The Silver Bull Market Is Not Over | Lobo Tiggre

Key Concepts

• Bull Market Dynamics: Silver typically lags gold initially and then outperforms towards the end of a bull market.
• "Upside Maximizer" Strategy: A profit-taking strategy that involves securing initial investment and some profit while leaving a significant portion to participate in further upside, mitigating the risk of losing gains.
• Physical Squeeze: A situation where demand for the physical commodity outstrips available supply, leading to price spikes.
• Monetary vs. Industrial Metals: Distinction between metals valued for their intrinsic worth and store of value (gold, silver) versus those primarily used in industrial applications (platinum, palladium, copper).
• Recession Resistance: The ability of an asset to maintain or increase its value during economic downturns.
• Tail Risk: A low-probability, high-impact event that can lead to significant losses.

Market Analysis and Investment Strategies

This discussion, featuring Elijah K. Johnson of Liberty and Finance and independent speculator Lobo Trading, delves into the recent pullback in precious metals markets and offers perspectives on navigating current market conditions.

Current Market Sentiment and Bullish Outlook

Despite a recent significant pullback in gold and silver prices, Lobo Trading maintains a bullish outlook on both metals, asserting that the current cycle's top has not been reached. He acknowledges that rapid vertical price movements ("hockey stick mode") are unsustainable and prone to corrections, citing the adage "markets take the stairs up and the elevator down." However, his core message is not to sell out completely but to ensure that significant gains are not lost.

The "Upside Maximizer" Strategy

Lobo Trading introduces his "Upside Maximizer" strategy, a modification of the "sell half on the first double" approach. This strategy involves:

1. Securing Initial Investment: Taking profits equal to the initial capital invested.
2. Leaving Remaining Capital: Allowing a portion of the investment to remain in the market to capture further upside.
3. Trailing Stop Mechanism: Employing a trailing stop, not as a strict stop-loss, but to lock in profits as the asset continues to rise. When the price rolls over, profits are taken.

This method aims to prevent the "Casey free ride" problem, where taking profits too early can turn potential "10 baggers" into "5 baggers." Lobo provides a personal example of applying this strategy, taking double his initial investment off the table, leaving him with 1.5 times his original capital while still participating in potential further gains. He refers to this as reaching the "point of no concern."

Fundamental Drivers for Precious Metals

The bullish case for monetary metals is supported by several fundamental factors:

• Central Bank Gold Buying: Increased purchasing by central banks globally.
• Global Reallocation: A shift in investment strategies across the globe.
• Political Risk: Geopolitical uncertainties contributing to safe-haven demand.
• Inflationary Pressures:
  • The "Trump agenda" is described as highly inflationary.
  • Europe's rearmament efforts are seen as inflationary.
  • Russia's war is also cited as an inflationary factor.
• China's Economic Policies: While China has reportedly faced deflationary pressures, the announcement of a new 5-year plan suggests continued stimulus, implying the eventual triumph of monetary expansion.

Silver Market Dynamics

Lobo Trading addresses concerns about silver, noting that it has tracked gold more closely this year, which is encouraging given his bullish stance on both. He highlights a recent physical squeeze in London as a driver for silver's outperformance, which he believes is a positive sign.

• Distinction from Gold: The physical squeeze in silver was not mirrored in gold, suggesting distinct market forces at play.
• Short Squeeze vs. Fundamental Demand: While some anticipate a massive short squeeze leading to triple-digit silver prices, Lobo suggests that if supply issues are resolved, silver may revert to its trend.
• Catch-Up Phase Concern: He reiterates that silver typically lags gold and then catches up at the end of a bull market. If silver's rise was solely due to a catch-up phase, it would signal the market's end. However, the physical squeeze explanation provides a relief for his bullish thesis.
• Near-Term Volatility: He anticipates potentially more downside volatility in silver in the near term compared to gold due to its higher inherent volatility. This volatility, however, presents buying opportunities for those who have secured profits.

Platinum and Palladium (PGMs)

Lobo Trading expresses caution regarding platinum and palladium, despite their recent price increases.

• Lagging Industrial Metals: These industrial metals lagged gold and silver for much of the year, with their recent surge being a more recent phenomenon.
• Physical Shortage Reports: Similar to silver, there are reports of physical shortages in platinum, potentially driving short-term price spikes.
• Lack of Fundamental Demand Shift: He does not believe there has been a sudden, significant increase in automotive demand for PGMs that would fundamentally alter their market.
• "Johnny Come Lately" Reaction: Lobo suggests that the recent buying in platinum and palladium is a reaction from investors seeking relative bargains after gold and silver hit all-time highs, rather than a fundamental shift.
• Vulnerability to Economic Weakness: He points to signs of economic weakness as bearish for these metals, given their industrial use cases.
• Higher Volatility: Platinum and palladium are expected to experience sharper declines if gold and silver correct, making them riskier for investors without strong conviction.
• External Shocks: They are also vulnerable to "Trump shock" or negative economic news from Europe or China.

Copper and Uranium (Energy Metals)

Lobo Trading discusses copper and uranium, categorizing them as "energy metals" with significant supply constraints.

• Copper:

  • Durable Bull Case: He believes the bull case for copper is extremely durable, potentially lasting decades, driven by its essential nature beyond AI and electric vehicles.
  • Supply Constraints: Similar to uranium, copper faces structural supply issues.
  • Caution on Industrial Metals: He reiterates caution on industrial metals due to potential economic weakness.
  • Buying on Dips: He is actively seeking to add exposure to copper, preferably on a dip.

• Uranium:

  • Recession Resistance: Uranium is considered more recession-resistant than copper.
  • Supply Constraints: Despite initial concerns about mothballed production coming online, most new supply initiatives have faced delays, cut guidance, or outright failure.
  • Tail Risk: A significant risk in uranium investing is the possibility of a "reactor meltdown" that could cause a major capital loss overnight. This is a tail risk that investors must accept.
  • Preference for Uranium (Near-Term): If presented with equal opportunities in uranium and copper, Lobo would favor uranium due to its recession resistance, while acknowledging the tail risk.
  • Active Portfolio Addition: He is actively seeking to add uranium exposure when opportunities arise.

Conclusion and Key Takeaways

The overarching message from Lobo Trading is one of prudent risk management and strategic profit-taking, even within a bullish market. He emphasizes that:

• Nobody knows what happens next: Therefore, it is crucial to protect gains and avoid letting significant profits slip away.
• "Nobody goes broke taking profits": This is a fundamental principle for navigating volatile markets.
• Having cash is an advantage: Securing profits provides liquidity to capitalize on future buying opportunities during market dips.
• The "Upside Maximizer" strategy offers a balanced approach to capturing upside while mitigating downside risk.
• Fundamentals support a bullish case for monetary metals, but caution is advised for industrial metals due to economic uncertainties and specific market dynamics.
• Uranium offers recession resistance but carries a tail risk, while copper has a durable bull case but is more sensitive to economic downturns.

The discussion concludes with a reminder of the Miles Franklin weekly specials for October 20th-27th, 2025, including deals on 1oz gold Philharmonics, 2oz silver Canadian Rocky Mountain coins, and Kilo silver Britannia coins, with contact information provided for ordering.