Exit Strategy

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#1 Fri, Jun 17, 2011 - 9:23am
donpaulo
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Exit Strategy

greetings to you all. I am relatively new to the PM game but like to believe I am a quick learner. I also am hoping that one of the best ways to learn is to brain storm an idea and see where it leads.

So let me (us) know;

What is your exit strategy ?

What do you plan to do with your hoarded metals ? I don't think it matters so much if its physically buried in a safe place or part of a silver hat or even if its held in paper or digital form. We are all buyers and long term holders of the shiny stuff but to what end ?

What do you plan to use your stored wealth for ?

looking forward to some lucid discussion

and thanks for reading

Edited by: donpaulo on Nov 8, 2014 - 5:09am
Fri, Jun 17, 2011 - 11:02am
SilverTree
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Hold & use as need

Hold & use as need.

Sat, Jun 18, 2011 - 4:38pm
PastTense
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The long term physical

The long term physical holders of PMs have exactly the same exit strategy as cash holders do--convert to physical goods and services as they are needed. They simply view PMs as a better way to store their wealth than cash (cash loses value with inflation, PMs don't--and most here expect a lot of inflation)

But this forum seems to be dominated by short term traders who are trying to get rich with trading and their exit strategies have to do with predicting exactly when PMs will reach a temporary top or bottom, they selling or buying....

Sat, Jun 18, 2011 - 4:58pm (Reply to #3)
Prize Fighter
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I've already exited into PMs.

"Exit strategy" in regards to PMs to me is like asking, What are you going to do with all your money? My silver/gold is my money. It's a store of wealth regardless of market and political gyrations. I think my money has a good chance to greatly increase it's purchasing power over the coming transition, but my plans for it are the same before or after the coming collapse. Save it till I want to invest it. I don't consider it invested right now, but I do consider it safe from counter-party risk and that's the only place I want to be.

PastTense wrote:

But this forum seems to be dominated by short term traders who are trying to get rich with trading and their exit strategies have to do with predicting exactly when PMs will reach a temporary top or bottom, they selling or buying....

I agree with this. A lot of smart, knowledgeable people on here but many got that way because of extensive trading and understanding of the market. Can one honestly say they can separate a lifetime of trader mentality from sound money reasoning? No single rain drop is responsible for the flood so just make sure you don't step over a '64 quarter to pick up a '11 dime.

Sat, Jun 18, 2011 - 5:06pm
Eric_2
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My long term plan

I am a long term stacker/prepper, no trading. The way I see it, silver will at some point in the next few years become extremely valuable, either because of the true physical shortage of the metal and it's need for industrial and high tech applications, or the general public will get on board and silver will go truly parabolic. Many experts such as Adrian Douglas of GATA see silver as high as $6,000/oz.

At that point I will cash out some of my physical into other necessities or assets (such as gold, if the GSR falls below 12:1).

People around here may not admit it, but at some point silver WILL enter a bubble (not at $50, but maybe at $6,000 - $8,000 per ounce!). When that happens, the stock market will have probably cratered big time. Then there will be a once in a lifetime opportunity to sell some metal and get back into equities.

Mike Maloney details this particular strategy in his book about investing in gold & silver.

Sat, Jun 18, 2011 - 5:14pm
tmosley
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I am waiting for silver to

I am waiting for silver to reach parity with gold (and overshoot) in an industrial user panic. Once we hit that, I will trade most of my silver for gold.

With the gold, I will wait out the dollar collapse, and inch my way into equities and real estate after those markets have collapsed and everyone wants to stay away, and everyone is scrambling for gold. From there, I collect dividends, rent, and enjoy life as one of the world's new oligarchs. I'll probably use much of that income to fund research into energy and food production, space travel, life extension, and other fields that interest me.

Sat, Jun 18, 2011 - 6:06pm (Reply to #6)
Captain Silver
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S/G Parity

tmosley wrote:

I am waiting for silver to reach parity with gold (and overshoot) in an industrial user panic. Once we hit that, I will trade most of my silver for gold.

With the gold, I will wait out the dollar collapse, and inch my way into equities and real estate after those markets have collapsed and everyone wants to stay away, and everyone is scrambling for gold. From there, I collect dividends, rent, and enjoy life as one of the world's new oligarchs. I'll probably use much of that income to fund research into energy and food production, space travel, life extension, and other fields that interest me.

Hat Tip! Silver/Gold parity sooner than we think I suspect.

Our monetary system has been hijacked by morons! Abandon ship!!!!
Sun, Jun 19, 2011 - 3:16am
donpaulo
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good stuff so far thanks so

good stuff so far thanks so much for posting.

I think the argument one could make about say a $6000 silver economy would be to ask things like "then at what price is gasoline, corn on the cob or an acre of arable land ?"

My conclusion is not so much that the PM's themselves will make massive returns but rather is a store of money for use in the future, hence the title "exit strategy".

Could silver go into a parity with gold ? sure perhaps. Unlikely but as Nassim Taleb says that anyone who forecasts the future is out to lunch.

So this idea is to either flip silver into gold and or fiat market assets at "discount" prices is a best case scenario. Nobody here will be complaining if such an instance occurs.

However this scenario, ie the fiat priced markets being way down, yet the prices of PM are to the moon seems too good to be true. I think to maximize your returns in such a scenario then timing is the critical element. It won't take a rocket scientist to decide to liquidate your PM into say DOW holdings when the ratio is 1:1. The question is how will you do it.

On the basis of chance I would say a silver parity with gold and a gold parity with the DOW are all unlikely events which many here would love to see proved true. Indeed its perhaps a driving reason behind the accumulation. Skepticism has many merits however and I remain unconvinced it will happen as simply as it is forecast or if it does happen the timing of the move will be critical to realize max gains.

What I find far more likely will be that say DOW inflation will move with PM inflation, or deflation will have a coupling move downwards. The investor will be left to time his entrance out of PM and into markets as best he can. Those who have diligently stacked will hopefully be rewarded...

The last possibility would be that DOW inflates up and somehow PM deflate downwards. Its not an impossible conclusion albeit very extremely unlikely.

If the market crashes and PM moves to the moon, then you buy in at a price that gives you a nice return.

If both the market and PM crash or alternatively hyperinflate then what is the exit strategy ?

If the market hyperinflates and PMs crash then I personally will be buying more PM.

Sun, Jun 19, 2011 - 4:03am
Basturd Toadflax
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Exit Strategy

I think the mistake that is being made here is the value of Silver/Gold in dollars. Unless your exit plan is to cash in for dollars of course. For me, real estate is the exit strategy. I currently have a good start of rental properties but will buy far more. So the real question is what is your Silver/Gold worth in whatever it is you plan to purchase or trade for when other currencies become worth -less to worthless.? What allot of folks fail to understand IMO is that taxes are their #1 expense in life and they need to reduce them or eliminate them as best they can (legally of course). You need to maximize your earnings for exponential growth.

" No one is more enslaved than those who falsely believe they are free"
Sun, Jun 19, 2011 - 1:32pm (Reply to #9)
Jake
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End Game--Become a Farmer?

Basturd Toadflax wrote:

I think the mistake that is being made here is the value of Silver/Gold in dollars. 

IMO, you will not want the FIAT in exchange for their silver or gold. Once you've given up your preservation of purchasing power, you won't want that paper. Acceleration of hyperinflation removes value so rapidly, that you'll want to spend it on what you need within minutes of exchanging your gold/silver for it. Right now, it seems as if inflation is gradual, almost invisible to your every day life. But once the confidence in FIAT is perceived to be lost, there will be no time left to prepare. The following vid describes the exponential onslaught of hyperinflation. As soon as the evil ones can no longer continue their Ponzi scheme, grocery shelves will empty and the barter value of FIAT will decline so quickly, that within days you'll want nothing except gold/silver.

IMO, unless you're prepared to be a farmer where your food comes from your own land, even then, you'll need to buy seed and fertilizer with something, the end-game will be one of spending gold/silver rather than exchanging it for something that appears to be cheap in relative value to what you've always been used to. This vid also describes the "Triple-Curve". It's an excellent way to understand how hyperinflation accelerates so rapidly.

LPACTV: Hyperinflation & LaRouche's Triple Curve
Your Silver--I Want to Buy it! Sell Me Your Silver!
Sun, Jun 19, 2011 - 3:28pm
Eric_2
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Donpaulo, I too am enjoying

Donpaulo, I too am enjoying and learning from this conversatio, thanks.for getting it.started. The important thing to realize about silver is it gets USED UP. At high enough prices I'm sure people will begin to recycle, but that is a ways off. I saw an article some months ago that the USGS predicts that silver will be the first element on the periodic chart that gets completely used up (about 20 years hence is the estimate). I'll see if I can find that article and post a link. So if the economy goes to hell silver will increase in value. But if by some bizarre miracle, we stumble through somehow without collapse, silver still stands to go to the moon due to the shortage and it's need for so many applications, where there are no other elements that can replace it.

Sun, Jun 19, 2011 - 3:59pm (Reply to #11)
Jake
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This might be the Article Eric

Eric_2 wrote:
I saw an article some months ago that the USGS predicts that silver will be the first element on the periodic chart that gets completely used up (about 20 years hence is the estimate). I'll see if I can find that article and post a link.

This might be it:

https://www.rapidtrends.com/2009/09/30/some-interesting-thoughs-on-silve...

Your Silver--I Want to Buy it! Sell Me Your Silver!
Mon, Jun 20, 2011 - 5:58am (Reply to #10)
donpaulo
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becoming a farmer

Jake wrote:
Basturd Toadflax wrote:

I think the mistake that is being made here is the value of Silver/Gold in dollars. 

IMO, unless you're prepared to be a farmer where your food comes from your own land, even then, you'll need to buy seed and fertilizer with something, the end-game will be one of spending gold/silver rather than exchanging it for something that appears to be cheap in relative value to what you've always been used to. This vid also describes the "Triple-Curve". It's an excellent way to understand how hyperinflation accelerates so rapidly.

Thanks for posting the video.

As a student of History I think that the some of the major factors differentiating todays scenario and that of 1920s Germany were simply glossed over in that presentation. However its unpossible to cover all aspects of that era in a 20 minute speech despite its good intentions.

I think for lack of a better tool for measuring gold and precious metals we are forced into the dollar system. Far superior to measuring in Yen or Renminbi. I guess to some degree they are all fatally flawed in one way or another.

Regarding farmers I think the fulcrum will be securing ones harvest and getting it to market. Transportation systems the world over are based on abundant cheap oil which is fine until oil is no longer abundant or cheap. Since oil at present is finite I think its a fair assumption to make until such time as a black swan event proves such conclusions false. (algae oil, mushrooms sugars etc etc)

As far as seeds and fertilizer go, there are always alternatives. Crop rotation is a proven method of producing caloric capacity sufficient to feed pre industrial England. Perennials are also a viable option to annuals in terms of yield, and perhaps most importantly use of water to bring the crop to harvest. Although perennials fly in the face of the rotation system however an orchard can have sufficient NPK delivered by the farmer adapting a chicken farm and by collecting "night soil".

I don't even want to go into how many calories of plant material go into making 1 calorie of meat but its a losing formula. With ratios of 20:1 meat may quickly find itself as rare on our dinner tables as it historically has been.

anyway I have gotten enough off topic to make a thread jack which I don't want to do.

I think we all agree that the problem does not appear to be getting better any time soon and that stacking is a time proven way to ensure purchasing power. If any additional benefits can be gained through stacking we here will be all the better. Perhaps at another time we can discuss what happens to farming cultures in a world of violence.

keep stacking ya'll

Mon, Jun 20, 2011 - 6:57pm (Reply to #13)
Zwipped
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Convert silver to gold

20% when GSR is 25

20% when GSR is 20

30% when GSR is 15

20% when GSR is 10

Hold 10%: You never know

Mon, Jun 20, 2011 - 7:24pm
Bill Brasky
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Hookers & Blow

I only hold physical for the worst case scenario. If we don't get to the worst case I will leave it to my nephews and when I die they can fly to Vegas and binge on hookers and blow.

Mon, Jun 20, 2011 - 8:30pm (Reply to #15)
Jake
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Don't Be Silly

Bill Brasky wrote:

I only hold physical for the worst case scenario. If we don't get to the worst case I will leave it to my nephews and when I die they can fly to Vegas and binge on hookers and blow.

Pete Rose Never Did Anything Like That! Get with the Program!

He Just Wanted To Smell Like a Man:

Pete Rose Aqua Velva Commercial
Your Silver--I Want to Buy it! Sell Me Your Silver!
Mon, Jun 20, 2011 - 9:40pm
Bill Brasky
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Charlie Hustle

He got his nickname for more than one reason. One of the greatest human beings I've ever met.

Mon, Jun 20, 2011 - 9:56pm (Reply to #15)
tmosley
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Order is important

Bill Brasky wrote:

I only hold physical for the worst case scenario. If we don't get to the worst case I will leave it to my nephews and when I die they can fly to Vegas and binge on hookers and blow.

You've got the order all wrong. Give it to them, go with them to Vegas, binge on hookers and blow, THEN die.

Mon, Jun 20, 2011 - 11:09pm
CharlesT4
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New wealth relative to other commodities

Where I see the real gains in wealth coming from investing in Silver, isn't really relative to other commodities. We all know that the fundamentals for the grains and a number of other market are incredible. The gains are likely to rival or even surpass the gains of silver. Where I see the value is relative to other things. I feel silver will make the biggest gains relative to labor. For many of the products that we buy, raw materials are a very low level of the input costs. Lets take for example, a pair of shoes. For a $150 pair of shoes, the materials might make up $10 of the cost. The other $140 of the cost is where I see silver making huge gains in value. This is the markups from manufacturer, to wholesaler, to retailer. As we enter further into this depression, it will be the margins of the businesses that get squeezed. We are already seeing this with food manufactures. 

In poorer countries like Egypt and so on, the reason their inflation is raging is because it is much more heavily weighted to raw commodity prices. An Egyptian family would likely be buying a raw bag of rice. In the US(and Canada), its more likely that the rice we would be eating would be Uncle Ben's prepackaged or from a fast food restaurant like Edo Japan. In these cases, the raw price of rice is only a fraction of the cost we pay. 

I would hazard a guess that only about 5% to 20% of the average Americans costs are from raw materials, and the rest is related to services. This obviously will depend on your spending habits, with it likely making a higher percentage for thrifty individuals. 

Now to answer the initial question, I plan on holding my current physical silver position as my core position for the rest of my life. I like to buy low and hold, selling only triggers an unnecessary tax bill. I plan on turning my silver into generational wealth that will continue to be passed on after my death. As for the trading position that I'm looking at building now, after the silver bull market is over, I'll probably transition to stocks or real estate, maybe even bonds. 

Mon, Jun 20, 2011 - 11:27pm
Dr Durden
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I like Bix Wier's exit

I like Bix Wier's exit strategy. He'll definitely be selling when the following happens....

Quote:

1) The removal of the gigantic concentrated short position on the COMEX Silver market as reported in the CFTC Commitment of Traders and Bank Participation Reports.

2) The announcement of charges filed by both the CFTC and the FBI in the pending investigations of Silver market manipulation by JP Morgan.

3) The shut down of the iShares Silver ETF (SLV) and the subsequent attempt by SLV investors to transfer into physical silver in their own possession.

4) The implementation of COMEX Position Limits in Silver of no more than 1,500 contracts and the enforcement of the Disruptive Trading Practices law.

5) The winding down of the outrageous and manipulative Silver derivative positions held by both JP Morgan and HSBC as reported by the Bank for International Settlements.

6) The mass redemption of paper Silver currently held in Pooled Silver Accounts and Silver Certificate Programs into physical silver held in the possession of the owner.

7) The Silver to Gold Price Ratio reflects the true physical relationship between above ground gold and above ground silver that is available for sale on a free and open market.

8) The realization by industrial users of silver that the supply of physical silver is rapidly depleting and with the future of producing their products in jeopardy they begin stockpiling physical silver.

9) The reversal of Silver's ever increasing use in industrial applications due to either high prices or the discovery of a viable substitute with similar physical properties and attributes.

10) The realization by the remaining 99.9% of the investing public that does not currently own any physical that Silver is extremely undervalued and should be held by all investors interested in portfolio safety and value appreciation.

11) Acknowledgment by the Bullion Banks and US Government that they have been involved in the price suppression of Silver for over 50 years in order to support and extend the global confidence in un-backed fiat US Dollar.

12) All Silver statistical reporting companies have completely revised their historical numbers to reflect the true supply/demand realities of the past and admit to the massive annual physical silver deficit going forward.

13) The USGS alerts the world to the reality that at the REAL current Silver consumption rates there is less than 10 years of known below ground Silver reserves remaining in the world.

14) The realization by investors that significant increases in the price of Silver would not curtail industrial demand as silver is mostly used in very small amounts in each product produced.

15) The mainstream media highlights that the investment drivers for Silver far out weight the investment drivers for Gold.

16) The US Mint starts to produce US Silver Eagle coins "in quantities sufficient to meet demand" and no longer illegally rations their dwindling supply.

17) When investors stop saying that silver is "too hard to store" and start worrying that silver is "too valuable to leave in a bank's safe deposit box".

18) When Central Bankers around the world stop printing money every time there is a "bump in the road" on their never ending quest to foster perpetual growth and end the extraordinary transfer of wealth from "the many" to "the few".

19) The US Government and the Citizens of the United States recognize and acknowledge that Article I, Sec. 10 of the US Constitution specifies that only gold and silver coin can be legally used as money and the Coinage Act of 1792 defined the US Dollar as "three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver."

and finally...

20) The price of silver has risen so high that it has fulfilled all my hopes and aspirations as an investor and I can now sit back and enjoy those other pleasures of life that I had put off in pursuit of FREEING THE SILVER MARKET FROM THE CLUTCHES OF MANIPULATION!

https://www.roadtoroota.com/public/571.cfm

​Lulz. Go Bix!


Got GIABO? "It's called the American dream, because you have to be asleep to believe it." ~George Carlin
Tue, Jun 21, 2011 - 1:57am (Reply to #20)
donpaulo
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I reckon vegas has nothing on

I reckon vegas has nothing on bangkok, saigon or even penom pehn. But to each his own I suppose. Saigon in particular has quite a few precious metal shops most notably gold, although I did see quite a few coin dealers in the area of sumkumvit university located in Bangkok.

I ate at a top shelf french restaurant Saigon and ordered a 5 course dinner including an excellent pinot for about 50 usd. I've eaten french cuisine in Paris, NY, Montreal and San Francisco and that Saigon joint ranked up there with them. You don't even want to know how lovely the ladies were lined up at the bar all seeking some male attention. The vietnamese could most likely teach vegas a thing or three especially when you consider how many foreign ladies "work" in sin city.

however I heartily agree with the order in which one should check out.

Saigon would be first on my list otherwise vive le difference

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