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Why would anybody want to sell some of their stock portfolio now and buy silver or gold? By most measures stock are at historically high levels but recent volatility may be a harbinger of a precipitous decline to come. Meanwhile, silver bumps along at historical lows frustrating those who own it. Silver’s fundamentals suggest it should be much higher. Industry requires it and the available supply appears to be limited. Investment wisdom suggests that you should sell overvalued assets and buy those that are bargain-priced. It’s hard to sell when you believe your stocks are going higher. For me the surefire sell signal is when I begin to think that I am a shrewd investor. A decline follows soon after. Edmund Burke wrote, “There was never a point of pride that was not injurious to a man.” So if you think you’re quite clever in your stock picks, it may be time to lighten up. It’s no fun riding stocks down in a bear market and that’s what so often happens to true believers who have a high opinion of their investment skills.

It’s also true that investors buy hand over fist when prices are rising. This phenomenon of a near buying panic at the top should be a clue on when to sell. In 1980 when silver and gold reached mind-boggling highs the investment demand was greater than ever before. People scoffed at any suggestion to sell. Even though gains in silver were ten or twenty times more than what they paid, nobody was selling. Lessons like this should guide people on what to do today. As hard as it is to go contrary to the crowd and sell a high flying stock it’s equally difficult to buy something out of favor like silver or gold. Nevertheless, making such a contrary opinion investment decision has time and again proven to be highly profitable. Silver is so out of favor and so depressed in price despite the most bullish attributes and mind-boggling developments that it may be the premier contrary opinion opportunity of all time. That could equate to the greatest gains ever.

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