What's going on with silver?

Discussion of the Gold portion of the Permanent Portfolio

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Someguy
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Re: What's going on with silver?

Post by Someguy » Wed Jul 31, 2019 8:13 pm

What do you think about this "silver" PP in transition to a standard PP:

- 25% Stocks
- 25% Bonds
- 25% Cash
- 25% Silver (because of the ratio)

When I need to rebalance, I sell silver (if more than 25% in that moment) or I buy gold (if silver less than 25%). When I need to rebalance again, I sell silver (if both metals are more than 25%) or I buy gold (if both metals are less than 25%).

In a few years there will not be silver in the portfolio.
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Ad Orientem
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Re: What's going on with silver?

Post by Ad Orientem » Wed Jul 31, 2019 9:13 pm

Someguy wrote:
Wed Jul 31, 2019 8:13 pm
What do you think about this "silver" PP in transition to a standard PP:

- 25% Stocks
- 25% Bonds
- 25% Cash
- 25% Silver (because of the ratio)

When I need to rebalance, I sell silver (if more than 25% in that moment) or I buy gold (if silver less than 25%). When I need to rebalance again, I sell silver (if both metals are more than 25%) or I buy gold (if both metals are less than 25%).

In a few years there will not be silver in the portfolio.
Not wild about it unless you are living in a place where its illegal to own gold. I own a little silver as a VP speculation. But silver is not a good substitute for gold. For one thing it's not a pure precious metal play. Silver is both a precious metal and an industrial metal. That means its price can be effected by different factors including a general slow down in the economy.
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Cortopassi
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Re: What's going on with silver?

Post by Cortopassi » Thu Aug 01, 2019 7:57 am

Agreed, AO, as the last 13 years have shown. Nice to have some, ideally to rebalance some gains, but not 25%

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ochotona
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Re: What's going on with silver?

Post by ochotona » Fri Aug 02, 2019 11:27 am

gold silver ratio getting close to 90 again
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Re: What's going on with silver?

Post by dualstow » Fri Aug 02, 2019 2:04 pm

ochotona wrote:
Fri Aug 02, 2019 11:27 am
gold silver ratio getting close to 90 again
It's been asked before- does the ratio mean anything?

I don't suppose there's a place out there where one can trade silver for gold and vice versa, with less friction?
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Ad Orientem
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Re: What's going on with silver?

Post by Ad Orientem » Fri Aug 02, 2019 3:41 pm

From an historical perspective silver looks significantly undervalued relative to gold. But that's no guarantee. And even if it is cheap, it could be a while before the gap closes. If your looking for a place to make a speculative wager less all the extra premiums and other issues that come with physical, I'd consider SLV.
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ochotona
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Re: What's going on with silver?

Post by ochotona » Fri Aug 02, 2019 4:06 pm

Physical silver is a costly trade. My 100 oz bar is a fetish object. I'm only buying one. Agree on SLV.
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technovelist
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Re: What's going on with silver?

Post by technovelist » Fri Aug 02, 2019 9:18 pm

dualstow wrote:
Fri Aug 02, 2019 2:04 pm
ochotona wrote:
Fri Aug 02, 2019 11:27 am
gold silver ratio getting close to 90 again
It's been asked before- does the ratio mean anything?

I don't suppose there's a place out there where one can trade silver for gold and vice versa, with less friction?
Harry Brown didn't think the ratio meant anything.
I agree with him.
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Re: What's going on with silver?

Post by pmward » Sat Aug 03, 2019 8:50 am

technovelist wrote:
Fri Aug 02, 2019 9:18 pm
dualstow wrote:
Fri Aug 02, 2019 2:04 pm
ochotona wrote:
Fri Aug 02, 2019 11:27 am
gold silver ratio getting close to 90 again
It's been asked before- does the ratio mean anything?

I don't suppose there's a place out there where one can trade silver for gold and vice versa, with less friction?
Harry Brown didn't think the ratio meant anything.
I agree with him.
I don't think it's a coincidence that the more industrialized of a commodity it becomes, the more divorced it becomes from gold, and the more record gold to silver ratio spreads we hit. I think that silver is apt to correlate more with the likes of platinum, palladium, and the other industrial metals vs gold these days. It's actually easier for me to assume that the record spread is because of the fundamental shift in the silver markets over the last couple decades vs thinking this arbitrary indication means that it's cheap and going to perform well. Gold has taken off and silver is still languishing. I see no fundamental reason why this has to change, or even why it should change. Should silver start to break out it might be worth making a short term tactical momentum play in the VP. But I think that allocating the gold portion of the PP itself away from gold to silver, especially the entire lot, just seems silly and completely breaks the point. Browne specifically chose gold because it is a monetary metal and not an industrial metal.
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technovelist
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Re: What's going on with silver?

Post by technovelist » Sat Aug 03, 2019 6:03 pm

pmward wrote:
Sat Aug 03, 2019 8:50 am
technovelist wrote:
Fri Aug 02, 2019 9:18 pm
dualstow wrote:
Fri Aug 02, 2019 2:04 pm


It's been asked before- does the ratio mean anything?

I don't suppose there's a place out there where one can trade silver for gold and vice versa, with less friction?
Harry Brown didn't think the ratio meant anything.
I agree with him.
I don't think it's a coincidence that the more industrialized of a commodity it becomes, the more divorced it becomes from gold, and the more record gold to silver ratio spreads we hit. I think that silver is apt to correlate more with the likes of platinum, palladium, and the other industrial metals vs gold these days. It's actually easier for me to assume that the record spread is because of the fundamental shift in the silver markets over the last couple decades vs thinking this arbitrary indication means that it's cheap and going to perform well. Gold has taken off and silver is still languishing. I see no fundamental reason why this has to change, or even why it should change. Should silver start to break out it might be worth making a short term tactical momentum play in the VP. But I think that allocating the gold portion of the PP itself away from gold to silver, especially the entire lot, just seems silly and completely breaks the point. Browne specifically chose gold because it is a monetary metal and not an industrial metal.
Yep.
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Ad Orientem
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Re: What's going on with silver?

Post by Ad Orientem » Wed Aug 07, 2019 2:04 pm

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Mike59
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Re: What's going on with silver?

Post by Mike59 » Fri Aug 09, 2019 5:28 am

In my experience precious metals trading is best done by relative valuation compared to a long term mean. I use a 50 month SMA. As it stands silver is on my watch list and I would say it's neutral (close to it's 50 month SMA), I've been loading up on Platinum in the last year in my VP and I see much more upside there.

Having said that, my PP gold allocation has outperformed the other VP holdings big time and I'm thankful that of my total investments VP is only about 10%, it is gambling at the end of the day. These other metals will have their day in the sun, likely further along in gold's bull market when enthusiasm spills over into all the other metals.
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