In Investing, It's All About Market Timing
I know that we've all been told market timing is impossible but I'm here to prove this is just another industry lie.
To begin this critical investment lesson today, let’s review the important part of my pinned comment I wrote on 27 June 2023 to this article:
(1) This is about understanding where prices will go from here ($22.30 synthetic). I'm very confident they will be higher and much higher in 12-18 months, so this is not “take a loss for the team”. This is about doing something good for ourselves AND for all of humanity. I 'll revisit this post in a year to 18 months to prove my point that all will miss a massive opportunity;
(2) Also, this is about understanding timing. So even if the MIB complex's stranglehold on silver asset price suppression is not broken, who cares? Last year I returned, 25%+, 40%+ and 90%+ returns in PM mining stocks when the GDX dropped like a rock by 27% from Q1 last year (to the end of the year) because I understand the manipulation game (and how to time markets properly).
In my above comments made just two weeks ago in which I urged the adoption of a strategy to further decrease global silver supply and squeeze the silver supply the banking cartel needs to execute price slams in the derivative markets, I promised everyone I was not advocating a communist message of “sacrifice for the greater good” if I believed this sacrifice would cause personal harm, as the Ruling Class advocated during co-vid lockdowns. I also outlined, in the above article, why this time was not the same as previous failed attempts of physical buying to squeeze the bankers and why I was so confident that my guidance would lead to solid profits for everyone if only we would unite in our effort to squeeze the bankers instead of constantly working against one another as has been the case since the 2008 financial crisis.
I made it crystal clear in the above that while I thought buying physical silver when synthetic prices were $22.30 would benefit the global community, that it would also provide much personal benefit. In the couple of weeks that have followed that article, synthetic silver prices have already risen by 9.88% and prices on some physical silver coins have popped by even more. (By the way, it’s far easier to convince friends of mine here in Mexico than in the US to do the right thing as two of my friends here informed me they purchased physical silver when I informed them to do so two weeks ago but I have yet to receive any ‘thank you’s from my friends domiciled in the US, which I will interpret as a failure to act on my guidance. I’m only mentioning this because it’s always interesting to observe how strong is the level of anti-precious metals sentiment in the US versus this lack of sentiment in other nations!)
Thus, my transparency in my written comment to urge those held back by unwarranted skepticism to buy physical silver at the exact time when synthetic prices were $22.30 an ounce was based upon confidence that this market timing call would be correct. Unfortunately many in the precious metals markets have been misled by a DCA (dollar cost averaging) promoted strategy of buying the same amount of gold and silver every month when far superior returns, given great dips in gold and silver price that occur every year, could be achieved with market timing strategies. And for those that have put my issued market timing strategies on my Substack and Patreon platforms to work since 2022, my returned yields have covered subscription fees on both platforms many times over. Furthermore, the -26% and -27% returns of a buy and hold strategy with the GDX did not utilize the highest and lowest points of the index within the past year-and-a-half, but merely, estimates of buying from technical chart pattern breakthrough points or mid-points in up cycles from which most investors tend to buy to its 2022 year-end close, after a nice recoveryinto the end of the year.
I’ve been timing the markets consistently for more than two decades now, even though we’ve all been deceived, misinformed, and instructed that it’s impossible to time markets, whether in academic business classrooms or in New York training sessions of Wall Street firms. When it comes to investing in gold and silver assets, the most important determinant, by far, on whether one reaps massive profits or massive losses from investments in the exact same assets, revolves around possessing the skill to adequately time markets with a repeated decent amount of precision. All of those that are familiar with my investment strategies know that I have been producing oversized realized profits (+69.5% last year to my top two tier level patrons) for years by timing the market and I’m confident I will do the same this year, by year-end, as well. Of course, to time exact market highs and lows is impossible (duh!), and this is how 99.9% of industry analysts, managers and advisers get away scot-free with spreading the lies that market timing is impossible. But market timing is very possible and very achievable and with a decent amount of precision.
In my most recent round of buy opinions I issued on both my substack platform and my patreon platform, I was a little early, but who cares? I was a little early on occasion last year too, and was still able to return an annual +69.5% yieldon all 31+ of my stock picks on patreon last year (to explain to my paying substack members here, I provide more stock picks at my Top Supporter patreon membership level than on this platform because my two platforms are very different in levels of instruction, though both are complementary to one another in necessity. My Substack focuses on big picture perspectives necessary to implement winning invsetment strategeis that I do not provide on my Patreon platform and my Patreon platform focuses on the minutiae of investing that I do not provide here). Over time, it is inevitable that even the best of analysts will be a little early or a little late on their market entry and exit strategies. On occasion, I’ve been very close to perfect in calling market tops and bottoms, but realistically, one is going to experience much more success in calling near market bottoms and near market tops on a consistent basis.
Thus, when I speak of timing the market, I’m never speaking of timing the market perfectly. Only a charlatan would make such a claim. My comment of Who Cares? is not one representative of any level of flippancy on my behalf. Rather, I am emphasizing the fact, and it is a fact, that market timing can be fine-tuned to the point, where executing it with a consistent level of adroitness can be achieved that enables one to benefit from the bulk of rapid price spikes and to simultaneously avoid the bulk of rapid price descents. And all PM (precious metal gold and silver mining stock) investors know that such periods of rapid downward and rapid upward price volatility happen every single year in this asset class.
Of course, even those of us that have been fine-tuning our market timing process for decades, still will make an occasional mistake as well. But all my subscribers will also inform you that I’ve never come close to issuing buys at short-term highs for at least over a decade, and never ridden 40% or 100%+ gains all the way back down to nothing as this should never happen, (though it does far too frequently with investors), with the proper use of protective exit strategies that minimize losses if one must take them. Hope, as many crypto-investors, especially of alt-coins, have learned, is NOT an exit strategy. Sometimes the stocks I track for investment have fallen 25% to 45% in just a few weeks as price volatile stocks make the best investments using a market timing strategy. But not one among followers of my buy and sell strategies have ever sat on anything close to 25% to 35% losses across the board on either my Substack or Patreon platform using my specific timing strategies.
Why the Industry Lies So Relentlessly About the Achievability of Market Timing
The number one reason why the investment industry always has lied to us about the impossibility of timing the market to make profits every year is because they train all their “advisers” to use a diversification strategy that minimizes the amount of work their advisers must execute to manage your portfolio while maximizing the amount of time to present sales pitches to grow AUM (Assets Under Management) to maximize profits of the firm. I know this from personal experience as I worked for a Wall Street firm in the past as a wealth adviser. I quite and embarked on a solo journey as a research analyst and educator shortly after I realized that my personal goal of maximizing client profits directly opposed the industry mission of sacrificing client profits to maximum corporate profits.
I’m sure all of us have heard the pitched lie from an adviser before: “Our AUM model aligns our interests with yours. When we make money, you make money”. While this sounds great on the surface, their interests are definitely unaligned with yours if they could be making you money when stock markets crash and if they could be making you money even in bad markets while outperforming market indexes in bull markets. This could be possible if their advisers actually had investment skill and their mission was to maximize your profits and not theirs. However, they would need to be in the office all day managing your portfolios using top skill strategies like market timing instead of in the field all day trying to convince some unaware sap to hand all of his money over to the firm for “management” that actually requires the least amount of management possible. In fact, if investment firms truly were to align their interests with those of their clients, the entire lot of them including JP Morgan and Goldman Sachs, would need to immediately rebrand all their financial advisors as sale associates so they could spend 100% of their time selling and hire a whole new lot of “financial advisors” that they actually trained as investment specialists.
Tricks of the Investment Trade
Let me expose a couple tricks of the trade used by uneducated, unskilled investment “advisors” in order to convince their clients to use the worst possible “buy and hold”, diversification investment strategies that have not worked for a couple of years and will not work for at least the next five years moving forward as well. Advisors convince their clients to stay fully vested in the market with buy and hold strategies not just for one year - but for three, four, five and ten years - by spouting a statistic that illustrates that if you missed the best 10 performing days of the US stock market each year for the last decade, then your performance would have been cut in half. At face value, this comment sounds reasonable and this is why thousands of “advisors” use this unskilled strategy that a monkey could execute to avoid doing any real work on behalf of their clients. Always remember, a passive buy and hold investment strategy puts money in their pockets during bad and good years, while taking money out of yours.
As an example of how poorly this strategy worked last year, the VanEck Vectors Gold Miners ETF, the GDX, has put in a horrible showing since Q1 of 2022 with a buy and hold fully-vested strategy.
I have always preached that skillful stock picking versus investing in a diversified ETF as a means to get exposure to a desired asset class will always yield outperformance of an index or ETF. However, last year, those that followed my guidance on many PM mining stocks for which I provided exact buy and sell prices earned profits of 20%, 30%, 40% and even 90%+. Clearly, a diversified buy and hold strategy failed miserably with gold mining stocks last year, but timing the market and providing buy prices when downside risk was low and blue sky above was high and providing sell prices when downside risk was high and blue sky above was low worked, and worked magnificently. Furthermore, you may be surprised to learn that I do NOT rely on technical analysis at all to time the market with a decent level of proficiency. Technical Analysis, or TA, is notorious for providing many false breakout and breakdown signals in share prices that lead investors into bad decisions, especially in an asset class as notoriously price volatile as precious metals. And if you listened to my last published Substack podcast, you know that I quoted Ray Dalio for stating that TA provides zero credible accuarte guidance with BTC price predictions, even though literally hundreds of BTC TA analysts exist on social media that are still duping people with their TA based price predictions.
Learning how to predict temporary lows and highs in underlying derivative gold and silver prices provides an excellent guide to issue buy and sell calls for gold and silver stocks. How does one learn how to do this? For me to gain the confidence to do this, I spent more than two decades analyzing daily price movements of gold and silver in derivative markets, and now have more than two decades of data from which to spot certain patterns and metrics that foretell certain price behaviors. And again, it should be easy to conclude why the investment industry so fiercely spreads the lie that market timing is impossible. Were their advisers to engage in this learning process to maximize profits for their clients, it would decimate their corporate profits as their rule for their “financial advisers” is for them to spend 80% of all their time in marketing and selling activities to bring more AUM into the firm.
This is the real unspoken reason why you can’t find any financial “adviser” that ever attempts to time markets, despite the fact that market timers that have proven repeated success with this strategy exist. But as every one of us that utilizes market timing to yield profits to our clients knows, learning how to do so requires loads of hard and disciplined work over a minimum period of 10 years, and can’t be done by any green advisor, especially those that are awarded the title of “financial advisor” by some global investment firm after graduating with an English literature or political science degree.
And since financial “advisors” are not compensated by the profits they return to clients and truly not rewarded for significantly outperforming their peers (unless under the compensation model of hedge funds), but rather are compensated by the amount of assets under management (AUM) they gather and keep, they are incentivized to manage your portfolio not by profits but by strategies that ensure minimum losses not in their client’s portfolios but in their AUM levels. As a consequence, even under terrible performing markets like last year when the US S&P500 index lost 19.6%, many financial salesmen and women incredibly experience little to no attrition in their AUM and the best ones will even be able to increase their AUM during terribly performing markets despite losing a considerable percentage of their clients’ portfolio values. And such is the dirty secret the investment industry desperately seeks to hide from you.
Thus, using the above deception and putrid advice of “you will lose out if you divest of the market and it’s in your best interest to keep holding through 20% dips”, advisers are able to succeed in tricking their clients to remain fully vested in terrible markets. But what if, instead of citing statistics of how much more poorly your portfolio would have performed if you missed just the best 10 best performing days of every year, your adviser told you how much better your portfolio would have performed if he/she only had the foresight to insure you were NOT invested during the worst 10 performing days or periods of every year? Most investors don’t give the thought that should be given to the above adviser deception, and merely nod in agreement with their adviser after hearing such a statistic and agree to remain fully vested through terribly performing markets. But advisers that have the vision and skill to ensure you are out of markets during the worst performing periods of every year literally can make the difference of your portfolio value increasing by 50% versus losing 40%. To provide a real world example of the difference between remaining fully vested and losing 27% in the GDX or gaining 30% by moving in and out of markets, such a difference, if compounded over five years, would be the difference between losing 79.3% of your portfolio value or profiting by 251.5%.
Given the massive price volatility in gold and silver assets that happens every single year, earning money in this sector is 100% about timing the market to successfully avoid the bulk of massive downturns and to successfully capture the bulk of rapid rises in asset prices. It’s always been about this, and not only is doing so possible, but doing so is realistic, so don’t let any advisor tell you otherwise. If your adviser informed you that gold stock Newmont Mining (NYSE: NEM), since the start of 2022, is still down more than 25% (as of the time I wrote this article), you’d probably breathe a sigh of relief that you never invested a single dollar, yen, euro or yuan into NEM. Yet, from a glance of the chart below, it is obvious that there was a lot of money to be made in NEM between 2022 and today. I used Newmont mining's stock chart as an example, because its price volatility is typical of that of a gold mining stock.
As you can see, there were two massive rapid spikes in NEM’s share price in which it quickly appreciated more than 60% and two volatile downward periods in which it dropped 29% and another in which it dropped a massive 56% just within the last 18 months. If you simply were a buy and holder as advocated by 99.9% of all global financial advisers that work for big global commercial investment firms, then you still need NEM to rise by 50% in share price just to get back to even had you bought this stock at the start of 2022. However, if you were a market timer, as is clearly the best and most viable strategy for gold and silver assets, then even if you only were able to capture 40% of the two big rises and to avoid 39% of the 51% downturn in NEM’s volatile share price during this short investment period, a completely achievable goal, doing so would have led to a compounded gain on NEM of 72.5%.
This is also why I’ve been stating forever that diversification is dead and only specialists will conquer investing moving forward. And sometimes those of us that have devoted our career to specialization unfortunately are ripped off by other analysts that sometimes merely forward all our buy and sell opinions to clients of their own business, which again is the lazy man’s solution to success. I became a specialist in precious metals and in one particular energy asset class over the past two decades. Both of these asset classes had general indexes and major asset class stocks that were down or close to even in 2022. Yet, as you can see from above, it was possible to invest in NEM and earn massive profits even in a year in which the stock performed terribly if one understood how to utilize market timing strategies. This is how I returned an overall +69.5% yield to my patrons last year despite the overall lackluster poor performance last year of these asset classes. A believer in diversification strategy could never do this in any asset class because it requires becoming a specialist to accomplish this. Compare the above stated outcome for Newmont mining to the current outcome of sitting on a 25% loss that a fully vested at all times strategy would have produced, and it should be self-evident that buy and hold is NOT even close to an optimal strategy when investing in some of the best yielding asset classes in the world.
Successful Market Timing is Not Just Knowing When to Buy, But Also Knowing When Not to Sell
One of the biggest mistakes I’ve seen investors repeatedly make over my long investment career in gold and silver stocks and uranium mining stocks is to get spooked by the analysis of the herd and panic sell at market bottoms. As both these asset classes often experience very rapid share price appreciations during the course of any given year in a bull market, panic selling locks in losses and prevents one from achieving very massive gains. Quite evidently, if one looks at the NEM chart above, if one made the mistake of buying near peaks and then panic selling near the bottoms, one could have easily experienced a 50% loss in NEM last year while an experienced and knowledgeable investor may have cleared a triple-digit gain.
And because the herd and herd-following analysts/money managers/advisers will always do the wrong thing at the wrong time, this is why people insist that market timing is impossible. People that insist upon this falsehood have been either part of the herd or following herd-influenced diversification analysts (that are generalists, not specialists). Therefore, such people in the investment industry always lose money at times they should be earning money. In great irony, we’ve all heard the investment strategy to “buy when there is blood in the streets”, but I just witnessed a lot of my peers in the industry panic sell into a “blood in the streets” situation with gold and silver mining stocks and a specific class of energy stocks instead of buying. In fact, through the entirety of my investment career, I have only known of a handful of people in the entire world that are smart enough to buy PM mining stocks and this specific class of energy stocks when blood is in the streets.
There have been times, when I’ve provided buying guidance a little early in the asset classes in which I’ve specialized, but as I already stated, that is fine as long as you do not provide guidance to panic sell and instead provide guidance to weather the storm and withstand small paper losses. Even when I had a consulting company, and my guidance was NOT to sell out of my open positions at small 10% to 12% losses that eventually became 50% gains due to my experience in this asset class, I was unable to convince clients that had advisers in London and New York, not to lock in losses and sell at small losses into a much bigger overall price dump. I was unable to do so even when my guidance had avoided the bulk of a larger 30% to 40% sell off due to opposition guidance of unknowledgeable London and New York advisers with whom they had 30 year relationships that wrongly advised them that timing markets is impossible and that the 30% to 40% price dump was going to morph into a 60% price dump.
Thus, I’ve witnessed clients of mine be wrongly informed by their traditional advisers that market timing was impossible and consequently exit markets literally within a few trading days of when these asset classes made remarkable turnarounds. Consequently, instead of being rewarded with 40% to 60% gains, these clients, beholden to outdated ways of thinking by their traditional advisers, locked in 10% to 15% losses. During times my buy opinions arrive a little too early, normally it’s simply due to my failure to catch the exact bottom of the market that year (an impossible endeavour) while still being very on point with the identification of an imminent massive turnaround. Again, one can still have enormous success in investing as long as one avoids the bulk of 30% to 40% price dumps and captures the bulk of 50% or more price rises. One’s timing does not have to be perfect, but traditional advisers keep their clients captive to poor investment strategies by tricking them into believing that consistent extremely beneficial market timing is not possible simply because perfect market timing is not.
The close mindedness of the vast majority of investors in the world about the use of non-traditional investment strategies is truly remarkable. To prove this point, those financial analysts with the largest revenue streams are all those that preach traditional investment strategies that yield terrible returns year after year and never provide significant positive yields if the market in general is suffering through a bad year. There exists a small group of analysts in the investment world that preach specialization over diversification, and are dismissed by the vast majority of investors. We preach that timing the market, not buy and hold, will always yield superior returns, and people scoff at us.
And despite achieving far superior documented yields by any comparison metric (stock market indexes, yields provided by “active” money managers at Wall Street firms, passive index funds, against the yields of traditional strategists with millions of followers, etc.), people dismiss us simply because their minds remain closed to approaches that are novel to them, but not to us, and because their advisers keep them mentally enslaved to approaches that benefit the industry and themselves but not their clients.
In life, as evident in the photo at the top of this article, perfect timing may be necessary to survive. In fact, when on a business trip to Bali in 2015, I avoided being at the site of a terrorist suicide bombing attack by one hour. So were it not for decent timing (I left the area of the attack one hour before it happened), I may not be alive today. Likewise, in the world of investing, we only need decent, not perfect timing, to thrive.
To read the conclusion to this article, including “Why Timing Markets in BTC Will Always Produce Far Superior Results than HODLing”, click here. Follow my brand new Telegram channel here. I’ve already issued a free stock tip on my Telegram channel that has already risen more than 18% in just two weeks. Have a blessed weekend everyone!
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