Living through from bull to bear - has anyone lived through a cycle?

Hey all,
3/4 of the way through mm's book (fantastic btw), and am just curious if anyone has lived through one of these metals cycles he explains in the book? How did you know when it was nearing breaking point, and did you make the right decision at the right time? I understand we're in the infancy of this "bubble" right now, which makes me nervous as a noob in understanding when the time comes, what signs to look out for in selling the precious.

Can anyone provide examples of their experiences?

 

I haven't lived through a cycle but would love to hear from anyone who has.

when PM's become mainstream news it's usually a sign we are nearing the end of the boom and maybe time to get out.

 

I have read some posters on that other forum (the one that starts with a K) who have lived through a cycle.

 

What does this mean?

The property market was "mainstream" for a few years before it hit its peak.
I wouldn't be using the "mainstream" litmus test as an indicator of when you should sell because it can't be defined from anything other than a gut feeling.

I'd definitely be looking at the Gold/Dow ratio as the main indicator.
The only problem is that in 1980 it reached 1:1 for a very short period.
This time around, if things really are that bad, the ratio will go even lower: you may even be able to buy several dow shares for an ounce of gold.
We have no real way to know just where the peak is going to be.

And if things get bad enough, we also have to take into account the fact that the governments of the world may enact laws that will screw gold owners over.
There's just too much we don't know at this stage.

I would say though, that if you sell when the Gold/Dow ratio hits 2:1, then that's probably a conservative exit.
You may miss out on any future wealth if the ratio drops lower, but there's a chance that those that hold on too long will lose much more.

 

Here's my strategy. Which I didn't stick to very well because I didn't sell any gold over 1900 like so may others.
Ok so here it is, not exactly earth-shattering. If/when gold hits 1900 again I'll sell 10-20% depending on my 'gut' If it proceeds to hit 2000 I'd sell another 10-20 depending on how much I sold at 1900. If it went up to 2100 same thing. I'd continue to sell until I had only 50% of what I have now and hold for long term Now, right now I'm not in a position to be buying right now, but I would if I could. I would buy under 1800 in smallish increments and continue buying a little at each $50 incremental drop, 1750, 1700 so on and so forth.
I know that's pretty much how the big dogs do it, being a small fish I'm just following the strategies of many successful PM investors that came before me.

 

Lived through South east asian boom and bust.

Pre 1997 South east asia:

Booming economy, strong currency, manufacturing full steam ahead, people are buying up assets in the usa, australia, uk, etc en masse. Millionaires (in dollars) aplenty. Cheap labour, high margin, western world great consumer.

Then came along 1997-1998, currency devaluation in the magnitude of hundreds of percent, riot, murder, rape, arson, anarchy, near hyperinflation. Banks closing en masse, food problem, fuel problem, government collapse. IMF wants their investment back, imposed high interest rate, no spending. Sounds like your shtf scenario?

But millionaires survived, and they got richer in a way.

Here's how they did it.

They diversified their holdings, they acquired foreign assets and they had savings in foreign currencies and some in precious metals (1-5% of their wealth).

They also tried expanding their operation internationally. Some succeeded, some not so much, but overall still helped them weather through the storm.

One thing for sure, they did not fixate on what they are used to doing or only on their home land investments, they diversified. It payed off many times over.