Monday, May 16, 2011

Value or Growth?

Wanted to lead with this today. Please take a moment to read and consider this brief article.
Be sure to take notice of how this money manager is described, a "veteran value investor".
From Investopedia:

What Does Value Investing Mean?
The strategy of selecting stocks that trade for less than their intrinsic values. Value investors actively seek stocks of companies that they believe the market has undervalued. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with the company's long-term fundamentals. The result is an opportunity for value investors to profit by buying when the price is deflated.

Hmmm. I thought the precious metals were in a bubble due to rapid growth of price.
Hmmm. What is a "veteran value investor" doing buying gold as her largest holding?
Hmmm. "Protection against what can go wrong". I thought only we "insects thought that way.

OK, to the business at hand.
I got filled overnight on some July silver $40 calls. Paid the price I wanted to pay so The Turd is very far. Because I don't expect silver to exceed $45 before expiry in late June, I'll be looking to raise some additional cash by selling the 45s I currently own and a few more against them.

Here is an hourly gold chart. Note the sideways action. On the plus side, we continue to hold 1480 and even make higher lows. Now, if we can just make some higher highs...

Silver looks much the same. It continues to find very strong support in the area around $34, stopping overnight right at $34.00. The more times that level holds, the stronger it becomes. Eventually, nervous buyers will begin to sense that the storm has passed and see a winning risk:reward. Big buyers could enter right now, if they wanted to. I'd buy at $35 with a stop below 33.80. That gives you only $1.20 of downside. I don't see any real, significant resistance until the 39.50 area. That gives you $4.50 in upside. That's a risk:reward of almost 1:4. You'd think that would be strong enough to prompt some buying. We'll see.

Lastly, I very much appreciate all of the diverse feedback regarding the implementation of a nominal "troll" fee for the new site. After much consideration, I've decided against adding any kind of membership fee. The new site will be completely free of charge and will remain so. However, in order to participate in any of the discussions, you will have to register with the site, become a "member" and provide a valid email address. No fees, though. Again, the site is dedicated to reaching and educating as many as possible and charging fees would only limit that purpose.

That's all for now. I have lasts of 1499 and 34.93 so maybe, with a little luck, we can turn things green today. Have a great one! TF

p.s. You'll want to read this, too. Louise Yamada is the only technical analyst that I listen to. She is the best. Period.$5,200_Gold_is_Long-Term_Channel_Target.html
And here is the full audio interview:


  1. print -e "just another perl hacker";


  2. I am still wondering whether MARAdona has been banned from The Turd's community.

    -- Paul D. Bain

  3. The new site will be completely free of charge and will remain so.

    Good call Turd. Thanks.


  4. At last, another open source devotee hereon!

    enoxard wrote:
    print -e "just another perl hacker";


    May 16, 2011 10:05 AM

    I am pleased to see, at last, another open source devotee hereon. Feared that I was the only one.

    -- Paul D. Bain

  5. @paulbain

    Nope, typing on a Linux desktop...


  6. To SaveAmerica1st-

    Silver AND Gold - Roll Program !

    To TF-
    How do you get orders filled in the middle of the night? I can't find a brokerage that will fill in the Asian trading hours and I've been looking for a while now!

  7. what if silver is the wrong metal to invest in? what if we should really be investing in gold to not only protect our wealth but to make an amazing return??

  8. kumanari said...

    Breaking news

    Do not know if anyone posted this yet but this is big.
    IMF head scumbag yanked off plane by Five-0 after attempted sex assault on hotel maid, loser leaves phone behind with Global bailout evidence which would have basically disolved FED and other CENTRAL BANKS!
    May 16, 2011 10:18 AM
    It' gettin hot in hea!


  9. "Brian said...
    what if silver is the wrong metal to invest in? what if we should really be investing in gold to not only protect our wealth but to make an amazing return??"

    What if you just eliminate any risk and uncertainty and invest 50:50 in both gold and silver?

  10. SSJ: I had an open, good-till-cancelled order to buy on the Globex.

  11. ....

  12. I hoping to get one more shot @ $34 in the next 3 days, it would not surprise me a bit if the EE pulls the typical 8:00 AM waterfall plunge and I can pick up some AGQ on the cheap.

  13. "paulbain said...

    I am pleased to see, at last, another open source devotee hereon. Feared that I was the only one."

    Don't get your hopes up. Contrary to pre 2000, we live in an age where every jackass and his 8 year old son can afford and operate a PC. The cool people either already left a long time ago or are virtually indetectable within the legions of brainless Ipad/smartphone users, secretaries and office workers with too much free time, and bratty kids at the free Internet PC at McDonalds.

  14. Turd, you made the right decision not to charge fees on your new site.

    And for those who blame this community for their own failed investment decisions - know what they say about free advice.

  15. Treasury Confirms Debt Ceiling To Be Breached Today; Will Tap Pension Funds

  16. This comment has been removed by the author.

  17. Yamada was with Smith Barney for 25 years until her forecasts for gold got way too high. Of course, they were with Citi back then, and maybe that's why she left. LOL. No doubt...

    The bearishness towards gold @ $1500 is amazing. Silver @ $35 and left for dead even more so.

    Bay of Pigs

  18. Thank you Turd - God bless!

  19. @ ERIC

    TF have a poll on how much every owns silver in

  20. $oss_zealots++;

    nothing squeezes shorts like a python.

    i can replace your HFT with a very tiny perl script.

  21. Markus

    plan on doing that, but what if silver never really goes up? what if it stays right where it is and its gold that we should be investing in instead. what if all this stuff about silver is wrong? Central Banks arent buying up all the silver, they are buying up all the gold. its in the news on a daily basis, it seems.

    i have noticed that most of the people out there screaming that silver is going to the moon and stuff like that have all calmed down. many of them saying they have no idea what is going on in the market. what if they are wrong about silver and its really gold that people should be investing. sort of like how the CB's are buying up all the gold??

  22. silver down, gold up. why should it change course?

  23. Good move on making the new site free.

    Look, I've been on forums for a long time and even operate my own. You cannot just go banning anyone that questions the status quo or groupthink of the membership. It's not healthy and it makes you look bad.

    Therefore, Turd and the moderators (if he chooses some) will need to agree on a TOS/rules and enforce them. Sure, there will be some members who will do nothing more than act like children, just hanging out antagonizing others cause they're Daddy never paid attention to them when they were a kid.

    And, on the other end (and equally as annoying) are those that will follow Turd around and kiss is ass hoping for handouts (want Turd to TELL them what to do).

    A circle-jerk is just as bad as troll city; in fact, I'd say the more the community becomes polarized, the more it will draw trolls in.

    I hope I speak for the whole when I say that what we want is a community of like-minded individuals capable of rational, lateral thought who's primary interest is learning and growing as investors. We're 'all along the watchtower' together, but that doesn't mean we'll all agree what we see.

  24. @options traders -

    Has anyone compared commission structure at Lind-Waldock vs. etrade vs. thinkswim vs others?

    It's a baaaadddd thing when the Jedi wakes up hungry and knows who took his food. (looks at Anakin over at JPM).

    It's even worse when the JPM guys want to packet sniff every fricking trade and front run your positions before you get filled.

    @Ruhul - please go back and read Vamoose from the last thread.

  25. "The more times that level holds, the stronger it becomes."

    How do you square this with the often repeated "the more times a level is tested, the likelier it is to break"?

    Is it the same phrase with a different conclusion, or are these two cases distinct? If they are distinct, for what reason?

  26. @Turd - good call on no pay-wall, IMO. Even the noise has some value...

    @Markus - most PC's don't even have perl. it's a scripting language found on lilnux/unix boxes. you've really gotta be a motivated geek to know it, I guarantee you it's not within reach of "every jackass and his 8 year old son"...

    (btw, paulbain... ex-unix sysadmin here, still an open source devotee, just got bored with IT so I'm not a "pro" anymore...)

  27. @Brian,

    I have been thinking the same thing myself lately. Silver may be great for speculative plays due to the volatility, but gold is the monetary metal being purchased by central banks (i.e. the establishment).

    How is it that there is suddenly enough silver for APMEX to launch a new fractional silver round product? I got an email about it from them this morning.

  28. Suggestion for new website.

    I would like TD to implement verification process via mobile phone similar to what gmail now requires. This system will be hard for trolls to create fake email and register.

    my 2 cents.

  29. OPen Source Kicks A**!
    (Linux, BSD-Unix and of course the Mac beats all comers)

    @PBain Enoxard Snoopy

  30. Great article by Bob Chapman

    BTW, It seems that pensions are next in the money hungry debt machine! it my twisted logic or does this sound WAY to bullish for silver and gold?!?!

  31. I'm sorry TF but this woman (LY) is talking complete b**ll*cks about the 'natural' pullback in silver from 1 May 2011 onwards. If if was just a 'natural' pullback from a 'parabolic' move up (I think it still had a little way to go past $50 - look at the chart - it isn't that steep at the top), then why was silver hit for $6.00 in as many minutes as soon as trading commenced at 23.00 GMT+1. - at a time when bids are very thin on the ground. I mean, how many sell orders was the market bombed with? 50,000? 75,000? Again, if it was 'natural', why didn't the 'profit-taking' start the previous Thursday (28.4.11) or Friday (29.4.11)? Answer: to lull everyone to a soporific state of euphoric contentment with a print of between $48.00 and $49.75. Remember London was closed on Fri. for the Royal Wedding and again on Monday for the May Bank Holiday meaning anyone who was still holding open positions on the LME was trapped.

    There was nothing 'natural' about it!!

  32. Turd -

    Instead of a junk option, maybe we can have a support button system so posters can build a reputation (positive or negative).

  33. Police warn central London of bomb threat

    These crooked Keynesian's are pulling out the terror card....Again!...The boogeyman is going to get us.

  34. Hit my stop at 35 on the open and bought again this morning at 34.50 coulda had 34.10 but wanted to read more first. Happy to be back in but see a couple rough days ahead still. Plan on selling most again and re-entering Friday afternoon maybe morning. Selling tonight or a trailing stop.

    GL to all turdites. Been tough lately. Want to go heavier but think its still to risky, QE2, debt ceiling, equaties. Alot of moving parts. So I have decided to tread lightly for now.

  35. @Brian "i have noticed that most of the people out there screaming that silver is going to the moon and stuff like that have all calmed down"
    Remember that saying:
    'Sell when everyone is buying and buy when everybody is selling."

    My take is that we are currently somewhere in-between these two poles.


  36. This comment has been removed by the author.

  37. This house is probably any turdites dream! You need to check this out if you haven't seen it before. The house actually opens and closes itself

  38. There is so much bad (for stocks) news out there it is getting ridiculous.

    Yet i looked at futures overnight and saw them barely down, so I knew today we'd see stocks recover, bizarre as it is.

    However, I think the complacency can only last so long, the crash is coming.

    But since it looks like ti will take a while, I am happily selling SDS $20 June puts at anything above $0.55.

    And once the May $20 puts I sold expire in a few days I will sell more Junes.

    Stocks may not collapse right away, but no way will I lose on being long SDS at 19.45 for the next 4 weeks, IMHO.

    Easiest money I will ever make.

  39. @Devin Hobbes

    It is a chart theory of behavior has been observed many times. They are not hard and fast rules just "likely" outcomes. It has it's bases in psychology of the trader. The more times a price approaches a resistance level to more comfortable people become with that price and the less who take profits causing it to rollover. The more times it bounces off of support the more comfortable people become with that level as a floor and don't get scared out of their positions.

  40. So did the POSX just shart its self?

  41. I think that apple tree picture that I was using, being a very large file, is giving me some blogger problems this morning. Anybody else get problems like that?

  42. Remember the Hunt Brothers? They were so bad to try to corner the silver market, right? Actually, the story told by a 1980 Playboy article is a little different. The rules have been a-changing for a LONG time.

  43. general comment on posts .... ( re Maradonna post ) wonder if any of these idea's help
    1) Kitco MB has a 7 day waiting period to allow new users to READ before they post ... hated it ten -- like the idea now
    2) not much of a facebook person -- but somehow we need to link who we are ... trolls hate sunlight and a visible track record ... how can we have our name verified -- and even better - show our track record on what we post ...
    3) we need opposing views -- I just don't think Maradonna was sincere ... but we need to be challenged in our views ... I dislike herd group thinking ...but like turd individual thinking
    4) seeking alpha has a 'star' system to identify the smarter posters ... plagiarism is the most sincere form of flattery ....


    Note - my profile is NOT blocked in Blogger ... is yours ?


  44. After reading Vamoose's comments on the previous thread I am rethinking this idea of showing off that nice Walking Liberty half to others as a way of educating the Public about the value of Silver.

    Remember, you have no control over any information once you give it to another person. While you might trust the person, you do not know whom this person will tell, or whom that person may tell.

  45. This development is downright ominous for private sector 401K & IRA's. But hardly unexpected.

    Consider cashing 'em out while you still have control of your monies. Taxes? Yes, and STILL at least consider it while the window remains open. If right for your circumstances, act soon:

  46. Man I want one of those houses...Cool stuff for sure.

  47. In my opinion you have made a good call on not charging a fee to post Turd. Thank you!

    Anyone have info on what backwardation in Silver is looking like currently?

  48. Man, I should have held on to my TRE!

  49. I'm currently in Shanghai and am buying silver here. I can give you the low down on the situation. my youtube blog....

  50. @ md6666 --- TF

    if done verification by phone how could

    people from other parts of the world join

    the blog.....

  51. 70% chance we retest $35.50 by the 4PM close.....silver is looking weak at the moment.

  52. 110.3125 -14.1250 (-11,35%) T-Bonds

    ooooops, sure wasn't part of the plan.

  53. Some Sprott news:

  54. Could be just me, but I'm just not seeing good volume the past hour or so.

    It's just drifting in a very narrow range.

  55. are the TBond prices refrenced by Firedollarz accurate.

    I see the same on my screen ~110

  56. @Chris Gordon

    It isn't a case of either/or, IMO. Silver was due for a correction. I agree with you it had a little more left in it. The EE saw their opportunity to give silver a push down at the most effective moment. That doesn't mean Yamada is wrong about a natural correction, however.

  57. "How is it that there is suddenly enough silver for APMEX to launch a new fractional silver round product? "

    They are melting down real dimes to make fake dimes that they can sell to people at considerable premium profit. Who could make this stuff up?

  58. INO shows the 30yr @124.53 and the 10yr @122.51.

    Must be a glitch in our feeds Firedollarz. I pulled mine from Glodseek.

  59. Speaking of melting:

    New Fukushima headlines are coming fast and furious today. From

    + Tepco says fuel in Reactors No. 2 and 3 may have melted — Announcement about the two reactors “will be made later”

    + Tepco Says Fuel in 2 Reactors May Have Melted, Bloomberg by …Read More

    + Moody’s cuts TEPCO credit rating after today’s news, saying damage at plant “appears worse than previously indicated”

    + Reactor No. 1 core had total meltdown and uranium fuel may be outside containment building — Nuclear reaction could have restarted

  60. Debt ceiling won't be lifted until the last minute, late July, IMO.

    republicans have no incentive to help Obama out, and the more pressure they apply the better deal they get for themselves.

    To settle earlier (unless they get everything they want right away) would be like exercising an option before expiry, why give up the time value for nothing?

  61. DSK

    I'm anti banker believe me. Though there's always two sides to a story. First link is interview 3 weeks ago and he mentions setup in sex scandal. Knowing that is his weakness (my view)

    Also if what is said in this second linked article is true. That would mean DSK may not have been fully cooperating with TPTB and might of actually been screwing their plans up a bit. I know his Ireland deal was squashed by Timmy G

    Only thing is why is he alive? If this were a setup a heart attack is easier no. I'm not saying it was a setup just providing alternative perspective

  62. Here is a recent quote from DSK

    State regulation of markets needs to be more extensive; global policies need to create a more even distribution of income; central banks need to do more to prevent lending and asset prices from expanding too fast. 'The pendulum will swing from the market to the state,' Strauss-Kahn said in an address at George Washington University last week. 'Globalization has delivered a lot . . . but it also has a dark side, a large and growing chasm between the rich and the poor. Clearly we need a new form of globalization' to prevent the 'invisible hand' of loosely regulated markets from becoming 'an invisible fist.'" (Link---

  63. @ rassillon


    You explained the first iteration (TF's). What about the second one, is it simply wrong? From my experience, I know that, after watching something bounce of support a couple of times, if I buy, support will break. Same goes for resistence breaking after I sell.

  64. @ Lazy Lester:

    I had it from

    Well, maybe we had the same miraculous vision from the crystal ball ;-) and we could see the beginnen of the end...

    Doesn't take too long to get there anyway

  65. "abe said...

    Turd -

    Instead of a junk option, maybe we can have a support button system so posters can build a reputation (positive or negative)."

    I think that is a great idea. Two things to expand on it:

    1. Make posters with a negative reputation go through increasingly difficult word verification captchas to post the more negative their reputation becomes. No captcha if your reputation is good.

    2. To make sure #1 is not abused by trolls, only let people with a positive rating above a certain threshold use the rating system to rate others.

    This way the forum becomes sort of "self moderation", saving lots of time and work.

  66. average joe,

    are you still in xau ?

  67. I just don't see silver/gold climbing to new highs or big bounces anytime soon.
    Too many people got burned at 48$/oz to try again.
    I wouldn't be surprised at 1350$/28$.

  68. @J that's funny, make trolls type out 20 lines of latin or ancient greek each time they want to post

  69. @Brian
    Silver and Gold may not be the only currency in the near future. You may want to look at regarding Virtual currency or Peer to Peer currency that seems to be growing rapidly. Here is a link Bitcoin info

  70. Did any of you catch Harriet Hunnable defending CME margin hikes in silver on Bloomberg? Is it just my imagination, or did she attend the same school as our friends Blythe and Evelyn?


    Ol' Michael
    "...paper is paper..."

  71. @Pailin

    I took a small bite at 34.25. I am anticipating I know signals arent there yet. You got your ears on?

  72. From SOLARI website:

    IMF to Sell Gold to Raise Bail For Strauss-Kahn

    Ironic, eh?

  73. Mining stocks seem to be holding up today. HUI is up still...good sign?

  74. @Devin Hobbes

    Can you be more specific about what I didn't explain, I thought I addressed both resistance and support, remember they are not absolutes.

    Market direction is up, that is to say, in general the general expectation for anything, stocks, commodities, etc is for it to go up. (blame inflation for that) So there is a bit of a bias in upside behavior. I hope I am not being too esoteric in my explanation. Think about birds and how they act when you try to feed them, markets act much the same way.

  75. The truth is:

    Value investors don't care about price action. As long as the price is lower than the value, they buy.

    So what is a value investor doing by buying gold? Discarding 'bubble' warnings from people who base it on merely price action.

  76. Balls of Steel Atlee. :)

    I'm still waiting. Hope I didn't miss the entry.

  77. @ rassillon

    My question was about this often repeated phrase: "the more times a level is tested, the likelier it is to break."

    It seems to be the opposite of TF's "The more times that level holds, the stronger it becomes."

    Your explanation dealt with the latter (level holds = stronger), but neglected the former (level tested = likelier to break). My question was, is the level test = likelier to break phrase wrong? If not, what's the distinction between the two?

  78. @ J That's a great idea. But how high is the possibility of group think developing as a result? People will vote up posts with which they agree and probably vote down posts with which they disagree.

  79. Deven Hobbs said: My question was about this often repeated phrase: "the more times a level is tested, the likelier it is to break."

    I believe that's true if the area being tested is WITH the overall "main" trend. You will see that theory holding true in the PM charts during the current bull run. The areas of "resistance" gave way after numerous tests. The main bull trend continued.

    Even after this nasty crash, the trend in PM's is still UP. We are currently in a "Counter trend."
    As it tests support in the current "COUNTER TREND" the longer it holds, the stronger it gets.
    As long as it remains a "Counter Trend" that hypothesis should hold.
    That's my understanding

  80. just saw your blog title..

    dont leave an exit w/ lots of mambo jumbo TURDIE.

    just type THIS IS THE BOTTOM,

    but you cant, cause you have been doing it repeatedly since 45..

    c'mon admit it! be a man; just say I WAS WRONG CALLING BOTTOM @ 45, stay wiser and wait for an uptrend, at least in the 4H charts... but YOU CANNOT.. cause you are emotionally attached...
    cause yur herding the cult.. you were gonna take out JPM and COMEX... but you sucked budy, just sit back and watch weekly charts for the return of the uptrend...

  81. and c'mon delete this post too.. put the shade on the sheeple...

  82. @Ozgur
    Thank you for protecting meeee, baaaa, baaaa...You see I don't have a mind of my own, so I will beeelievveee yooouu, baaaa, douchebag

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