IMN - Investment Management Blog

Midwest Public Funds Summit
Chicago, IL
June 17, 2013

4th Annual African Cup of Investment Management Conference
Cape Town, South Africa
August 29-30, 2013

The 19th Annual Alpha Hedge West Conference
San Francisco, CA
September 15-17, 2013

2nd Annual Derivatives Trading in the Era of Dodd-Frank's Title VII
New York, NY
September 16, 2013

18th Annual European Beneficial Owners' Securities Lending Conference
London, UK
19-20 September, 2013

Global Indexing and ETFs
Scottsdale, AZ
December 8-10, 2013

20th Annual Beneficial Owners' International Securities Lending Conference
Austin, Texas
January 27-29, 2014

Main Website >>Investment Management / Alternative Investment >>Blog >> Gold and Silver Manias Updated

<< Back to Blog

Email/Share:

Roger Nusbaum, Chief Investment Officer, YOUR SOURCE FINANCIAL (RIA)

Gold and Silver Manias Updated
Friday, May 06 2011 | 03:00 PM
Roger Nusbaum
Chief Investment Officer, YOUR SOURCE FINANCIAL (RIA)

A couple of weeks ago I had two posts (here and here) outlining the mania in precious metals. Then starting early Monday of this week silver started to blow up, see the chart below. As I mentioned in the second post, I got some push back from some commenters on Seeking Alpha who essentially were saying that the fundamental argument of debt and money printing meant that precious metals could not go down.

Even if I was incorrectly interpreting those comments we have all read commentaries that have said precious metals can't go down. My reply to this is and always has been that anything can go down in price at any time for no apparent reason. That silver started to drop so quickly after my comments is just a coincidence as I can assure you I had no idea when it would correct and now that it is correcting I have no idea how long this will last.

What I try to understand is when manias are occurring and how they might impact client portfolios. Those two posts, among other things, reminded any clients who read them that occasionally there are distortions in the market like the extreme lift up and now a decline that seems to be pretty big. We have increased volatility in our exposure to materials and energy so for example we were down a hair more than the SPX yesterday and I would expect that with our current exposure anytime energy, materials and related foreign markets fare worse than the SPX so too will our portfolio.

As I said yesterday in an interview about the decline in silver "a long term strategy that unravels based on one week's trading was never a long term strategy to begin with."

I would also repeat something else I always say during these sorts of things; these type of events have come along before and are guaranteed to come along again in the future. The key for most types of market participants is to not learn you had to much exposure to thing that is going down a lot after it has declined such that you panic out at a low.

Visit My Website!

0 Comment | Add Comment(s)

<< Back to Blog

Email/Share: