Silver collapsed from $40 to $27 in 3 days and is still falling, as gold has dropped from over 1900 to now 1590. Stocks worldwide appear to now have entered bear trends while bond yields hit record lows.
In my view (and my trading record) the short term outlook has become totally unpredictable.
When the "crisis" began in 2007, I advised that the coming years would be a time of unpredictability and a time to best just to try to hold on to what one has, instead of trying to make anything.
This has indeed turned out to be true. That didn't stop me from trying to make home runs anyway, yet I should have been wiser.
The real problem ? Even when I was right, I turned out to be wrong. The moves in individual securities and commodities just didn't follow any accepted playbook which served to throw off anyone who employed leverage (like foolish me).
Best advice ? Don't listen to your emotions, try to find opportunities that make overwhelming sense, pay cash for them and let the chips fall where they may.
What are opportunities right now ?
Selective real estate: Banks are seeing the light and are beginning to dump their inventory at fire sale prices. This happens very much on a local level. Look for it: When you suddenly see properties offered at 50% of assessed value and find them to be in established neighborhoods, make an offer.
Solar stocks: Me thinks we are approaching a tipping point here: Prices for photo-voltaic elements are now dropping to levels where solar energy can compete with other sources without subsidies.
At the same time, stocks are making new all-time lows while trading at P/E ratios of 5-7 !
Silver dropping from $50 to almost $25, or from $40 to $25 in just 3 days ? Probably not a bad idea to buy a few ounces, since unlike Dollars, silver doesn't become worthless.
If we get another stock market crash, gold could drop to about $1300. That's where I would step up my buying again.
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