Hi all, I have never had any spare money to invest so I am not up-to-date on all the lingo. I can Google for it but without the context I am not sure which bits to read. So firstly; CORRECTION I have gleaned that a correction is a price drop due to overvaluing, possibly because of speculators or by a resolved squeeze in supply. Is this going to be a massive overnight crash or is it going to be a gradual, dollar-a-day drop in the spot price? Also will people/general public/bandwagoneers; 1. want to hold on to it in the hopes that it will rise 2. Sell it to minimise their losses 3. Buy more on the dips! (which I am guessing will be the case for most of us on this forum) PARABOLIC From what I understand this is a shape of a graph, starts slowly then rapidly almost straight up before slowing, no plateau and then rapidly straight back down before slowing again. Is this just a turn of phrase? Like saying "Silver has gone exponential"? or is it an actual scenario that people are predicting based on previous cycles? I can't see it in the yearly graphs but I know know that plotting a moving target against another moving target (value of silver against value of inflationary fiat currrency) is not as helpful as I first thought it was. INFLATION Do you take this into consideration when working out how much you have made from your investment? I understand that trying to work out how well you are doing against fiat currency which is being devalued or manipulated is not 100% but I buy silver in fiat and I will probably be getting fiat when I sell it. I started buying silver 4-5 years ago so the $100 dollars I spent then would be the equivalent of $115 in today's money. (according to http://www.rba.gov.au/calculator/annualDecimal.html ). Does anyone adjust their valuations to work out a real profit? Does anyone have a basket of commodities with which to measure their silver's worth? Other than that I have picked up a lot from lurking around here, I have thew day of so I will be posting a few other questions but I didn't want to derail my own thread.
Correction: Generally when an asset is overbought, or investors decide to take some profits, the supply side of the equations increases relative to the demand side and prices drop a little. This is not a Crash, but a period of price correction where the asset value may trend down or sideways, before resuming its fundamental trend. In the case of silver, that's up. Parabolic: An exponential graph function, where price gains increase at an accelerating pace. Either signs of a mania underway (look up tullip mania) or a currency crisis (look up Hyperinflation in the Weimar Republic). Inflation: If we are witnessing the death of the US dollar, and it looks a lot like it, then silver (and gold) acts as a wealth preservation medium, storing your purchasing power between one monetary paradigm and the next. An ounce of silver (or gold) doesn't change, it just holds its value relative to other assets (allowing for industrial consumption variables of supply & demand). The gains are mostly nominal against the inflation of the global money supply and not real in terms of the things you will buy in the future, although silver is increasing in value against gold so is a better play at the moment.
Thanks for that, all I can remember from school was a parabolic curve and that goes up and then comes down again Like that! So when we talk about silver's price going parabolic I hope we are only talking about the left side of the graph.
Jislizard, Your parabola is inverted ! Parabolas come in the following shapes y = ax^2 + bx + c and in your case the coefficient "a" is negative thus inverted parabola. See below for the look of parabolas with different "a" coefficients "b" will move it to the left or right "c" moves it up or down PARABOLA EXPONENTIAL GRAPH SOURCE http://regentsprep.org/Regents/math/ALGEBRA/AC5/LFuncGraph.htm Note : Exponential functions INCREASE FASTER than parabolic functions
Sure it ain't a sine wave? Source: wikipedia - http://en.wikipedia.org/wiki/Sine_wave but progressing upwards on an exponential curve? Source: kookaburra
I think we have now progressed beyond the basics! Parablic curves were described to me as "The path a ball would take if ou threw it up in the air" that's probably why my curve was upside down.
The terms parabolic and exponential seem to be thrown around loosely as meaning "increasing at an increasing rate". The thing is with the right parameters it's possible to fit both a parabolic or an exponential curve to the silver graph.
