Saturday, March 01, 2008

Price of Silver

I have posted before on the attractiveness of silver bullion as an investment.

How do you know that people want something? Its price goes up quickly, and some people start to pay more than market value because they fear there is a shortage coming.

A week ago, you could have bought a 10 oz bar of silver on eBay for a pretty predictable price: $195 to $205. A week before that the range was a bit lower. This week both the price and the range have jumped up, and it's now about $235 to $285.

I conclude from this that people are starting to flow into silver bullion purchases. Since investors move in herds, expect higher prices and eventually a full fledged frenzy. When prices go parabolically upward, fortunes are made by those who sell wisely to latecomers. When the last on the scene borrow to buy at the top, fortunes are lost.

Be early.

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