Made more money shorting Silver in the last 2 months than I've made being long it over the last 2 years, although I recognise this position is a derivative of a long USD trade. Sadly, because I'm doing it within an ISA and SIPP, this leaves only inverse ETF's as a vehicle to use. I've done it via 3SSI - a triple-leveraged daily short ETF that uses swaps.
This has been a fantastic portfolio hedge in the last 2 weeks, and whilst I wouldn't usually choose a leveraged short ETF to establish a position against a commodity, I recalled how hard and fast Silver bombed in February and March 2020, and decided this would be a good vehicle to try to take advantage of the same thing happening again. Some caveats here:
1. This is a synthetic swap-based ETF so wide open to counterparty risk in the event of a banking crisis.
2. In a choppy market, the time decay caused by the daily swap resets will vapourise your position over an extended time period.
3. When the US Dollar turns, I agree that Silver will most likely catch a bid and you want to be at least 1000 miles away from 3SSI when that happens...
For the time being though, it's a great portfolio hedge - especially if Silver ends up going back to $12.
I recall Julian Brigden accurately calling the turn in both Silver and the USD back in March 2020, so would recommend keeping an eye on the JulianMI2 twitter handle for anybody currently in the long USD trade.
Thanks Dominic, although you should probably save the congratulations until after I've closed out. The biggest risk to this trade now, other than a banking crisis, is overstaying my welcome. ;)
Another reason to absolutely love platinum. Per the World Mining Council (or someone of a similar name) the all in production cost of producing platinum is $800-900 an ounce, ignoring low cost russia who come in at the $600s. And these were prices in circa 2018. Adjusting for inflation platinum is trading at or below its effective 'cost'. Precise figures may vary but you get the drift, it effectively gives you a price floor. As far as im concerned this makes it 'risk-free', or at least more risk free than your classical government's version of the same!
I haven't looked at platinum that closely so I will take another look based on the information you have supplied. I have a little silver and gold, and plan to buy some more when I feel it's close to the bottom. I have heard figures of $900 for gold from Harry Dent...surely it can't go that low can it???
Harry Dent has made a lot of forecasts over the years. Some - particularly in the 1990's - were spot on. Most have not been. I have personally learned to be wary of forecasters who are too certain of their own forecasts and themselves. When I think of people who forecast the future as a certainty and have being wrong time and time again, a long list comes to mind. Harry Dent is on it. Even the best forecasters (I include people like Raoul Pal and Julian Brigden in this short list) get things wrong, and it's all about the probabilities. Hedgeye are really good over shorter timescales, but as their CEO Keith McCullough has said on many an occasion, when his trades stop working, it tells him we're in a market regime phase transition and their job is to work out which one is being transitioned to. More here:
For the avoidance of doubt, we're currently in a Quad 4 market regime as Hedgeye see the World.
Given the current climate of a strengthening USD, if Gold does go to $900 as a result, this implies the US Dollar index (DXY) goes in the direction of 120 and beyond in a big hurry (it's all about rate of change - large jumps catch large investment $$$$s offside, and the shepherds of that capital have to reposition in a panic-induced hurry = volatility rises and asset prices move around with larger amplitudes). If such a move transpires, the Pound will most likely be trading around US Dollar Parity. In this scenario, I would anticipate that UK-based holders of Gold will still find it has proved to be a better protector of their purchasing power than the local currency.
There is a lot more to Gold than the US Dollar price if you hold it and live in a non-US jurisdiction.
I mentioned Harry Dent as he is so sure of that price, and from all of the people I have ever listened to on the future of gold prices there is one thing that I have learned...
Most get things wrong more often than they get things right.
I've bought gold low, I've bought gold high, if it does go low ( I think $900 is unlikely personally), but if it does go lower I'll be buying it on the way down, and holding it on the way back up.
Yeah, he's a little too sure for my liking. Many of these guys get occasional big calls right and are lauded as gurus as a result. However, they are only human, and as fallible as the rest of us when it comes to falling victim to our own bullshit. :)
I couldn't agree more, there have been some pretty wild predictions when it comes to gold prices, and each prediction comes with a huge amount of confidence. Nobody has a crystal ball and looking for 'cycles' is like trying to match waves in the ocean. Heraclitus had it right when stating that you can never step into the same river twice, we are not following any historical pattern with the financial markets...this is all new, but what I would say is that as human beings the same mistakes are being made.
If someone is prepared to make enough guesses then at some point they'll get some right.
Guru?...not in my book, even a fool can get it right sometimes.
Made more money shorting Silver in the last 2 months than I've made being long it over the last 2 years, although I recognise this position is a derivative of a long USD trade. Sadly, because I'm doing it within an ISA and SIPP, this leaves only inverse ETF's as a vehicle to use. I've done it via 3SSI - a triple-leveraged daily short ETF that uses swaps.
This has been a fantastic portfolio hedge in the last 2 weeks, and whilst I wouldn't usually choose a leveraged short ETF to establish a position against a commodity, I recalled how hard and fast Silver bombed in February and March 2020, and decided this would be a good vehicle to try to take advantage of the same thing happening again. Some caveats here:
1. This is a synthetic swap-based ETF so wide open to counterparty risk in the event of a banking crisis.
2. In a choppy market, the time decay caused by the daily swap resets will vapourise your position over an extended time period.
3. When the US Dollar turns, I agree that Silver will most likely catch a bid and you want to be at least 1000 miles away from 3SSI when that happens...
For the time being though, it's a great portfolio hedge - especially if Silver ends up going back to $12.
I recall Julian Brigden accurately calling the turn in both Silver and the USD back in March 2020, so would recommend keeping an eye on the JulianMI2 twitter handle for anybody currently in the long USD trade.
Great trade. Well done Jimbo
Thanks Dominic, although you should probably save the congratulations until after I've closed out. The biggest risk to this trade now, other than a banking crisis, is overstaying my welcome. ;)
Another reason to absolutely love platinum. Per the World Mining Council (or someone of a similar name) the all in production cost of producing platinum is $800-900 an ounce, ignoring low cost russia who come in at the $600s. And these were prices in circa 2018. Adjusting for inflation platinum is trading at or below its effective 'cost'. Precise figures may vary but you get the drift, it effectively gives you a price floor. As far as im concerned this makes it 'risk-free', or at least more risk free than your classical government's version of the same!
https://www.goldpriceforecast.com/explanations/platinum-production-cost/#:~:text=The%20all%2Din%20sustaining%20costs,can't%20go%20on%20indefinitely.
Interesting thanks
I haven't looked at platinum that closely so I will take another look based on the information you have supplied. I have a little silver and gold, and plan to buy some more when I feel it's close to the bottom. I have heard figures of $900 for gold from Harry Dent...surely it can't go that low can it???
Harry Dent has made a lot of forecasts over the years. Some - particularly in the 1990's - were spot on. Most have not been. I have personally learned to be wary of forecasters who are too certain of their own forecasts and themselves. When I think of people who forecast the future as a certainty and have being wrong time and time again, a long list comes to mind. Harry Dent is on it. Even the best forecasters (I include people like Raoul Pal and Julian Brigden in this short list) get things wrong, and it's all about the probabilities. Hedgeye are really good over shorter timescales, but as their CEO Keith McCullough has said on many an occasion, when his trades stop working, it tells him we're in a market regime phase transition and their job is to work out which one is being transitioned to. More here:
https://app.hedgeye.com/insights/102268-chart-of-the-day-expected-values-by-quad-regime?single_item=true
For the avoidance of doubt, we're currently in a Quad 4 market regime as Hedgeye see the World.
Given the current climate of a strengthening USD, if Gold does go to $900 as a result, this implies the US Dollar index (DXY) goes in the direction of 120 and beyond in a big hurry (it's all about rate of change - large jumps catch large investment $$$$s offside, and the shepherds of that capital have to reposition in a panic-induced hurry = volatility rises and asset prices move around with larger amplitudes). If such a move transpires, the Pound will most likely be trading around US Dollar Parity. In this scenario, I would anticipate that UK-based holders of Gold will still find it has proved to be a better protector of their purchasing power than the local currency.
There is a lot more to Gold than the US Dollar price if you hold it and live in a non-US jurisdiction.
I mentioned Harry Dent as he is so sure of that price, and from all of the people I have ever listened to on the future of gold prices there is one thing that I have learned...
Most get things wrong more often than they get things right.
I've bought gold low, I've bought gold high, if it does go low ( I think $900 is unlikely personally), but if it does go lower I'll be buying it on the way down, and holding it on the way back up.
Yeah, he's a little too sure for my liking. Many of these guys get occasional big calls right and are lauded as gurus as a result. However, they are only human, and as fallible as the rest of us when it comes to falling victim to our own bullshit. :)
I couldn't agree more, there have been some pretty wild predictions when it comes to gold prices, and each prediction comes with a huge amount of confidence. Nobody has a crystal ball and looking for 'cycles' is like trying to match waves in the ocean. Heraclitus had it right when stating that you can never step into the same river twice, we are not following any historical pattern with the financial markets...this is all new, but what I would say is that as human beings the same mistakes are being made.
If someone is prepared to make enough guesses then at some point they'll get some right.
Guru?...not in my book, even a fool can get it right sometimes.