Member Info for NoelShempsky

For quite a few years, I listened to GoldSeek Radio. In one of the weekly programmes, the host told us of how easy it was to make money out of natural gas. He said that natural gas was reliably cyclical - cheap in the summer then expensive in winter, so, every year, he used to buy in summer and sell in winter. Making money out of it was so easy. Presumably a no-brainer.

Then one year - shale gas came on line and the price plunged, even in winter.

Always expect the unexpected.

So, there we have another example that shows why only an idiot would say that an investment is a no-brainer - and don't forget that the Titanic was unsinkable.

Due to the limit on the number of characters - the end got cut off. Here it is -

... Then the dot com boom really got going. If I had spent £1,500 at the time when I rang up, those shares ended up being worth over £800,000 - that is eight hundred thousand quid. That company, a British company, made a huge leap forward in technology leaving its rivals in the shade, and it came out with a product that everybody wanted.

That's is how crazy it was. Another one was a new company that floated close to the height of the mania. It was a cash shell with no assets, just a director who was famous for making money for his investors and a claim that he was going to cash in on the dotcom boom.

It floated and in two weeks the share price multiplied by a hundred. A thousand quids worth at the start was worth a hundred grand two weeks later.

Will the gold and silver bull be like that? I might try to catch dips with a portion of my PM holdings, but I would never dare to sell all of my PM stocks and be left behind if the rocket takes off.

That idiot just made money from acting on Moriarty's article.

Admittedly I had expected to make more than I did, and I had to quickly buy back in as the price looked to be going back up.

The silver price had moved up in sharp spike. The law of gravity comes into effect when a price makes a spike. Only an idiot would ignore it. Money can be made by selling the spike, catching the dip and buying back in.

But with prices (stock, commodities or currencies) nothing is certain and there is no such thing as a no-brainer. On Sunday I posted link to a peice by Michael Oliver who told us - "quite often in the middle of a trend they will find too many bulls and yet the price will still drive north (head higher). This was the case during the Dotcom move where investors were bullish as heck in 1999 and yet the stocks went up for another year, vertically".

So although gravity should, and under normal circumstances would, bring about a correction, a rare event can negate that effect. A mania such as the dotcom boom is very rare.

I took notice of Oliver's words (and the views other people), weighed them against Moriarty's and made up my mind - I expected the correction to be greater, but there was too great a chance of the HOC price going back up so I got back in, which I signalled on here and in advance, so no bull from me.

I stayed nimble and as the situation changed, my strategy changed.

Note that I posted links to articles on both sides of the fence, for example my post Sun 19:20 - Micheal Oliver. I am prepared to accept other people's views and prepared to change my opinion as new information comes along. My willingness to accept varied opinions leads me to a balanced point of view, which leads to rational decision making.

You will find that in this game nothing is certain (take ACA for example - a well managed company with low cost of production, ever expanding reserves - it should have been a no-brainer, but look at what happened to it) and being contemptuous of other points of view and having a ****-sure attitude will be harmful rather than beneficial to you.

It was my openness to other opinions, rather than a rigid, smug and conceited attitude, that helped me to make a bit of money.

No one needs to tell me what a good investment HOC is for the medium to longer term. As you have seen, I have been in since at least 2008 and possibly earlier, but look at the price swings. There is money to be made from trading - but see my post yesterday - " We never know for certain how share prices are going to move, which is why I sold only some and not all."

Just a couple of anecdotes about the dotcom boom. I phoned my broker (this was before internet dealing) and asked for a quote on a stock I fancied. I was going to buy £1,500 worth. He told me 51p to buy. I wanted it for under 50p, so I didn't buy. A week later it was over 90p. Two weeks after that it was over 180p. Then the dot com boom really got going. If I had

03-Aug-20 16:35:20 267.60 282,557 Buy* 267.20 267.80 756.12k

I need to get back in.

Double from here? Possibly. We never know for certain how share prices are going to move, which is why I sold only some and not all.

Even though spikes usually collapse, I have to admit that, this morning at 265p, fear of a sudden rise made me buy back some of the shares I sold. I made a small profit, but considering the nervousness, I wonder if it was worth it.

Here is a bit of HOC history, from my records of my trading. (I might have bought in earlier than 2008, but within my ISA and I don't have time to go through years of statements. These are from my spreadsheet of trading outside my ISA that I keep for CGT purposes.)

HOC share prices -

April 2008 - 380p

July 2010 - 301p.

Feb 2012 - 396p

May 2012 - 414p

June 2012 - 480p

June 2013 - 209p

July 2013 - 141p

And in October 2015 there was a rights issue and I think were offered the shares at 43p each.

April 2016 - 132p

August 2016 - 298p

So - ups and downs - in 2015 we could have bought at 43p and I'm sure I remember when they were well over 600p per share, but that is looking at long time frames.

Taking a shorter period - April to August 2016 and the price went from 132p to 298p.

Back to the present, and I can envisage the sp doubling in a fairly short period of time, but I still think there could be a correction to under 260p before the price shoots up, but it is just an opinion.

Anyone who says "a no brainer" has, themselves, no brains because, as TigerByTheTail told us -

"the stock market exists to teach us all how little we can know about the future.
And to inflict the maximum amount of pain on the maximum number of participants, of course."

Having mentioned Jesse Livermore - "Be right, sit tight" was his advice, I have just come across this -

https://kingworldnews.com/michael-oliver-just-issued-this-major-warning-for-investors-in-the-gold-bull-market/

This man says that the tactic I have just used - a spike making me think the rise was too far too fast so bet on a correction - could be the wrong thing to do. He says sit tight as this gold bull could shoot a lot higher. I presume that silver will go with it.

I'm in for a nervous week ahead.

Hi Jack,

Yes, I think there is time for a big rise in the HOC sp before they get hit with massive tax bill - if a tax raid is going to happen! I could possibly be wrong.

I have taken a gamble on a deeper dip, but you are probably wiser holding. I believe the famous Jesse Livermore said that he made far more money by just sitting tight and waiting, than he made by gambling.

Governments around the world, including our own, are spending like crazy to help people to get through this pandemic.

"The Latest on COVID-19 (Coronavirus) in Peru

Updated July 30th-Peru celebrates 199 years of independence, President Announces Reactivation plan & Machu Picchu Remains Closed

...

The government has created a fund of 2 billion soles to keep small business afloat related to the tourism sector. This includes: restaurants, tour agencies, transport companies, tour guides, artesanias, tour guides, lodging, and inter-provincial transportation." (This paragraph will probably disappear when the next update takes place, but it should be possible to find it on an archive page on this site - https://amazonas-explorer.com/is-there-coronavirus-in-peru/)

Where will the governments of countries such as Mexico, Peru, Argentina, and others, go to get the money to pay for it all?

The miners, especially as they see the big jump in profits due to rising PM prices.

Expect a huge windfall tax on the miners and a subsequent sharp drop in the share prices.

Proved wrong within minutes.

Bearing in mind your point Tiger, I think the spikes in the silver price and in the HOC sp were too high, so I think economic numbers will be ignored as the need for a correction outweighs them. I think the HOC sp still has further to fall, but I don't know how far and I am nervous and keen to buy back the ones I sold a few days ago.

More on the subject -

https://www.dailymail.co.uk/news/article-8575345/Survey-finds-half-office-staff-work-home-rest-summer.html

An opinion - correction on its way -

https://www.clivemaund.com/article.php?id=5508

He ends with - "Finally, it must be pointed out that THE LONGER-TERM OUTLOOK FOR SILVER COULD NOT BE MORE POSITIVE. We are only looking for a short-term correction / consolidation here."

Thank you Sotolo, but I don't know about wise, perhaps I'm just a gambler.

Although I believe in Fibonacci levels, you never know when the price will turn around - will it be at 23.6 or 61.8?

"The Fibonacci retracement levels are 23.6%, 38.2%, 61.8%, and 78.6%. While not officially a Fibonacci ratio, 50% is also used."

https://www.investopedia.com/terms/f/fibonacciretracement.asp

If the price drops back by 23.6% and I buy back in, will it drop to 50% or 61.8%?

That article does say that it is dangerous to assume that a price will reverse after hitting a specific Fibonacci level.

So, you can look at a chart and, with hindsight, see that the reversals do happen on Fibonacci levels, but seeing them in advance is a different matter. I suppose it has to be, otherwise we'd all be rich by now.

Well, I took a gamble and, over the last few days, sold some HOC, but I am nervous because I know too well what you mean by having to jump back in. In the past I have lost money by trying to be clever and gambling on dips and recoveries, so if this time it turns out that I make money, I will be honest and say that it was partly good judgement but with a lot of good luck.

Sorry, that should have been a jump up then the sharp drop.

As for HOC, keep an eye on the Fibonacci retracement levels. A 50% retracement for HOC would take it to 235p.

James Turk says that $30 silver is on the way, but could there be a sharp dip before it gets there?

The silver price chart looks very suspicious. At 15:11 EST there is a very sharp drop to about $24.02 then a jump up.

Not about HOC, but on the subject of pullbacks \ corrections \ retracements -
This looks like a fund that has cut its stake in SHG.

https://www.investegate.co.uk/shanta-gold-limited--shg-/rns/notification-of-major-holdings/202007291150434946U/

Taking a bit of money off the table after a big rise in the sp. Nothing goes up in a straight line.

Thanks Sotolo.

Thanks OWLS - good point.

The other day, I posted a link to an opinion piece by Bob Moriarty, who said that the silver price had risen strongly and a correction was due.

Here is another article saying that a correction is due -

"Gold & Silver Correction Imminent"
https://thedailygold.com/gold-silver-correction-imminent/

We all know that nothing goes up in a straight line, so we are expecting a pullback at some point, but I've been thinking about those large buys on Friday.

People don't spend that sort money on a mere whim. They aren't just gambling, so, presumably, they have given it a lot of study and they don't expect a pullback, otherwise they would have waited.

Maybe I'm wrong. Maybe they aren't bothered about short term moves and are interested only in the long term. They know that the silver price is destined to go much higher, they know that HOC is a good company that will benefit from the rising silver price, and so they want to be in.

I can't say that Moriarty is never wrong, but it is not often that he is wrong. However, he did say that the top (only an intermediate top) - "might be a month from now. Or it might be tomorrow".

As you know from my previous posts, I expected this jump in the HOC share because, even though I am no expert, the flag pattern was crystal clear, and as this site says - a flag is "A simple low risk chart pattern with high reward potential" and "Flags are excellent chart pattern trading candidates".

https://www.thebalance.com/how-to-trade-the-flag-chart-pattern-1031467

So the price broke out of the flag as expected, but I was wondering how high the spike is likely to go before it drops back. As I said, I'm no expert so I read up on flags and the breakouts.

"The target for a bull flag is derived by measuring the length of the flag pole and projecting it from the breakout point."

https://www.investopedia.com/stock-analysis/cotd/answ20090105.aspx

I read other sites too to get a clear picture, and from my understanding, this spike has already gone higher than the top that could be expected based on the usual advice about flag patterns.

I see two possibilities - either a severe correction is imminent, or, harking back to those big buys, we are in uncharted waters and the pressure under the silver bull is so huge that records are going to be broken - this spike could be massive and those big buyers know it.

Disclaimer - this is waffle from an amateur and I post it only to invite comments from others to help me to get a more balanced view.

On the "Trades" screen -

Fri 24 Jul - 16:35:20 - Buy 184,078 shares at 268.6p - £494.43K

Fri 24 Jul - 17:17:33 - Buy 76,893 shares at 268.6p - £206.53K

Fri 24 Jul - 17:17:47 - Buy 55,644 shares at 268.6p - £149.46K

Wow! 300p next week?

Sober analysis of the silver price, and some interesting charts -

https://www.clivemaund.com/article.php?id=5493