I don't want silver to rise!

I don't want silver to rise, , , , yet!


I'm not done buying and I don't think it will ever be this cheap again. I know we have all been beaten up lately, but turning tough price moves to your favor is what makes the difference.

Most people who invest do everything backwards. They see the price of an equity rising and rush in and buy. As it continues to go higher they either hold on in anticipation of further upward movement, or worse yet, they add to their position.



It is important to point out that, when I say that they add to their position, I am looking at the whole sector. For instance if you have Exxon shares and you buy Occidental Petroleum, you have added to your position, because you are positioned for an advance in the oil sector. If Exxon makes an upward move chances are Occidental will follow and the inverse is particularly true. Equities tend to move in sync. Some follow and some lead. Very rarely does a stock move unilaterally unless it is because of company specific news.



As these amateur investors feed into the hysteria and are buying on the way up, the pros are slowly selling into the price strength, reducing their position in the sector in anticipation of the fall. When the price rolls over and starts to nose dive, the pros bail out of their remaining shares and don't look back. The amateur investors hang on and ride the train over the cliff.



When a stock bottoms out, it doesn't bounce right back, it usually bounces along the bottom for quite a while, here is where the amateurs finally get shaken off and this is where the pros move back in. You'll hear them use words like "nibbling"or "dipping my toes in the water"or "take a taste", cautionary statements indeed. This is what you must train yourself to do because it's not in our nature to buy investments that are cheap. If it's that cheap nobody wants it. It isn't valuable, right?


Sometimes, but sometimes it's not right.


That's where you have to dig into the fundamentals, to find it's value and compare that to it's price. Find the diamond in the rough or in this case, the silver.


I am continually blown away by the professionalism of the silver investors. They haven't panicked. They know the value of silver and no one is selling. The supplies of bullion, when you can find it, are not coming from the private investors. For the most part, suppliers are getting the bullion from the large institutional holders or from various mints, government and private. Imagine if you will, a crazed, raging, wild horse, bucking, spinning, and flipping about while the cowboy tenaciously hangs on, refusing to be thrown. This has been the ferocity of the private investors in this price collapse. I am not hearing capitulation from them, in fact I'm not hearing much in the way of complaints other than the usual cry of foul about manipulation from the speculators. They, or maybe I should say We, are resolved to dig in deep and build a large supply of bullion and good quality junior mining stocks.

But why such strong resolve?

I have yet to hear one rational, reason why not.

Everything is in place for a colossal price movement. Will it happen today? tomorrow? next week? next year? I don't know but I really hope this weakness lasts for a long time and allows me to build an even larger position, but I know that won't happen. This is because the price is too low to support the miners. They have already halted work in their more expensive operations and in projects that haven't been completed and many have gone out of business altogether. Coupled with the facts that financing and credit have dried up and stock prices throughout the sector have tumbled, many more operations are threatened. It is true that manufacturing demand has fallen off somewhat, but the extent of that is not yet fully known. I suspect the dramatic increase in investor demand will more than compensate for this.

These factors are enough for me to be bullish on silver. When you take into account the monetary aspects of silver it becomes even more imperative to buy bullion. The amount of money that governments across the globe are printing, is far too large to even contemplate. In fact the latest buzz on the financial news networks, Internet and papers is that, it is the stated policy of governments to stave off depression by inflating their respective currencies. How scary is that? They are not even being secretive about it!

Just so you understand the seriousness of this, think of it as a hidden tax. As they inflate, your savings lose purchasing power. You become poorer and the governments spend to their little hearts content. If that is not a tax what is?

Buying gold and/or silver checkmates the the monetary manipulation. It denies the government the ability to impose this hidden tax on you. It preserves your wealth.

Add in the potential to dramatically increase your wealth and we have the perfect relationship. I know of nothing that can match silver in all the areas that I have mentioned.



Good Luck and Godspeed



JT



Legal disclaimer: This post is for informational purposes only and is solely the opinion of the writer. Nothing in this post should be considered investment advice. Before investing in anything, the reader is encouraged to do his or her own research and consult with a certified financial advisor. Which John Tompkins makes no claim to be. John Tompkins and Toro Creek Investments accept no liability for financial losses or damages incurred by the reader because of this post.