Best Silver for Speculative Gain

I am thinking about sinking some money into silver to try and make a profit. I have seen lots of posts on here that say silver is going way up and I'm glad to see I'm not the only one. I am sure that silver producers would love to be able to get more money.

The mean gold/silver ratio is 54.03
http://www.taxfreegold.co.uk/goldsilverratioshistoric1970onward.html
It is currently 64.23
http://www.kitco.com/market/

The question is what is the best physical product. I am trying to choose between 90% bags or modern bullion coins. I thought about rounds or bars but I am worried about discounts and assaying costs.

 

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1 oz government issued bullion coins, any date: ASEs, Maples, Philharmonics, Libertads, Perth Mint silver bullion, Britannias...

And I hope that your 'sinking' rises too!

 

Most of my silver is in the form of 90% US coinage. I like MS Roosevelts, JFKs and Franklins at or near melt as well as VF-EF WLHs, AU Peace dollars and EF-AU WQs. A decent percentage is also in silver bullion coinage of the modern ASE variety. However, I do add the Mexican pieces when given the chance.

 

There is no question in my mind that ASEs are best. Someday the Mint will discontinue the series, and every ASE in existence will immediately start to accumulate a numismatic value to go along with the bullion value because supply will be fixed but demand will continue to grow.

 

I agree and am beginning to wonder if this series is soon to end. No burnished or proofs in 2009 and maybe not in 2010. This series turns 25 years old this year. The 20th anniversary set appeared in 2006, so maybe the US Mint will end with a quarter century anniversary set in 2011 or perhaps change the design. Now may be time to stock up. TC

 

I love these world bullion coins too. However, some (Australian Perth Mint issues, Britannias, Pandas) have such high premiums over spot that it makes me wonder if they are worth it from a "best silver for speculative gain" perspective as introduced by the OP. TC

 

You could buy some silver on the forex. Some brokers offer 200:1 leverage so you can reap the gain of thousands of ounces when you only assume a fraction of the price of the bullion. But know that leverage is a double edge sword, it multiplies your profit but it will also multiply your loses.

exemple if your leveraged 50:1 you could hold a position of 1000 ounces of silver for a margin of 180 some dollars. The forex is neat that way ...

 

Of course, this isn't an investment in silver. It's a bet that you can predict shor term price changes.

 

I buy 90% junk silver. I like it for two main reasons. One, you can actually buy it for about melt value where the government issued Eagle rounds always carry signficant premiums. Two, I'm a coin collector. I really enjoy searching my "junk" coins for dates I'm missing for my albums and also for varities. In almost every lot of "junk" I've ever purchased I've found coins that are worth more than just their silver value and occasionally I find one worth much much more than melt. Eagles are all the same and boring.

 

You want advice? Don't put in more than you can lose. Consider all information about price rising or falling to be specious at best. NOBODY can say with any certainty what's going to happen with the price of precious metals.

People who invested in 1980 when silver was $50/oz are still waiting to make their money back.

 

You were doing well until you threw in that comment. That price existed for such a short time, and was during a time when there was a huge melt going on, that I think you would be hard pressed to find any knowledgeable silver investor who was actually BUYING silver that week.

 

And you did so well until you said "knowledgeable silver investor". That's the point.

Or was it too sharp for you to see?

 

I think the safest and most liquid are the ASE Government issue coinage.
The silver bars are not that risky if you get JM or Englehard brand.
90% silver US coins are also a good bet.
Those three choices would be my picks.
Anything else adds a risk factor as it isn't as easily sold.
However I may add that any silver you buy now stands a chance of showing a profit later on.
Of course it could all come crashing down too.

 

I would say any silver is good silver to have right now.

 

Your question isn't too specific and the answer would change with the size of your speculative investment.

- Are you considering $1 million+ investment, 100K-$1 million, or less than $100K?
- Do you really want to take physical possession of silver?
- Is your ideal situation to average into and out of a position or to move everything all at once?

You note the historical average price ratio of gold:silver, so it seems that your theory is that the ratio will revert back to that mean. If that is the case, and this ratio will determine your entry and exit of the trade, then why would you even worry about physical possession? What I mean is that there are other ways to trade that gold:silver price ratio. You can trade this in the stock market by selling short the gold ETF's of GLD (or its double of UGL), while at the same time buying the silver ETF of SLV (or its double of AGQ). By shorting gold and buying silver you are effectively speculating on the ratio returning to the mean.

I'm curious as to what "discounts and assay costs" you are talking about? Individual investors will pay spot or better. Few, if any dealers will buy at spot unless they have a buyer already set up at a premium and they only act as the broker. A good dealer will buy at spot minus 5%. Assay costs should only come into play if you are dealing with precious metal containing scrap. In this case, the scrap must be homogenized and then assayed. But, you don't buy scrap as an investment.

You pay a premium for brand names. That premium is not usually recognized when you are selling to dealers. If you are selling to an individual, then you might be able to get a premium for brand names. Buy and sell as close to spot as you can. And if something sounds or looks too good to be true, then 99.9% of the time, it is. Pass on it, there is plenty of silver out there

 

What you might be too young to remember is that silver wasn't nearly as popular in 1980 as it is now. The price ran up due to buying in the futures market, not the physical market. There really wasn't much of a physical market compared to today. The vast majority of silver owners were sellers to the melters. They weren't buyers. It was the paper speculators who where hurt by the runup to $50, not people like those on CoinTalk today.

 

That was a better answer than your patronizing response to my last post. This one wasn't anywhere near as patronizing.

 

Glad to help. People way overstate the importance of the $50 price to buyers and sellers of physical silver. But it persists as the measuring point to demonstrate what a bad investment silver has been. It's like someone saying that NASDAQ stocks are and forever will be bad investments at all times because at one moment in the distant past it sold for more than 5,000.

 

That's what I was trying to say before... but you said it better

 

Check with APMEX. I think I heard that they make selling their brand bars back very easy and with a price advantage.

If you are especially interested in short term profit in a big way, maybe there is another type of product that might be more profitable, such as breeding Great Pyrenese pups?