The Best Investment of 2012 to Repeat in 2013?

Y

Yippe-Ki-Ya

New Member
Toward the end of last year, the editors here at Port Phillip Publishing got up on stage at our Doomers' Ball, to give our 'Big prediction for 2012'

To paint the picture, at the end of 2011 the market had been well and truly beaten up.

The Metals and Mining index (XMM), Small Ords (XSO) and Emerging Companies indices (XEC) all fell more than 22% over the year. So it was a bit challenging to find a sunny patch in the market to get excited about for a 'big call for 2012'.

Admittedly, when I made my call, there was a fair bit of heckling!

I even caught a few folks checking their eyelids for holes, and catching the odd fly for good measure.

But thankfully, twelve months on - so far - my big call has turned out to be the best performer of 2012...

What was the call?

It was SILVER.

So far this year silver has gained 18.4%.

For comparison gold has gained 8.8%.

The Metals and Mining index (XMM), Small Ords (XSO) and Emerging Companies indices (XEC) are all down again.

The S&P500 is up 12%, and the ASX200 has surprised with a gain of 11%.

The only thing supporting our market is the financial sector: the ASX200 Financials index (XJF) is up 18%. So the Aussie banks were one of the few sunny spots.

But humble silver still beat them, and with a lot less effort involved too.

Just the Start for Silver

The downside with silver is that it comes with plenty of volatility. All the silver bullion globally is worth just $60 billion - just half the size of BHP Billiton's (ASX:BHP) market cap. So the price can be prone to some big swings.

The upshot of this is that, if you get the timing right, you can trade it for accelerated profit [enter the Paper Panzies :lol: ].

Silver - a gain of 18.4% makes it the best performing asset of 2012

1859_1212_1.jpg

Source: Stockcharts, MM edits

The good news is that it looks like silver's move has only just started in earnest.

The effects of the latest round of quantitative easing (QE) have only just started flowing through into the silver price.

During the first round of QE, silver gained 74%; and during QE2 (starting from the Fed pre-empting the program) silver gained 94%. These are huge moves for any commodity.

So with the Fed now 'printing' $40 billion a month indefinitely, silver is well poised to maintain its new rally

It's critical to note that silver was the best performing asset class during Obama's first presidential term.

The humble metal more than tripled, gaining 208% over the four-year period.

The only other asset to put in a triple-digit percentage gain was gold, with 122%.

This incredible performance is probably why the US mint has just had its busiest month on record. The prospect of another four years like the last four, with money printing, debt and fiscal deficits, is very bullish for precious metals.

Silver's technical chart looks excellent as well.


A Great Investment Opportunity

When the technical price action backs up the fundamental picture - it can often translate into a great investment opportunity. In other words, if the idea is good, and the timing also looks right, then the shot could be a winning one.

To get here, the market has been through some pain in the last 18 months. The second half of 2011 was horrendously volatile for silver. It set a record high on Anzac Day, only to fall more than 30% within weeks straight after. Then in September, silver got smashed down by 30% AGAIN.

Most of this year has been spent regaining its footing after last year's abuse. It has taken time, and many speculators have left the market, understandably fed up with the volatility.

But this mass clear-out has set the stage for the next leg up. The technical chart confirms this and has turned bullish again. In late September, silver traced a golden cross. This technical signal has been a solid predictor of the start of a new up-trend.

Even better, since then the 200-day moving average held fast during its test. Now silver has broken up above the 50-day moving average - and stayed there. This paints a bullish technical picture of a price in strong uptrend.

All the stars seem to be aligned for silver now.

We didn't have a 'Doomer's Ball' in 2012, as we hosted a big conference in Sydney earlier in the year.

But if we had to go on stage today and make a big call for 2013, I'd have found it very hard to look past silver - again!
Click to expand...
Dr Alex Cowie
Editor, Diggers & Drillers
 
Silver again! Woahhh doesnt feel like it though. Been a slowish year compared to 2011 :)

We are definitely in early when still nobody knows or invests in Silver (in the mainstream)

Keep stacking boys and girls. Just make sure you have an exit plan.
 
Ernster said:
Silver again! Woahhh doesnt feel like it though. Been a slowish year compared to 2011 :)

We are definitely in early when still nobody knows or invests in Silver (in the mainstream)

Keep stacking boys and girls. Just make sure you have an exit plan.
Click to expand...

outa the country?? :lol:

why? you worried about confiscation?
 
Should have bought Jan 1 and sold at the end of march. Take the rest of the year off.

On a more serious note though, is there anyone who bought physical last year who has seen the value of their metals purchases increase by 18%. Chuck in this year too if it helps any permabulls with their permutations*. By this I mean are you able to receive 18% more for your goods now than what you paid for them. I would have on a few occasions like when 1oz takus were $31.50, but, like many of us, didnt have the $$ at the ideal times.

I mean all types of silver, not just coins/numis.
 
Ernster said:
I'm only up about 5% in about 3 years of stacking :/

Ben Bernanke was right :(
Click to expand...

how the f..ck did you manage that??

You must have really bought a large proportion of your stack at $48 /Oz! :lol:
 
I'm definitely up.

I have more ounces of silver and gold today than I did at the start of the year.
 
Eureka Moments said:
Should have bought Jan 1 and sold at the end of march. Take the rest of the year off.

On a more serious note though, is there anyone who bought physical last year who has seen the value of their metals purchases increase by 18%. Chuck in this year too if it helps any permabulls with their permutations*. By this I mean are you able to receive 18% more for your goods now than what you paid for them. I would have on a few occasions like when 1oz takus were $31.50, but, like many of us, didnt have the $$ at the ideal times.

I mean all types of silver, not just coins/numis.


:)
Click to expand...
I am up way more than 18% on probably 90% of Chinese coins I have bought last year! :D
 
willrocks said:
I'm only up 43% since 2008.
Click to expand...
Those that bought in 2008 undid inflation since and more.
Those that paid $25+ prices (includes me with my USD $29), well, they gonna need some more years to start a gain in terms of dollars. In terms of purchasing power it could require a decade.
Alot seem to forget that hedging against general price increasings (due to new dollars) first requires those higher general prices.
Because without, there is profit in terms of purchasing power, and people dump silver again to grab it.
As is proven time after time.
That's why we should be very reluctant to buy silver whenever heaps money for nothing pump&dumpsters are 'in'.
The futures market position is now near to 60000 contracts. That's 60000 x 5000 = 300 Moz silver. That's 1/3 of an annual world supply.
If they really thought todays price was a bottom price, if they really wanted the silver, they would just have bought it directly. Now. They don't.
My next chunk euro's will be swapped to silver AFTER they dumped their positions.
As long as I don't see other prices rising in more comparable degrees with silver since 2008, there is time to wait for these position dumps.
 
Yippe-Ki-Ya said:
But humble silver still beat them, and with a lot less effort involved too.
Click to expand...
The underlying reason for this is that the silver market is more visited by people that want to longterm hedge against the central planners inflation theft.
But they should be more careful regarding which price to buy.
Because disappointed people might leave the silver market again. Back to dollars. Defect to gold. Whatever else.
Some 'pump' silver all the time. $50! $100! $1000!. While they are encouraging others to pay the already higher price, they mass-sit ready to SELL.
And that's where that volatility origins from. Avoid paying the uptrends of the money for nothing club, and it's gone.
 
Ha ha ha, I wouldn't get too carried away with PPP's predictions, admittedly these figures are in USD but they make for a sobering picture of the PM market, rather than PPP's usual "cherry-picking of data", which yippe detests. :P

Silver:
2010 close USD30.70
2011 close USD27.86
currently = USD32.59

Gold
2010 close USD1410.25
2011 close USD1574.50
currently = USD1697.34

Guess when I started to invest? Clue: look when I joined SS :lol: (Luckily I was into gold earlier :/ )

But have a look at the closing prices for both metals in 2008 and 2009:

Silver:
2008 close USD11.33
2009 close USD16.85

Gold:
2008 close USD881.10
2009 close USD1096.50

18% profit in 1 year is nothing, it's just a figure, it's just one year's stats, plucked out of the air to sell subscriptions. In fact, it's 13% at the moment going on today's price, that's a big difference. And it's a little too late compared to the profits you could have made investing at the close of 2008 or 2009. If you had invested in silver at the close of 2009, and sold today you would have doubled your money, if you'd done it at the end of 2008 you would've tripled your money. But if you'd invested at the end of 2010 you would've only made 6% profit.

Have a look at gold's % increase:

2008 - 2009 = 24.4%
2009 - 2010 = 28.6%
2010 - 2011 = 11.6%
2011 - current = 8%

The hyperbole that is PPP is capable of clotting the brain at times.
 
I am glad to say I bought in the dip earlier this year. Definately was a good way to decrease my average cost.

Not really too worried about actual % increase as spot goes up and down all the time. Still looking for good value buying opportunities whether spot is $27 or $37.
 
I'm not up or down - I'm even. :) Came too late to the game and bought too much when silver was in the $40s, unfortunately. So was sitting on large loss this time last year. However, having stocked up a bit at lower prices this year (high $20s, a bit in the low $30s), I've made up that loss. Almost exactly at break-even right now (assuming I can sell with premiums retained, i.e. on SS ... if I had to sell at spot I'd still be down a bit).

If I had 'discovered' stacking a few years earlier I'd be laughing.
 
wouldve done way better buying SIR at .07 and selling in the 240s and unless u picked the bottom and didnt pay any premium or bought paper youd probably be breaking even or at a loss. However the lower prices and inheriting 13 oz of junk silver from my grandmothers coin stash has brought my cost average down to where Im in the green once again I didnt start stacking until late 2010 so I pretty much started at the worst time possible. Lucky for me its a minimum 5 year investment.
 
You must log in or register to reply here.
Back
Top