Friday, May 6, 2011

Sometimes I get it right

Called this one correctly

Last week I wrote that silver was extremely overbought and was primed for a big pullback. In fact that is what happened. I have since sold my (ZSL) shares for a handsome profit. I also had some puts on the silver ETF (SLV) that had a nice move. At this point I have no opinion on silver or any of the commodity markets. I wrote in my newsletter, the Actionable Intelligence Alert, early this year that I expected quite a bit of volatility in the markets this year. This volatility is a direct consequence of the FED artificially driving interest rates to generational lows and forcing people into financial speculation. The only problem is that most regular people do not know what they are doing and regularly get sheared in situations like what happened in silver this week. Quite frankly there are quite a few people who bought silver at $45 and are now wondering what to do with it trading at $34. I am content to wait and see what happens over the next few months as the summer is notoriously rough for commodities and natural resource stocks. I think there will be an excellent opportunity to buy back positions for big discounts later this summer. There is an excellent video by Rick Rule that discusses being a contrarian and how not being one leads to being a victim. Here is the link, I believe you have to provide your email to view the video.

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