Well…I hate to say that I told you so…but I will   As many of you remember, I was buying Silver a couple of years back (Investing in Silver) and it has turned out to be quite a strong investment!

The question now is, at $50 per ounce, is it time to sell my silver holdings and lock in significant profits?

I have a history of selling at the completely wrong time!  Recent Example:

Bought Apple @ $87 per share in about Nov. 2008, and sold it at $175…just to see it rocket to $350 about a year later.

Is silver going to do the same thing to me that Apple stock did?

All the reasons I was buying Silver in 2008 seem to still be in place.  For example, our government continues to print money and kill the value of dollars at an alarming rate!  And I suspect they will continue to do that, as the best way to pay off down our $15 Trillion of dollar denominated debt is to significantly lower the value of US dollars…which means Silver could keep running up.

Anyways, I’d appreciate the input of the financial wizards who visit this blog, so PLEASE, let me know what you think!

Most interesting to me was a chart that showed current Gold, Silver, Platinum, etc. prices today (at record highs) and then compare them to “inflation adjusted” 1980 prices.

What the chart leads you to believe is that when you take inflation into consideration, precious metals may still have significantly more upside potential, especially if you believe that the current economic environment is similar to the environment in 1980.

I’m extremely intrigued by precious metals…and rare coins for that matter.  I’ve written quite extensively about Silver Investing as you may know, and have recently invested a significant amount of money into Natural Gas when it was around $3 a MCF.

Anywho…please pipe in on Gold, your opinions do matter to me…as in the case of Natural Gas, your feedback helps direct my actions.  That is what this blog is all about!

And BTW, I still have not decided on a vehicle.  I’m leaning towards the Ford Taurus, but am waiting until they are available with about $2500 in rebates that I can take advantage of.  They currently DO offer $2500 in rebates, but you can only get access to $1500 of those dollars if you have a competitors lease.  Unfortunatly, I own competitior vehicles, but OWN them, don’t lease them at this time.  I will keep you posted.

It seems like most commodities, the laws of supply and demand are determining the price of Natty Gas.  I’m currently reading that stockpiles are nearly 19% above their 5 year average, and that demand is down.  BUT WHY SUCH A DRAMATIC FALL?

That is where I see opportunity.  I believe that the stick has swung WAY too bearish on natural gas, and that these current depressed levels create a buying opportunity.  Yesterday I took a bit of IRA money and pumped it into the natural gas market, hoping that over the next 18 months we are able to see a much more historically normal spread between the price of oil and natural gas.  Oil traditionally and historically trades around 8 times the price of natural gas (give or take a bit).  CURRENTLY OIL IT IS TRADING AT 24 TIMES THE PRICE OF NATURAL GAS, and I don’t believe this will be sustained. 

With the current President being bent towards this idea of “cap & trade” I believe that more and more producers of electricity and going to turn to natural gas more and more as a way to offset their coal fired plants.  We will see though!

Just my two cents, I would love someone with some knowledge or a strong opinion on the subject to weigh in!  Hopefully soon, before I commit more hard dollars to my Natural Gas theories!

Anyways, I think it is important to open up a discussion with all you smart folks about HOW AND WHY the US stock market has been on suck a tear over the past couple of months.  If you made some good decisions 3 or 4 months ago, your investments are probably up 50% or more!

IF you believe that the US stock market is a “leading indicator” for the US economy, this run in the market would lead you to the conclusion that we are heading out of “The Great Recession” post haste…THE TROUBLE I have with this theory is that our home values are still falling, so the US consumer is feeling a negative “wealth effect”…also stunting our growth is the fundamental shift from consumption to savings.  I believe that most sensible people are going to save more and keep real tabs on their spending habits. 

I also fear that mutual fund managers have been chasing returns, and this is artificially pushing up stock prices ahead of the actual earnings growth of these companies.  (I hope I’m wrong though and that good companies were just SOOOO oversold that we are getting back to fair value)

All this to be said, I’m loving the run up in stock market values, but I’m worried that the market is getting ahead of its self and banking on a sharp uptick in the overall US economies growth and consumer spending. 

Do you guys really think that is going to be the case, or are we looking at a major pullback soon?  Will $3.00 gas pull us back down?  As always, any and all feedback and ideas are appreciated.  There is SO much knowledge left in the comments of this blog!

I purchased 15 companies over at Fristrade.  As of today, nine of them have lost money, five of them have made money…but my account is sitting at almost EXACTLY the $15,000 that I started with…so I’m flat overall.  That is ok, as I am generally investing for the next 4-6 years.  I did this in late 2002, andby 2007 my original $10,000 investment in stocks had quadrupled.  I liquidated around the time when the Dow Hit 13,000.  (I originally had thought I’d made a horrible decision as the Dow continued to climb past 14,000…but I stuck to my guns and did not get hammered in this market.)

So like I said, I tested the waters with $15,000 about 6 months ago.  My best RETURN was a 1 week trade on National City stock.  I bought in at $1.80 per share, and about a week later sold for over $3.00 a share. 

BUT MY BEST INVESTMENT HAS TO BE AMERICAN EAGLE OUTFITTERS INC. (AEO)

American Eagle is up 41.14% since I purchased it.  Same store sales are down at AEO, but not terrible.  I was a teenager once, I remember saving all my money to buy clothes.  (We really seem to care about clothing here in America, don’t we)  The company has next to zero debt, and almost $500 Million cash on its balance sheet.  It is also highly profitable.  I think as the economy softens, they do better than companies like Abercrombie & Finch…because the products is similar in style, very similar, but at a considerable value.  That has been a winning combination for my portfolio!

2nd best investment…APPLE COMPUTER STOCK…UP 17.54%

Again, I’m not offering specific investment advice, just letting you know what I’m up to.  Please seek professional advice when making any type of investment.  For informational purposes only!  Amen.

This word is all my little brain could register when I pulled up my retirement account at Firstrade today.

I’ve been a licensed securities broker for almost 9 years now, and I NEVER saw this coming. 

Buy and Hold index fund investing is officially a TRAIN WRECK if you started in about the last 12 years or so.  I’M REALLY GLAD for all those variable annuities that I sold between 2003 and 2007…as most of them had GUARANTEES attached to them that may end up being EXTREMELY VALUABLE TO HAVE!

I HAVE NO ANSWER to my title question, and no one else does either.  As a student of history and economics, I know this type of market meltdown has happened before, but the variables are so different now.  And don’t turn on CNBC, because that will just give you a headache.  They will have “experts” on their shows back to back who will completely contradict each other.  Both, probably very smart people, are understanding our current economic realities in TOTALLY different ways.  BRIGHT SPOT THOUGH…MOST EVERYONE SEEMS TO BELIEVE IN THE LONG TERM SUCCESS OF CAPITALISM AND OF THE UNITED STATES!

I’ve posted several times regarding the auto industry here in Michigan.  Since then, we have seen GM and Chrysler receive some federal money to try to keep them afloat. 

Ford Motor Company appeared to shy away from federal dollars and put up a good front that they had everything under control…we don’t need any bailout money. 

Based on this, I’ve had friends invest significant dollars into Ford Stock.  They believe that by Ford not taking any federal money, they are proving that their company is in good shape and on a smooth path for future profitability.  I DO NOT BELIEVE THIS TO BE TRUE!  Here is why…

I believe that Ford has taken a “calculated risk” in deciding to put their best foot forward to the general auto buying public.  Ford is trying to convince us that they are operating “business as usual”…”no need to worry here”…”Come buy cars from us, we will be around to honor warranties!”  I DON’T BUY IT.  The public records that make their income statement and balance sheet open to observation lead me to believe that Ford is in a world of hurt, just like the other guys. 

My point is to look hard and do your own research before investing into individual companies.  The last 6 months have proved that his can be risky business!

I am amazed that so many folks are just itching to invest their hard earned dollars into Ford and/or GM.  Many of you sincerely believe that there is no way that the government will allow them to fail.  Well, no one can be sure, but the facts about GM are disturbing.

I’m going to outline for you what can be found in public records (public companies must provide financial statements and results to the investing public) and let you decide for yourself.

• General Motors does not make an operating profit, on average, on any car that it sells. 
• GM has over $40 Billion Dollars in debt on its books
• GM, through internal estimates, believes the Enterprise Value of its company to be just north of $30 Billion Dollars…what is left when you have assets of $30 Billion but you owe other people $40 Billion?
• Over 15% of GM shares are currently being sold short (that means people have borrowed GM stock to sell it because they believe it is going to go down even more and they can then buy back the borrowed shares later at a much lower price than they sold them for…thus making a profit.
• The CEO of GM said on television and before Congress that his company is burning through about $5 Billion dollars a month.

The list can go on and on.  The bottom line is that some of us will be right on GM, some of us will be wrong.  I just suggest that you proceed with caution!

The commodity was selling at about $5.00 per troy ounce and he was sure it would go to $20 or higher. 

If I remember correctly, he felt that there was a worldwide shortage in silver, and that the stock market was overvalued…so if the market tanks…people will fly to silver and gold.  Wouldn’t you know that he was kind of right.  He had traveled all over the Midwest buying bulk silver @ $3500 a bag.  He got out several months ago at around $15,000 per bag of bulk silver (When the spot price was about $19.00 per ounce. 

The bottom line is that HE WAS RIGHT, and he make a killing.  I was an idiot back then and didn’t pay attention to the writing on the wall, and I did nothing.  There is nothing worse in life than procrastination.  I figured that I would look into silver sometime in future…and here I am 3 YEARS LATER…visiting the case for an investment in Silver. 

I am going to be a buyer of silver very soon.  I wish I was buying at $5 an ounce, but that ugly thing called procrastination already bit me in the behind.  The reason that I’m still a buyer at $10 an ounce is that I believe our country is going to see some significant downward pressure on our currency as we continue to print more and more dollars to bail out more and more stupid companies. 

What that means in the long run is that our every time the US prints more currency, those bills in your pocket are worth less and less (in theory)!  That being said, I see commodities like Silver and Gold seeing significant increases in value over the next few years as smart money flies to quality. 

Please weigh in with your opinion on silver, as I am in no way an expert!

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