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overtheedge
Member since May 2012
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The Ultimate Confirmation

- Theodore Butler - Butler Research

Well, gotta admit that there is a problem if a person tries to play silver as both an investment and as an insurance policy.
I would suggest that anyone trying to play both is gonna get beat down repeatedly.

Then each has to admit that everyone entering any market, where the price isn't fixed, is in fact attempting to manipulate the market in their own behalf. The smaller the player, the less effect they have. A major player with deep pockets can usually meet their own margin calls. Ergo they can make bundles while the smaller players often get margin called into penury.

We also have the problem of tail wagging the dog. The concept that paper sets the prices for physical is ridiculous, but that is just the way it is. So in a way, Mr. Butler is correct that major players are manipulating the market effectively. Small players just aren't very effective. I contend the major reason for small player's lack of success is trying to use too much leverage and/or unwillingness to get physical.

I've found that the easiest way to avoid losses is to avoid gambling. Buy on the dips and never sell. If you don't sell, you don't "book" a loss.
Were I to desire to gamble, I would avoid developing an emotional attachment. Take the fast nickel and avoid the propensity to shoot for a dime bag. Usually it appears that individuals hold too long before selling in hopes the pricing will turn positive again. They buy high (why buy at the lows if there is no interest?) and sell low (because I gotta recoup whatever I can.). Both based upon technicals. It seems most in the market are herd beasts and just as smart.

I would offer that there are only three approaches I know of that usually work.
1. Be the contrarian; buy when nobody wants it and sell when everyone wants it. Get out while everyone else is getting in aka panic now and avoid the rush. Or be the contrarian and hold for the long term, years or decades.
2. Use only 2X-4X leverage if you must play with paper. Provide yourself with plenty of room to avoid margin calls. C'mon, does it make sense to lose it all over a 3% drop in price?
3. Consider it insurance and falling prices are just a reduction in the premiums. Do you sell the insurance policy you took out? None of this, "Bob, I'll trade it all for what is behind door #3". Gambling with an insurance policy just doesn't make sense to me.

I would agree that gold is far more a monetary metal than silver. It is more compact as a store of wealth. And in your case, as well as probably others, it is what you have confidence in. Each should stick with what they know.

I have little confidence in gurus as they don't cover my losses, but any profits have a psychological tendency to increase my confidence in said guru undeservedly. And even less for those who blame others for their own failure.

If you know the system is gamed and you decide to play, man up for own screw-ups. You weren't forced to play.

Commented 3371 days ago

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Beginning of the headline :I’ve embraced one central theme for the past 30 years – that the price of silver has been manipulated lower on the COMEX. For a good part of those three decades I’ve exerted an intense effort in analyzing the actual supply/demand fundamentals of silver, including production/consumption trends and the resultant annual balance between the two, inventories, investment demand, etc. Those fundamentals indicate that the price of silver must increase dramatically in the future, making the manipulation... Read More

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