Gulp!

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#1 Thu, Jul 7, 2011 - 6:51pm
Anonymous

Gulp!

Ok, I'm confused for real.

If physical silver is the way to go. Why is anyone buying silver shares. 

I just bought the physical stuff. Should I be buying the paper the stuff too. Sorry but I have no idea why I am talking about.

Thanks.

Edited by: Anonymous on Nov 8, 2014 - 5:09am
Thu, Jul 7, 2011 - 7:02pm
jackmeoff
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Paper

Some people just want to daytrade silver so they use paper, some just dont know any better, and there are also funds that can not trade physical so have no choice but to trade the stock slv or gld. You are going about it the right way if you are looking for protection. If you are just wanting to flip it back and for then paper is the way to go. Also think of 401k's, ira's, 410b's and others. there is just no way to buy physical with them. I guess you could use pslv if they offer it but it is still paper even if backed by physical it is not physical in your hands.

Thu, Jul 7, 2011 - 7:04pm
SilverTree
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Keep buying physical until

Keep buying physical until you fully understand paper. :-) And don't wager what you can't live without.

Thu, Jul 7, 2011 - 7:32pm
uptofreedom
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Ruffian wrote: Ok, I'm

Ruffian wrote:

Ok, I'm confused for real.

If physical silver is the way to go. Why is anyone buying silver shares. 

I just bought the physical stuff. Should I be buying the paper the stuff too. Sorry but I have no idea why I am talking about.

Thanks.

fwiw, I only trade paper with money that's trapped in an IRA. Part of me wants to leave it there so that when silver eventually takes off I'll be able to get a little "F You" in to The Man by riding AGQ up. And the other part of me wants to take the hit, cash out and buy physical. Under no circumstances would I even consider putting any new, investable funds in paper. Anything new goes into physical.

Thu, Jul 7, 2011 - 8:05pm
HappyNow
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paper is for

paper is for trading.

Physical is for a much longer time horizon and for protection against what many believe will happen with the financial systems. If you don't believe finances will fail then maybe you shouldn't get very much physical.

If you believe financial systems will crash and burn in an apocalyptic way then you shouldn't hold very much paper.

Swing trade indexed ETFs. Long physical gold, silver, and 1 miner.
Thu, Jul 7, 2011 - 8:24pm
Jasper Puddlemaker
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Ruffian wrote:Ok, I'm

Ruffian wrote:

Ok, I'm confused for real. If physical silver is the way to go. Why is anyone buying silver shares. 

Different strategies for different people. I use CEF and/or one of the Sprott funds because I want country diversification. For me physical, CEF/Sprott, and mining shares are all must-haves, but again, different strategies for different people. I get a better night's sleep knowing that I have some diversification and leverage, but I am not in the "end of the world forever" camp so spreading out across the sector that way fits me better than holding physical only.

Thu, Jul 7, 2011 - 8:28pm
magis00
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IRAs and Control of *Your* Money

Control is my primary motivation. As we're all learning daily, a lot of the edifices in our interconnected world are build on a foundation of trust - - a very shaky foundation of trust. 

  • I don't trust the Treasury Dept. to "honor" the 401(k) or 403(b) or 529 "agreements" we have with it. (Bolivia, Argentina, Belgium(?) -- and now our Treasury, at least with Federal pensions -- have all broken that promise.)
  • I don't trust D.C. (or the ECB or the PBoC)(or the TBTF or hedgies or Soros) to keep my US$ valuable. (Inflation. Duh.)
  • I know there were "bank holidays" in 1933, and in Greece in the past few weeks, and if we get into trouble I think there could be bank withdrawal limits of $250/day or some such limitation -- F that.
  • Saddest of all, I don't trust my fellow man to respect my sovereignty should either of the three preceding "what if's" come to pass; herein the armaments and rations.

That said, my wife & I cashed out one 401k, took the hit, and bought physical (and guns, and "canned bacon" [like that as my new shorthand for Prep] . . . ) -- and the other one we have spread around in various miners that are favorites on this site, using some "funny money" to learn enough about investing in options to be very dangerous in the coming frenzy. 

Our extra cashflow goes into physical and Prep -- As many have said, what you control is all you really have.

Thu, Jul 7, 2011 - 10:48pm
Anonymous

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Thu, Jul 7, 2011 - 11:05pm (Reply to #8)
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Thu, Jul 7, 2011 - 11:15pm (Reply to #6)
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Thu, Jul 7, 2011 - 11:24pm
magis00
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Browse the old site?

Hey Ruffian,

Absolutely respect your self-knowledge -- I dig on that, and see all this PMs and Prep stuff as an extension thereof.

I was thinking that some time spent reading TF's old blog posts might be a good refresher for you --

https://www.tfmetalsreport.blogspot.com/

I would scroll down until you get to the monthly lists of posts on the right hand side; go back to like November or December 2010 and just sort of click around. I think the whole community here was in its more fledgling stages (there were mass old hands, of course, but I know I participated in a lot of "ah ha!" moments with a bunch of other posters here), and TF seemed to tailor his posts to sort of teach us . . . more than he seems to now, where I feel like he's just giving us information to process.

Also, I would recommend another sometime poster Yukon Cornelius, who's very big on "thinking strategically" about his mining picks, and from whom I learned a lot about "why invest in so-and-so" . . . https://yukoncorneliusssilverandgold.blogspot.com/ He's presently "on tour" in the Western US in parts unknown, but his archive of posts (and the comments are more manageable in volume) will give you a slightly different angle than the Ag and Au focus you'll find here.

Best of luck my friend. 

~Magis

Thu, Jul 7, 2011 - 11:35pm (Reply to #11)
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Fri, Jul 8, 2011 - 12:24am (Reply to #10)
Jasper Puddlemaker
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Leverage...

[/quote]

If you have a minute can you tell me what that means? I mean how does owning miners and that term relate to one another.

I'm trying not be too annoying.

[/quote]

No problem. A lot of folks here trade futures and options on metals. I don't. My "leverage" comes from the miners. I got into the mining sector (juniors and explorers) in 2001 and have stayed with them. Historically, the miners have greatly outperformed the physical metals in percentage terms. At times the metals will lead, but overall in a bull market the miners will greatly outperform. Leverage comes from owning an economic deposit in the ground that was acquired when metals were a lot lower in price, or from a successful exploration program. Eventually a successful company will be taken over, go into production on its own, establish a partnership, or go the royalty route. Leverage really shows itself in the blow-off phase when the public jumps in and bids them up to unreal levels. There is more to it, but that covers the basics.

Again, what I am referring to is the leverage that comes from owning the juniors and explorers. It takes a lot of work to sort out the good from the bad. It certainly is not something someone would want to be involved in until they have established their desired physical metals position. It isn't for everyone; volatility is huge in that sector. I always recommend someone interested in the sector subscribe to several of the better newsletters, and/or utilize a full service brokerage that specializes in the sector. Online discussion groups, though fun, are not the way to determine which company one wants to own (too much BS and bad information mixed in with the good in those groups).

Hope that helps (if not keep asking :)

Fri, Jul 8, 2011 - 12:58am
tallydynasty
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Keep on nibbling on Silver

Keep on nibbling on Silver Stackers. Build up over time.

Sat, Jul 9, 2011 - 4:15am (Reply to #13)
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Sat, Jul 9, 2011 - 8:33am
magis00
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Inherent Value

Hey Ruffian,

Just read through your first (?) post about being nervous, etc., and have a much clearer idea of where you're coming from. Mad props for speaking out for some help!

With your understanding of racing and breeding and what makes a horse worth money and what doesn't, I think you're closer to grasping all this fiat dollars / stock markets / physical assets stuff than you think you are.

For example:

  • Physical assets -- the reason folks order gold and silver bullion to store in their safes/electronic equipment/drapes, is because this way there's no reliance on someone else's promise. In racing (our realms of knowledge are reversed here, so I'm halfway guessing), you could have a deal with a stud owner to breed your mare . . . or you could have a foal. That's the difference between paper, and a physical asset. A lot could go wrong with the "promise", but if you've got that baby in your possession at least it's in your control. I remember one of my "ah-ha!" moments came while reading FOFOA* : the idea that "money" has 2 purposes: to store value, and to be a medium of exchange. You can go to the store to buy microwave burritos and a dollar works awesome for the latter, but where PMs come into play is to take the place of the dollar as to the former. For example, the strength of the dollar has diminished by 98% since 1913 (due to "healthy" inflation year-after-year). That is, the dollar is, and is still becoming, a really awful way to store the value of your labor. Gold (in particular; silver less-so) is meant to "store" that wealth.
  • Adding value -- the strength of the dollar (the USD [whose "index" is the USDX, or called the POSX by Turd]) basically means how strong a "promise" it is. In the same ways that you analyzed how your horse felt after its first race (weight, swelling, blood -- really interesting, p.s.!), that's what all this "debt-to-GDP" and "unemployment numbers" and such is for the US Dollar. Those "metrics" are just ways to evaluate how strong the economy is -- the same way you would look at your horse, or someone else's if you were thinking of doing business with them. Obviously most of us around here think that its owners are doing all the wrong things. By contrast, we understand what the "right" things would be. Until those things start to happen (e.g., "shadow banking" ends, "naked shorting" of the PMs ends, the Gov't actually allows the housing market to find its own bottom), I will continue under the assumption that the Gov't is idiotic, and is bad to do business with.
  •  Red Pill/Blue Pill -- I think it's absolutely awesome that you're here, because it means that you uncovered some truth that you hadn't recognized before. Stick with that! You mentioned that your learning disorder is like a string of Wikipedia entries and you jump from one to the next . . . but that's precisely the skill-set you need to have in order to learn all of this. It's 100% about being self-taught, and that happens by clicking from one thing to the next, looking up the words you don't know, asking the right questions, and just following your curiosity. Take the red pill!

...and Happy Saturday. Be well Ruffian.

~Magis

* (the writing is pretty dense and hard to understand, at first -- like reading Aristotle or something--, but the ideas are spot-on and working through the complexity will sharpen your grasp of everything you've already learned: "The Debtors and the Savers", https://fofoa.blogspot.com/2010/07/debtors-and-savers.html , and "Deflation or Hyperinflation", https://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html , are the two that really blew my hair back)

Sun, Jul 10, 2011 - 7:46pm
Jake
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Silverdoctors has a good article on this subject.

Of course. you must understand that it is an opinion and only meant to give people something to think about:

https://silverdoctors.blogspot.com/2011/07/is-trading-paper-silver-is-ma...

Your Silver--I Want to Buy it! Sell Me Your Silver!
Mon, Jul 11, 2011 - 1:23am (Reply to #17)
Desert Fox
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Good Stuff!

Jake wrote:

Of course. you must understand that it is an opinion and only meant to give people something to think about:

https://silverdoctors.blogspot.com/2011/07/is-trading-paper-silver-is-ma...

Wow! You're quite the character. {knew that already} lol

Interesting site. Could spend a little time there. {Did}

Good concept.

Thu, Jul 14, 2011 - 5:15am
agreefron
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rigorous cole haan shoes

cole haan shoes

Thu, Jul 14, 2011 - 9:01am
Big L
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Same spot

Ruffian,

I'm in the same spot as you, trying to learn and having to make decisions that I don't feel entirely qualified to make, but I need to make them.

I own both paper and physical, and both have problems and advantages.

Many here claim that physical is the safer option. Maybe, maybe not. With physical once you take delivery, your problem is keeping the coins or bullion safe. Will you keep it in your house? Where? Do you have a safe? Have you thought about theft? Can someone reading this blog tell who you are and figure out where you live? Have you told anyone else about your plans and thoughts? A friend that might mention it to another person? I read here that someone suggested you bury some silver. But what would you do if someone shows up with a gun and demands that you dig that silver up?

The reason this is all important is because if the SHTF (financial system failure) there will be many desperate people out there. Anyone with knowledge of where valuables can be found is a threat to you.

You can get a safety deposit box at the bank, and that's a good option, unless the banks fail. If the banks fail, who will open the doors? The employees? How do you access that box? In a complete systemic failure it's possible and perhaps likely the employees will lock the bank doors and drill the boxes, taking all the contents for themselves. 

You might think this is crazy, but this possibility was brought to my attention by a bank officer. We were discussing this exact scenario when she explained to me what would/could happen under those circumstances.

Physically handling anything of value puts you in a potentially dangerous position. How comfortable will you be taking the metal to the bank from the coin store or your house? How comfortable will you be picking up the metal to take it back for redemption? How comfortable would you be storing valuables in your house?

On the other hand, with physical metals, you will have them in your possession and under your control.

Paper silver is safer to handle. It's within your ability to open a brokerage account so you can buy and sell the 'paper', usually SLV and GLD. It might not be easy, perhaps intimidating to learn new software, but anybody who can handle a race horse can handle a web site. Trust me on this one. Use the same skill set. Go slow, when you get confused, back up a few steps and start again. Keep trying and you'll be successful.

'Paper' can be sold and bought very easily, but computers can be hacked. Systems can go down. Didn't our federal government in it's infinite wisdom, just give our president the power to shut down the internet in case of an 'emergency"? I'm sure some will correct me if I'm wrong, but doesn't the idea of that give you pause? What's an emergency if not a systemic banking failure? How long would the internet be down? Hours, days or months? What do you do in the meantime?

Will the internet be there when you need it?

If the SHTF and you need to access your accounts, will the web sites work? Will the demand for service swamp the servers and crash the sites? Will you be able to act fast enough? Will the computer traders wipe out the silver market before you even hear about a problem?

To make matters worse, can you even trust that the physical silver is really backing the paper? Or are the paper markets just another aspect of the giant ponzi scheme?

My personal belief is the bankers have too much invested to let the system fail, they will do everything in their power to avoid a total melt down. I think the likely hood of total failure is small, but how small we have no idea. And there is certainly going to be a lot of disruption on the way to a solution for a problem the Turdites know to be almost insurmountable. I believe that massive inflation is coming sooner rather than later, therefore the metals are a very good bet.

So what are we to do? Some of these questions are beyond our ability to answer. We can hunt the blogs and articles and forums, but it's all opinion. We are left to make our decisions based on faith and trust and best guesses.

This is why I own both, physical and paper. And I own guns, and I have a conceal carry permit. If the reason to own precious metals is to protect ourselves, I strongly suggest that us girls need to consider not just our financial safety but threats to physical safety as well.

I can't say these types of decisions get any easier with time. I've only been learning for a couple of years and I've had the help of some very bright and caring people, one of whom is a good friend and my broker. Yet, I wonder everyday have I done the right things? I'll never know until this crazy situation plays out. The best I can do is exactly what you're doing. Be aware, seek good information, weigh your options and think things through.

Hope that helps, my thoughts are with you, I hope I haven't made your decisions more difficult.