The gold and silver market are down and people are trying to recover...

I posted this video clip on Youtube about how I feel about some of the pricing in the market lately in regards to silver and gold. This video was posted right before Bernanke made his statements. I may get some negative feedback from some after seeing the clip, but I am pretty straight forward, and I bet others will agree as well. All feedback is welcome.

http://www.youtube.com/watch?v=rFmpaCRf4VM

 

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two post and two links to youtube videos. ill pass

 

They are my videos I made for people who enjoy talking about silver. The one is a silver stacking video, shows the new bullion I just got, this video is talking about ebay and some dealers who are trying to recover from the drop in PMs. They are not long videos.

 

I think we can all agree that EBAY is not the cheapest place to buy bullion. Margins are thin on bullion so it is unrealistic to think you can get a good price after the seller has to turn over the 10-12% juice to the 'Bay. So while prices are high, I think you are wasting your time trying to convince the EBAY seller they are priced too high. Just move on to the other sellers who don't have this handicap

Mike

 

Ebay is pretty efficient. Silver Eagles are selling for about $27 there now.
Provident has them for $24.25.
If you take out the 10% fees, the ebay seller is getting the retail price of a Silver Eagle.
But that $27 includes free shipping (an additional $1.69 expense for the seller to ship one Eagle with tracking)

If an ebay seller wants to ask more, I have no problem with them doing that.

If you have a problem with the prices, then why don't you suggest a solution other than taking their coins off the market? Do the math and then explain how an ebay seller could offer low low premiums on bullion.

 

Here are a couple, JMbullion is selling them for a cheaper price and the shipping is not bad, also here is a coupon code for $5 off TSBNET
Scottsdale silver is another, free shipping on orders over $500 or the shipping is only $6.50 under $500. Also here is a coupon code for $5.00 off too SS5off

Oh yea for wholesale purchases (large bulk purchases)
http://www.meritgold.com/product-detail/silver/bullion/silver-american-eagle-1-oz

 

the sound is bad on the vid- I may watch and even sub if the sound were better

 

I just played it, no issue on this side ??? that's weird.

 

Absolutely. It's undisputable that ebay prices are high on Silver Eagles and the like. I agree with you.

But I don't agree with your premise that ebay sellers who sell for $27 or $28 are somehow getting more than those retailers. If they sell for $27, they are getting less than $23 after fees and shipping.

 

I think in general, a lot of the dealers are trying to recover from major losses, think about it... Most dealers bought on the $30 and above range and now silver is barely at $20 going into next week. Some dealers are still trying to sell for $27 or above, $7 over spot, that is high. I understand the costs of ebay since I am a seller as well. I stopped selling for awhile knowing that I would take a loss if I sold after buying at a higher rate. Thats my point if you watch the video. Some guys are still trying to make back some of that money even with the drop in PMs

 

First, a good dealer should hedge his positions. He should always have downside protection so he is not in this position. Second, in a falling market dealers have ALWAYS tried to get a higher premium. Sometimes it works, like in 2008 they kept their premiums up and the PM market came back. Sometimes it backfires like for those dealers in the last month or two keeping their premiums up but the market kept falling. They would have been better off selling everything they had ASAP.

Knowledge is your best protection. Know the spot market price, know what premiums are traditionally charged, and do not be one of those who get hosed by too high a premium.

 

So how are dealers supposed to make money if they stop selling?
Like medoraman said, if the price continues to fall and the dealer doesn't sold, he's got bigger losses.
What you advise is gambling.

 

Exactly. What many people do not "get" is they lost the money the instant the market dropped. If the market drops from $30 to $25, then they sell based upon $25 market, they do not lose when they SELL, they lost when the market dropped. Its called "mark to market", revaluing inventory on market values as opposed to purchase cost. This is why more astute dealers will hedge their inventory so they do not incur this risk.

Sometimes like 2008 the market will bounce back. Other times it will be like the early 80's and just slowly keep dropping. Lots of dealers went out of business in the 80's since they kept "not wanting to take a loss" and held their silver from the low thirties all the way down to single digits, not selling anything along the way. I distinctly remember a dealer in about 1984 pricing junk morgans at $25 at a coin show. He had the same pile like 12 shows in a row. I asked him once why so much, since by then BU rolls were only going for $15 each, and he said "he had that much in them". I do not think that pile of his ever declined, and eventually he was no longer at the coin show.

 

I've decided to invest in silver today. I think it is time to move into Silver ETF's.

 

Unfortunately for most of us the world does not conform to our will or viewpoint all the time. My advice learn to roll with it.

 

Exactly all selling ever does is lock in that price of an item and takeaway your exposure up or down to market changes. I can't imagine how many people have probably rode various investments into the ground reciting "It isn't a loss until I sell". Strangely you never hear people telling you "It isn't a profit until you sell" which in my mind may be truer. The stock market has a saying that sort of sums this up "Bulls make money, Bears make money, Hogs get slaughtered". Also people seem to not understand money not lost is just as valuable as money made.

 

A simple way to put it is not to put all you eggs into one basket. A smart dealer will have other means to make money, if he has all his money invested in the bullion market, then yes it is gambling, but think on the other side of the coin, its not realistic that I should have to bail out these dealers by paying those high prices, I don't care to pay those premiums just so that dealer can get out without major losses.

There is way to much competition out there, the dealer has a tough choice to make. Sell at a loss or hold on and hope that the market recovers sooner then later if he has nothing else to fall back on. I may **** off a few people, but I don't think I should have to pay high prices because people did not know when to get out and not take the losses they did.

 

Lol, I cannot even get my wife or kids to conform to my will, let alone the world.

 

This looks fishy! First of all, most dealers can not buy eagles for spot, how would anyone make a profit selling at spot. The person selling them would make no profit, makes no sense, clicked on the link, also looks like the site is hand made. Buyer beware in my opinion.