Even if I was incorrectly interpreting those comments we have all read commentaries that have said precious metals can't go down. My reply to this is and always has been that anything can go down in price at any time for no apparent reason. That silver started to drop so quickly after my comments is just a coincidence as I can assure you I had no idea when it would correct and now that it is correcting I have no idea how long this will last.What I try to understand is when manias are occurring and how they might impact client portfolios. Those two posts, among other things, reminded any clients who read them that occasionally there are distortions in the market like the extreme lift up and now a decline that seems to be pretty big. We have increased volatility in our exposure to materials and energy so for example we were down a hair more than the SPX yesterday and I would expect that with our current exposure anytime energy, materials and related foreign markets fare worse than the SPX so too will our portfolio.
As I said yesterday in an interview about the decline in silver "a long term strategy that unravels based on one week's trading was never a long term strategy to begin with."
I would also repeat something else I always say during these sorts of things; these type of events have come along before and are guaranteed to come along again in the future. The key for most types of market participants is to not learn you had to much exposure to thing that is going down a lot after it has declined such that you panic out at a low.
3 comments:
Myabe I am a loner on this, but I am reading more hype and hysteria
on Seeking Alpha than before.
I also suspect seminar writers (paid by groups such as moveon.org)are shilling crafted positions for the far left. They are easy to spot because they generally have fewer than twelve posts to their credit. Many leave it at one.
The revised Seeking Alpha format appears to be most favorable to paid writers (commission per click)and habitual writers that churn posts and comments to satiate ego rather than perform a unique perspective to investors. One recent addition was given an Editor's Choice for only one post. I know her and appreciate her frequent comments to other's articles, and likewiwse. She e-mailed me and asked if I had any ideas for a second post!
Folks like Roger and a few others deserve priority treatment on this site because they know that their advice remains cogent, tempered and clarified as a professional courtesy to readers.
Unfortunately, what I am seeing more and more on Seeking Alpa are "celebrities in their own mind" who write to write, to accumulate quantity click data to make them a star, and in the process probably do many less experienced investors a great disservice. This is accompanied by an ego-driven bio. So much for the Sir John Templeton approach. It reminds me more of the angst permeating our current political debates.
If I had twenty-three hours a day to crank out investment crap with a graph or two, maybe I would continue to feel more at home there.
T
i'm not sure what is really going on there but i have noticed that people like Edward Harrison, Mike Shedlock and Bruce Krasting no long post there. I go their sites directly now.
I dislike SA's new format very much. I'm normally OK at adapting to new sites and such so I think it might not be my problem.
I'm reading more hysteria on most sites I go to now, particularly with regard to precious metals and banks (in the UK). The silver hype has got a lot of people, who are new to investing, buying the damned metal (which I actually favor over gold) at ridiculously prices in the (in my opinion) mistaken belief it will go to triple figures.
Then they contradict themselves by saying that price actually matters in their doomsday scenarios. If there'll be no economy or currency then you want the price today to be as low as possible so you can accumulate more. Rejoicing in a higher dollar price is absurd when you're wanting to get enough of the resource to provide for the next 60 years (most of them are young guys).
I feel I have to point out the hyperbole from the uber-bugs that say PMs are the only asset to own, when many more are good hedges for inflation. Try saying that on Zero Hedge and then remember to duck, or take my advice and spend your time on other pursuits.
Once the market returns to normal I can imagine a lot of people sitting on losses and not wanting to sell for two reasons;
1. a paper loss doesn't feel as bad
2. this will be admitting the world is not going to end and that faith in a fiat currency is needed.
The capital that's tied up in those lumps of metal won't go into housing, education and many of the other pleasures life gives us. PMs also do not pay a dividend and you can't swap BRIC gold for infrastructure or fish (FISN) gold.
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