Silver Bullion vs Gold Bullion as an investment

For Beer, will go with a "Flat Tire", and will go cole slaw over potato sald
But just by the smallest margin...LOL

 

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Cole slaw just floats at the top and ends up tasting like plain cabbage once the beer washes the dressing off.

 

My beer of choice is scotch. For sure.
Give me three potato salad and I'm happy.

Thanks for playing. Now here are your parting gifts!

 

Can I point out the flaw in your argument?

You are basing your values off buying from a national dealer and selling back to them. Of course there is going to be a spread with that ... i.e. Profit. Their profit could very well vary across different PMs and will impact your ROI.

If you are truly "investing" in PMs, buy them at spot or less. There are a variety of places to do that including here. Then you dont automatically take a loss on your purchase.

I always buy PMs under spot and sometimes will quickly flip them (under spot as well). If you track the For Sale section on CT you have probably seen me do that 10 times in the past year and that included nice graded pre1933 gold.

I guess my point is that you can be more resourceful in your buying. Instead of tracking the daily spot price and the margins of the big boys look for opportunities to buy right regardless if it is 90% or bars. There is a saying in real estate "you make your money when you buy".

 

I think the premise is that "investors" will be buying from and selling to some dealer or another, and given that premise, the big nationals offer lower spreads than most local dealers.

Any purchase can put you ahead if you can buy lower or sell higher. Heck, cash under the mattress can be a good "investment" if you get it from parking lots and CoinStar reject slots -- or sell it as "rare mint errors" on Etsy.

Bargain hunting and creative marketing aren't what most people have in mind when they talk about "investing", though. If you want to buy and sell with known players and predictable availability, you're stuck dealing with their spread. And while big dealers have smaller spreads than the little guys, and gold has a smaller spread than silver, all those spreads are huge compared to stock/bond/fund trades through a broker like E*Trade or Ameritrade.

 

Thanks, but I'll limit myself to lemon in my Corona, and that only if there's no real beer available.

 

I don't buy your argument. "Investors" also buy from late night infomercials and from those companies that lure them in with a reasonable 1/10 oz AGE purchase and then pester them with phone calls.

IMO... you are correct that the average buyer will continue to buy from both the big nationals and the local shops. That is what is easiest. However, if someone is serious about buying PMs they can put in a little leg work and have more control.

You mentioned "creative marketing" ... there is none of that required. Just watch the for sale section here and on the other boards. I think it is more of having an actual plan with your PM strategy and some patience.

 

You make a fair point that a person could buy lower premium silver instead, or they could hunt for deals.

But here's the problem with that. I already showed in a previous post that buying a cheaper version of silver (like a 10 oz bar as the OP does instead of a Silver Eagle) will still result in losing 9% because of the slightly over spot price one will pay and the slightly under spot price when they sell. The same spread holds true for generic rounds.

You seem to also suggest: how about I hunt for great at spot deals and buy only at those times?

A few problems with that: 1) there aren't many at spot deals that exist. And if they do, you will devote time (which has a value) to trying to find them. This time devotion wouldn't calculate into your expenses if this is a hobby, but if we are talking about it as investment, we need to consider it as a cost
2) buying only at a spot will result in a large random holdings of silver, which will make them harder to sell back. Bullion dealers do pay less when they have to do more work to decide what to pay you. It will also make it harder for you store all this random junk
3) Buying lots and lots of different random, at spot silver will increase the likelihood of buying counterfeits because you will have to familiarize yourself with many different types of silver. Contrast this to the person who buys only silver Maples or Eagles. He knows exactly what to look for and is therefore less susceptible to missing a counterfeit
4) You are ultimately describing a hypothetical which is impossible for any forum poster to analyze in a comparison in this thread. Therefore, we need to use online bullion dealers' prices that we can all read so we can make a fair comparison.

 

I think you are making this more complicated than it has to be.

Look in the for sale section now and you will see a guy selling plenty of 90% at a 4% premium. I bet you could offer melt value for the lot and it might get accepted. MANY times 90% is sold at melt as the asking price to start with there.

EDITEd: No B/S/T Solicitations in General Forums ~ only Classifieds. Next will have consequences!

I think I just solved all of your problems!! I hope APMEX doesnt come after me!! LOL

 

90% junk silver is bought back at an even lower price than generic bars.

It's not "making this complicated," it's analyzing this as an investment because many of are treating it as one. If it's a hobby, this is all unnecessary complication. But, if this is your investment, you have to be doing the work I just did.

I think this goes back to my other thread: are many of you buying precious metals because you don't know how to invest?

 

This can't be emphasized enough. Bargain-hunting is a separate activity, a separate skill, and VERY much a separate time-sink.

 

Which goes back to what we see in the other thread(s): are people missing your point because your "questions" sound arrogant and insulting? They do, you know.

 

Not really... if you thought silver was going to skyrocket would you not search for the best opportunity to stock up? The lazy way would be to go online and buy at high premiums. A true investor would search out the mode with the highest ROI.

If my goal was to invest in silver, I would not care if I was buying silver table spoons or ASEs - whichever had the most upside potential. I would spend plenty of time looking into all aspects of it just like I would with any other investment.

If my memory serves, the xx% premiums on many silver coins almost diminished when silver was at its peak.

 

Like in anything else, you always want to seek out the best possible deal
Being it for a new car or a bar of silver, prices vary greatly, after all its
Your money spend it wisely !!

 

As a chemist, I like it very much when you can cancel the units. I will have to do that. It doesn't work comparing pounds of gold to pounds of bananas, because the pounds have different weights.

 

The pounds have different weights? You said you're a chemist.
The pounds have the exact same weights. They'll have different volumes though.

 

There are different measurements for bullion than for other things https://www.free-bullion-investment-guide.com/troy.html

He's right. You're wrong. Might want to learn a little bit more about how this all works before you "invest" more money into bullion.

 

Says the guy who insults everyone who isn't him.

 

I am direct. Deal with it. If you had said to him "I don't think that's correct" I would have responded very differently. But when someone says "you're a chemist. They have the exact same weight" insulting the guy and claiming you know something, it's going to get shoved right back into your face.

 

You both had your says, so let it go, both of you. Bullion discussion was allowed on the site only because it dealt with coin metal and bullion coins were a normal entity in collections. The stock market as a whole was not given a place other than general discussion subforum. Certain aspects of it is allowed in regards to precious metals and bullion if it seems reasonable to the moderators. General discussion of the overall market should be limited or linked to PM such as futures, contracts, options, etc. Thanks. Jim