Investing in silver coins

So I've decided to slowly start investing in silver coinage. Nothing huge Ill just occasionally check ebay and bid on coins that I feel are being priced close to spot value. I want to know what are the best types of coins I should be looking for. Obviously 90% silver coins are the best, but is there anything wrong with going for the 35% nickel and the 40% clads? Just wanted everyone's opinion on this.

 

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Investing implies that you will want to sell them sometime in the future. With this in mind, get the cheapest lots you can. WARNING...WARNING...WARNING searching for good stuff can be addicting.

 

You may want to go with .999 bullion. TC

 

If you have a lot of storage space, there's nothing wrong with 35% Jefferson war nickels and 40% 1965-70 Kennedy half dollars. Dealers hate them; now and then, they will sell below spot, just so they can acquire capital and concentrate on 90%.

A real stacker buys only 90%. As you migrate toward numismatic coins, you buy ASEs or Maple Leafs, or even Brittanias or Philharmonics or Pandas, although they sell for big premiums over 90%, on an ASW basis.

A buyer of 90% is NOT investing; he's hedging against an eventual fall of the dollar, as might happen if the dollar loses its reserve currency status. For over 30 years, the demand for the dollar has been based on the fact that other countries needed dollars to buy oil. If that function declines, those dollars will come back to the US and greatly inflate the money supply, bringing hyperinflation with them.

People laugh at this analogy, but I don't care -- today, a silver dime buys a loaf of bread. Hyperinflation comes, bread jumps to $3-4 per loaf, but a silver dime may still buy a loaf of bread, as PMs rise alongside inflation. So what the stacker has done is preserve the buying power of his most liquid asset, coins and currency.

He does NOT trade silver, eventually he will guess wrong and get whacked. In addition, as the price of PMs goes up, you lose the premium between 90% and numismatic coins. If silver reaches $50/ounce, for instance, a VG Barber half will be worth the same as a cruddy Franklin half -- the premium you paid today will have evaporated. You have to decide what you're going to be, numismatist or stacker. If your goal is to protect your capital, you're a stacker. If your goal is to build a nice coin collection out of 90% silver coins, 1-ounce 0.999 bullion coins, etc., then you're a numismatist. So why can't you do both simultaneously?

Because to get nice numismatic coins, you pay a substantial premium, despite knowing that at a certain level of bullion prices, they'll all be worth the same. Now you may expect a dozen CT-er's to tell me I'm crazy. No problemo.

One last thought, if things come to the point that we're using 90% in everyday commerce, and you have silver dollars and foreign 1-ouncers, etc., who's going to make change for you? The guy with food or water or gas or ammo will say, that's my best offer for your silver dollars, take it or leave it. The same applies to my comments...

 

So a silver dime buys a loaf of bread today. To be fair, when you make your speel, why don't you tell us how many loaves of bread a silver dime would buy in 2011? Answer is three. This is a very important fact that you ALWAYS leave out. Why is that??? This way folks can decide for themselves if their purchasing power is truly being preserved.

 

always the same Edited ~( unnecessary) paranoid nonsense. "After the apocalypse yer gonna buy bread with a mercury dime".

 

Also don't forget the long stretch through the 1990s where it would buy half a loaf, if that.

Similarly, when you're thinking about numismatic value, it may be the case that silver at $50 will leave VG or even F Barber halves with the same value as junk Franklins. But, conversely, silver back at $5 would likely mean that the F-VF Walkers or AU Franklins currently trading at melt would regain some premium.

When silver was above $30, I tried to buy lots that included better (numismatic) stuff at melt, rather than just grabbing all the 1964 quarters and dimes I could find. I'm surely still underwater on a lot of that stuff, but I'm in better shape than I would have been with the pure junk.

 

If you're going to hold for the long haul, I would go with ASE's, period. Nothing else, that means no Maple Leafs and no Mexican Libertads or any of those other beautiful silver ounces. Collect what you like, meaning if you like Maples or Libertads, then collect some for your collection, but not as an investment. When it comes to stacking silver, the liquidity of American Silver Eagles can't be beat in my book.

 

The two coin shops I go to charge between 14x and 15x face value on the 90%. I use this as my baseline while scouring eBay; if I can win an auction at or below that price including shipping, I'm happy. If I win an auction barely above that baseline, I have to factor in 3 gallons of gas round trip and any excess shopping we do near the LCS on top of what I would have spent at the LCS in order for me to be satisfied. I do still go to the LCS at least once a month to give them some business and just chat. All this being said, I noticed most good auctions end in the morning to evening, hardly any good ones late at night, and I have won several dime lots below spot. Ask the sellers if they combine shipping and check their other items to offset shipping costs. And as someone else said above, it gets addicting...

Edit: I also use the coin calculator app or something of the sort that calculates how much each coin is worth intrinsically.

 

Competition is fierce among the big bullion dealers. Today, Provident quotes 12.89 times face for $100 face value in 90%, postpaid and insured. Don't know about sales tax.

If you are 100% ASE's, and you want to buy something cheap, what do you do? By the way, I figure my holding period to be 5 to 8 years, if I live that long. I started in June 2010, by making 3 consignments to Stack's, and using the proceeds to buy silver. I'm around 10% gold, Eagles and Maple Leafs.

Think I'll ignore FryDaddy JUNIOR.

 

no one cares if it's a 1 ounce silver bar or an ASE. it's an ounce of silver.
if you're edited, then you should just put money in your bunker.

 

Doug has it right.
PM's preserve the value of your investment. Commodities rise when stocks fall. With commodities, you have something, not a piece of paper and a promise.
Silver has been around as something of value for thousands of years, across all cultures. Enron stock, anyone? Or maybe you can buy one of those $100 trillion dollar bills from Zimbabwe off of Ebay for $20? Fiat money is so valuable!
It does not take an end of the world scenario for PM's to go up. Yes, they are down in the short term, but down from fantastic highs. Back when our money was made from gold and silver, a $20 gold piece was 90% gold and the gold was only worth $18. Now its $1200 an ounce. Actual circulating coins have numismatic value above that. Silver dollars had 90 cents worth of silver in them. How much for a VF common date Morgan off of Ebay now?
There are many investments out there, PM's one of them.

 

I've kept it simple. I purchase from a national company at .99 over spot and free shipping for purchases over $100. No complaints here, each round, bar or any other piece I've gotten is clean, very happy.

 

PMs may certainly be an investment (for experienced speculators, playing a short term trend) but almost no one here - especially the emotionally-invested types - sounds capable/competent to swing that successfully. Best avoid that delusion, altogether. The litmus test: if you cannot guess the year end price range of Ag within a dollar or so, you're out of that league.

For almost everyone else, Silver is a poor "investment" in the classical, traditional and modern sense of the word: there's no income dividend nor yield - no capital appreciation either. Those here who point out that Silver is a hedge or deep insurance policy against a catastrophic future scenario are better understanding and prepared.

You wouldn't properly call a stockpile of storm batteries an "investment" either: it's a prudent set-aside, the "savings" portion of your total asset portfolio. For that, you buy on discount cautiously.

 

Sounds reasonable. I would never trade in-and-out of silver, I bought for the long term. If I only break even, in terms of purchasing power, I'm satisfied. The average household has ALL its assets and income streams tied to paper dollars -- homes, Treasuries, farmland, stocks, antiques and collectibles -- sell any of them in an emergency, and you get paid in paper dollars.

You've put all your eggs in one basket. Pensions and bonds and annuities, the income all filters down as little electronic blips to your account; you don't even get to see crisp new bills. Your entire future is tied to paper dollars, risk-on.

With interest rates from banks and Treasury securities the lowest in a generation, few people are concerned about the opportunity costs of owning bullion, as in "Wow, I could be earning 0.6% with those bucks in a Money Market fund!"

It's the elderly who suffer most from the current situation. Their income has been decimated by these low interest rates, and this is why consumer spending, the fundamental engine of our economy, is flat, in a no-growth mode.

Those of you in Coin Talk who continually buy nice coins, you are protecting your net worth better than, say, 90% of the general population. The only difference between your numismatic investments and my bullion hedging -- I have greater liquidity in an emergency. The satisfaction of owning coins makes up for this.

 

If I were to buy silver coins solely for their silver bullion value I would stick with 90% silver coins. Good luck convincing someone who is not into coins how much silver those nickels have. Likewise on the 40% Kennedy.

 

Be honest littlehugger, how has that worked out for you? Not so well huh, even though all the stackers say how good they are doing. It is just not true. Think there may be a reason for that? Yeah you bet there is. Sure PM has some mighty swings and if someone was born under a special star or something, then just MAYBE, but for everyone else, it works out just about how it has worked out for you.

 

beef, you get it!

And even worse, convincing someone those bars and ingots are silver to begin with; and who's going to "make change" for them, the most illiquid of all the PMs?

NOBODY is going to question silver dimes and quarters of the 40's and 50's, plus from the point of view of someone selling or bartering food, booze, or ammo, they're glad to get small denominations too. What's the odds? My guess, 2% in my lifetime. Win or lose, I'll have real money. Right, Junior?

The factor hardly anyone takes into account, if the production and distribution of prescription drugs is severely affected, some of us are toast, PMs or not.

As a cancer and diabetes survivor, two weeks without meds and I'm dead, and that last week is no fun...

 

A couple participants in this thread should get together and make their own thread talking about how anybody that buys PMs is a moron. They spend a little too much of their time patting themselves on their back with the belief they're the smartest one in the room.

 

Payday in Zimbabwe, 5 years ago; bad news for pickpockets. If three dudes corner you in an alley, they steal the wheelbarrow, not the money.