Silver predicted to fall 25% in 2011

Even the MSM is talking about $40 silver for next year.

(Bloomberg) -- Silver, the leading performer in metals this year, is likely to repeat its success in 2011, reaching $40 an ounce on new applications and industry demand, said the head of commodity trading in Japan at Standard Bank Plc.
 
I would be perfectly happy for silver to drop to $7 AUD per ounce and stay there for the next 5 or even 10 years allowing me to accumulate bargain priced silver. Hell if it goes to $2 even better as I can buy even more.
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I wonder if your fellow stackers are also looking forward to this possibility as much .Its now 30 years since the Hunt brothers.Silver was$4 and $7 how long ago and for how long.
I have silver and I hope it rises.Just as I'd hope vegs would rise in price if I sold vegs,and not go down.
Its easy in theory, but when what I have falls badly ,I'm scared.And for all the bravado(and thats what it is) most of the people here will be too.
Maybe you won't be,but maybe you could turn out to be wrong.And you could turn out to be right and make a fortune.
Nothing is certain now.The world could crash.Even gold could fall badly,and silver would be worse.
But I hold both because I think presently its the best bet.But I'm not sure.And if I become less sure I'll go silver to gold.
What I'm saying is that I think its dangerous at the present time to be sure of anything,and it is possibily misinforming newcomers to appear overly confident
of silver.
And I get annoyed when people wish for a decrease in the price of something I want to go up,because I hold it.And so do they.
If they are so sure its going up,why not buy all the time,because it always going up anyway.
Just seem like madness to assume you cant lose.Silver is speculative and volatile.Don't those words mean anything.
 
The concept of "I wish something was cheaper (in this case silver) so I can buy more" always intrigues me. What I have seen happen usually goes something like this:

Silver at $30 - "I wish it was cheaper so I could buy more."

Silver at $27 - "Wow - it's finally gone down I'll buy more."

Silver at $25 - " Woohoo - it's a bargain I'm going to buy heaps."

Silver at $22 - "I'm buying more - it's so cheap I think I'll back up the truck"

Silver at $20 - "Wow - why is it so cheap? Is something wrong? People are so stupid - how come everyone isn't buying at his price? I'd buy more but I've run out of money."

Silver at $18 - "I wish it would go up"

Silver at $17 - "I need it to go up - I have to sell some silver."

Silver at $16 - "This is crashing - I'm selling some of my silver."

Silver at $15 - "What a joke - I'm selling all of this crap metal. I've made a huge loss. I should have bought real estate."

Silver at $30 - ??????????

I know this will cause people to all start saying "I wish" But talk to some long term investors or retailers. With the price nearing $30 they cant get enough because of the huge demand - waiting periods for delivery of some silver products has blown out to 6 weeks or longer. When the price was less than $20 people just weren't interested. Remember prices go up AND down. Set your goals - both buying and selling. At the end of the day silver is just another investment and is certainly not the only investment. It isn't even the only metal or shtf invesment. If you are 100% leveraged to silver (or anything for that matter) you are opening yourself up to huge risk - maybe even greater than the people who believe in fiat!

malachii
 
Good points all round.

I think buying when it goes down is hard. Most people don't.

What they really want and are saying is that they'd love to buy at $25 when the spot price is $29.

Personally I think as long as I am still earning paper money I'll alwaysbe buying gold and silver for storage of my labour.

They always stand the test of time. Anyone not able to forget entirely about the money they are putting into metals is running a risk. Anyone who treats it as if it was money already lost at the casino, or blown on booze and hookers will do well.

Just don't put money you can't afford to lose in anything including metals.
 
malachii said:
The concept of "I wish something was cheaper (in this case silver) so I can buy more" always intrigues me. What I have seen happen usually goes something like this:

Silver at $30 - "I wish it was cheaper so I could buy more."

Silver at $27 - "Wow - it's finally gone down I'll buy more."

Silver at $25 - " Woohoo - it's a bargain I'm going to buy heaps."

Silver at $22 - "I'm buying more - it's so cheap I think I'll back up the truck"

Silver at $20 - "Wow - why is it so cheap? Is something wrong? People are so stupid - how come everyone isn't buying at his price? I'd buy more but I've run out of money."

Silver at $18 - "I wish it would go up"

Silver at $17 - "I need it to go up - I have to sell some silver."

Silver at $16 - "This is crashing - I'm selling some of my silver."

Silver at $15 - "What a joke - I'm selling all of this crap metal. I've made a huge loss. I should have bought real estate."

Silver at $30 - ??????????

I know this will cause people to all start saying "I wish" But talk to some long term investors or retailers. With the price nearing $30 they cant get enough because of the huge demand - waiting periods for delivery of some silver products has blown out to 6 weeks or longer. When the price was less than $20 people just weren't interested. Remember prices go up AND down. Set your goals - both buying and selling. At the end of the day silver is just another investment and is certainly not the only investment. It isn't even the only metal or shtf invesment. If you are 100% leveraged to silver (or anything for that matter) you are opening yourself up to huge risk - maybe even greater than the people who believe in fiat!

malachii
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The fundamentals on Silver are so strong mate, that $15 silver to me isn't a joke - it's a dream.

Even if it goes to $1, I'm buying and I'm buying as much as I can get.

People who panic at $15 are in for the short term play. I'm in this market for life if necessary and even then, I'll simply pass it to my kids.

This is *real* money we're talking about, with intrinsic value and a history of several thousand years.

The only place I see silver and gold become worthless is in the event of a total breakdown of society, in which case you don't need gold and silver, you need Guns, ammo, food and water.

As long as we have a workable society, silver and gold WILL remain the default option for a store of value.


I believe so strongly on the fundamentals (on silver especially) that I'll buy no matter what the price.
 
I believe so strongly on the fundamentals (on silver especially) that I'll buy no matter what the price.
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And maybe you'll make big money out of it.
 
intelligencer said:
Just don't put money you can't afford to lose in anything including metals.
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+1

Honestly, if you get panic attacks at the thought of silver (or anything) falling in price by more than 50%, then you aren't an investor - you are a gambler or a flipper or a trader. Hey, this isn't a bad thing because this is an art and it's how some people earn a living or a tactic to make (or lose) some quick profits.

I've done this in the past with both physical and paper silver, and I will continue to do it in the future, but I only use money I can afford to lose. I also have a core stack of physical that I just refuse to sell at present because this is my long term investment - my insurance if that's what you want to call it.

Listen, there is a chance that PM's could be much lower in the future - and if you think otherwise then you're kidding yourself. I really don't know what price PM"s will be in the future, but I do know that prices certainly won't be going up or down in a straight line. There will be huge volatility in both directions in the future. So if you can't sleep at night when prices fall, then maybe you've over stretched yourself financially.

So before purchasing any amount of physical you need to ask yourself... if the price of silver fell $10 per oz next week, would it cause me any undue financial stress? If not, then go for it. But if the answer is yes, then you need to have a plan in place to scale back your investment as necessary.

One option could be that you use 75% of your stack as your core holding and then trade the other 25% (sell higher and hopefully buy back lower) to help you sleep at night. Whatever works for you. Everyone has a tipping point and it's important you know what yours is before you get too deep.

There will come a time when even the most ardent physical PM investor will sell their stack, but for me that day is not coming anytime soon. :)
 
Auspm
The only place I see silver and gold become worthless is in the event of a total breakdown of society, in which case you don't need gold and silver, you need Guns, ammo, food and water.
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Yeah but you may need silver or gold to buy the guns, ammo, food and water because fiat won't be worth diddley squat :D
 
Silver is Money said:
Auspm
The only place I see silver and gold become worthless is in the event of a total breakdown of society, in which case you don't need gold and silver, you need Guns, ammo, food and water.
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Yeah but you may need silver or gold to buy the guns, ammo, food and water because fiat won't be worth diddley squat :D
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Technically speaking, gold and silver won't, either.

If you have Guns and Ammo, you can just take the money from those that have it.
 
Auspm said:
Even if it goes to $1, I'm buying and I'm buying as much as I can get.
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Auspm,

Please dont take this as me having a go at you or anything - I have always enjoyed your comments and find your input in discussions valuable.

I find this statement fasinating though. If silver was to drop to $1 it would not do it overnight - it would be a slow grind down. I am putting words in your mouth here so correct me if I'm wrong - but previous comments from you seem to indicate that you would buy consistently the whole way down from the current price. Assuming the current silver price at the start you are now down 97% on your investment - why are you buying more? Are you expecting a 2900% return on investment to bring you back to a break even point? If you bought silver at it''s peak when the Hunt brothers' cornered the market you still haven't got back to a break even 30 years later - and that is before you take into account inflation or holding costs - or your opportunity cost. Why does this make sense?

I know this whole discussion is hypothetical - but at some stage we will all have to sell - we are all traders, we just work on different time scales. Silver or any other investment is purely a tool for wealth management. I cannot see chasing the price of silver (or any other investment) up or down as being sensible. ALL investments go in cycles - pretty much the sames as petrol, milk and many other things. Use these cycles to your advantage.

malachii
 
When silver dropped for $21 to $8 I wanted to buy lage amounts after I saw the price in single in digit. Unfortunately I was too far away from civilization and when I finally came back and had the chace to buy the party was over.
Physical investors did not panic or rush to sell; instead they were frustrated because physical silver was not available with any reasonable premium.
The situation was so ridicules as everyone wanted to buy silver, exactly the opposite what the banks wanted to achieve.
Anyway this trick had its used by date so single digit silver belongs to the history books.
 
Peter,

That's the whole point I'm not planning to sell my silver any time soon (unless it becomes substantially overvalued) as I'm young and have a very long time horizon, hence at this time I am a buyer not a seller and hoping for the price to fall. Yes there is risk in buying silver as there is with anything else. But the point I make is that you have to think of risk as being the probability of a permanent loss of capital (including the loss of purchasing power of that capital) not as being a decline in price, and react in a rational manner by making decisions on a price to intrinsic value basis at the time not simply panicking because the price has fallen or becoming excited because the price has risen.

Are you saying you would buy silver at any price? What if the price today was $2000 per ounce, would you still buy it? What a ridiculous thing to say. Is the intrinsic value of silver infinite?

Hobo-Jo,

Some investments are easier to value than others. Sometimes you can work out the intrinsic value of an investment within say a plus or minus 20% range, other times you might say the intrinsic value of a company is between $2-$5 per share. For example it is a lot easier to calculate the intrinsic value of Woolworths (WOW) than a junior mining company.

Silver in my opinion is difficult to value. However it is one of those cases of 'I know a bargain when I see one' type situation. For example let's say you work as a cashier at a liquor store and you see a grey haired man walk into the store to buy some wine you don't need to ask him for ID as you know he is over 18. Whether he is 60 or 85 is irrelevant. Similarly if you see a kid walk into the store and try a buy a bottle of beer you would ask him for ID. Whether he is 12 or 16 is irrelevant he is too young. Similarly I can see silver is a bargain without necessarily being more precise than that. Would I buy silver if it was trading at $100 AUD per ounce today? No I wouldn't.
 
This is a good thread

Honestly it boils down to your exit strategy, its as simple as that. This is the reason there are dozens of different takes on the situation because it depends on the tactics you use that give you the opportunity to see your strategy play out.

it could depend on your age, your financial situation, your other investments, a historical perspective, a combination of two or more, you could have no strategy, etc etc etc.

A prediction is a GUESS. Nasim Taleb shows us in his book "Black Swan" that its all a bunch of hogwash. People have no idea what will happen tomorrow. They can GUESS, they can make what they think is an educated GUESS, but its still a GUESS.

Add to this very simple formula that the market is currently RIGGED. Very powerful corporations and major investors are trying to change the casino odds in their favor. If there was an individual or group of them who could move the market through arbitrage we here certainly would know nothing about it. I personally don't believe that one person has that much power but I suppose it is possible, Taleb has taught me never to say never. Black Swans happen. They can try to control things on a temporary basis but the market forces are too powerful to be tamed forever. Add to it that those with the pull could just as easily prefer to push the prices higher right ?

So

I think you can view it in one of two ways

value investor will buy and hold. Regardless of the price. They have faith in their decision making and will continue to acquire PM using various purchasing tactics so as to reach their strategic goal.

speculator will tactically buy or sell or hold. Whatever will result in a profit, subject to the overall strategy. Buy the frakin dip !

Some folks might play a balancing game between the two positions but those are the two camps as I see them.

My personally I am not selling. I know enough to wager my stack on higher prices going forward. If they fall I will follow my acquisition strategy. I sleep well at night knowing my decisions too, I bet most here do likewise.

silver at 30 bucks ? great because I am in the black. My strategy was to acquire at prices below 25 for my initial goal and I was able to reach that goal buying my last brick at $24 per ounce.

Silver at 25 bucks ? see above

Silver at 20 ? My strategy is to acquire PM and to lower my net average costs. If my net average costs are above 20 then I am a buyer here.

Silver at 15 ? again, what is my dollar cost average. This determines my buy or hold strategy.

Silver at 2 bucks ? I am buying. I enjoy collecting silver. Others enjoy collecting art, or baseball cards or comic books. I like to collect silver and bourbon whiskey. Its lovely to look at. To hold and to yes I will say it FONDLE or in the case of whiskey to drink ! 2 buck an ounce fondling ? gimme some more of that shyte !

If its a long slow ugly winding down to 2 bucks I will be on the bus ride down. When I die those who read my will can decide what to do with the proceeds. I know my average costs will be drastically reduced so a play to the upside puts me in the money that much sooner. I can wait, I have time. I don't need the money for something else. I am happy, have my health, a decent lifestyle and I like collecting PM.

So ask yourself

what is your end game ?

PM can only do one of three things barring a black swan type event
go up
stay the same
go down

what will YOU do in all 3 cases

its a simple battle plan. You make the calculation, do your price diligence, make the call and hope for the best. I have had folks tell me that "hope" is for fools, but when it comes to money and markets having hope doesn't hurt as long as it doesn't affect your tactical approach towards meeting your strategy of meeting your end game.

25 bucks sure fine

personally I want santa to bring us 22 dollar silver for christmas and I haven't given up my santa's hope yet !
 
I think sometimes people need to look at predictions and think, If economists are so smart (and know whats going to happen), then why do they have to work. The fact is, you should never really take notice of what someone is predicting, unless they prove they have put their own money on it.

When has the world ever operated on the true value of something. I go to the tap and can get 300mm of water for $0.0006 cents, get it from the shop and it costs $2.50. Approx 4000 times the difference.

40% of the worlds (80 million barrels a day) oil gets pumped by opec for a cost of approx $20 a barrel, but they can charge $90 a barrel, because the world needs 80 million barrels a day, and the last 2 or 3 million barrels each day cost $85 a barrel to produce.

Quite simply, Silver will never go below $6 an ounce, because this is the cheapest any mines are able to produce at. More importantly, Silver isnt getting easier to find, and the price will always revert to the highest price it takes to mine the last few million ouces of demand (out of a yearly demand of 800 or so million ounces).
 
spannermonkey said:
Peter said:
If Silver falls and stays for a time at around $10 you'll all be bloody spewing.
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Not if 90% of your holding are $10 silver coins:D
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Depends on what you paid for them! They do come with a great built in put option thought!

malachii
 
malachii said:
spannermonkey said:
Peter said:
If Silver falls and stays for a time at around $10 you'll all be bloody spewing.
Click to expand...

Not if 90% of your holding are $10 silver coins:D
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Depends on what you paid for them!

malachii
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Even at $20 each as I have been buying lately ,its worth it for worst case scenario to face value.
 
In my previous posts I am not trying to say whether silver is a buy or sell at this price. What I am trying to say is that as an investment tool you need to plan your buys and sells in regard to what is happening. Dont just buy or sell for the sake of it - plan. I would have no problem buying silver at $1500 an ounce if it met my investment purposes at the time.

I am not advocating this but there is a technique in share trading where instead of trading the price of a share you trade the share against the number of shares you can buy in another company. For example you might hold BHP and you can now convert your 100 shares of BHP into 130 shares of CBA. It doesn't matter if the price of BHP has gone up or down just that the ratio to CBA has improved. Then a while later you might find you can trade your 130 CBA shares for 110 BHP shares because the ratio has changed again. The theory is that you are building your shareholding at no real cost. A bit like some of the people on here have done with the gold silver ratio. This is not worrying about prices and where they are going as much as using the investment tool (in this case BHP and CBA shares) to increase your overall investment portfolio.

Dont just buy or sell because "it's Tuesday". Work your investment plan and use the investment tools available to you or you will find you are the tool in someone else's investment plan!

malachii

PS - I am in no way advocating the above as investment advice - please do your own research and make your own decisions! I am NOT a qualified invesment planner or advisor.
 
None of us can see the future so I have hedged my bets a little, which buying silver is only a bet. When silver hit $30 an oz i sold enough to cover most of my original investment and have invested most of the money into gold not from an investment point of view but just because I want to be able to possess the gold just to have it if you understand that. I was always taught from a young age "never bet with frightened money" that is if you can't afford to lose it don't bet with it and that is how I view buying PM's.So far I am cruising but if silver dropped to $1 an oz I wouldn't be buying and conversely if it went to $200 an oz I wouldn't be buying it either. I might be wrong but I don't see the SHTF scenario ever coming to pass. I think SILVER IS MONEY and INTELLIGENCER are right on the button with their views. Consider everything you do before you do it and don't be one of the sheeple and follow the advise of self proclaimed "experts" and you probably won't go to far wrong because remember the experts are spending your money if you follow their advice not their own
 
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