Awesome thread Hi-Ho. Thanks.
Gold is real tangible money, and it will be around when the last issue of fiat money is struggling to survive. Gold has a five thousand year history of representing wealth. No fiat money has ever lasted as long as a hundred years.”
“So in managing risk, there is not a lot of risk to manage when you own gold. Or let me put it this way -- as far as money is concerned, the nearest thing to riskless money is gold.
Mar 29, 2011
1. “We are all getting poorer in hopes that a few don't get richer.” – Victor Hanson.
2. Many gold investors are getting poorer, ironically, by waiting for a collapse of the dollar to make them richer. While a fall of the dollar against gold makes those around you poorer, it doesn’t make you richer.
3. You may gain some power, but not riches. Only a rise in the dollar can make gold owners richer, because only a rise in the dollar allows you to buy more gold on sale. Gold is on sale this morning, but is anybody in the golden grocery store? Is anybody taking action?
4. I’m here at the empty gold grocery store, buying this gold sale, like I buy every sale. The store is basically empty, except for the usual banksters alongside me, also on the buy. Wait, there’s a couple of members of the gold community, too. Thank goodness, it was almost a wipeout!
5. Click here now to view a picture of my Gold Grocery Store.
6. While my competitors, and most investors, get better and better at predicting the next theoretical valuation of their fixed amount of gold, I get richer. Every day, sadly, I watch my competitors hoist their fixed amount of gold up the dollar valuation flagpole, and salute their toilet paper flag. You need to decide whether standing at attention at the flagpole for hours every day, or getting yourself into the gold grocery to take buy action, today, is going to make you richer. Focus on that key word, “today”…
7. If you bought ten ounces of gold in 1998, how many ounces of gold can you buy with that ten ounces now? The answer is ten ounces. You build no wealth by measuring a fixed amount of gold against the dollar, but you get to watch millions get poorer and poorer, and see them eventually go to the breadline, as the crisis causes them to hold less and less dollars, with each dollar they do hold buying less and less of the items they need to survive.
8. You build power, not wealth, by watching those around you get poorer against your fixed amount of gold.
9. If you have a million dollars of cash in your trading account and a thousand ounces of gold in a vault, what is your wealth? The answer is that your wealth is a million dollars of cash, and a thousand ounces of gold. 99% of investors think your wealth is the dollar value of the combined items in your portfolio. That assumption is 99% incorrect, and is a large part of the reason that 99% of investors are lifetime losers in the market.
10. Do not value your wealth in dollars. Value your cash in dollars. Value your gold and silver in ounces, your wheat and corn in bushels, and value your oil and natural gas in barrels and BTUs.
11. Use valuation as a tool to increase wealth, not as a measurement of wealth, or at best your wealth will remain static, and at worst, and most likely, it will nosedive.
12. Working professionally to increase your wealth is not an act of greed. Staring at a fixed amount of gold hanging on a dollar valuation flagpole is greed, and that action of pure greed will destroy your wealth. “I have a professional wealth destruction plan of action in place, and it is standing at attention at the dollar valuation flagpole, a flagpole built by the banksters.” – Not you, March 29, 2011.
13. If you want to get richer, here is your course of action. Predict nothing, buy gold on sale, and do it now. Getting poorer is not funny. I’m not just interested in getting richer. I exist to get richer. That’s all I do all day long. I get richer, through professional market action, from 4AM to 8PM. Get yourself richer, in cash, gold, silver, oil, gas, wheat, corn, gold seniors, gold intermediates, gold junior stocks. Get more, more, and…more!
14. Dollar valuation is a tool. Use it correctly. Don’t use dollar valuation like a chainsaw in the hands of a four-year old, or you will soon look like a diced financial tomato. There are only two correct uses of dollar valuation. The first is to value the amount of cash you hold, and the second is to build absolute wealth, by buying gold and other quality assets when they are on sale, which they are today.
15. For 99% of investors, the dollar valuation tool causes horrific wealth destruction. There’s only so much time I’m going to devote to watching the show, “a thousand ways for Elmer Fudd Public Investor to financially die”. Most of your time should not be wasted guessing when the gold grocery is going to hold a sale, but spent responding to the sales that do occur, without exception. Today is one of those days that demands you respond professionally, on the buy. Stand back from the mob that is glued to the dollar valuation flagpole, or you will destroy your wealth.
16. Investors should understand that today’s dollar price of gold is a tool, not a valuation. The banksters want you to think $1410 is a valuation. It’s not a valuation. It’s a tool. If you are bored in the gold market, it is solely because you are erroneously using the price of gold as a tool for valuation, rather than as a call to action.
17. Once you are awake, you should be rushing to the quote machine, to see if you bought any gold on sale or not. You should be rushing to look at the cash in your accounts, to see if you bought any of that on sale too!
18. You only get richer when your amount of cash measured in dollars, rises, and your amount of gold measured in ounces, rises. If you have a thousand ounces of gold and $1 million in cash, you only get richer when you have more than a million dollars in cash and more than a thousand ounces of gold.
19. I estimate that 1% of investors understand that they are engaged in wealth destruction, not wealth building, and only 1% of investors will end this gold bull market any richer than when it started. Many will end the bull market with more power over poor people, but you won’t be any richer. I think relative power is over-rated, compared to absolute riches. What do you think?
20. Let’s take a look at some charts, while you read the above 19 points repeatedly, until you take buy and sell action like riding a bike, rather than engaging in predictive action like riding a bike.
21. Here’s the gold juniors chart, via GDXJ. Notice the short term stochastics is giving a bit of a sell signal, while the longer term stochastics is flashing a buy. It is a complete and utter waste of your financial time to guess whether “short term, we might have a dip”.
22. As time has passed since the gold markets stalled out against the dollar last October, a huge amount of energy has been expended by investors to guess whether we are going lower or higher. More and more, price is shaped as a consolidation, but in the end all that matters is whether you are prepared to use the cash in your accounts to buy gold market items if they go on sale, as they are today.
23. If gold market items go more on sale, then you buy more. If you have significant assets, you should be carrying a position of gold put options and gold short positions as well, so you are booking profits today while buying long positions.
24. The bottom line is that the gold market is what you make it. It is boring if you stand beneath the dollar valuation flagpole with a fixed amount of gold and pretend you are getting richer or poor as the banksters raise or lower the flag. It is phenomenally exciting beyond most of your imaginations, if you use the flagpole as a “gold on sale” and “cash on sale” tool. Most everything is on sale, today! See you at the store!
Much inline with my own thoughts.
I have my own rotational system
That moves me around gold's
Opportunity calendar. This means a circulation from metal
To shares to leveraged instruments.
Shares very cheap right now, so if
Gold dipped to 1400 they would
Get a little bruised, but a nice juicy
Drill result could mean a quick 30 or
Per cent move up. Great work HIHO.
My tech ability improving nicely with this thread.
Love the micro analysis b/c I don't see it a lot. Keep the charts coming, partner...hat tip to you.
I posted this about myself on Pailin's thread, and is probably a good idea to post here too:
"I am also self-employed, but businesses are not doing well. So I have been actively investing/trading Silver until other opportunities show up.
I've been trading/investing 13 years. Lost a bundle (6 figures) in the tech bubble as a novice trader. I managed to make it back trading equities after a steep learning curve. Read many books, blogs, attended courses, software etc.
I use multiple trading methods/software to arrive at my investment decisions. I no longer believe in the equities market as it is all due to Fed pumping and $ devaluation. The best way to make money these days is to buy in a Secular Bull market which will forgive poorly timed purchases. PM's are the ONLY Secular Bull market.
In 2006 I sold a property in London which tripled in value after buying in 1995. These profits were put in an offshore account making a nice income getting nearly 8% interest (one account was in Iceland. I was savvy enough to get out while the getting was good). Then rates dropped,and that income disappeared.
After watching Gold move from $450 to $850, I decided to take money out of the banking system and put 50% of those profits into gold coins in 2008. They have seen a nice increase, BUT realised that these are were actual profits but rather a preservation of wealth.
I needed to generate PROFITS, so I looked at silver as an under-valued play in the Jim Rogers style. After much research, I put 25% of my property profits (which were still in an offshore account collecting .25% interest!) into silver right at the breakout point of the August 2010 bull run. I rode it for the most part to the top for excellent profits. I did this by buying PHYSICAL. NO leverage. I knew that Silver was called the "bitchy" metal, and that leverage could kill anyone. At the halfway point of that run, I fine-tuned my strategy for buying physical so as to maximise my profits in future.
So here I am today accumulating slowly, and waiting for a huge SPIKE down (2008 style I hope) to back the truck up with.
I Buy BLOOD Red days when there is FEAR. The only way to win in this manipulated market.
I love to learn more about the PM's and came across the Great Turd. I thought it was fantastic that Turd's main goal was to help the unknowing sheeple. I tried to help those around me by telling them what's happening in the economic world. Most either stuck their head in the ground, or called me a negative, pessimist conspiracy nut. I no longer spout my views unless I feel they will be taken openly and honestly. My wife is of the ostrich persuasion, even though she understands my views are correct. I am posting here as to share with others wanting to learn and share.
My sister is married to a high wealth trader for Credit Suisse (after leaving UBS). I went to visit them in CT over Xmas. Her husband and I have good conversations about the economy, and he agrees the future sucks. Funnily enough, he gave me The Gartman Letter every day while in CT. lol
Best conversation during Xmas was with one of his former UBS colleagues, who lost his job there. Not knowing him, I asked what he did for a living. He told me "he closed banks"! I asked how, and he said he worked for the FDIC. He told me that he cannot understand how Americans can keep spending on STUFF when they cannot afford it. HE sees what is going on BEHIND closed doors...and it ain't good. HE IS SAVING. and PREPARING.
Well that's my story, and I'm sticking to it...lol"
A hard reversal drop after a Low is put in...not exactly 5 days on this last trip off the low, but one may be due today.
A case could also be made that the ANGLE of ascent on this latest rise is slightly less steep with each prior drop, which means Silver is WEAKENING. Probably NOT a Waterfall decline. (Definition: A financial waterfall is a relentless decline in a market for weeks in a row, almost always carving out new interim lows when it finally ends. In a financial waterfall selling pressure builds and builds, powerfully driving an index lower and lower. Eventually the selling pressure reaches a temporary climax in a short-term capitulation panic and then a textbook V-bounce is born from the ashes.)
I get a rising wedge when I look at that avatar....... but thats another story...
Here's something from Chris Weber:
Silver looks to be morphing into a pennant. A break ABOVE would be VERY Bullish (although there is overhead resistance)
A break below would confirm the Falling Wedge pattern.
HiHo, maybe I'm getting old, but I can't quite read the numbers on the chart.
What are the 'break out ' prices?
Excellent work HiHo.. we all appreciate your charts and comments on Silver.
Keep posting the good articles you find also...they are well worth reading for all.
There is definitely some tension in PMs now going into the summer months. We all knowthe fundamentals and tightness in the market make a great case for and upward spike in prices later this year. However, we also know the EE has plans to keep it down (and go lower) before this is over. Since the $49.50 highs in Silver we've only made lower highs in the past 2.5 months and Silver sure looks like it is being capped hard not to go any higher (stopped 3 times yesterday from going over 36.60).
Keep up the great work in charts, comments and articles.....
120 minute chart: Watch for a break above yesterday's HIGH
36.49 and tickling, are we looking at a shorting opportunity? Considering I have roughly 2 weeks left of trading on Forex! THanks in advance :)
its taking a crack at yesterdays high... not sure it will break it though..
I would think if price broke UP thru 36.70, then we go higher...if it does break higher, it will probably only hit resistance a little higher up. If you did NOT buy at LOWER prices, then it is probably NOT worth trading the move.
This is EXACTLY the reason why you should ALWAYS BUY silver/gold on WEAKNESS, BLOOD, and FEAR.
IF you are new to trading you should find a website that provides free intraday charts, and try copying/placing in the same trendlines etc yourself. Then you will have more exact prices, AND LEARN how to create them etc.
Thanks for your ongoing commentary and charts. Is there any way for you to post (or link to) slightly larger graphs? I think I remember the first few charts you put up being bigger.
PS: Are you really in Yemen?
Thanks HiHo, I agree with buying on blood,
But only a 30-40 cent drop is more a scratch!
I closed my short at 35.95, hesitated to go long though.
Thanks again, excellent work.
Gold and Silver are in SECULAR BULL markets. Instead of looking to Short these metals during short term weakness, the BEST strategy would be to BUY them on WEAKNESS. It is much EASIER in the long run, and one can sleep WELL at night. It's a waste of time trying to pick tops/bottoms in a manipulated market.
Buying Dips in a SECULAR BULL market has the advantage that over TIME, one's ill-timed buys will be ironed out because in the long run the metals will continue to run up....UNLESS the Gov't/Politicians do the CORRECT thing...which I somehow doubt...lol
Here is a link: