StellaConcepts $50,000 Trading Challenge

Starting Capital: $50,000.

Trading Conditions

1. Physical portfolio only - no electronic trades.

2. 8% round trip spread for silver. 3% for gold. This is what me dealer gives me for generic bars and is reasonable. Unless there is a clear dislocation in the market. Most of the time these trades will mirror my real-life purchases so I'll be able to keep on top of premiums.

3. Minimum trade size 1kg silver, 1/2 oz gold.

4. Trades made in USD. Since one could easily hedge the FX exposure, trading in USD is simplier.

5. Profits in USD. Since one could hedge quite easily in AUD, but for simplicities sake all profits in USD. Profits can also be considered in ounces I guess as well.

6. Since all portfolios in my opinion should have 10% metal regardless of cost, I am purchasing one ounce of gold and 3kg of silver from the start regardless of price.

7. These trades are hypothetical and NOT investment advice. I am not a financial advisor, every post made by me on this board is for pure entertainment purposes only.

8. Please DO NOT post in this thread. Admin - can you enforce this to myself posting only? Since this thread may last for a while I can see it getting clogged with a lot of noise, I think we should have a discussion thread where posts can be made, but this thread kept purely for trading updates.

Looking forward to it. Since I will be looking to make moves in this market over the coming months, I think this will also help me as much as some of you may get some entertainment from it ;-)


Prices at the start of the challenge:

Silver: $US30.00
Gold: $US1612.00

 

Current Spot Prices:

Silver: $US30.00
Gold: $US1612.00

Trade One:
BUY
1oz Gold: $1612+1.5% Premium
3kg of Silver: $965/kg+4% Premium
Total Consideration $4,646.98


Portfolio:
Cash On Hand: $45,353.02
Gold Oz: 1
Silver Oz: 96.45

Reasoning:
No portfolio should be devoid of metal. Any portfolio should have 10% metal on any reasonable pullback, such as what we've seen.


p.s edited as accidentally put 3% silver premium on top instead of 4%....

 

Current thoughts:

1. Silver is testing key long term technicals.
2. There is a lot of institutional funds coming OUT of the metal, especially gold.
3. Waiting to see how Silver reacts around this level and if fails, does 26.50 get support. If it does, then considering purchasing some at 28.
4. 23.75 still long term worst case, 21.50 is Armageddon and all remaining funds will pile in at that point.

 

Time to get out the fiat and do some exchange....

Current Spot Prices:

Silver: $US28.48
Gold: $US1573


Trade Two:
BUY
2oz Gold: $3146+1.5% Premium ($3193.19)
10kg of Silver: $9156.32+4% Premium ($9522.24)
Total Consideration $12,715.43

Portfolio:
Cash On Hand: $32,637.59
Gold Oz: 3
Silver Oz: 417.95

Reasoning:
Fed made clear that policy will be very easy for some time (Like we didnt know already The market has been concerned the fed wanted to ease up on their easing program, however made clear overnight that policy would remain very easy. This little nugget found on bloomberg as well. Boston Fed President Eric Rosengren said today "this discussion does not do justice to the policy trade-offs" of the Fed's large-scale asset purchases, referring to a paper written by four economists, including Frederic Mishkin, a former Fed governor and co-author with Chairman Ben S. Bernanke. Fed Governor Jerome Powell dismissed a suggestion policy makers won't act to curb inflation.

 

Time to get out the fiat and do some exchange....


Silver: $US28.61
Gold: $US1577

Trade Three:
BUY
10oz Gold: $15770+1.5% Premium
Total Consideration $16,006.55

Portfolio:
Cash On Hand: $16,631.04
Gold Oz: 13
Silver Oz: 417.95

Reasoning:
Policy to remain easy. Sequester factored in (overfactored in my opinion). Japan fighting deflation with new BOJ gov. Europe issues continue. Gold still shiny. Limiting risk by just buying gold... deflation still threats.

 

I am now converting all gold I hold for the challenge and converting it to silver, as well as use all remaining funds to buy silver.

Silver is currently at 23.55 and gold at 1409.

I am uploading a vid to my channel now...

I will do the math for the trading challenge in a bit... but im now all in. my target has been reached.

very excited

wouldnt be suprised to see low 20's... but risk/reward is not making it worth waiting for.

 

I couldn't edit the post after it moved to the official thread, so here are the numbers and I'll ask for this to be moved as well...


Trade Four
SELL GOLD
10oz Gold: $13,878.65@1409 (inc. 1.5% Commissions)
Cash On Hand: $30509.69

Trade Five
BUY SILVER
39Kg * 24.7 (including 4% premium)
= 1253.85oz.

Total Ounces of silver.
1671.8
No gold left.
No cash left in bank ya!!! Donations accepted
Just enough silver to sink a battleship.