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Daily GSR - Gold/Silver/Ratio Thread

ccjoe

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This is the thing, life is beyond your control, you may be force to sell at a bad time, controlling your buy time is all you can do to defend yourself against having to sell at a bad time.

Averaging in is a reasonable solution but not perfect, T/A IMO is better, even if you only use it on monthly charts for longer term investment!
Well put Zed!
 

Ahillock

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If you are in 100% with gold and silver, sure. But many of us still have cash as well as weekly/bi-weekly income. Enough to cover monthly expenses as well as save for emergencies and put towards buying more gold and silver. I can't remember the last time I sold any of my physical back to a dealer. Just haven't needed to.

But I can see how someone all in with gold or silver could get into trouble financially and need to sell some off in an emergency. But if it is an emergency then all the T/A or averaging doesn't matter as you need cash quick.
 

Zed

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But if it is an emergency then all the T/A or averaging doesn't matter as you need cash quick.
It absolutely does if you used it to buy right, you are flat at the worst and up significantly at the best. Buying right can greatly reduce the odds of life catching you flat footed WHENEVER you end up forced to sell. Add good risk management and you make that a near certainty... but that is another subject entirely.
 

Ahillock

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It absolutely does if you used it to buy right, you are flat at the worst and up significantly at the best. Buying right can greatly reduce the odds of life catching you flat footed WHENEVER you end up forced to sell. Add good risk management and you make that a near certainty... but that is another subject entirely.
Keep word is "emergency" and you could also add "need cash quick."

In an emergency, when time matters, you don't have time to worry about T/A or averaging. You just don't. All you care about is the emergency situation forcing you do sell metals for cash and the quickest way you can get the cash needed (LCS, pawn shop, Craigslist...etc.). Especially for those that don't look at T/A on a normal basis they aren't all of a sudden going to use that in an emergency situation.
 

Zed

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Keep word is "emergency" and you could also add "need cash quick."

In an emergency, when time matters, you don't have time to worry about T/A or averaging. You just don't. All you care about is the emergency situation forcing you do sell metals for cash and the quickest way you can get the cash needed (LCS, pawn shop, Craigslist...etc.). Especially for those that don't look at T/A on a normal basis they aren't all of a sudden going to use that in an emergency situation.
Yes.... missing the point totally.

If you follow the suggestion you have already used averging or T/A and bought wisely so by the point you have to sell the T/A or averaging has already done its job! If you have bought wisely then no matter when you are forced into a liquidation you will be flat at the worst and up significantly at the best.

Using these skills to buy correctly can some what mitigate the need to use them in selling if you are indeed backed into a corner at some point!

Half of selling right is buying right! You may not be in total charge of the selling, so at least control the buying with some discipline.

2c
 

Ahillock

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T/A is only accurate ~55% of the time. What do you do the other 45% of the time? T/A doesn't guarantee anything in terms of when your emergency takes place and what you will get when you sell.
 

smooth

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T/A is only accurate ~55% of the time. What do you do the other 45% of the time? T/A doesn't guarantee anything in terms of when your emergency takes place and what you will get when you sell.
Being right 55% of the time can still be rewarding. I know cause I'm wrong 55% of the time and it hurts. What Zed is suggesting takes alot of work and constant improvision. T/A is always in flux and you must be able to adapt. Knowing how to cut short your losses can be a huge part of the game, a part that I have struggled with badly. And my accounts can verify. But this possibly belongs to another thread.
 

Zed

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T/A is only accurate ~55% of the time. What do you do the other 45% of the time? T/A doesn't guarantee anything in terms of when your emergency takes place and what you will get when you sell.
The accuracy rate varies depending on a whole range of things, 55% is just a made up number with no real relevance. With some study you should be able to lift your results higher than 55%, REGARDLESS if you practice proper money and risk management that takes care of the failure rate. You can support an accuracy rate of as low as 33% or so if you are strong on the back office stuff, that is not to say you should have to but it gives latitude for human error and the intangible nature of charting.

Even T/A alone is certainly better than just random timing as is averaging, add money/risk management and then you have the key (in my mind they are inseparable, detractors never bother to learn that half of the equation!). Talk to a pro Black Jack player and ask how it is done, probability and money management will be concepts they will broach with you! The great advantage that investment has is that it is not a 100% binary result like gambling. YOU can make it a 5% loss and a much greater % win, not a 100% loss like betting. Yet still they can win black jack by understanding probability and controlling position size.

The point is to buy with some form of discipline with a view to selling.... possibly at an unexpected point.

Control what you can, you can control loss, you can't control profit, you can control when you buy, you can't always control when you sell.

IMO ---> It leaves you ahead of those that never consider selling!

Bye now...
 

Silver Buck

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Keep word is "emergency" and you could also add "need cash quick."

In an emergency, when time matters, you don't have time to worry about T/A or averaging. You just don't. All you care about is the emergency situation forcing you do sell metals for cash and the quickest way you can get the cash needed (LCS, pawn shop, Craigslist...etc.). Especially for those that don't look at T/A on a normal basis they aren't all of a sudden going to use that in an emergency situation.
Let me try and explain what Zed is trying to say (since it is apparent you don't bother critically reading any post that starts with Zed).

Using T/A along with fundamentals (trend is up) allows you to properly time your purchases (even if you cost average in). The same can be said when closing out part or all of your position.

If you are a buy-buy-buy/hold-till-you-die! type of person, neither T/A nor F/A is for you. Just go buy as much as you can no matter the price and wait until you have to sell to sell.

That's keeping it simple. No brain needed.

However, some of us like to look at not just the big picture, but also the little pictures and all of the details. I used T/A (in a very crude way, but still was effective) to time my purchases on the way up. After the moonshot (hindsight is so 20/20) I have used T/A to time my sell offs. My first one was back in September just to take a bunch of profit off of the table. it took me a couple of years of steady study to get a firm grasp of T/A (and I use the term 'firm' liberally) but based on what I saw, the trend was going steadily down and I better start timing some sell offs to maximize my return.

We haven't seen the price ($34.XX) that I sold at back in September and probably won't for quite some time. I was told by some here that I was crazy, and had brass balls for pulling the trigger on that sale. To me it was quite an easy decision because I had kept my eyes open and used some F/A and T/A.

How was I able to time my sell-off? Using T/A.

Have I been successful since then with some sell offs (since a one time shot means nothing)?

Twice more since then.

While I hadn't planned on any more sell offs, I saw where I was going to possibly be in a financial pinch. Most 'emergencies' are nothing more than failing to see the inevitable. That car breaking down? You usually have warning signs. Same thing with the furnace or A/C. That tooth that 'suddenly' blew up on you? You knew about it some time ago and chose to ignore it (raises guilty hand).

If you are setting aside PMs as a 'In Case Of Emergency' stash, you need to maximize the return on that stash! If it has been running good, take some powder off of the table and put it in a Mason jar! If the ship is starting to list, take some powder off of the ship and put it in a Mason jar!

You can always buy back in later.

And you will already have your emergency cash (funny how we still need actual cash even though we are fully committed to PMs) at hand and won't be at the mercy of the spot price of your metal.

He who blindly commits to a path of certainty will be blindsided by avoidable consequences.

How does this apply to the GSR?

I missed out on swapping a bunch of Silver for Gold because I didn't pay enough attention to the T/A that was literally screaming 'OVERBOUGHT! GET. OUT. OF. SILVER. NOW!'

What, you still don't believe in T/A? Bless you, folks will make a lot of money off of you types. The thing is, while you may not believe in T/A, most of the trading world does, and that is what matters.

I became a better poker player not because I worked on my style of game, but better understood my opponents' style of game. If they were making their decisions on what the pot odds were, then dammit, I better understand how they are making their decisions on whether to call/fold/raise on those odds and use it against them.

It doesn't matter what I think or believe when it comes to the bigger stage; it is what the masses are believing and thinking and doing that matters when it comes to making such decisions. If they are using 20/50 day moving day, then by golly I better study up on that! It doesn't mean I have to use it exclusively (what's the advantage of that), but I can very well use it to help my timing when I'm using my blend of T/A.

Using this combination of open minded observation allows one to make critical decisions and sell a day early than be left holding the bag a day late.

Again, if you are the type that believes in 'buy-buy-buy/hold-till-you-die' than none of this applies to you.

At all.

Now excuse me, but I'm missing my morning feeding.
 

BackwardsEngineeer

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Silver Buck,
If i had a nominate button, you sir would get huge post of the month. It has been a painful process learning and comprehending all it contains. But because I did I am sitting 60% out of pm's in a very interesting short term opportunity, with a maturity date between now and September. Feeling like the stars might be falling into position, and I would never have been smart enough to see it without T/A.....
 

Zed

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Fundamentalists v Pragmatists

Let me try and explain what Zed is trying to say (since it is apparent you don't bother critically reading any post that starts with Zed).
...and he never will! However I applaud your effort! :23_28_100s:

The root of the issue that many here seem to have with alternate views of the market lies in a sort of "fundamentalism". They simply believe that if we all get together and buy physical gold and silver that will be enough to kill the evil empire and we will break through to some sort of market nirvana. Anything that deviates from or threatens that is spat upon, often with the same zeal that a religious fundamentalist would. Indeed it is closer to religion than any other phenomena I have run into in the investment world!

My feeling is that those with more skin in the game are a little more pragmatic. They seem to have had more experience, they seem to acknowledge that they are fallible and that they need methods that allow for this fallibility. I'm not playing with monopoly money, I am playing with my future, I can't afford to get this too far wrong so I can't afford not to be pragmatic... I suspect others here are in a similar boat... I also suspect that many "fundamentalists" here could lose their stash and write it off to experience.

I can't see that anything that strays from the buy physical, hold physical, together we can break the banksters, do it now... doctrine will ever be accepted by these guys. Even if you actually own more physical than your accuser you will always be considered the lesser because you are not absolute and monolithic in your approach to the market!

Now Alanis, that is irony, for gawd sake get it right in the next song! :cheerful:
 

BackwardsEngineeer

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Re: Fundamentalists v Pragmatists

I can't see that anything that strays from the buy physical, hold physical, together we can break the banksters, do it now... doctrine will ever be accepted by these guys. Even if you actually own more physical than your accuser you will always be considered the lesser because you are not absolute and monolithic in your approach to the market!
zed,
You should consider this as a signature line....

I want to emphatically add that I'm as long term bullish pm's as I ever was. Maybe even more so at current price levels, in fact I may not be able to control my enthusiasm if we can wash this out through the fall to setup the nextdecade. What has changed for me is a defined end game. I have a documented exit strategy, that is flexible but firm. I did well in spring 2011, but my buy and hold strategy caused me to leave way too much on the table. Won't happen again... at least not that way, they are going to have to pull a different cutie to catch me this time out.

BE
 
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Zed

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Thats a big sig!

I do hold longer term more than I trade, that has always been the way. I am getting to the point that I'm wanting to turn more than I hold longer term, I think with what is going on it is really becoming a traders domain. We will see, it depends how this unfolds but I can see myself markedly changing strategy in the not to distant future.
 

ME Co.

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Back to the GSR, I see 62 again...When did that happen? Been having puter probs and using a dinasaur backup so haven't been on much last week. HH all, Mark
 

savvydon

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Back to the GSR, I see 62 again...When did that happen? Been having puter probs and using a dinasaur backup so haven't been on much last week. HH all, Mark
Last week there was a sudden flash spike down in silver that catapulted us up and over 63. Since then it has popped back down a bit and been mostly dancing around 61-62. You can almost taste the next silver smack down waiting around the corner to get us into 64-65 territory.
 

smooth

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looks to go higher?

gold_6_month_silver.png
 
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B2 Stealth

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~68? ...........
Do I trade a partial ammo fort at 70 GSR? Hmm, is it time to buy Ag? :eek:

Still learning...

B2

In "Zed's" world, I also wonder what 5000 rounds of .22lr, a 10/22 ,and two mags are worth as a "short or long" much less ten loaded PMAGS and associated AR rifle "down lower"... Yeah, we'll stop there? :cool1:

Kidding, but some of us (me) aren't very smart folks....
 

rodzm

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I could see a 1400 gold and 20 silver putting the GSR at 70.

Look at the GSR for the past 15 years and it shows the GSR has peaked almost religiously every year between the months of July and August.

Wait for it folks and you will be rewarded
 

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Irons

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I could see a 1400 gold and 20 silver putting the GSR at 70.

Look at the GSR for the past 15 years and it shows the GSR has peaked almost religiously every year between the months of July and August.

Wait for it folks and you will be rewarded
Just look at that chart folks, if you've been here for a few years we really have nothing to complain about excitement wise.

THAT is some fun stuff right there! :23_28_100s: :party30:


gold_15_year_silver.png
 

RxGold74

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OK, forgive my ignorance because I am new to PM buying. I understand the concept of T/A and the importance of the Gold/Silver ratio. But I don't understand how you would most effectively play the ratio. It seems to me that trading out of one metal for the other wouldn't be worth it due to the transation costs involved. Or do you simply use the G/S ratio along with seasonal trends to signal good buying opportunities for gold or silver? I have so much to learn that my head hurts thinking about it!
 

Zed

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78 +. When gold runs silver will lag behind. Again.

Ach! It's different this time, I keep fergetting. :rolleyes:
Silver lags? Show me the history on that...

Since 2003 the ratio has closed down on gold rallies... FYI that is silver leading in % gains.

Get it right mate!
 

Zed

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OK, forgive my ignorance because I am new to PM buying. I understand the concept of T/A and the importance of the Gold/Silver ratio. But I don't understand how you would most effectively play the ratio. It seems to me that trading out of one metal for the other wouldn't be worth it due to the transation costs involved. Or do you simply use the G/S ratio along with seasonal trends to signal good buying opportunities for gold or silver? I have so much to learn that my head hurts thinking about it!
Full jacket metal heads are never happy holding cash so they simply roll from gold to silver at either end of the ratios extremes.... or their best guess. That way they never don't have metal but they can trade up their stash in outright holdings of oz's. You'd want to have a reasonable stash to make it work IMO, as you point out transaction costs would be high, too high on smaller amounts.

I dunno, I don't mind cash now and again... but then I don't take USD :cheerful:
 

savvydon

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OK, forgive my ignorance because I am new to PM buying. I understand the concept of T/A and the importance of the Gold/Silver ratio. But I don't understand how you would most effectively play the ratio. It seems to me that trading out of one metal for the other wouldn't be worth it due to the transation costs involved. Or do you simply use the G/S ratio along with seasonal trends to signal good buying opportunities for gold or silver? I have so much to learn that my head hurts thinking about it!
Look at the chart. Say you bought an ounce of gold in 2008, traded it for 80 oz of silver in 2009 and then traded that back for two ounces of gold in 2011. You doubled your stack in three years without adding any capital. Don't worry so much about this - just try to create a position for yourself.
 

Irons

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Silver lags? Show me the history on that...

Since 2003 the ratio has closed down on gold rallies... FYI that is silver leading in % gains.

Get it right mate!
2009 to late 2010 Gold rose steadily for over a year going from $800 to nearly $1400 before silver woke up and started to meekly follow.

I remember it well, I wanted to dump all of the frickin' silver I was sitting on because the ted butler drug had worn off. I had to wait.


10 yr gold.png 10 yr silver.png
 

Zed

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2009 to late 2010 Gold rose steadily for over a year going from $800 to nearly $1400 before silver woke up and started to meekly follow.

I remember it well, I wanted to dump all of the frickin' silver I was sitting on because the ted butler drug had worn off. I had to wait.
One short period, it wasn't a year, 6/7 months that the GSR was relatively flat (still choppy @ around 67!) while gold rallied, indicating so so performance. Prior to that it moved harder and faster than gold and after that it killed gold in % gains. The only real time after that was when silver topped out ahead of gold in 2011. Gold rallied for a few months while the GSR rose... but really that whole period was strange... and you could equally say that gold sat on its ass while silver took a moon shot hence the 30 GSR.

GSR-M-20130504.png

Me thinks you whine about silver too much! :cheerful:
 

smooth

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Brother Irons, you just got schooled! (not trying to start any trouble).
Someone... take the stick away from andial...He's doin too much poken lately.
 

smooth

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One short period, it wasn't a year, 6/7 months that the GSR was relatively flat (still choppy @ around 67!) while gold rallied, indicating so so performance. Prior to that it moved harder and faster than gold and after that it killed gold in % gains. The only real time after that was when silver topped out ahead of gold in 2011. Gold rallied for a few months while the GSR rose... but really that whole period was strange... and you could equally say that gold sat on its ass while silver took a moon shot hence the 30 GSR.

View attachment 39012

Me thinks you whine about silver too much! :cheerful:
Silver is like that crazy chick we all knew in our younger days. She is so freaken squirly you gotta grab a hand full once in a great while, And its possible you might have the time of your life. On the other hand it could turn out to be a scene from a horror flick.
And in the end you feel bad for the guy who married her...