but possibly for some other readers. But I enjoyed his article, and considered all the arguments again to see if anything had changed since I last thought about those issues. He was correct in that there are a few who round on anyone who criticizes Turd to protect, which is unnecessary as Turd is well able to speak for himself. I do think these members constitute a "cultish" force at TFMR, and wish they wouldn't do that, but because they are relatively few they don't stop discourse between the rest, who do what we all do, and pay more attention to some than others.

I was happy enough for SRoche to bring the article to my attention, and felt no need to blindly attack or deny anything. I just saw more fresh information, so I read it, and assimilated it (like the Borg!), and hopefully my judgment gets better for that.

If a silver round has the host's image on it, and it's low cost silver, the price is what matters, and the rest is a bit of fun. ASEs are nice but expensive and weigh one ounce too. It's the buyer's choice, as in everything else. I have some ASEs and some Turd rounds.

For the record my average cost of PMs is located a tiny bit above the current trading range high for the metals. No transactions, just buy and hold. Buy as wisely as possible as it's a single shot transaction which requires great care. If they go down more, I’ll buy more at the extreme low if I can identify it. That is how long term accumulation of illiquid assets gets done in the real world.

Dan mentioned about providing information for free as a test, and trading for a living. A bit disengenuous, since not many have what it takes to be a successful trader. Should all traders open a free blog? Rhetorical only, reply not required obviously.

But my blog is here and that part is free, so I do my bit. I hope it's not considered "free internet BS", as I put a lot of care and thought into it, and hopefully readers get value from it. But if someone can't see the value in it, I'm not bothered and have no worries about quality control.

But I as well as everybody else have my good days and worse days, so like the Curate's Egg, it's good in parts!

To recap:

There are many varied voices at TFMR, both measured and more urgent, often in opposition to one another, but sometimes in accord, discussing a myriad of issues. A lot more than just trading I would add. Readers are free to pick and choose from the many views put forth on this website.

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

About the Author

  63 Comments

silver66
May 4, 2014 - 8:07pm

good perspective

Oh Yeah SECOND

Silver66

AlienEyes
May 4, 2014 - 8:09pm

Threed

trace

DeaconBenjamin
May 4, 2014 - 8:10pm

Prisoners released as Pro-Russiaactivists storm Odessa police HQ

A group of pro-Russia activists has stormed the police headquarters in the southern Ukrainian city of Odessa and released scores of prisoners detained at the scene of deadly violence on Friday that culminated in people being burned alive in a trade union building. In the pouring rain, men armed with clubs battered their way into the building through a vehicle entrance. Ranks of riot police offered no resistance. When crowds burst into the compound and began smashing windows and wrecking police vans, officers agreed to release the activists.

Men and women, many in tears, emerged from the door of their cell block and left through a tunnel of cheering supporters. Local police said later that 67 people were set free. "The police did not interfere," said Maksim, 26, an activist wearing a balaclava and a helmet who was one of the first to get inside the compound. "They are only defending their weapons."

Residents and government officials in Kiev have criticised the police, accusing them of fatal passivity during the violence in the Black Sea city. More than 40 people were killed on Friday during street battles that escalated until pro-Ukraine activists launched a full-scale assault on the trade union building. It was defended by people opposed to the current regime and in favour of closer ties with Moscow.

The Ukrainian prime minister, Arsniy Yatsenyuk, told the BBC that Odessa's security forces were responsible for the deaths. "I personally blame the security services and law enforcement office for doing nothing," he said. "[They] are inefficient and they violated the law." Yatsenyuk, who was reportedly due to visit Odessa yesterday, also said that the region's police chief had been dismissed.

Those inside the compound said that there was a lot of sympathy for the pro-Russia cause among lower-ranking police offers. "The police are with us," said Mikhail, 21, who had just been released. One activist said that he had personally witnessed how police had covered pro-Russia fighters during street battles on Friday.

https://www.theguardian.com/world/2014/may/04/pro-russia-prisoners-relea...

F.Capra
May 4, 2014 - 8:10pm

Holding Period

If one's time horizon is to hold for several years, then "averaging in" is not flawed. Holding gold and silver also removes the threat of bank and brokerage failure. This bull market began around 2000 to 2002 and I suspect it will last another 6 years. Buying low and selling high is truly desirable but when and when is it low enough or high enough?

Mr. Fix
May 4, 2014 - 8:21pm

First, there is a disinformation agenda at all levels:

Something that I have noticed in the past few weeks, is that even formally “reliable sources”, have become less than reliable. I suspect that well-known “whistleblowers”, “inside sources”, or “alternative media outlets” are being fed a cacophony of misinformation, most probably to weed out who the “whistleblowers” actually are.

Let's say you are high up in the “ evil Empire”, and you want to find out who is loyal to you.

All you have to do is come up with a whole bunch of different, sometimes outlandish stories, and then make a careful note of who you tell them to.

Then, you simply have to go to “Steve Quayle, Dave Hodges, Alex Jones, Hagman and Hagmann,

(or to save lots of time, go to the "DOTS" forum here at TF metals,)

and you can quickly find out who are the traitors in your organization.

This also serves the dual purpose of greatly confusing the populace, while undermining the credibility of the alternative press.

the only thing left that seems to be credible, are actual “eyewitness accounts”, and of course, my own assumptions as to what the end game actually is.

So far, it's playing out pretty much as expected, although I must admit, it's taking quite a bit longer than I originally anticipated.

This is a good thing, business has never been better, I can't even keep up!

Hopefully, I can ride this wave to the end.

As for the discussion that I did not participate in, namely, the name-calling from another site,

I found it particularly “low class” to come here and start impugning this website.

I also found the entire discussion completely irrelevant to my quest for knowledge.

I personally disagree with most of the analysis offered, and sometimes I say so,

but character assassinations are completely out of line, like I said above,

absolutely everyone is being fed an epic amount of misinformation.

May 4, 2014 - 8:27pm

" .... Then, you simply have

" .... Then, you simply have to go to “Steve Quayle, Dave Hodges, Alex Jones, Hagman and Hagmann ..."

Hmmmmm.

Dagney Taggart
May 4, 2014 - 8:31pm

Addition to the Loonie Bin

Chris Duane. Silver Stacking Tips and Tricks #1: Don't Buy Generic Silver

https://www.youtube.com/watch?&v=oT9zfPriCNM

There's no "monument to one's self" here? Chris' coins are not "generic"?

I know I posted this video yesterday. Perfect timing, Argentus.

May 4, 2014 - 8:32pm

Duane silver ...

The best thing he did was the SOLA videos.

His designs are pretty, but when all is said and done, Duane rounds are generic rounds too.

Barfly
May 4, 2014 - 8:58pm

Dagney

Thanks for pointing that out. I've seen it in a couple of threads, but haven't remarked. I laughed and stopped that video at the point he suggested that I was going to take one of his rounds and sell it to someone for the same premium as an ASE. Ridiculous. If you tried to sell any of your silver to a dealer and wanted a premium over spot, they'd laugh in your face.

I have a couple of Duane's rounds. I bought them because they're pretty. That's what I paid for and why I paid for it. Other than that, they melt just like anything else made out of silver.

FreddyKrugerrand
May 4, 2014 - 9:06pm

@ Argentus Maximus

...aliens arriving tomorrow, nuclear detonations in the backyard, and the implosion of the entire western financial system in a week – these are not items on my list of immediate concerns... But I like TFMR which has only a small clique of over the top doomsters, and they are not on my ignore list.

________________________________________________________________

I had the same reaction when I started coming to TFMR several months ago on a regular basis. Yeah, I couldn't believe the REALLY over-the-top stuff I was reading. That, and a lot of religious stuff. At times I felt that I had entered a right-wing echo-chamber. On the other hand, the folks who post these things write well and often have some other, gold-related things to say that are good take-aways. In any case, this site beats the hell out of any of the MSM sites, especially with respect to information related to PMs.

As far as not recommending an "average in" strategy for buy-and-hold stackers, I don't know. I don't trade, I only stack. I've averaged in over the past 13 years and I'm happy to continue. It has worked for me, but everyone's different and the buy-after-a-big-drop strategy you recommend may work better if you have the discipline (that I lack) to stick to it.

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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