smart-money-report.com Blog

John Lee apparently thinks that silver is a no-risk bet:

The scenario will go like this – a $1 billion hedge fund makes $200 million from gold futures, reads about silver, decides to put $100million in silver and instantly bumps the silver price by $2/oz. Others read the tapes and follow – the bull becomes a self-fulfilling prophecy. Coupled with that, apparently no-one can go to the physical market and dump 100 million oz of silver to cool the fire makes silver a no-risk bet.

Nothing is no-risk, but I get his point.

Roland Watson has a very informative post on how in the 70’s (the last primary bull market in gold and silver) at times the metals would outperform the stocks and sometimes the stocks would outperform the metal. In fact, sometimes one would be going up while the other was going down.

Read the whole thing, but the takeaway is that you have to own them both — the stocks and the metals.

Still more demand for gold.

If you’ve ever wondered how Wall Street works and how the stocks of respected firms like Bear Stearns can be so seriously overvalued, Michael Lewis tells it like it is.

In the weekly Smart Money Report, I wrote this about next week’s Commitment of Traders report for gold:

So on next Friday’s report, unless there is a big run up on Monday and Tuesday, look for commercial net shorts to be much less than what we see with this week’s report. I’m guessing about 50,000 contracts less.

And this about silver:

With silver — and, again, assuming there’s no big advance on Monday and Tuesday — I wouldn’t be surprised to see a 20,000 decline in net shorts for one week.

Well, it turns out that silver guru Ted Butler, who stays very close to the situation, has come to a similar conclusion:

The sharp sell-off has resulted, in my opinion, in the cleansing out, or removal, of most, if not all, of the technical fund leveraged long positions in silver and gold. I think the amounts come to 20,000 contracts (100 million ounces in silver), and 75,000 contracts in gold COMEX futures (7.5 million ounces). This is my analysis, but we will have to wait until this week’s COT Report is issued to verify the actual figures.

Whatever the exact number turns out to be, it’s likely to be a big one. And Ted Butler is “All In.”

Bill Rempel attempts to answer the question of what level of investment returns is impressive? As you might guess, it depends. (H.T. chrisperruna.com)

…the U.S. leads the world in high corporate taxes. (H.T. The Instapundit).

…there’s a silver shortage.

Paul Kedrosky reflects on what happens when you get a “surplus of bearishness.”

Boris tells us. And concludes with this:

The flight to safety panic cannot continue much further and this unusual amount of cash sitting in T-Bills will have to find a home elsewhere. It will return to the most oversold sectors of the stock market, stabilizing precious metals and related stocks in the process.