Holding out for the crash

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Firstly I'll start out by saying I'm an absolute novice concerning mining equities.

I have about half the money I want invested in mining equities. I'm thinking no matter how undervalued the shares are at the moment, there's a monumental Earth shattering general stock market crash imminent that will at least temporarily smash all markets. Basically convinced this will happen, I'm finding it hard to keep the money on the side waiting for this event while some quality stocks are so undervalued.

Do you people think it best to have a toe in but also be ready to take advantage of the crash when it comes?
 
mmm....shiney! said:
Have you read this thread salty? :)

I know it's not helpful but it's along the same lines and more.
Click to expand...

Thanks for the not helpful link shiney

:)
 
Watching that doco on the 1929 wall street crash and the great depression just reiterated that during a crash there's only one thing people want...and its not gold or silver...it's cash.

Leveraged investors whom had 10% down recieved margin calls once their stocks had devalued below the initial 10%. Rather than giving up and cutting their losses, they did what they could to hold onto their stocks... selling whatever they could, cheap...anything to bring in some cash

And it was those holding the cash could set their own price and call the shots.
 
Why would the market crash?????????
The money would have to run somewhere....
European bonds......not likely.
U.S. muni bonds........no freakin way.
The Euro or Yen.........only if your crazy
U.S. bonds.........not with interest rates about to turn

only 2 games in town now.....the mighty U.S. dollar and the stockmarket.....this is where a lot of money is heading to escape the above mentioned as they are the less risky. ( Not to be confused with the best investment )

You will be waiting a long time for the crash you are concerned about....remember 20% corrections are normal.....but for the mega collapse, there must be something better which can return a dividend.....
 
tolly_67 said:
Why would the market crash?????????
The money would have to run somewhere....
European bonds......not likely.
U.S. muni bonds........no freakin way.
The Euro or Yen.........only if your crazy
U.S. bonds.........not with interest rates about to turn

only 2 games in town now.....the mighty U.S. dollar and the stockmarket.....this is where a lot of money is heading to escape the above mentioned as they are the less risky. ( Not to be confused with the best investment )

You will be waiting a long time for the crash you are concerned about....remember 20% corrections are normal.....but for the mega collapse, there must be something better which can return a dividend.....
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yep thats what I believe it will be quite a few years yet before the music stops playing.

PM's will stay flat and shares will perform well in that time that QE is in place.

THe good thing about shares vs PM's in this climate shares also pay dividends, so you dont need to rely just on the investement to increase to make some money.
 
Clawhammer said:
Watching that doco on the 1929 wall street crash and the great depression just reiterated that during a crash there's only one thing people want...and its not gold or silver...it's cash.

Leveraged investors whom had 10% down recieved margin calls once their stocks had devalued below the initial 10%. Rather than giving up and cutting their losses, they did what they could to hold onto their stocks... selling whatever they could, cheap...anything to bring in some cash

And it was those holding the cash could set their own price and call the shots.
Click to expand...


I like the idea of Harry Browne's Permanent Portfolio http://en.wikipedia.org/wiki/Fail-Safe_Investing


The book outlines "17 simple rules of financial safety" and provides detailed commentary on their explanation and implementation. The chapter for Rule #11 is called "Build a Bullet Proof Portfolio for Protection" and makes a case for a diversified investment portfolio of stocks, bonds, cash and gold to insure financial safety. According to the author this type of portfolio has the goal of assuring "that you are financially safe, no matter what the future brings"[1] including economic prosperity, inflation, recession or deflation.[2] According to the book this is because some portion of the portfolio will perform favorably during each of those economic cycles. The book calls this type of investment portfolio, a "permanent portfolio" and advocates it be re-balanced once per year so that the 25% allocation is precisely maintained for each asset class.[1] The breakdown is as follows[3]
25% in U.S. stocks, to provide a strong return during times of prosperity. For this portion of the portfolio, Browne recommends a basic S&P 500 index fund such as VFINX or FSKMX.
25% in long-term U.S. Treasury bonds, which do well during prosperity and during deflation (but which do poorly during other economic cycles).
25% in cash in order to hedge against periods of "tight money" or recession. In this case, "cash" means a money-market fund. (Note that our current recession is abnormal because money actually isn't tight interest rates are very low.)
25% in precious metals (gold) in order to provide protection during periods of inflation. Browne recommends gold bullion coins.
According to Browne such an permanent portfolio should be safe, simple and stable.[4] Authors Craig Rowland and J. M. Lawson call it a passive style of investing.[4]
Click to expand...
 
The long dated U.S. bonds are going to get mega smashed as the interest rates turn and rise faster than most will be expecting.....you can forget about that 25%.....we are just seeing a precursor to this if you look over the last few months what happened to the 10 and 30 year notes....not pretty.....best give that 25% to me.....
 
Clawhammer said:
Watching that doco on the 1929 wall street crash and the great depression just reiterated that during a crash there's only one thing people want...and its not gold or silver...it's cash.

Leveraged investors whom had 10% down recieved margin calls once their stocks had devalued below the initial 10%. Rather than giving up and cutting their losses, they did what they could to hold onto their stocks... selling whatever they could, cheap...anything to bring in some cash

And it was those holding the cash could set their own price and call the shots.
Click to expand...

I'm hearing what you are saying, but my parents were British, Greek speaking Cypriots and I shared a few hours last week with the Cypriot community and heard actual stories of lost savings and superannuation from many of the Cypriots visiting. So yes, cash will be king when the SHTF but if it is held in the institutions, the bail-ins will get a lot of it and what you need to leverage quickly will only be available in dribs and drabs.

So my question and quandary is, do we stack cash as well as PMs or only enough cash to sustain us for a couple of months and the rest in PMs and other assets of choice?
 
As for this SHTF scenario, I am skeptical.....there will always be a market and as such there will always be opportunity. Once the world runs out of oil and gas then we might be in a touch of strife....
Cash is always good during a deflationary episode but it depends on how much you have. In the U.S. home prices plummeted but food prices rose. If you are a multi millionaire, cash is good but if you are the man in the street where do you put your money when you are actually experiencing inflation of at least 5% ( food etc ) and banks only offer 1/2 percent on savings.

Not many people today would have traded goods and services for gold and silver so it would be very difficult to determine exactly what it is going to buy.

I think that it would make more sense to invest in the gold stock because you have removed your money from the banking system, you are invested in a private company ( unlike sovereign and muni bonds ).

If you are really worried about the SHTF scenario you should be buying good quality land.....just like those who panicked in the 70's and bought land and guns. Similar scenario.....
 
Nugget said:
I like the idea of Harry Browne's Permanent Portfolio http://en.wikipedia.org/wiki/Fail-Safe_Investing
Click to expand...

Sounds pretty much the same as what Marc Faber keeps bringing up in interviews

25% stocks
25% property
25% cash
25% gold

Only he stresses the cash and gold not all be in the US


You just have to remember to count things like super (which is probably invested in bonds and shares) when looking at percentages
 
tolly_67 said:
The long dated U.S. bonds are going to get mega smashed as the interest rates turn and rise faster than most will be expecting.....you can forget about that 25%.....we are just seeing a precursor to this if you look over the last few months what happened to the 10 and 30 year notes....not pretty.....best give that 25% to me.....
Click to expand...


Well, I shouldn't imagine securing long dated government bonds in the current "record low" interest rate would be sensible. Harry Browne did write that quite a while ago and lets be honest here, If you'd bought in at $25oz for Silver then that would have been re-weighted (sold to bring back in the 25% range) and many people would have realised gains at $40 odd. Just saying


Noite - I do not follow this, nor am I one to be giving financial advice. I'm just saying I like the idea of this portfolio style and it might be worth some peoples time to research into it. There are other's out there of a similar vein.
 
trew said:
Nugget said:
I like the idea of Harry Browne's Permanent Portfolio http://en.wikipedia.org/wiki/Fail-Safe_Investing
Click to expand...

Sounds pretty much the same as what Marc Faber keeps bringing up in interviews

25% stocks
25% property
25% cash
25% gold

Only he stresses the cash and gold not all be in the US


You just have to remember to count things like super (which is probably invested in bonds and shares) when looking at percentages
Click to expand...


Harry Browne didn't advocate property because it wasn't fungible.
 
sammysilver said:
So my question and quandary is, do we stack cash as well as PMs or only enough cash to sustain us for a couple of months and the rest in PMs and other assets of choice?
Click to expand...

http://forums.silverstackers.com/topic-27754-how-much-cash.html

It might seem like a lot but trust me, I recently needed mine and was worth more than gold (particularly as I didn't have to liquidate my PM's). Once you've got what you feel is a comfortable stack, start hoarding cash (both physical and digital).
 
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