Tuesday, March 3, 2009
(Cont'd from above)...

Jim:       But, like Cramer fave William Jennings Bryan, the great populist, I am not content with just gold… this is your buy metalism addition of Mad Money… you got to get some silver too… Mr. Mustard with the candlestick in the library… like gold, silver is a precious metal… a hard asset that keeps its value in times of turmoil…just like gold it is a way to have some chaos and inflation insurance in your portfolio… think of it like that… you hope that you insurance isn’t needed, right… but you always buy it… according to a great story on Bloomberg.com, I quote everybody… yesterday, it also happens to be trading at its largest discount to gold in the last 13 years… Bloomberg called silver the poor mans gold, and since we all are feeling poor… and the President seems dead set on keeping that way… buying some silver would be a great way to make your portfolio more Obama resistant on the cheap… silver has become a 57 variety play… as in the 57 varieties of Heinz Ketchup… we expect it to catch up, catch up to gold.

Right now one ounce of gold will buy you 71 ounces of silver… you know we went all the way back to ‘68... President Johnson, kind of like Obama, guns and butter, lets have it… to look at what that ratio has been historically… and on average the price of ounce of gold has been 52 times the price of an ounce of silver… might big discount… so far silver has been outperforming even gold, to say nothing of the wretched stock market… gold, which grabs all the headlines is up about 3.8%, thanks to the recent pullback… while the price of silver is up almost 13%… it is already playing catch up… but I don’t think you missed the move… so how do I think you should play it… coins, stock, silver miner, silver bouillon, bars, not the stuff you put in soup… or an ETF that owns silver, like the iShares Silver Trust (SLV)… jewelry, if you want to know more, hey I got an article about it on MainStreet.com, part of TheStreet.com family, where I am chairman… right now I would go with the SLV… I would not go with this attractive wedding present (holding a silver tray)...

Alright, anyway…. I would go with the ETF over everything else, just like with gold… I think that silver bouillon is too difficult unless you are very wealthy… coins are tough… you will often get hit with hefty markups of 15% to 30%, but if you must, I would buy the Canadian Maple Leaf Coins or the US Silver, American Eagles straight from the US or Canadian Mints, the US government has got a good website… if you want the stock of a silver miner than I like Silver Wheaton Corp. (SLW) pure play on silver and Pan American Silver Corp. (PAAS)… they are the ones with the best growth… but Pam American Silver also has some based metals, the dirty metals that aren’t doing so well, I don’t like them so much… the fact is that if you are going to own a miner, you want a gold miner not a silver miner… besides the price of disparity… I like gold more than silver… you know that Agnico-Eagle Mines Ltd. (AEM) is my favorite gold miner...

Now, let me just take a second to make something crystal clear… I think that gold is going down in the near term, and silver is going down too… because people can’t even afford gold, they are buying less jewelry… 60% of demand from gold is from jewelry… they are selling everything precious at this moment.. right now I am bearish on gold and silver, but I am bullish on the asset class of precious metals as a kind of insurance… why recommend something when I think it is going lower… because I am trying to get you into a diversified portfolio of good entry points… I think you should have 20% of your portfolio in one of these metals… but I want you to buy them the right way, not the wrong way… never chase, just bid… as I was taught at the hedge fund… I predicted the decline in gold, and now it is happening… you want to buy 100 shares of the GLD, the tracking stock price for gold… then I would buy the first 25 right here… the next 25 of GLD at $85... the next 25 at $80... and your final shares at $75... I don’t know where gold is going to bottom… I do know that it is going down… and when it recovers it is going to snap back like a rubber band… you don’t want to miss that move.

Silver is similar… first run for silver SLV, $12... next $11.50... next $11.00... next $10.50... for a miner I would also start buying Agnico-Eagle here at $45... you want 100 shares, 25 at this price, 25 when the stock is at $40, 25 at $25, and 25 at $30... we buy using a wide scale as gold and silver go lower… the worst that happens it starts going higher and you don’t get as much as you would want in… sounds good to me.

Here is the bottom line…

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