Four Silver Investments to Avoid

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Tim Staermose here, Simon’s tied up today looking for property on the Chilean countryside.

Nine years ago I gave up my six-figure salary, bonuses and perks, and resigned from my job at Lehman Brothers in Hong Kong. I could see we were on the cusp of a massive bull market in gold and precious metals, and I’d received an offer from a former employer to begin writing an investment newsletter covering gold.

I figured it was a no-brainer. Gold was below $300 an ounce and nobody wanted it. The price wasn’t even quoted on the financial news any more, and people laughed at me when I said I was buying gold.

In 2003, when I first wrote “The Case for $1,000 Gold”, people again poured scorn on my predictions. But, I had the last laugh. Gold has since climbed more than 4 1/2 fold, to be trading comfortably above $1,400 an ounce.

Today, the bull market is long-in-the tooth. And honestly, I’m not that interested in gold any more. I’m looking for the “next big thing”… something people will laugh at me for buying today.

I’ve not yet found it. But, I’ll keep looking until I do. (Incidentally, if you know of a cheap and hated asset, other than US housing, we at Sovereign Man would love to hear about it.)

Don’t get me wrong; I’m not suggesting you sell all your gold today. My own version of Pareto’s 80/20 rule, applied to the financial markets, is that 80% of the profits often come in the last 20% of the move’s duration.

When the mania stage hits (and I know many smart people who argue we’re not there yet) it’s not inconceivable to me that gold could triple again in fairly short order.

The move in silver, meanwhile, has been even bigger than the move in gold. Since 2002, silver has risen more than 8-fold.

If the gold bull market is long-in-the-tooth, the silver bull market is positively doddering and entering dementia.

And, as with all great bull markets, a plethora of new ways to invest in silver, along with a whole new crop of providers to purchase them from, has sprung up left, right, and center.

Again, don’t get me wrong. I’m not suggesting you rush out and dump all your silver. I’m simply advising you keep a cool head and stay rational in your appraisal of the likely future gains.

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