Super high premium silver bullion. What's your plan?

Discussion in 'Bullion Investing' started by Jason.A, Jul 15, 2017.

  1. Jason.A

    Jason.A Active Member

    My intention of this thread is not to criticize. It is to ask you what your plan and strategy is.

    Many people are buying super high premium silver bullion that is marketed as semi numismatic coins. But at the end of the day, they are basically still just bullion.

    What is your exit strategy for selling these? Do you believe 10, 20, 30 years from now people will be interested in buying them from you for a premium over spot? If you had to turn around later this year and sell them because you were in financial difficulty, would you be able to recapture the premium you paid?

    Let's look at spot today, on 7/14/17
    Silver spot: $16
    Gold spot: $1232

    Let's look at a few examples of silver and gold coins:

    Spider Man silver Tuvalu: $28 per coin. You are paying 75% over spot
    South Korean Chiwoo $40 per coin: You are paying 150% over spot

    vs

    American Silver Eagle $19.50 per coin You are paying 21% over spot
    1 ounce Gold Eagle $1300.00 per coin You are paying 5% over spot


    My comparison here is meant to illustrate 2 things:

    1. If you are spending a set amount of money (say, $1300) your best buy to pay the lowest premium is a single ounce of gold.

    2. If you buy silver, your best buy is something like an American Silver Eagle, especially if you buy $1300 worth all at ounce in 3-4 worth of tubes. Then, the premium dips under 21% over spot for your $1300 worth of silver Eagles.

    However, if you were to buy a hodge podge of Chiwoo, silver Krugerrands, Spiderman, Darth Vader, and other semi numismatic silver for 50%-200% over spot, how do you plan to ever make your money back?
     
    Last edited: Jul 15, 2017
    silversiren and Johndoe2000$ like this.
  2. Avatar

    Guest User Guest



    to hide this ad.
  3. Kentucky

    Kentucky Supporter! Supporter

    I have quite a few ASEs along with some Maple Leafs, Britanias, etc. I also have a few of the 2 ounce rounds made as "art" rounds. The ASEs etc. will always have the silver value, but might not gain much in collectability. The art rounds will always have the silver value, but will have an appeal to people who like decorative things. The prediction of what things will have value is as much of an art as the production of these things. I don't think I will make anything on the art rounds, but you never can tell...I even buy lottery tickets sometimes. :)
     
  4. silversiren

    silversiren Active Member

    I have avoided all the "premium" coins you mentioned except the Chiwoos, because we got in early with the intention of flipping them (so far so good) and they were cheaper than the newer releases are going for now, even though spot is lower. For the most part we refuse to play the high premium game in 2017, the demand is simply too low to warrant paying crazy premiums, dealers leave less meat on the bone by raising premiums, and in the after market (ebay etc) there's a lot of people racing to the bottom to sell the "hot" coin of the month. We've dialed our purchases way back for now.
     
    SLACKACTION likes this.
  5. Santinidollar

    Santinidollar Supporter! Supporter

    Except for the silver and gold eagles, I consider the other coins to be collectible coins, and not bullion buys. They will require demand from collectors -- and not bullion investors -- to maintain their premiums. "Semi-numismstic" doesn't exist -- except in the mind of the marketer, the same ones who push graded/slabbed bullion coins.
     
  6. longnine009

    longnine009 Hammer of the gods

    Maybe some stackers are mostly collectors. Maybe they're ready to vomit on ASEs they've been looking at for the last 30 years.
    Maybe they want to look at something different.
    Maybe they don't care what the premiums are as long as they like it.
    Maybe no one else should care either since they're spending their own money. Maybe-good luck with that.
    Maybe they believe "normal" coin collecting, prices and TPGs have gone full retard. Maybe spending an extra $10 for a slabbed medal struck 5 five minutes ago is only going half retard. Maybe even quarter retard. Who knows. Retard quantification is subjective and quantifiers may have differing opinions.
    Maybe they don't see coin collectors as fitting in too well with "civilized society." Maybe they extend that to include not giving a rat's behind about what other collectors think they should collect.
     
    Last edited: Jul 15, 2017
    Kentucky, PeacePeople and SLACKACTION like this.
  7. silversiren

    silversiren Active Member

    "Maybe" if someone is going to post up a long list of "ifs" they should "Maybe", just "maybe" include an actual answer to the OP's question about exit strategy in there somewhere..."Maybe" :p
     
  8. SLACKACTION

    SLACKACTION UNION REPRESENTATIVE

    Pickie Pickie nothing wrong with what he said Silversiren... just stating his list of MAYBES.... may not captures Premiums pd....but in crisis you get what you get and you don't throw a fit........ that's what my granddaughter told me when I scratch off another losing Missouri Lottery ticket............ EXIT strategy sell to coin shop, friends, ebay, here on sale forum... ask for advice on here their very very knowledgeable here... be careful some of them are intelligent as heck but no sense of humor and common sense seems to be a thing of the past......
     
  9. Jason.A

    Jason.A Active Member

    Here's what I am going to share from my own experience. Here is what concerns me personally.

    I think that a lot people view silver as a more affordable investment than gold. Clearly, at $16 an ounce vs $1230 it is. Having said that, I personally, (and I would suspect many other bullion buyers too) came to buy bullion first as investors and secondarily as coin collectors. There is a wide variety of very beautiful silver bullion coins that we can afford much more so than we can afford gold bullion. What started as investing is turning into collecting the wide variety of silver available.

    So, we have been roped in or tricked into this investment game. Our initial aim was to stash away savings by buying silver bullion, but now we're willing to pay higher and higher premiums for collector grade silver. We see a really pretty looking South Korean Chiwoo coin for 75% over spot. That 75% is insane for bullion, but that 75% in real dollars actually represents only an extra $12. So, we tell ourselves "I like this coin. What's an extra $12? That's lunch money" And we buy it. And we buy every piece of silver like that we like, believing in the back of our minds "I can easily resell this some day to a coin shop, ebay, or on this forum." Now, the small amount of money we used to spend each month buying bullion has turned into buying less and less silver with higher and higher premiums because we find the coins pretty. Investors don't care about "pretty." Collectors care about "pretty."

    So, my fear is that years from now no one is going to care about this made up category of "semi numismatic" silver bullion. Few will care that we paid 75% over spot for a South Korean ounce of silver. And a whole lot of us are going to be stuck with silver bullion we paid nearly double to obtain. When we turn around to unload our investment, many people will lose their shirts and get only near spot for their stuff.

    The silver market seems to be just one giant racket because we have convinced ourselves to buy overpriced "semi numismatic" coins thinking we're making a smart investment, but really we're just collectors.
     
    Last edited: Jul 15, 2017
    Santinidollar and silversiren like this.
  10. silversiren

    silversiren Active Member

    Pickle Pickle Pumpernickel if you are insinuating that it was wrong of me to point out that in all that gibber gabber there was no answer to the question at hand. Well then . . . that wouldn't be the least bit picky of YOU now would it SLACKACTION? :rolleyes:
     
    Jason.A likes this.
  11. Johndoe2000$

    Johndoe2000$ RE-MEMBER

    There are silver rounds, usually purchased near spot. Then there is the monetized bullion which can be purchased for near spot to a high premium, such as the Krugerand, or Chiwoos etc... Then there are what I like to call art rounds, usually lower mintages which command very high premiums. Those looking only for investment purposes should pass on these. The future sell values are uncertain, and if sold in a rush (coin/pawn shop) would most certainly net the lowest return. These high premium "art rounds" need to be sold as intended, to folks that are willing to pay the higher premium. I do have some of this type, The Destiny series for example. Of course some are made with different finishes, higher relief, etc.. All boils down to what you want... silver rounds, Eagles, Britannias, Maples, etc... are bullion items to me (the regular edition ones anyway) and can be bought/sold for near spot prices. The art rounds are collectors pieces, and should not be labeled as part of bullion stacking at all. IMO. Ultimately, your money, your decision.
     
    silversiren likes this.
  12. PeacePeople

    PeacePeople Wall St and stocks, where it's at

    I wonder why others believe they need to educate the world why their opinion is right?

    There isn't anything wrong with buying something you like, even if you do overpay for it in somebody's opinion. From what I've seen, many of those high premium rounds and coins do maintain the premiums while others go up or down. That's not really the point if you bought it as part of your collection or just want one.

    One thing that has become abundantly clear to me is everyone that buys precious metals believes they are a stacker, but not most are in the traditional sense. There seem to be a lot of collectors, speculators, stackers and many that are some mix of a couple or all of them. There isn't anything wrong with that.

    My guess is that many that buy these higher premium coins believe they're going to appreciate and they'll get their money back or even some profit. For them to do that, they'll need to sell back into the collector market and the demand for them will need to increase, raising the premium. Whether that works out for them or not remains to be seen. By buying only ASE, generic or other low premium bullion, you still have a small chance at getting a collectible demand that raises the premium, but you're more likely tying yourself to spot.

    In the end, people make choices, some of them are bad, some of them are good and some of them might not be choices at all, but who are we to judge them, try to protect them, tell them our opinions and methods are better or any other thing we believe.
     
  13. Jason.A

    Jason.A Active Member

    Definitely. But my concern is many people lack an understanding of those premium differences and that many buyers are relatively new and may not be aware. I know I made a few mistakes.

    I hope people are aware that high premium items are unlikely to be resold for anywhere near that same premium.
     
    silversiren likes this.
  14. PeacePeople

    PeacePeople Wall St and stocks, where it's at

    Everyone makes mistakes, it usually how we learn.

    Who are you to to tell them what to buy and what not to buy? To use your words, what are your credentials?
     
  15. Jason.A

    Jason.A Active Member

    Have I told people what to buy? Nope. Re-read the topic, please.
     
    silversiren likes this.
  16. longnine009

    longnine009 Hammer of the gods

    Maybe just maybe when your done playing strategic genius with yourself, you can point to "the long list of 'ifs''' in my post. Or better yet, stop mis-quoting me.

    Maybe stackers who buy what they like actually know that they are paying a preminum. Maybe they actually check spot prices. Maybe they acually have a calculator on their cellphone and can subtract 15.98 from 40 to see how much premium they're paying. Maybe, just maybe they can even divide 15.98 into 40 and come up with a 2.5x spot thingy.

    Maybe your wondering why they still persist in buying way over spot. Maybe your wondering why they don't use the brilliant idea of buying bullion at spot and formulating an exit plan that no one else has ever thought of before.

    Maybe whimsy can't be quantified. Maybe the whimsy of future collectors cannot be quantified. Maybe communications, technology, and more (or less) individualism will have different affects on
    whimsy in the future. Maybe they'll confiscate gold and silver coins in the future except for collector coins. Maybe rounds that had high premiums at issue will then have even higher after- market preminums while ASEs will be called in. Do you feel lucky? Yeah I know--eyeroll, because, like, dude, everything in the future will be totally normal. Nothing will be butt backwards.

    In long, maybe there are too many variables to have an exit strategy for anything stackers may view as a collector coin/medal/round.
     
    Last edited: Jul 15, 2017
  17. Clawcoins

    Clawcoins Well-Known Member

    potential exit strategies for my ASEs ....

    #1 if I'm dead, I really don't care. But making a casket (or just a corner of it) out of melted poured silver sounds like a good idea ...
    #2 if spot silver goes up to $30+, I'm way profitable anyways and would consider just dumping them at a LCS.
    #3 if spot silver is where it's at today +/- there are higher profit locations to sell. It all depends how quickly you want the cash. There is eBay which you can get a premium for certain years of ASEs (and I have all years, multiples of). There's facebook buyers who seem to over pay for ASEs, but it's cyclical.

    It all comes down to:
    1 - how quickly you want to exit
    2 - how the economy is ... is there a consistent good demand, or flat or down demand
    3 - how much you expect to get out of your bullion coins (for me strictly ASEs).

    last time silver was above $30 I didn't sell. I didn't need the cash. And PMs are a % of my overall portfolio. So if I sold the ASEs it would break my portfolio % ... so I kept them. I had bought them starting at $7 ... so I was profitable, but kept them as it made no sense in my portfolio strategy to sell.
     
    SLACKACTION likes this.
  18. silversiren

    silversiren Active Member

    *STRAWMAN ARGUMENT ALERT* *CHIP ON SHOULDER ALERT* :wacky:
    Can you please be a dear and quote where I misquoted you? I'm not privy to the duration of time you play strategic genius with yourself, but as for me playing strategic genius with myself is a never ending endeavor, rendering the rest of your "insightful post" moot. Thanks for playing, you can pick up your consolation price at the door.:kiss:
     
  19. longnine009

    longnine009 Hammer of the gods

    I did quote it. Look for the little tick marks at the top. Or get someone to sing it to you in a nursery ryme if your having reading issues.

    Keep the consolation prize. It's probably just a shiny fender that you mistook for a rare Chinese string coin anyway.
     
  20. silversiren

    silversiren Active Member

    Actually what you quoted was an out of context snippet, as a quick review would reveal.

    LOL at the consolation prize reply, that was a good one!
     
  21. Johndoe2000$

    Johndoe2000$ RE-MEMBER

    Actually, the statement was "consolation PRICE" not "PRIZE" and hope the consolation "PRICE" was close to spot. ;)
     
    silversiren likes this.
Draft saved Draft deleted

Share This Page