PSLV gets a haircut

PSLV

SLV

PSLV dropped 10% due to being bid up to much. I think shares were put out on the market as an offering. More silver was bought and shares were put on the market. The % over NAV is around 10% now. When you buy this fund the NAV has to be considered before you buy, I do believe it is safe to buy but dont buy much over NAV. It shouldnt go below NAV because silver backs it. High volume bidding raised the price over NAV.  In a sence the hair grew to fast and it got a haircut. 

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Short term bear market

The next 10 days will be bearish for stocks and metals- silver and gold but 2012 will see large gains for stocks and metals especially silver.
India and China are selling gold but America is buying it. In 1991 the Rouble failed because they didnt have enough gold; America is doing good for itself by buying gold. Germany has the 2nd  largest gold holding in the world.

$1550 bottom for gold in 2012
$26.80  bottom for silver in 2012

If you buy equal amounts of silver and gold at the same time you will make double what gold makes with the silver. I highly recommend silver over gold.

Housing values will recover. FMCC and FNMA may go back up; REIT portfolio  values should go up as well. How much the portfolio is worth will go up but earnings I am not certain about with low interest rates and refinancing risk. 

Eoro should stabelize after a few weeks. Eventually years from now it will collapse though.

Time to buy PSLV, or SLV or bullion

This is the Sprott silver ETF backed by silver bars. Sprott does not short his own fund either, he is a believer in silver. Silver, gold, the US  Dollar and US  stocks will move up together in 2012. People from foreign countries will be diversifying their portfolios with gold and silver this year. American stocks will be doing well, not sure about foreign stocks, I do feel the American markets will outperform foreign markets. ARR did an offering last night; they are down around or a littover 1%. They did an offering last month as well but the price is not down much this time. I got a 3% or more discount on the stock  in December.

what is the difference between SLV and PSLV? 
Both are based on silver bullion but PSLV is trading at a 25% to 27% premium to Net Asset Value (NAV).  I am not sure why this happened but I think it gradually happened over time. SLV does tend to follow the physical market better. The volume of SLV is greater and this especially shows up in after market trading so PSLV is not as liquid as SLV but in the day they both trade normal. After market you basically cannot sell PSLV because there are not enough buyers. PSLV has a lower numerical value which may be a plus for day trading. ( you can buy more shares for $100 than SLV) The people who run PSLV may be truly pro silver and honest but people are paying more for the fund than what it is worth. Another difference is PSLV cannot be directly shorted like stocks can. This may be part of the reason for the premium over NAV.

Prepayment Risk, silver at bottom of trading range?

There is talk of prepayment risk in REIT sector. Prepayments are up in the last 3 months. It is something to watch but the rise has flattened out.  Some people are paying off their mortgages with new low interest mortgages. Otherwize REITs are doing well especially AGNC which is the highest rated.  ARR will be paying $.11 per month for Jan, Feb, and March. CIM is still having insider buys which is getting to normal for them now-- they seem to buy their own stock a lot in the last year. I do believe CIM and IVR has bottomed out but AGNC is a better investment because they have better experience and good track record.

It is time to enter the silver market. Silver will go up in 2012, we have seen a bottom in the market. The Euro-crisis has been the preassure on silver prices to the downside. Yesterday the employment situation seems to be improving but the Euro situation stold its thunder. Silver went down a little but last week it went up 7% which most of that gain is still there.  I do not yet recommend leveraging silver yet but if you have cash silver is an excellent investment now.  Those who do leverage silver now could stand to make a lot of money, I believe we are at the bottom of the market.  Silver is oversold and the problems in the US and other governments are not solved and inflation will surly be here in 2013 and likely 2012 with higher gas prices.  Portfolios without silver will be missing out on the silver fun but stocks will do well as well. All portfolios should have silver and or gold of 25% to 50%. 5% of a portfolio like was suggested 20 years ago is simply not enough and almost foolish. Silver will be over $100 an ounce in 2 to 3 years. Be careful where you buy it; China is flooding America with counterfeit bars and coins-- see my earlier posts for details.