My Silver Selling Strategy: How I Use the Gold-to-Silver Ratio for Exiting Investments
Summary:
This video outlines the presenter's personal silver exit strategy, emphasizing a disciplined approach based on the Gold-to-Silver Ratio (GSR) rather than arbitrary dollar prices. Key points include:
- The presenter congratulated viewers who profited from silver's recent price surge, which nearly tripled since his previous video seven months ago.
- He advocates using the Gold-to-Silver Ratio (GSR) as the primary indicator for selling, as it compares silver's value to gold, a more stable historical benchmark than the debasing US dollar.
- His personal selling threshold for paper silver (SLV) is a GSR of 50. He recently sold 25% of his position when the GSR dropped slightly below 50 on January 14th.
- This is a strategic rotation, not a liquidation, aiming to lock in asymmetric gains and reduce volatility by reallocating funds into other assets.
- He plans to dollar-cost average out of his remaining silver positions if the GSR continues to fall, and only consider selling physical silver after all paper silver is sold.
- He remains bullish on precious metals as a long-term hedge against currency debasement and a position for monetary change.
Introduction & Silver Performance [0:00]
- Recent Silver Gains and Their Impact on Viewers [0:00]
- The presenter congratulates viewers who profited significantly from silver investments, noting the price has nearly tripled since his previous video seven months ago.
- Many viewers used their profits to pay off credit card debt, student loans, or car loans, or to feel more comfortable in retirement.
- Recap of Previous Silver Investment Video [1:05]
- Seven months ago, a video titled "Why I'm Investing in Silver Now – Before the Price Surges" was released, explaining the rationale for buying silver with supporting research.
- Silver Price Increase Since Previous Video [1:16]
- At the time of the previous video, silver was priced at $33 per troy ounce.
- Currently, the price of silver is around $90 per troy ounce.
My Silver Exit Strategy [2:09]
- Using the Gold-to-Silver Ratio (GSR) [2:16]
- The presenter's primary exit strategy involves pricing silver in gold, using the Gold-to-Silver Ratio (GSR).
- The GSR indicates how cheap or expensive silver is compared to gold. It's calculated by dividing the price of gold per ounce by the price of silver per ounce (e.g., $3,300 gold / $33 silver = GSR of 100).
- Why Not Compare to USD? [3:00]
- The presenter argues against comparing silver's price to the US dollar because the dollar is a fiat currency "backed by nothing" and its real historical inflation rate is unknown and manipulated by the government (referred to as "CPI lie").
- Comparing silver to gold provides precise, factual data for historical analysis of its true value.
Current Gold-to-Silver Ratio (GSR) and Selling Action [4:13]
- Historical GSR Trends [4:13]
- Historically, a GSR between 60 and 80 is considered normal.
- The market fluctuates, showing patterns of buying low and selling high.
- Personal Selling Threshold (GSR 50) [4:52]
- In his previous video, the presenter stated he would start selling when the GSR reached 50.
- Initial Sale of 25% of Silver Position [5:05]
- On January 14th, the GSR fell slightly below 50, triggering the sale of 25% of his paper silver position (SLV).
- This initial sale almost recouped his original investment, making the remaining position a "free roll."
Important Considerations for Selling Silver [5:51]
- 1. Why sell if silver might keep rising? [5:55]
- The decision to sell is not based on a belief that silver will crash, but because the investment thesis has partially played out, and relative values matter.
- At a GSR of 50, silver has already outperformed, volatility is increasing, and the risk/reward is no longer asymmetrically in favor of silver.
- Historically, when the GSR compresses quickly, silver often overshoots and then gold tends to become the better vehicle.
- 2. Gold and Silver move together [6:34]
- Gold and silver generally move in the same direction.
- If both gold and silver prices double, the GSR remains unchanged (e.g., still at 50).
- Therefore, the presenter will not sell based on an arbitrary dollar price, but on the GSR.
- He notes that "buy and hold" is often difficult to execute emotionally, as people become nervous with unrealized gains.
- 3. Importance of staying invested (rotation, not liquidation) [7:45]
- He emphasizes the need to stay invested, especially in the current economic environment.
- Selling silver is a rotation into other assets, not a liquidation into cash. Holding cash leads to losing purchasing power due to government-driven currency debasement.
- 4. Dollar Cost Averaging (DCA) out [8:57]
- Just as he dollar-cost averaged into silver (buying in 2-4 increments at decreasing prices), he will dollar-cost average out when selling.
- This approach aims to generally capture good prices without trying to perfectly time the market.
- 5. Strategy for Physical Silver [10:04]
- His rule is to sell paper silver (on the stock market) first, and physical silver last.
- He will only consider selling physical silver after all paper silver is sold, and may still keep some physical silver as a hedge in extreme economic scenarios.
- 6. Would I buy silver again? [10:43]
- Absolutely, if the Gold-to-Silver Ratio justifies it, he would rebuild his silver position.
- This is a capital allocation decision, not an emotional attachment to silver.
Final Thoughts: Bullish on Precious Metals [10:56]
- The presenter remains bullish on precious metals, protecting against currency debasement, and positioned for long-term monetary change.
- His actions (reducing volatility, locking in asymmetric gains, repositioning) reflect discipline, not a bearish outlook.