I upped my stake in physical silver today, about doubling it. I retain a smaller cash position; which could be increased substantially with any sale of ERY.
I consider this purchase of physical silver as a sequal to a series of trades I made starting in 2009. This latest move has created a proven, profitable spread, as I’m back in lower – after all costs – than where I sold out in December of 2010.
Silver is stupid cheap here. In the event Europe decides to take the leap over the edge, silver is going back into the teens. But I would be buying it in the teens, too.
Some background, for those of you who were not following me then:
Generally, it is unwise to trade physical positions like I have. Instruments like SLV almost entirely eliminate the bid ask spread, which when pushing physical positions, and after shipping and handling costs and insurance, can get rather wide.
However, my original physical position was built largely on credit; I saw all too well what Bernanke was up to in the summer of ’09. So my problem was that, outside of merely having this lumbering stake of metal, I also had interest and debt to worry about.
Unsure whether or not the financial system would even be around today, at the time it seemed a good idea to have…a little bit extra lying around. Even if it was technically somebody elses – if you follow me.
But after it became apparent the system was going to survive – and being up almost 70% on the position – I decided it was a good time to sell enough to extinguish the debt, leaving me with a rather handsome legacy position which I hold to this very day. And now, having lots of cash and low prices, it seems an equally good idea to buy some of it back, free and clear.
A bit of history for you.