Silver Bullion Coins

coins vs. bullion

You've been to this website, right?

http://www.coinflation.com/silver_coin_values.html

One of my strategies to get silver coins is I just post an ad on Craigslist offering to buy coins, where I offer to tell them what the coins are worth even if I don't buy them. This way I'm giving them something for the trouble of contacting me.

90% of the people who contact me are a waste of time, but I get a great coin for every 1 in 10 contacts lately. All I do is look up prices in the redbook for them. Once we establish a dialogue, I drive out to see what they have (usually 2 in 10 will get to this point), I then cherry pick what I want, and tell them what the rest is generally worth. Everyone is happy.

You can also just search ebay for foreign coins in Silver and have a copy of the Standard Catalog of World Coins 1901-2000 (37th Ed. 2009) on hand. I snag good deals on coins this way a lot. I always look for a seller with free shipping. Works for me.

A previous message said buy 100oz. bars, which is as close as you'll get to a large quantity of metal at spot all at once, I would concur. Problem is, when you buy 100oz. you have to sell 100oz. and people who buy and sell 100oz. of silver are a smaller community of investors. Selling 1oz. bullion coins might seem like a higher investment, but you can still dump them one coin at a time.

I used to be all about Silver Eagles and bullion coins, but you can find silver everywhere much cheaper. Ebayers regularly sell bags of silver quarters and dimes around spot price with free shipping if you look around. There are scrap lots on ebay as well, but make sure they aren't tossing other crap in with it.

This is a good reference for the ebay silver spot price, rather than use the Daily London fix, it's a truer representation of what people are actually willing to pay for physical delivery of silver bullion:

http://www.goldprice.org/ebay-silver-prices/

As for the 90% silver coins vs. Bullion debate I look at it like this: A 1900-O Morgan silver dollar that I picked up for $15 the other day has a melt value of [FONT=Arial, Helvetica][FONT=Arial, Helvetica]$11.9111 [/FONT][/FONT]today. The Redbook lists the coin in G-4 condition at $18 and MS-64 at $60 - I bought it because I felt it was a high grade coin for a low grade coin price.

So, even if Silver tanks, that coin will still be worth about $60 from a numismatic standpoint even if silver is $9/oz. again - if I have the G4 coin, it'll most likely be worth closer to $9 or less - this is that whole argument that as the coin grade goes down the close it comes to approaching the spot price for it's metal content.

So, as time goes by that MS-64 Morgan I picked up will most likely appreciate in value above the $60 price in the book. So there's an argument for cherry picking quality coins above spot silver price (even 2-3 times spot price) vs. silver bullion accumulation. Sure it's more work, but the investment payoff seems higher to me as time goes by,

As for me, I do both. I pick up whatever turns out to be the best deal for me at that time and place. Sometimes it's bullion, sometimes it's high quality 90% silver coins. That's why I call myself a Cherry Picker.

Just my 2 cents.

-baff.

 

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Thanks for that well thought-out insight to your strategy Bafflez. I agree with your assessment of the 100 oz bars. Maybe once you get to a certain critical mass with rounds (assuming you are considering using them as an alternative currency at some point), the bars make sense but I'm not there yet. Between work, coaching basketball and spending time hunting, fishing and the like with my two teenage boys it seems like I never have enough time to pursue personal interests. As such, the cost of convenience of buying rounds in any quantity I desire makes good sense for me

Between your Craigslist and Ebay strategies, I think the latter is a better fit for my time budget. As I guess with most endeavors, there are many great strategies but no true "one size fits all" approach. Thanks again for your input - well written and interesting ... good luck!

 

Always buy it right and sell it soon.

Always buy it right and sell it soon. This is the key to making any money.
The worst mistake you can make is paying too much and waiting to long.
If you paid anymore than $15.70 this past week for any silver you paid to much except for American Silver Eagles. I bought all the silver maple leaves I wanted yesterday in gem bu as packaged by the mint at $15.40 each. The key to all this is turning it over - I would always rather make .90 cents each and sell 200 in the next two months than than waiting for some ultimate price to come down the line. This stuff is neither rare nor hard to find and is always availible - it's just stuff. People who end up in love or in covet are missing the boat and could easily end up losing .90 cents a coin and never see it fanish right in front of thier eyes.

 

BHP, you hit that on the head.

Essentially, this is the difference between an investor/dealer and a collector.

Had it happen way too many times to me in Baseball cards. Or as they say with stocks - don't fall in love with a company.

I think the silliest thing I hear people say is: "I'm in for the long term". Totally illogical.

 

Amen to that man. I bought a number of Olympic silver coins this summer and have been listing them since the games opened last night, even with silver coming down $4.00 since then the coins are selling for more than I paid. Timing is everything.

-baff.

 

Wow BHP, that's great! Where do you buy your Maples?

 

Yeah ditto that ^^ I'd like some $15.40 maples. Did you get them on ebay?

-baff.

 

On a similar note.. I saw today that APMEX raised its prices over spot for 2010 ASE's. Last week their site advertised that you could get 2010's for "As low as $2.99 above spot" Now the've raised their prices to "As low as $3.29 over spot" They are currrently out of 2010's and may get some in by the end of the month.

 

I never buy on eBay (I did at one time) I cultivate relationships

I never buy on eBay (I did at one time) I cultivate relationships with other dealers and collectors over years and years and do active trading with same.

 

Bravo!

 

Buy silver because you 1) like the look and feel of silver, 2) want to convert your cash into something more physical, or 3) want to impress your family and friends -- but not as a "hedge against inflation." It is NOT a hedge against inflation. Even if it were, you would have to own enough of it, and be willing to sell it, to offset whatever inflation you are suffering from. And, after you sell, you are back to square one. It sounds cool, but not reality.

 

You could always buy rounds!!

 

Ahearn, investments in PM's as an inflationary hedge is a common, well understood practice. In a nutshell an inflation hedge is an investment in a hard asset/commodity that is negatively correlated with inflation. Many respected economic commentators agree that we will likely experience rising inflation within 18 months or so. Whether or not you agree that inflation is a likely prospect, that was what I meant by "hedge against inflation". So assuming an inflationary environment you either don't understand the common use of the term "hedge" or have developed an opinion that for the first time in history, fiat currency will outperform PM's. And, of course I would be willing to sell when the time is right, otherwise what's the point?

I will concede that pulling together investment capital is difficult and it never seems like you can get far enough ahead of the game but the alternative is to write off investing as a waste of time altogether. Perhaps you could enlighten everyone with your top pick of an inflationary hedge.

 

My father wrote off investing in anything. The times he complains about the most seem to be those associated with high inflation. He doesn't have anything nice to say about the mid 1960s, nor the late 1970's to early 1980's. He claims he lost everything he had during those times. I have decided the buck stops here. I'm investing for the high inflation we will see. If we don't see high inflation, the only other alternative is a severe depression.

You don't sell your PM when the high inflation is happening. High inflation doesn't last forever. Thing will eventually go back to "normal." It is then that you sell. The alternative is to hang onto the cash/dollars and watch them inflate out from under you.

 

Regarding not investing in anything, this is sort of an existential question. Money has to be someplace whether you like it or not. CDs are an investment. So is a money market. Even cash stuffed into a matress is an investment in a non-interest bearing currency.

The mid-60s were pretty benign. Maybe he meant mid 70s which were the toughest times since the Great Depression [up until now]. I can understand his thoughts about the late 70s and early 80s.

If you wait until things get back to normal, you'll probably have to give back at least half your profits on metals. Markets anticipate, and the time to sell is when the gold and silver prices go parabolic. I expect to see gold rise by as much as $100 per day near the end, and silver as much as $10 per day. Selling well is much harder than buying well.

 

Cloud, back in the late 70's, gold approached $1000 per ounce in an environment of high (not hyper) inflation, high unemployment and high interest rates (18% mortgage rates). If those same conditions existed today, and people reacted similarly, the price of gold would be somewhere around $4500 per ounce (using an annual inflation figure of 5%).

If you factor in the dramatic increase in the money supply and our governments shrinking access to easy credit, it is conceivable that we are heading economic conditions that are more severe and longer in duration than they were in '79. I think it is likely that these factors will create a larger PM bubble this time around with gold trading at a premium to the inflation adjusted $4500 per ounce. That's the way I see it.

When you say "near the end", what factors do you see driving us to the end and what levels do you think gold will reach?

 

I don't expect fundamentals to drive gold in the last stages of the bull market. It will be pure speculation by hedge funds and the general public buying gold simply because it is going up. I try to avoid guessing at a number that gold will reach. Instead, I plan to just stay alert for signs that the price rise is in its final stages. The top might be $2000 or it might be $10000. I don't think there is any reliable way to know.

 

I get this question frequently from investment oriented coin and or bullion investors: "What is the most liquid form of hard assets?" The answer will depend a lot on your network. As a dealer, my range of contacts is so vast almost every form of gold or silver is liquid. However, as an individual, you will want that form which the most people can easily buy for a recognized and easy to determine price. The price of silver (or gold or platinum for that matter) is easily found on line, in the daily newspapers, or on television. Therefore, any one ounce silver coin that is easily recognized as containing one ounce of silver will probably be easiest to sell. This could be well known silver rounds like sunshine, or US silver eagles or Canadian Maple Leafs. Bear in mind, silver eagles and maples have higher premiums even when you sell, which is inconvenient for the casual seller. However they are a bit more desirable since they are so easily identified. Somewhat harder to sell are bags of 90% pre-1965 silver, 10 and 100 oz bars, circulated Morgan or peace silver dollars, etc. That being said, none of these are really difficult to sell, as virtually every dealer in the country and quite a few non-dealer will readily buy them. Just be sure to watch your values. Hope this helps.

 

How to get Scrap...

How?

Are you referring to old tea services and cutting ware?

 

What about deflation

What about deflation? Do you like Precious metals for deflationary/depression periods?