- Silver is over $20 per ounce for good. The dollar index
is headed for 70, kicking and screaming every step of the way. That's just
the near term.
-
- Long term: Can you spell "Moon,"
Alice?
-
- Mid term - this Fall, perhaps: $30 silver, widespread
homelessness, poverty and WWIII. I predict a very harsh winter for next
year.
-
- More charts than normal are coming my way as people attempt
to get a grip on the surging (and purging) financial markets. Straight
analysis by charting past price movement is what is known as "technical
analysis." Consideration of the full host of underlying assumptions,
corporate changes, earnings-per-share and the like, falls under the rubric
"fundamental analysis." Technicians and Fundamentalists have
been at odds over the correct approach ... forever, it seems. As usual,
the truth lies somewhere in between.
-
- Famous New York appellate judge Benjamin Cardozo, later
a US Supreme Court Justice, once observed (about his Palsgraf vs.
Long Island Railroad Company opinion) that he judged best, the less
he knew about the parties beyond the relevant case facts. He preferred
not, even, to know their names. His approach is revered today by almost
every lawyer and judge but myself, it sometimes seems. Cardozo's Palsgraf opinion,
perhaps more than any other judicial case in American history, set the
limits on simple negligence tort cases and is the centerpiece of every
law school's first-year Torts class. I thought Cardozo was wrong when I
studied him in law school and, today, I am sure of it.
-
- For nearly 30 years, I have been meaning to get a T-shirt
printed up that states, simply, "Cardozo was WRONG!!!" It
would have played better, had I done so during law school. Now it simply
would be the ultimate obscure in joke for lawyers.
-
- The investment analog to Cardozo's approach to judging
is called "technical analysis." No doubt, he was a Republican.
The late Supreme Court Justice William O. Douglas, on the other hand, represents
the opposite end of the spectrum. More recently, the late Chief Justice
Rehnquist represented to me the diffident stiff in judging. Both Douglas
and Rehnquist had nasty habits of authoring strictly logical opinions that
were perfectly orderly except for single paragraphs, buried deeply, which
amounted to "he waved his hands and it magically appeared." I
long have dismissed all ridiculously-liberal judicial opinions as "Douglas
opinions" and equally-ridiculously-conservative opinions as "Rehnquist
opinions." Real judging requires consideration of both ends of the
spectrum.
-
- Cardozo, by all accounts, lived and died a cold, impersonal
and lonely man. Douglas, on the other hand, laughed a lot, traveled, made
no apologies for his abject liberalism and died married to a young babe. You
choose which approach seems to work best on a personal level.
-
- There is a time and a place for everything. All things
in moderation, especially moderation, in other words. This applies
to investing, too, not surprisingly.
-
- I respectfully suggest that technical analysis, by itself,
truly is useful only in "normal" or "made-to-seem-normal-because-manipulated"
markets.
-
- When things change fundamentally, technicians sit on
the sidelines, at best. At worst, technicians tend to buy high and sell
low in huge bull and bear markets. We are in the midst of the most fundamental
change seen in financial markets in modern times. Now is the time to temper
our predilection for charts with fundamentals, else charts will kill us
all day long. In other words, all chart-based market timing approaches
suck these days.
-
- I now am retired. My solution, since I view this as the
greatest silver bull ever, is to buy on dips and never sell squat on perceived
peaks. The last time I had anything with which to buy, silver dipped just
below $12. Now I intend simply to ride it until I die or silver hits $100
(adjusted for inflation), whichever comes first.
-
- So far, so good.
-
- When "Easy Al" (Bad Credit? No Credit? Come
on down!) Greenspan spoke of the stock market's "irrational exuberance"
13 years ago, yet did nothing, letting the Dow surmount 5000 and thereby
kill me and my naked S&P 500 shorts, I knew we were in trouble. I started
buying gold a year later, a coin or two at a time, as I could afford them.
Then I started buying silver 8 years ago and laid in a good foundation
while it was beneath $5.
-
- A little over 2 years ago, I went "all in,"
selling all the gold I had bought and using the proceeds to buy silver
at $7. I have added to that silver with all the funds I have had come available
(including borrowing) since then, whenever the price got taken to the cleaners.
I have to take some down here and there for living expenses, but I'm continuing
to roll the bones, day after day.
-
- People keep emailing me to ask, "Is this a
good time to enter the silver market, despite the recent price runup?"
Always, my response is, "Every day is a good day."
-
- I could be wrong, but I doubt it.
-
- What to do with our empty hours, once investing becomes
so ... easy? This would be a good time to mend fences with family
and friends. In the fast-approaching hard times, we will need them, more
than ever.
|
