This is a shorter blog, as the title tells the story pretty clearly. Have most of you observed what I have this week?
- “These “experts” are idiots and I’m done with them”
- “No one really knows”
- “I think TAs are trying to paint a rosy picture to sucker us in to buy so they can get out”
- “I’m done”
I’m summarizing some of the vitriol, but you get the idea. Having now been in this game for 21 months, I’m still relatively new compared to you 40-50+ year stackers out there, and even the babies that got involved in the last run up 12 years ago. However, I also can plainly see the difference of a paper smack down versus a real trend change. Many of you can’t see this – yet.
This smells of desperation of banks. Many others have dissected this in a Picasso-like fashion, so I don’t need to butcher it. Check out what happened here.
Why? For any one of you really doubting your investment thesis, I want you to quick….go to your local coin shops and ask them how many people ran into their stores at 6:45 PM ET (USA) to sell their gold and silver.
The legit answer is zero. Most of them worldwide were not open.
On the flip side, you have Ronan Manly reporting that Bullion Star has 10:1 sales to buy orders through this entire thing, linked above. How can you reconcile this? You have paper selling by the billions, and on the flip side you have people buying billions at these discounted prices, gobbling up the physical and saying “thank you very much”.
Meaning, there is a clear, clear, clear disconnect between the paper markets and physical markets. THIS is what you must understand at this moment before we take a step further.
Glass half empty
For those of you who buy options on miners and SLV/GLD, this type of thing hurts – deeply. You can clearly see an entity come in, during the most illiquid time of the week, essentially, and drop $4 billion in gold on the market (and comparable silver, as their charts look to be a xerox copy of each other).
Some of you then finally realize what many have been trying to tell you – none of us have crystal balls. We look at these prices and charts based on probabilities, not certainties. We also look at upside risk versus downside risk to then own our own investments. We do not blame Bob for calling $27 silver, then putting our kid’s college fund on it, then blame Bob when XYZ bullion bank smashes prices to infinity. That was not price discovery, it was currency manipulation – to steal this line from Andrew Maguire. If you are blindly following people online and gambling money then – the house sometimes wins, and you know this, yet still want to blame the poor chartist whose technical did indeed predict $27. As a probability of occurring. I use others’ forecasts to then invest. But I don’t blame them when shit goes south. I say, “we’ll get the next one”. I man up, re-evaluate my investment thesis, check my ego at the door, and try to learn lessons on things that went south to then build a better strategy. You will see one below.
I have been detailing my options trades so all could see HOW these work. Getting SMOKED. But a massive portion of these options are for SILJ for January. On paper, I’m getting killed. I’m also buying on dips with all of the firepower I can which is reducing my dollar cost average. However, is it likely by January silver has a strong recovery? In my opinion, yes. When you buy options, you also have to be very careful of downside risk appetite, when to sell, etc.
When you are a fund manager investing billions, you cannot afford the risk of trying to call the bottoms or tops. As an AMATEUR investor, this is the fun part of investing for me. How much meat can I get off of the bone. This then has higher risk. I’m ok with that. Most aren’t. I used probability to then focus these trades on those stats. I figured I had a 80% confidence. So far, the 20% house advantage is winning. I have time, and plenty of it. Let the fools sell out before the whales step in.
YOU need to own YOUR investments. Many people out there try and show you what they are doing to educate you, and also educate you on your level of risk. Many do not have the patience to invest in this sector. As a 14 year old, I played an 8 hour game of chess in the World Open in 1990 (or 1991, can’t remember) in Philly (1 hour from my house then) and went 5-2-1 during that July 4th weekend. As an 8th grader, I had led my team to a county championship before transferring schools between 8th and 9th.
I only bring this up because my background in strategy, risk, and game planning may not be the same as your “where lambo” investment attitude. You need to take a hard look in the mirror if this is the right sector for you.
Glass half full
If you are playing options and starting to learn the volatility trade like I am, you realize you can make an ass load of money on this chop. I’m just now getting much better at this, but consider the below snippet from the tracker of my options.
What you see here is some green. How? Gold and silver got crushed? Yes – BUT – look at the dates bought and the the date sold.
Here is the larger GDX picture. My “TA skills” saw that there was a broadening wedge. I decided to buy more into some lows.
If you then zoom in on this wedge, you see where I bought and sold in the red circles – and look at the line here which showed the profit.
When I saw this bounce off of the 200 dma down (blue line from above), I sold these positions, quickly, and got out at the perfect time, luckily. If you look at the numbers on the sheet, I put in $1050 into the machine at what I considered a low price, and I then sold at what I felt was a really good return on THAT trade in a week or so. I got a $1117 profit on that $1050, or groceries for my family for 2 months.
I bought on a smash, and sold into the price rise. I realized that had I just bought SILJ in August of 2020 and held for the last year, I’d be down $3 per share. So instead, I listen to as MANY people as I can and I find my OWN investment model.
What you MIGHT see is a lot of the options not mentioned on this sheet I’m getting crushed on. I don’t have updated prices from the Friday/Monday smash. I don’t really care – on some of these, I will lose my shirt I bet. On others, I will print money. Overall, the plan is to see a lot of green while I wait for a long term breakout. Which, optimistically, could be any day or week now.
It’s easy to look around and see people dejected. Really. That’s the whole goddamn point of these psyops and wash outs. To get you to sell at a loss, let them buy at a discount, and get you out of the market.
Do you really think that 100k more jobs than expected really means the economy is 100% healed and gold and silver will continue to sell down to 20 year lows? If you honestly believe that, you didn’t invest in the metals or miners with the most conviction ever – someone pointed you at this, then you threw money at it, and aren’t making 1000% in a month, so you’re pissed.
News flash. You don’t actually LOSE money until you sell at a lower price (unless your options decay to nothing). Many of you are, with the miners, and I understand. Risk management. At the same time of disaster, you can see my Labrador and Aya gold crushing it, with a 3x for me on Labrador and a 1.5x on Aya. So there are also pockets of really good performing items in this sector.
For those of you I didn’t piss off yet, most of the “experts” you see are looking at the metals through the lens of glass half full. In that, we are in a bull run and the trend is up, over time. In that respect, you can see how the market does pull backs. During the 1970s, gold went from $35 to $800. However, it was not a straight line over a decade. In fact, at one point gold got to $200, then over a year corrected to $100. Then, it went from $100-$800. I have made a contention over the last 19 months or so that we are seeing a lot of what we saw in the 1970s, including all of the inflation. I then documented these price pull backs. Specifically, with gold I saw lots of support at .618 retracements.
Which is what we just hit now. For the third time. So, one can also make an argument we have a double or triple bottom in play, and now we march up. You can listen to Andrew Maguire discuss how this take down looks like the March 2020 assault and how this next leg up could look like that July move from 2020.
I made some comments on someone’s post about the thought of coming to a conclusion and then finding data to support it. Unfortunately, this is how science works. How are most operating? Assuming we are still in the bull market…
- Ask the question – “will gold rise in the upcoming years?”
- Observe – gather evidence to understand the situation.
- State a hypothesis – “gold will go up because macro factors A, B, and C”
- Experiment – what do the charts look like? What do our investments look like with $2000 gold? $3000 gold? What do the probabilities look like short term versus long term?
- Conclusion – “as long as X is happening, Y is the direction. Otherwise, Z is the direction.”
Now – if you want to disagree with my hypothesis, GREAT!!!! What fundamentals do you bring to the table that refutes my thesis? Oh, a chart is telling you I’m wrong? Look – a chart is a tool. It’s NOT a predictive crystal ball, and those selling you this with confidence you need to be leery of. The guys I follow with charts like Patrick, Kevin, The silver chartist newsletter, and John Howell – they are very careful to tell you what COULD happen IF X, Y, or Z. They don’t look at a chart and tell you that they are right and everyone else is wrong. They show you that there are probabilities in what they are seeing, and convey those probabilities to you, responsibly. I USE this tool and education to then perhaps find entrance and exit points to trades and long term holdings, not gamble college funds. For example, when I got out of that option above at the 200dma reversal, that was from watching all of these guys and understanding what may may markets move. No one spoon fed me that I should sell there. I hit a hell of a profit target in a week and pulled the rip cord.
Likewise, if you asked me which is better, Fortuna or Endeavor – I’d look at a chart to see where they are with RSI. While one person may favor Endeavor long term, Fortuna is in a risky jurisdiction due to politics now and their merger got them crushed. Some analysts believe it will take time for this merger to be reflected in stock price. THAT being said, if I was holding to $50 silver, I’d pick Endeavor. If I wanted a 6 month option play with upward torque, I might buy Fortuna at a more favorable price discount on the charts. So – you invest in what works…for YOU.
To add – my thesis is well defined. Until the fundamentals change, my long term strategy does not. What DID change was short term volatility, and I then pivoted a larger portion of my holdings into trades. When the volatility subsides, I may then go back to more longer term holds – perhaps through $2500 gold.
Many of you unfortunately go squirrel and goldfish on me and don’t read the fine print in the conclusion. You just see the short term red, get pissed, and vent. I get it. But if you are seriously investing money, you need a rigorous plan based on fundamentals and logic, not your emotion. And, unfortunately, that’s how a lot of people lose money.
You have some people who had called for a $22 or so pull back before it moves higher. In my video with Patrick and Kevin, we discussed the arcs and how that number could be reached. Kevin was convinced we’d touch $22, and I thought it was possible in the auspice of a major market take down, not a week later, but months later. Don Durrett recently had called for a move down to $22, and he was almost alone on an island. It happened. Then, you have Jordan Roy Byrne who almost seems a permabear saying there will be no breakout this year with the certainty of a 5 year old screaming that he did, indeed, brush his teeth when you clearly see he wasn’t in the bathroom – looking at charts and not taking into considering the constant debasement of currency and the fact the DXY could fall off of a cliff any moment now. He could be right. But it’s a probability thing, not a “right or wrong” thing.
Looking at the DXY above, IF this arc continues, as I mapped, you can potentially see a strong move down in the DXY coming. Kevin Wadsworth has a smaller arc than mine and has a different take – HE could be right and I could be wrong in the short term. There are no college classes that teach you this, it’s sort of pseudoscience pseudo-art. Also, a lot of charting today may be defeated by high frequency algo trading that may recognize these patterns and wash you out where you just got in. So some TA now, if you ONLY do TA, is antiquated. Case in point? Sunday night.
What most don’t realize is when the DXY goes down, it makes imports more expensive for Americans. Ergo, inflation is seen at the dinner table. The inflation narrative continues, and is exacerbated as more money is printed and the DXY continues to tumble. What this means is, for the mathematically challenged, is as the DXY goes down, it thus takes more dollar currency units to buy one ounce of gold. The folly with most in this space is trying to look at the value of gold in dollar terms. Pretty much the entire G20 is trying to print their currency to oblivion where you have the BRICS+16 countries all increasing gold supplies. This will not end well for the West.
I digress – in this space, certainty is a double edged sword, but littered with land mines. Why? Because once again, no one has a crystal ball. Whether you are looking at charts and you are CERTAIN of something, or you are looking at macros and are certain of something – there are no swamis out there.
Sorry to burst your bubble.
You need to educate yourself the best you can, and find what works for you. Find a financial investment advisor. I’ll bet you a 6 pack no one you talks to advises gold or miners. Why? Volatility. Risk.
What you have to look at is….how many of these calls these guys seem to get close to more than not? I believe a batting average would be a more fair assessment than trying to hold people online to every goddamn word they ever said. And, it should be fair game for YouTube and Twitter “experts” to say, “I missed that one”. While you may lose a portion of your followers, who gives a shit? I follow some guys out there right now that seem to get it right a lot more than they get it wrong. Make no mistake, everyone gets things wrong. They call balls and strikes and may whiff on a few. This is what many of you precious snowflakes are not understanding. You need to find high quality and guys who have a better batting average. Not people who claim to always be right.
But for you to throw in the towel because criminal banksters in the darkness of night attacked gold and silver? That’s precisely why they did it dude.
This is why I write. To counter-balance these attacks you see that shake your confidence. I laughed a few times joking that I’m a permabull, and someone called my shit on it. “Why would you hype for the sake of hyping”? I’m not, really, I just feel that at some point all of us will find our sell times, and buy times, but I think the generalist who is newer to the sector need reminders about why they are here, what the risks are, and when they need to look to exit.
Questions you need to ask yourself
- Could this be another 2016 fake out? Anything is possible. But it’s also not likely.
- What downside risk exists versus what upside? If you are buying metals weekly or monthly with your paychecks for a 2026-2030 exit strategy to sell a portion of your metals, you should be ecstatic at these price smashes. I was buying at $16 silver weekly and LOVED when prices would go down. I know, counter-intuitive – when you are in an accumulation phase, you want price to go down. Once you accumulate, you want it to go up. I get it.
- What is your risk appetite? If you cannot see yourself participating in an 8-second rodeo-like violent movements with your trading account, this is not the sector for you. For times when you nail trades like I did above, you can make some good scratch in the chop and LOVE the volatility because it presents you trade opportunities
- What prices are you buying and selling what you have at?
- When do YOU want to get out. If you think the bull market is over, get out. If not, buckle in harder.
- Has my underlying investment thesis changed? Meaning, maybe you WERE a long term hold guy but maybe switched a larger chunk to swing trades. Maybe you sense a bottom now and are moving from swing trades to long term buy and holds?
- Have the underlying macros changed? Did the debt go down? Inflation go away? Money printing and currency debasement stop? In all likelihood, you are being smashed with short term noise rather than any change in the fundamentals. That is the psy ops being run on you and anyone that wants to go long now.
- Are the people I’m listening to tunnel focused, or do they also recognize downside risk?
I hope many of you read this and examine YOUR investment thesis. I hope you listen to a lot of people online and get a lot of opinions, then take ownership of how YOU want to play it. Have fun with this. Be entertained by some. Pay more attention to others. Tune out others as white noise.
Most guys here that are for real, do not really give a shit if you follow them or not. They are in it because it’s a science to them they are passionate about, and they want to share what they found with you. Many of these guys made fortunes off of these bets, and they are trying to help you. Others left their shitty job as a Burger King manager to be a newsletter writer and it’s the best job he ever had because he’s doing something he loves. This guy might get some things wrong, but get a lot more right and have a terrific following.
Overall, don’t let the banksters win. I’m seeing you all dejected. Re-evaluate your investment thesis. Then, let’s go.