Back in 1980, the price of silver hit an all-time high of over $20 per ounce (gold was high, too). Jewelry and coin dealers were advertising heavily to buy precious metals - bracelets, silver dollars, what have you - offering high prices. Does any of that sound familiar?
I had a small box of silver coins and a need for some spare cash. So I took myself and my box down to a local coin dealer and sold my coins for what seemed like a small fortune at the time: $10 per half-dollar coin. You'd think I was satisfied with the $200 I walked away with, but I felt sheepish, even stupid, for selling my silver. After all, I read in the papers at the time about how gold & silver prices were going to keep going up in price, nearly straight up. Market commentators were convinced of this "truth", and I felt bad because I needed a few bucks and sold my few coins.
Turns out, blind squirrel that I was, I had found a acorn in all that silver fever. I sold my coins at a price that has not been seen since, adjusted for inflation. It was pure luck, selling at the top, and a feat I have rarely repeated. Today of course, the media is full of news about gold and, more recently, feverish speculation in silver. When I hear such a buzz about any asset (Hello, real estate 2006?) I tend to shy away. Once everybody is in the game, the game is usually over.
Will silver prices go higher? Maybe. Will I be a buyer? Not a chance.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).