"Congratulations, you’ve won a 10-ounce bar of silver or a chilled king-sized Hershey chocolate bar. Which one do you want?”
If you were approached with this offer, what would you choose? Not sure about you but for me it is a no-brainer that I’d choose the silver bar worth $150 vs the chocolate bar worth $1. I thought most people, if not all, would make the same choice. WRONG, WRONG, WRONG!! You can see the video below posted in YouTube.
So what does that mean? Well, it means a lot to me. In the investment world, one thing which has never changed over thousands of years is the people’s emotion. For the vast majority of investors/traders, they like to go with the herd, i.e. become bullish when there is euphoria and bearish when there is pessimism. When everyone wants something like the tech stocks during the dot.com bubble time or the real estate stuff before 2008, you can bet the top is in. Similarly when nobody wants something, oftentimes it means the bottom is in. This simple street test clearly demonstrates that there is virtually no interest in silver or precious metals in the streets even though silver has gained over 20% this year. Does this sound like a top for silver. No way! On the opposite, it is a very strong reassurance that precious metals including silver has a long long way to go up. When all of your friends or taxi drivers start to talk to you how to buy gold or silver, you should then start to think how to sell your gold/silver.
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