Post by jeffolie on Oct 26, 2007 17:53:32 GMT -6
The following portions of this long article condense the article.
If your expectations are for silver to make smooth linear gains like gold, you really ought to consider resetting them to expect lots of boredom with periodic stunning parabolas. Silver will still be a great investment, but it will require lots of patience and nerves of steel to hold it long enough, and then sell it quick enough, to capture these parabolas. All throughout modern history silver has usually waited until late in gold bulls/uplegs to really shine and show its true colors.
To be honest with you, at this point I feel let down and misled. All my life I have drank the Kool-Aid of the silver mythos that states it should outperform gold most of the time. Yet this is just not true in history. Regardless of what you or I want to believe about silver, the historical data is crystal clear. Yes, silver does tend to outperform gold at the very end of precious-metals moves when popular greed waxes extreme. But before those climaxes silver tends to lag gold considerably for the majority of the total time these moves take.
In light of this revelation, silver's underperformance in 2007 shouldn't frighten any precious-metals investor or speculator. It is simply par for the course. Silver will more than likely fly during this gold upleg, but most of its move higher will start in the later months after gold's own run has already restored confidence, bullishness, and greed to PM speculators. Silver will eventually surge to catch up with gold in its own good time. All silver's non-confirmation of gold's run today signals is an absence of general PM greed so far, which is a good thing since it suggests this gold upleg remains young.
While this long-established silver behavior doesn't alter long-term bullishness on silver one bit, it really should readjust trader expectations. Like soldiers describing war as mostly boredom punctuated by occasional sheer terror, so is silver trading. We need to expect long periods of boring consolidations and relative underperformance to gold before silver suddenly shoots parabolic and earns us fortunes within months.
www.safehaven.com/article-8699.htm
If your expectations are for silver to make smooth linear gains like gold, you really ought to consider resetting them to expect lots of boredom with periodic stunning parabolas. Silver will still be a great investment, but it will require lots of patience and nerves of steel to hold it long enough, and then sell it quick enough, to capture these parabolas. All throughout modern history silver has usually waited until late in gold bulls/uplegs to really shine and show its true colors.
To be honest with you, at this point I feel let down and misled. All my life I have drank the Kool-Aid of the silver mythos that states it should outperform gold most of the time. Yet this is just not true in history. Regardless of what you or I want to believe about silver, the historical data is crystal clear. Yes, silver does tend to outperform gold at the very end of precious-metals moves when popular greed waxes extreme. But before those climaxes silver tends to lag gold considerably for the majority of the total time these moves take.
In light of this revelation, silver's underperformance in 2007 shouldn't frighten any precious-metals investor or speculator. It is simply par for the course. Silver will more than likely fly during this gold upleg, but most of its move higher will start in the later months after gold's own run has already restored confidence, bullishness, and greed to PM speculators. Silver will eventually surge to catch up with gold in its own good time. All silver's non-confirmation of gold's run today signals is an absence of general PM greed so far, which is a good thing since it suggests this gold upleg remains young.
While this long-established silver behavior doesn't alter long-term bullishness on silver one bit, it really should readjust trader expectations. Like soldiers describing war as mostly boredom punctuated by occasional sheer terror, so is silver trading. We need to expect long periods of boring consolidations and relative underperformance to gold before silver suddenly shoots parabolic and earns us fortunes within months.
www.safehaven.com/article-8699.htm