Let’s talk silver and investing

Discussion in 'Bullion Investing' started by BMoscato, Mar 25, 2011.

  1. BMoscato

    BMoscato ANA# R-1181086

    Over the years I’ve collected 1oz bars that were fabricated by Engelhard, Credit Suisse and Johnson Matthey. I’ve also collected rounds such as Maples, Libertads, Pandas and various Australian rounds. Obviously, I also collect American Silver Eagles (ASE).

    So, any bullion that is actually minted as a coin has both an intrinsic and a minted face value; this leads bullion minted as silver eagles to command a higher cost of ownership as you will always pay a premium above spot.

    I like ASE’s but are they worth the extra cost to purchase if you’re considering them as a investment in the commodity market and not as a numismatic holding?
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  3. howboutatrade

    howboutatrade Active Member

    As an investment, no they are not worth the premium. As a speculation that the numismatic premium will also increase along with the investment in silver content, sure. But I would never look at the numismatic market as investment...it is a hobby with speculation and trading.
  4. Lon Chaney

    Lon Chaney Well-Known Member

    With ASEs, it's a reliable, trust-able source. You know for a fact that the markings of .999 fine, 1 troy oz. are correct. Same with englehard and such, but not so much with random silver rounds.
    But when it comes to reliable bullion, government issued coins are probably the top.
  5. BMoscato

    BMoscato ANA# R-1181086

    In the same line of thought, bars from Engelhard, Credit Suisse and Johnson Matthey are considered desirable and also command a premium over spot. So, what do you purchase if you want to have the physical metal and not a paper note? Also, if you don’t purchase Maples, ASE’s or the above mentioned bars, how do you know what you’re getting?
  6. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    In my opinion, ASEs will aways command a premium to other forms of silver bullion when you go to resell [but I'm not sure what will happen with some of the Australian and other coins that also have a following]. Some people want the cheapest purchase price. I tend to go for what will be easiest to resell under most circumstances. The bars you mention currently command a premium over spot, but I don't think this was the case a few years ago.
  7. Rono

    Rono Senior Member


    Any of you folks ever drink Scotch? What's the difference between bar whiskey and top shelf call whiskey that justifies the additional cost - the premium, if you will? In some cases it might be the taste, in some it might be the label and in some it might be familiarity. For whatever reason, some folks are willing to pay more for Johnny Walker Black than bar whiskey.

    Same sort of thing applies to silver. There are name brand ingots and coins and there are plain vanilla junk. If you want to sell me a prospector I know what I'm getting. If it's some art round, how do I know what it is - how pure? what weight? ASE's are fungible. That means you can trade them readily near and far. Cripes, Utah's about to make them legal tender for paying your taxes and there was just a wall street bank that will now take gold in exchange for whatever. But note that it's the ASE's and AGE's that are most often included and at coin stores and wherever you might be trying to sell something, Englehards and J/Ms are easy and some art bar from BillyBob's Mint and House of Joy is going to be discounted.

    Getting back to the investing in silver issue, the pure play on the price of bullion is with the least premium in the largest size (or quantity) that is still fungible. Ah, but is the pure play the very best way to play the silver bull market? How about silver mining stocks? That's where the big money was made back in the late 70's. It's where I've made the most this time and I've been riding this bull since '02. I bought a little Silver Wheaton SLW back in '09. It's up 1056%. Wish I had bought more and in all honesty this is the first Home Run I've ever hit. The point is that the leverage is with individual mining stocks, particularly the juniors on down. Before this is over, there will be a lot of serious money made in these issues . . . and a LOT of it will be lost. Most of these junior miners are more pipe dream than reality. That won't matter when this things blows off. This garbage will be selling like hotcakes and be the very hottest thing in the investment world. And when the bull market ends and silver and gold come back down to whatever extent - these miners will go back to $.0.50 a share.

    So, I got super lucky one time and that's great. That's not how I can afford to invest or even speculate to that great a degree. Too much risk to risk that much.

    What I do as both investment, speculation and coin collecting is a combination approach sort of like yours. I'm working a roll set of ASE's, have albums for Leafs and Libertads. Working on the other main countries - pandas, koalas, phillies, etc. Also have started a collection of silver crowns from around the world. Have some 10 oz. englehards, rolls of prospectors, 1 oz. ingots in tubes (englehards). In my 401 I've got CEF, SLV, SIL and SLW. In our taxable acct I've got TGLDX and in wifey's Roth we've got some Fortuna for giggles. I've tried to allocate my gold/silver holdings around the gold/silver ratio.

    The nut is to do what feels good to you, makes you some money and let's you sleep at night. Everything else is rot.


  8. GeorgeM

    GeorgeM Well-Known Member

    Well said.
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