Wow! You raised some excellent points Willie. Ok, I'll try my best. 1) You are 100% correct that if silver suddenly skyrockets, silver coins will be sold at a percentage under melt. Back in 1979-80 this percentage was as high as 40%. The reason for this discount is simple, it can take several weeks for the coins to be melted. So, the purchaser pays under melt so that if silver tanks while the coins are being melted, he won't stand to lose as much. 2) I would agree that e-Bay is the perfect setting to sell these coins. First off, you don't need to accumulate $1000 face in order to sell your silver profitably. As for $1000 bags of 40% Kennedy's, they don't come up real often due to the currently depressed price of silver. So, unfortunately, there is no accurate way to tell how these bags will perform on e-Bay in a strong silver market, as there hasn't been a strong silver market while e-Bay has existed! 3) Obviously everyone who buys silver hopes that it goes through the roof. However, I don't see a problem with buying old coins hoping for a rise in the POS, but not worrying if silver continues to underperform. I enjoy collecting coins, and thats why I don't buy silver rounds or bars, but rather silver coins. Would I part with many of these coins if silver hits $30 an ounce? Absolutely! Then I would take my profits and keep on building my collection of early American coppers. I think that this makes perfect sense. If I can get some extra money to buy more coins then why the heck not? And to quote Forrest Gump "thats all I have to say about that."
1. Part of the big reason for the discount from spot in 1980 was that the silver price went parabolic and spiked up to $50. Buyers were afraid the price might drop a lot before they could get rid of the silver. Smelters were somewhat overwhelmed by the quantities put on the market so there was about a 2 week delay between when a dealer could buy the silver and when he could sell it. But a sustained and less erratic high price would make it easier to sell at or close to spot. Every market is a bit different in this respect. 2. Ebay is the benchmark. 3. Numismatic coins always sell for many multiples of junk silver. They have been an excellent inflation hedge and probably will continue to be. But you have to know what you are doing and not overpay. This involves more than just knowing current auction prices. Buying very high quality coins in periods of price weakness, not at peak prices, seems the safest course if making money is the goal. All of this is opinion. Don't bank on it.
I just ran some numbers. Right now, we consider buying 90% coins at about 5 times face value a fair deal. If silver actually did hit $50 on ounce, that ratio would jump to about 35 times face. Can you imagine a roll of circulated Roosie's selling for $175?? Wouldn't that be something.
We may look back on this someday and think, 'wow, I used to be able to buy whole rolls of silver dimes for only $25 on eBay all day long....' These ARE the 'good ol' days...' If the POS goes the other direction, we can get even more than now. I see it as a win-win situation. I have $44 to go 'treasure hunting' with on eBay this weekend. I'll post if I can get a good deal....Even though I pay spot prices for silver, I get some VERY collectible stuff along the way. This is how I grow my collection AND fill my silver 'box', (just a cardboard box that all of my 'junk' coins go into). Everything else goes into my 'preserve at all costs' collection.
I just got 100 "Unsearched BU Silver Roosevelt Dimes" (yeah right) for 40 bucks. That's still below melt so i don't care if they are BU.
I only mentioned a $1,000 gross sale (not face) hoping someone would walk us through the costs to sell on ebay in determining what we could actually put in our pocket from such a sale. Then, perhaps we can compare that to the minimum purchase quantity in selling to APMEX, which can be calculated daily online after adding shipping charges. Willie
Willie, for someone without a respectable eBay history (at least 12 months on eBay and a positive rating of 100% over ar least 100 transactions) It would take about $225 face Value to get $1000 on eBay (bid price plus shipping). The total cost would amount to a MINIMUM of $28.12 in listing and closing fees PLUS $29.30 in Paypal fees PLUS at least $25 in postage and packing expenses. That comes to about $82.50 in total expenses for a sale of $1000. edit:The numbers I quoted assumed that you had at least some positive feedback and NO negative/neutral feedback on your eBay account, that you live in the continental US, that your buyer lives in the continental US, That you only use one picture in you eBay listing, that you have a starting price of less than $1 for your auction, that you don't set a reserve on your auction, that you have a Premiere Paypal account (one that accepts credit card payments), that you can package the coins for shipping for less than $2, and that you ship USPS parcel post.
Thanks Cave_Troll, I figured if anyone could, and would, give us some eBay hypothetical transaction details to ponder, it was you. I certainly note your emphasis on the many variables. And, again, best of luck on your purchase from the banker's grandmother. Willie
It seems strange that a clad dime in 1965 had greater purchasing power than a silver dime does today. All of the junk silver coins hoarded after the switch to clad are worth less today than they were then...whoever's been holding onto them since the 60's must be losing money, or else I'm lookin' at this the wrong way. I do know that in 1965 a dime would buy 2 candy bars. Today, a silver dime, (worth about $0.50), might get me 1 candy bar. Any thoughts?
You just described one of the reasons why many people regard silver as underpriced to day because of the action of dealers and futures traders.
