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JaysRage (78.11)

Precious Metals -- Oh how I hate thee



May 01, 2014 – Comments (10) | RELATED TICKERS: SAND , GOLD , PHYS

I'll warn anyone who is reading this blog in hopes that I will be able to help them with precious metals investing that you can stop reading now.   Know this.   I am one of the worst precious metals investors in the history of the stock market.   Until now, it might have been possible to make significant money fading every opinion or pick or move that I made, but that will no longer be possible, so I am of no use to you.   

I find precious metals investing fascinating.   The interaction between the economies, the banking sector, the minors and the general public make it just incredibly interesting to me.  

However, I have failed miserably to understand it.   On top of that, I have failed to find an analyst that can understand it either.   I have found that I can throw every analyst that I have ever read into two buckets….perma bear and perma bull.   You might have an analyst that you adore and trust that finds a way to be neutral, insightful and brilliant.   Great for you.  I’m not even looking any more. 

Every formula or strategy or thesis that I have developed for every other sector (including some commodities) has failed in every form when implemented against precious metals.   Every economic thesis that I have tried to apply to precious metals has failed.   Every analysis of company operations that I have tried has failed when applied to precious metals.   You are a strange and complicated beast and I do not understand you. 


I have officially thrown in the towel on precious metals investing.    

It’s a lesson learned.   I like to learn new things, but it also important to know your own limitations.   I thrive in the sectors of technology, energy and restaurants.   I know nothing about pharma or precious metals, and in relation to precious metals, some things are better left alone.  

10 Comments – Post Your Own

#1) On May 01, 2014 at 7:51 PM, HarryCaraysGhost (87.05) wrote:

A man's gotta know his limitations.

~Clint Eastwood. 

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#2) On May 01, 2014 at 7:52 PM, awallejr (34.60) wrote:

I don't bother with PM stocks for the most part (have some ALXDF).  I buy silver and gold coins.  Since I hope never to sell them I don't worry about price except to the extent I buy more as prices decline.

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#3) On May 02, 2014 at 2:41 AM, jiltin (46.12) wrote:

I do buy gold coins,few coins in a year, and leaving it as personal savings for my retirement.

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#4) On May 02, 2014 at 7:05 AM, portefeuille (98.91) wrote:

I have never been all that interested in gold / silver or companies digging it out of the ground or planning to do so, or pretending to be planning to do so, but I find this post kind of refreshing :)

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#5) On May 02, 2014 at 11:39 AM, ryanalexanderson (< 20) wrote:

I see gold as just insurance against monetary shenanigans. Pick a % of your personal assets you want to throw into it, buy some physical, forget about it. Stop watching it. 

Silver is an even stranger beast - industrial uses, medical, solar, gold investors on steroids. Same thing applies, though. Just insurance. 

If we all go through life in a world where precious metals fare poorly against inflation, it's going to be a pretty good world for your other investments. We've learned that the central banks have no hesitation to throw the kitchen sink at deflation. If they mess up, it -won't- be to the downside. 

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#6) On May 02, 2014 at 11:55 AM, TMFFischer (95.95) wrote:

Jay: Few people understand precious metals at all. I submit that you (and anyone else) stand a much better chance making your life's fortune by investing in cash-flow generating companies that are poised to keep growing over the years. I stand in good company in that belief, and more than half-way through my life (gulp!) it is holding true. You have precious time. I'd attach it to cash flow, rather than trying to guess where precious metal prices are going.

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#7) On May 02, 2014 at 11:56 AM, TMFFischer (95.95) wrote:

In other words, I objectively (and subjectively) applaud your conclusion. :)

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#8) On May 02, 2014 at 12:40 PM, rofgile (99.24) wrote:

I have no idea on how to predict any commodity price!

 I hypothesize that their price will tend to return to the average over time.  But over what period of time?  A year? 5 or 10 years?  Who knows.

The price of silver itself was crazy from 2008 to 2014.  It was $18, then down to $9, then up to $50, then back to $18... why?  




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#9) On May 02, 2014 at 5:35 PM, jiltin (46.12) wrote:

As long as people make money out of it, any form of investment is fine. Gold is one among them.

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#10) On May 02, 2014 at 9:42 PM, JaysRage (78.11) wrote:

I understand the desire by some to own physical assets for diversification of wealth.   I'm run that through some thought patterns, and the truth is that I don't want the inconvenience of dealing with holding a significant amount of physical assets such as coins and bars....whether it be in a safe or deposit box...along with insurance....etc.    

In fact, I have recently liquified the majority of my physical assets that were of the investment type, coming to the realization that I had put more at risk by having them and keeping them relatively unprotected than I do by being heavy in equities, and I don't really want the cost and overhead of holding precious metals correctly.  


Eventually, when the time is right, I will use real estate as a physical asset diversification (besides my primary residence).  I have not yet decided what form that will take, but it will happen at some time in the future.  

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