Discussion in 'Bullion Investing' started by myownprivy, Mar 19, 2020.
Still no extra charge for condescension, eh?
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Fair point about collective demand. But it collective and transactional. A bullion dealer is not risking 10 years of profits by overcharging a small random customer. A large customer, like a solar cell manufacturer, will remember for a long time, and refuse to do business with you, for a long time, if you hose him in a crisis. I have lived it. I still have vendors I prohibit buying anything from, in categories my firm buys 20 million dollars worth a year.
So, the large, daily users of a material get best price/best service. They pay market price. A group of 25,000 small buyers who come and go into the market frequently will always get the short end of the shaft. This is simply because even if a dealer takes care of them, there is no guarantee that buyer will buy every month for years. I am betting that HSN and others who buy ASEs every month from major dealers are not paying such premiums right now. So even in the coin market, there are major players getting normal prices today, but the small fry are getting taken to the cleaners on premiums.
It makes no difference. You're still losing money. Yes you're closer to the spot price but you still paid the dealer markup. In order to show a profit you must sell above spot andvyhe dealer markup. Anything less is s loss.
No matter how you slice it you're still paying $17 per ounce regardless of the spot price. The percentage premium is nothing. All that matters is the price per ounce with all markup costs. Over the years I've made a lot of money in pm's.
How can you write that it makes no difference? One was a premium of $5 and one was a premium of $1.50. That's $3.50 per ounce difference! One is a premium of 9.67% and one is a premium of 41.67%! That's a HUGE difference. Huge I write.
If silver spot is $15.50, it is more likely to reach $17 than if silver is $12. An increase in spot of $1.50 is more likely to happen and to happen faster than an increase of $3.50.
So, paying $1.50 premium on $15.50 equates to a better and faster opportunity to break even at $17 than paying a $5 premium on $12 silver to break even at $17 spot.
I'm in Michigan where I just heard we're looking at 4-8 week lock down once the national guard is in place. Just closed Indiana from what I heard, many states will be following suit. Went from 110 cases in Michigan yesterday to 336 confirmed today. No one is selling, everyone is hoping to buy silver at spot plus $2-3, not happening.
Do you think the USPS/UPS/FedEx is going to be delivering your silver while everything is shut down? Doubtful. If you don't hold it, you don't own it.
Why are you so concerned with how other people spend their money?
It stimulates the economy, you should be as happy with that as the rest of us.
But but, its shiny and I need it.
WHAT??? I don't need it?
OH, it's a want then...then who am I to say how someone spends their hard earned money ?
Carry on Privy,
I still think your chaneling a modern school teacher or drill Sargent from a previous life.
I'm sorry that you don't get what I'm saying.
$12 silver with a $5 premium (equals $17) $15 silver with a $2 premium (equals $17) $17 silver with No Premium (equals $17)
I have to agree with collecting nut on this one. I have a buy price and do not buy above said price. The spread is irrelevant. But I sometimes get stuck on principle when spot is way below the sell price. Since there is currently nothing to buy it is a moot point.
Essentially yes. Every time metals drop people start claiming it's just cus of the ETFs and can't get physical there or it'll come back etc. Same claims were made at $40 then $35 then $30 etc after the last big spike.
If the fact that metal spot price has tanked during an actual global issue isn't proof against all the hedge and doomsday claims nothing will ever convince some people
Exactly! All that matters is how much you paid! All the associated costs have no bearing. What does is how much you paid when you opened your wallet.
Gold premiums are equally idiotic. The spot price tonight is $1,488. Apmex will happily sell you a 1 Oz AGE for $1,646 on eBay. Premiums on their site are, at best, more than $100 over spot.
I get that if you pay $17, you pay $17. But I'm fortunate enough to have a couple of stores that I can buy, provided they have coins (foreign), at melt. For domestic I pay a multiplier that is slightly higher due to wear. So if you tell me I have to pay $X premium, I'm rarely buying, and never at more than a $2 premium for proof coins.
So when I go to Fran J Jewelers, and they tell me it's a $5 premium, I leave. But when I go to LCS and buy at spot, I spend.
I'd rather not buy something with little upside that crashes during the time where it's supposed to sky rocket and save everyone
Not sure that's a useful comparison, because it sat at low prices for many years. Over time I expect the premiums to drop. Eventually sellers figure out that it's not a "dip", and that if they want money they can actually spend, they need to sell at a price people will pay.
Suppose on this day in history silver is $13 per ounce. Suppose your dealer charges you a $4 premium. $17. Suppose tomorrow you have to sell your silver. Dealers will buy at spot. That means you lose $4.
Suppose on March 1 silver is $16 per ounce and your dealer charges you a $1 premium. $17 silver.
Suppose the next day you have an emergency and sell your silver. Dealers will buy at spot. That means you lose $1.
This is why the premium you pay matters. This same example remains true if you sell your silver 1 month later, 1 year later, or 10 years later. Premiums matter less the more time passes, of course, but premiums matter because the lower premium you pay the less time is typically required for you to reach a break even point or a profitability point when reselling.
I totally, 100% agree with your assessment of buyers premiums.
The problem with your writeup is the condescension and vitriol in your approach to speaking to everyone.
Separate names with a comma.