As I posted on my Twitter feed this morning, I picked up some USLV (3x weighted silver) this morning at $10.81.
If you haven’t seen, gold and silver have both fallen over 10% in the last two days:
I am averaging into my position in silver because as you know, I cannot predict direction and I have no idea when the bottom will be.
I decided to use USLV instead of SLV because it’s much cheaper per share and also because it’s weighted 3x. This means that for every 1% SLV moves, USLV will move 3%. It’s more risky, but I’m using less capital. Look how much USLV has dropped relative to its recent highs compared with SLV:
Here’s a chart of the last 11 months showing SLV (silver), AGQ (2x weighted silver), and USLV (3x silver):
I will continue to buy as it drops further until it starts going back up. Please note that I only do this for instruments that I believe are going to recover, such as the indices and silver. You’ll notice that I never do this for individual stocks because you never know when a stock is going to go to zero.
Just like when I was heavily drawn down in my SPY position about 1.5 years ago, I am not worried. I think silver will go back up. Stay tuned for my future buying positions.