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Topic: Silver After the Crash (Read 209 times) previous topic - next topic

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Silver After the Crash
Hello all,

I just wanted to get a little insight about silver during a market crash. The main reason I am investing in silver is because I would like to preserve wealth over the coming years because I personally think we are in one of the craziest times in history. That being said... I have a few concerns that maybe you guys could help me out with.

In short, I am worried that purchasing silver now would be a bad idea because in 1-3 years the market could crash, which would cut my value in half. So, would it be smarter to hold on to cash and wait for it... or purchase now, take a hit on prices after the crash, and then hope it goes double afterwords.

I know it is a terrible "what-if" and "market crash" question, but it is something I think about often.

Also, this is "extra" cash that will either sit in a bank account or be put into silver. It is not money I need for life or trading in the markets so time is not a factor.

Thanks
AM

  • Erich
  • [*][*][*][*]
Re: Silver After the Crash
Reply #1
Why not take a small position you can add to or get out of as needed. Keep plenty of
cash so you can sleep at night. Always be buying always be selling always be holding
and always have cash. You will do fine.
ER

  • edthelorax
  • [*][*][*][*][*]
  • Administrator
Re: Silver After the Crash
Reply #2
AM,
 The simple answer is, there is no simple answer.
I hold my physical silver for the type and level of security it provides.
I like having a nest egg of physical silver for several reasons.
To protect my capitol during a black swan event, such as a SM crash, isn't really one of them. The liquidity of the silver is,
The days following 9-11 the SM was closed, making my "savings" unavailable until trading resumed and i could sell stocks to raise cash. My silver was right here, all i had to do was sell that instead.
In 2008, I lost most of my money in the market, due to greed and leverage. I wanted a house that year, even though the silver price took a 50% haircut from the highs, I still sold silver and gold to buy my house.
The physical metal is all I had left when I really needed the money.
Now one may say I should have put my money under the mattress, or in a bank, then i wouldn't have lost 1/2 right before i needed it.
I will simplify and embellish the truth a tiny bit to make the story bet the point across.
From 1998 to 2008 I spent about 1k a year accumulating phys a little every month. this gave me 100-200 oz a year at about ave of 7$/ oz. so i ended up with about 1500 oz at 7$/ oz.
At the same time i was putting about the same into a savings account 100$/ month.
When we wanted something or needed something like to move in 2007 due to an unexpected ending of our lease, guess where i got the money? Savings account. I wouldn't go sell silver to pay a surprise dentist bill, or to take the fam on a much needed vacation. Unless i had no other choice.
So in 08 I had little left in the bank, my stocks were worthless, I have 0 credit except with friends, none of which would loan me 20k.
I didn't want to sell the silver, knowing 14$/ oz was low and if i would wait it would go back up. but I wanted a house more than a box of metal.  so I sold my 1500 oz for 14$ and got about 20K, and bought the house I live in now, very happily I may add.
 The moral of the story is that accumulating LT when prices are low (5$ in 02 or 20$ now)  gives something liquid, but not so liquid that i can gab and spend at will.
Even though silver "crashed" in 08 I still got 100% more than I paid for it.  At least I had it!
So my theory is if you were to buy now, and silver crashes in 3 years to 1/2 it's price, that could very well be from 72$ /oz to 36$/oz. or double what it is now.
The only way to fully protect yourself from a black swan event, is to have enough $ to be able to afford to "insure" your portfolio with a constant supply of expiring puts.
Gold and silver are money and the liquidity and lack of margin or leverage makes them the first thing to go when ppl need cash to cover their margin calls from a crashing SM.
Accumulate is the name of the buying PM's game.
I hope this covers the points I want to make.
\Ed




For Entertainment Purposes Only.

Re: Silver After the Crash
Reply #3
Erich, Thank you for your post!

and ED.... This is exactly what I was looking for! Thank you for taking the time to tell us that story. Now looking at it, how you PM's had saved you after 2008 and the fact that accumulating over years helped as well, I'm more confident at purchasing at these levels.

I guess since I am looking for the security long term, that short term prices are not so important.

Thank you again Ed!

AM

  • Nikko
  • [*][*][*][*][*]
Re: Silver After the Crash
Reply #4
Ed...thanks for sharing...i have some crazy stories that I wont share but the one think I have learned is to stay away from margin as it will destroy your e=wealth eventually. Banks give us this almost free money to gamble with and scoop up the shares when they crash on your call.
All investors in mining shares need to understand that ANY miner can fall 50% in a matter of weeks without exception and if you are on margin...you lose it all.

  • edthelorax
  • [*][*][*][*][*]
  • Administrator
Re: Silver After the Crash
Reply #5
Ed...thanks for sharing...i have some crazy stories that I wont share but the one think I have learned is to stay away from margin as it will destroy your e=wealth eventually. Banks give us this almost free money to gamble with and scoop up the shares when they crash on your call.
All investors in mining shares need to understand that ANY miner can fall 50% in a matter of weeks without exception and if you are on margin...you lose it all.
This deserves repeating. over and over again.
For Entertainment Purposes Only.

  • ken
  • [*][*][*][*][*]
  • Global Moderator
Re: Silver After the Crash
Reply #6
"All investors in mining shares need to understand that ANY miner can fall 50% in a matter of weeks without exception and if you are on margin...you lose it all."
_________________________________________

Think back to the great depression where people took out loans to buy stocks. Then it all came tumbling down. Same thing.