By John Fisher
The THREE PHASES of this Metals Market:
This precious metals market is still in its early stages. Now, we must be patient and realistic in our time frame. Our returns will come soon enough, and our efforts will be rewarded. Don’t fall for the worry that is prevalent all around. “Don’t worry, be happy” – for you will be my friend!
Phase One (Stealth Phase)
The smart money begins to enter when no one else can see the changes that are coming. These people are the forward-looking type. They are prepared to act upon what they believe. They can see ahead. They are not part of the crowd. This minority are the instigators of change. The crowd never initiates; they only follow what the minority first instigated!
Phase Two (Wall of Worry Phase – The Present Phase)
Next comes the institutional money such as banks, insurance companies, investment fund companies hedge funds, etc. Also from here emerges those companies and individuals which began in phase one and have now grown much bigger. Companies are now marketing to the mainstream crowd. Plus, there is rampant talk that the market is in a bubble. Investors and sideliners alike are trying to determine if they should buy, when they should buy, should they sell, is it too late, etc. Worry everywhere!
Phase Three (Mania Phase)
Now even the diehard bears have become believers. Everyone is speaking about the sector, including Joe Average, the Former Naysayer and the Newspaper Boy. Unscrupulous vendors are coming out of the woodwork. The market seems to go nowhere but up. You literally can’t lose – and if you don’t get in now, you’ll be left in the dust forever (sounds like Florida real estate and dot com stocks.) This sector is the greatest time of reward for those who began and did not bail out in phase one or two.
There’s Nothing New
It has happened repeatedly before.
In 1982 the smart money was buying into an infant sector of technology companies when no one else was paying any attention. Then, the large institutions and venture capitalists began to enter approximately between the years of 1989 and 1991 still unbeknownst to most. In 1995 the mainstream crowd began to enter the tech stock arena driving the price of this sector to the moon.
In the tech sector, mainstream America did not realize for almost thirteen years what was simmering and getting ready to explode. By the time most people realized this, it was well underway, and only those who were pre-positioned realized the tremendous gains.
It is no different with the current Precious Metals market we find ourselves in today. The mainstream still have not entered. However, it is bubbling away just under the surface ready to explode – just waiting for when the timing is correct for the mainstream crowd – and not a moment before. Just take a realistic look around you. Are friends and colleagues speaking about gold in the same way that people were speaking about the tech sector in the 1990s?
An Unfortunate Truth
Those who bailed out in phase one or phase two will never know what could have been if they had hung in there. However, those who stay the course and hold on with confidence will reap a multiplied return from the efforts of the seeds already sown by those who got out long before.
When You’re In, Stay In, When You’re Out, Stay Out:
When you have made your decision, whatever it is – stay in or stay out. It’s the getting in and out that destroys your potential for large profits and success.
All Things Considered – John’s Commentary:
When you look around, notice that one doesn’t see people fail because of wrong decisions. Rather, they fail because they simply won’t make a decision.
As investors in gold and silver, we can expect the future to hold first a “wall of worry”, followed by literal mania. This sector will become very, very attractive to the mainstream. You may be ridiculed by those who cannot accept your investment choices. But, you can enjoy the increased wealth you have earned from the bold choices you made.
Action to take now: You are in either one of two camps. The first camp – you have not yet purchased gold or silver and have been reticent to do so due to price and volatility. I can tell you that it is going to get worse before it gets better. Just get in! Don’t worry what happens tomorrow. Worry about what will happen next year if you don’t get in.
The other camp is that you have purchased metal but are wondering if you might be able to pick it up cheaper. You may have thought the same thing back at $900 or $1000 or even $1100. I am not saying we won’t see those prices again, but they are fading into the distance. No one wins in market timing. Slow and steady additions over time irrespective of price are the best bet. Period.
What to buy: Many Austrian coins have been snapped up due to the Greece/Euro crisis. However, there are great buys right now on Austrian 100 Coronas. In silver, pre-1965 half dollars are very handy to have on hand on and are not expensive.
Quote of the day: “Whom the gods would destroy, they first subsidize.” – George Roche
