I apologize if you watched the spectacle I made of myself today. I dropped my entire SLV position and then hedged on and nearly immediately thereafter, hedged off, my portfolio. It was a magnificent money losing tap dance, that I performed with such grace I can assure you.
The primary reason I dropped my SLV position was the state of the futures. They were being torn apart with such a spread that you could have taken delivery of a metal one month and sent it out the door the next, for a 10% gain. Not healthy, unless you believe it costs so much to hold the metal.
I didn’t think so either…
However, not even a few hours after I dropped SLV, the futures began to settle. They are calming down now, approaching a more reasonable state.
I do not know if I will jump back in and try to regain my lost coin.
I’m holding MGM, WNR, CCJ, BG, AEC, CLP, AWK, and physical silver.
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Not too familiar with the issue of analyzing wacky spreads between months, but can the “calming” be at all attributed to nearly every commodity, index future and major currency, flat lining since the US close?
I would not go near silver or any other commodity – the last couple of days is why I really try to avoid stuff the hedge fund monkeys like to play. If they spike again, they will raise margins again. I agree with SB, margins on commodities should be the same as stocks – 50%, not this ridiculously small % that leads to crazy swings and leverage. I believe the gubmint is basically telling Da Boyz behind the scenes – “free lunch on commod trading is over – peeps don’t like paying $5 for gas – we gave you a chance to jack up your balance sheets but election time is getting closer and no way we get re-elected if the common slob in a smelly T-shirt is going bust trying to pay for food and petrol”.
I still think the easy money has been made in this cycle and the best play (other than cash) is sticking with dividend paying stocks that have some stability and a good long-term story.
By the way, I really screwed up on the gold trade. My broker told me a couple of years ago to buy gold, but as my hearing is not so hot any more I thought he said to buy mold. I have bags and bags of green fungus waiting for the inevitable Goldman Sachs call to get in front of the mold trade as mold fever is about to hit.
If you want more mold, I have a friend who will sell cheap the stuff he has in his walls!
lol
The only way to play the PM’s is to buy the dips and sell the rips, I’m telling ya. I learned this the hard way back in 07, but what I have learned this year from JakeGint is to keep a core position whilst buying and selling the dips and rips with an add on position. For me this is was the missing link, as I was buying and selling entire positions and psychologically speaking, I felt like I was spinning. But with keeping a core position and trading the rest, it just seems to work psychologically as you stay in control (and it’s profitable because you have cash to buy during this extreme volatility).
However, this last crash I totally effed up and did not take enough profits before hand (too greedy with letting too much profits ride), I did add some, as I had cash on hand, but I kind of had that deer in the headlights thing going on, really slow and lathargic on all counts.
I didn’t even look at my account today. I just don’t want to know. Kind of thinking about putting the freaking computer away for the summer and coming back in the fall.
Gawd, I just read my post and I know you guys know this stuff already, so my post probably sounds so stupidly elementary, but I’m still learning. The PM’s are a magnified bunch. The juniors can drop 50% in the blink of an eye, so you’ve got to be able to take profits and buy the dips. Talking to myself here, out loud. LOL
(laughter) it’s fine Chanci, you’re doing well.
My problem is more primal; I like the idea of the US dollar strengthening significantly. I think the amount silver has dropped is asinine, but while I was in both trades, my mind was tearing itself asunder.
I will have to start executing my exit from CCJ tomorrow. Sucks for me, but it broke to a new lower range today.
If it’s not back in it’s range tomorrow, I am starting my selling.
I saw that; ridiculous.
I’m just going to hold, it’s a smaller position for me, so no liquidity issues there. I can add back later on.
We’ll see, everything might drop soon. There’s a lot of tension to be felt in the world right now.
My sentiments entirely, both posts. Three years ago I read that Gold was going to $2000 an ounce. Now I didn’t disbelieve the forecast but thought the risk reward trade off was not worth the trade. How conservative is that?