Sunday, August 7, 2011

Bull Run's Gold and Silver Conversion Story

BullRun’s Conversion Story
With a potential monumental night almost upon us, I would like to share my story on how the Doc convinced me to buy physical precious metals. The Doc and I have been best friends since 2004, we met in medical school. I was best man in his wedding; he was best man in mine. I was always big on finance and investments. I had been investing in the stock market since 1996 and I was fairly successful at it. As we sat in the computer lab one day, I noticed he was looking at a metals market screen. My thoughts were, “Gold, silver, platinum, why was this guy wasting his time looking at a metals market pricing chart. He surely couldn’t have any money invested in something physical…something you would have to store or hide…something that doesn’t earn any money or pay a dividend…something that would be impossible to sell…how would you even buy gold or silver and where would you put it.” The Doc quickly went to another screen before I had a chance to confront him on making sure he wasn’t making a “stupid investment.”

Our friendship grew over the next couple of years and once day the computer lab situation played out again. This time the Doc entrusted me enough to talk about the yellow and silver stuff. We had a heated debate on the issue which left me still thinking “this guy is an idiot.” I wanted to invest in clean-energy and I thought the Doc should do the same, it was a once in a lifetime opportunity to make money in clean-energy stocks! Pacific ethanol is one of the stocks I remember we talked about. Bill Gates had just made a big investment into PEIX, that’s where all the “smart” money was going…what don’t you understand Doc? Furthermore, this Doc guy was pretty much telling me I should invest in silver and gold. Doc, aren’t you worried about me breaking in and stealing it? Why would you put yourself at such a risk? Just put your money in the bank or in stocks, it’s safe and easy to do.
As the days passed, I began thinking about the reasoning of why Doc was telling me to put at least some money in gold and silver. My vision of the financial system and government system we live in started to become clear. It became crystal clear in 2008 with the silver market takedown. Why was silver getting beat to the ground on record physical demand? I met with a financial advisor and asked this question, he said his financial company’s view agreed that it didn’t make sense. His financial company advised its clients to stay clear of the precious metal markets because “it didn’t make sense.” However, I took the opposite view. I had already decided I was going to put money in silver and gold. If physical demand was at record levels, the prices should be at record levels. The system was flawed and, therefore, I invested heavily in silver and gold. I put half of it in physical and half of it in mining stocks. I wasn’t keen on taking delivery of physical metal still, but I wanted some (in case of the worst case scenario happening.) It was a tough sell for the Doc to get me into precious metals. It was years before my conversion, nothing like the couple hour conversions which the Doc has talked about recently in his conversion stories. I still believe the majority of reader’s underestimate how little ordinary people know about precious metals. Just last week I had a discussion with a patient regarding the stock market and investments. He claimed that there was nothing to invest in and that the safest place to put your money in was U.S. treasuries. I quickly responded, “U.S. treasuries? U.S. treasuries paying you 2% when real inflation is closer to 10%?” Patient responded. “I meant T.I.P.S.” I told him I had put a little money into SLW a few years ago, a silver miner, and it had performed relatively well (obviously understatements). The patient responded, “Silver, isn’t that risky?”