Discussion in 'Bullion Investing' started by goldcollector, Apr 17, 2017.

  1. goldcollector

    goldcollector Member

    I see a lot of bad advice on this board but by far the worst piece of advice I see is one I see over and over again. It goes something like this --- GOLD HAS BEEN BASHING SILVERS SKULL IN SO BUY SILVER.

    Ok ok they say the GSR has gotten really high so you should buy silver wait for the GSR to "come down" and sell it for gold.

    This is just really really bad advice. First in the real world ur gonna be paying premium when you buy the silver, then your gonna get under spot when you sell, then youre gonna pay premium to buy the gold. You would likely need a GSR OF 55 just to break even. The GSR is 68.93 as I write this and THE GSR WILL NEVER FALL TO 55 EVER AGAIN. Now yes here in internetville everyone buys their silver under spot and sells it for a massive premium. People have been saying buy silver since the GSR was 40 they have been 100% wrong but they always make a profit. In the real world things dont work like that. You try playing the GSR youre gonna get soaked in the real world.especially when the GSR goes from 40 to 70 ur gonna get smashed.

    What you need to do is buy what you want to buy whether that be gold or silver but dont believe the false stories on here that youre gonna end up with more gold by buying silver first. It doesnt even make sense to assume the GSR is gonna fall simply because it does nothing but increase. The GSR is 68.93 right now I will bump this periodically. I GUARANTEE you the GSR wilk never see 55.

    PS for the billions of posters who bought silver last week for $12 an ounce then sold it this week for $33 an ounce then used the money to get extra gold - that has nothing to do with playing the GSR.
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  3. losthomer

    losthomer Active Member

    Never see 55:1 again? I'll take that action. It's been a whole 6 years since it was in the 30s.
  4. goldcollector

    goldcollector Member

    Yeah thats quite a horrible 6 years for silver losing over 60 % of its value and the GSR more than doubling. They were giving the same advice back then saying buy silver and switch over to gold when it returned to its historic 16. How did that advice work out ?

    Most now realize that 16 is gone forever. They just dont yet realize 55 is as well. Right now at 68 or 69 there are millions if not billions of ounces on dealer countertops they cant sell and virtually no gold going unsold. In a few years when the GSR is 95 or 100 the idea of going back to 55 will be a forgotten dream and the silver crowd will be promising that it will soon return to 80.

    If you want silver buy it but dont delude yourself into thinking your tricking the system or doing something brilliant to get free gold in the long run. Despite what the internet storytellers claim thats just a way to guarantee that you lose in the long run. Only in internetville can you buy silver, watch the spot price drop 60% +, watch the GSR double, and still make a massive profit.
    Last edited: Apr 18, 2017
  5. HawkeEye

    HawkeEye 1881-O VAMmer Supporter

    For years I followed the ratio and it bounced around 60:1, which I think might be where is settles. But even that recent plateau is tentative. The Platinum/Gold ratio was 1.1:1 during that same period and I am not sure we will see that again. People seem to forget that these ratios can change/correct in two ways. Gold can fall instead of silver rising. To believe you will make it back to 60:1 then gold could correct to $1,110; 55:1 would be $1,017. Thinking you are intelligent enough to know the direction of metals is dangerous when you realize even the dealers don't know and hedge their purchases to guard against price movement.

    Buying high quality collectibles where the metal value is a small component might just be the safest bet. An MS65 1881-O is about $1,200 making the silver composition only 1.5% and almost irrelevant. At the MS66 level it is only 0.001% and completely irrelevant.

    I have another thread going in the bullion forum talking about the Mint bullion sales and how they suddenly started declining since January until this month they have gone to near zero. So something is up, but what?
    Last edited: Apr 18, 2017
  6. sakata

    sakata Devil's Advocate

    Goldie, if you want to be credible you have to realize that excessive use of the word never just labels you as another of those gold nuts whose opinion is about as useful as the silver stackers who say the price is going to $150.

    Anything is possible, some of them even probable. Silver may go to $150, but if it does an ounce will probably still buy the same as it does now. The GSR may drop below 55, it may even drop to 30 but I consider that unlikely, and it may go to 100. The point is that it is all irrelevant.

    Let people have plans to trade their silver for gold or vice versa at certain thresholds without attempting to ridicule them. If they are right and you are wrong then you have made a fool of yourself. But if you are right and they are wrong then no one has lost anything: they still have their silver and it has risen along with gold and will still buy whatever they need. And almost certainly it will buy more than will the FRNs which people would have if they did not hang onto their PMs.

    You are giving gold bugs an even worse reputation than silver bugs. Neither deserve it.
    Last edited: Apr 18, 2017
  7. David Setree Rare Coins

    David Setree Rare Coins Well-Known Member

    Some things go up.

    Some things go down.

    Rarely at the same time though.
    SmokinJoe, DEA and Santinidollar like this.
  8. goldcollector

    goldcollector Member

    Nice post hawkeye. I guess thats really what I was trying to say. There is no way to know where the GSR will end so if you want silver buy silver. "Playing the GSR" is just lame internet nonsense regardless which way ur playing it.
    LA_Geezer likes this.
  9. goldcollector

    goldcollector Member

    Sakata thanks for your feedback. I think you are still angry about my comment to your gsr swap. Look if you can get crazy prices to swap then do it. If I had someone willing to pay me $2000 for my gold and let me swap for silver at $5 an ounce I would do it. Still doesnt make it good advice. Everyone else has to pay premiums which means guessing on the GSR direction is dumb and they have been preaching the buy silver now swap for gold later story forever. They have been 100% wrong. Newbies coming here need to hear the truth not the silver nonsense. Dont be so easily triggered.
    Last edited: Apr 19, 2017
    Cheech9712 likes this.
  10. sakata

    sakata Devil's Advocate

    That's the most egotistical response I have seen in ages. I hadn't even thought about your comment about my post. It is not all about you. Everyone needs to be exposed to idea on both side of a discussion. Saying that any points you disagree with are dumb merely indicates that nothing you say has much credibility.

    I will not try to present a reasonable response to any more of your posts as it clearly is not worth it.
    MerlinAurelius likes this.
  11. Bman33

    Bman33 Well-Known Member

    Here's a scenario that come up for me in regards to your ideas here. I was at a coin show three weeks ago. I have been wanting an 1885 CC Morgan in MS65 PCGS. I found it for $1,150. which is a little on the high side but still in the realm of me purchasing it. I ended up looking at it several times under a loupe, posted pictures of it here and people that responded said over graded do not buy. I followed their advice. Instead I bought my first Gold Buffalo for $1,315. I feel much more comfortable with my Gold Buffalo knowing I can sell it for $10-$20 over spot. If I bought the 85 CC I would have been hard pressed to sell it for $900 to a dealer and I don't know where I could find a consumer to buy it. The point is that even if the 85 CC was a true MS65 I don't think coins are equivalent to bullion as far as investments go. Finding a buyer or going to a dealer are not fun to try and get more money than what you paid for. I've heard it said on this message board to not expect to make money off coins if you are a collector. If you are a dealer or have access to wholesale pricing on coins or you score someone's collection at a low price then that is a different story. Not trying to shoot you down, maybe you have a system that works. I was just giving you my opinion.
    buckeye73 and Cheech9712 like this.
  12. HawkeEye

    HawkeEye 1881-O VAMmer Supporter

    My comment was only one of a math exercise with comments about coupling metal values and collectibles. Everyone has a different reason and logic for buying. If you believe gold is more solid then the gold buffalo is certainly a better bet because the high intrinsic value in the coin puts a floor under the value. On the other hand if you are truly collecting something like Morgans then the intrinsic value is inconsequential and the higher the grade the less the intrinsic value matters.

    I keep very detailed records and the intrinsic value of all silver in my collection is about 10% of the market value. For gold coins the intrinsic is much higher as a percent (as you pointed out). But which is safer is anyone's guess and every coin and collector is different with different goals.

    My observation has been that the long term (30+ years), big wins in coins tend to be rare, high quality coins and whether or not they are gold or silver is secondary to the collectibility. If the medal content were an issue then no pennies, nickels or dimes would ever be a real home run, and we know that is not true.

    But that is my observation and what I believe to be true. Your goals, experience, and collecting needs may be different which is what makes this a fun hobby. It can fit all of us.
    Cheech9712 and Bman33 like this.
  13. Bman33

    Bman33 Well-Known Member

    I guess then since this is the Bullion section we would need to make a list of coins that are the best investment vehicles. Is that possible without massive speculation? Anything that could compare to investing in gold or silver?
  14. HawkeEye

    HawkeEye 1881-O VAMmer Supporter

    One thing I have done is look at the values of higher grade coins and how much their auction value fluctuated with bullion prices. There is a relationship, but not a tight one. Learning about both bullion and collecting is a valuable exercise, especially for new and young collectors. There are times and places for both and I buy both for that reason. Good luck with your quest, it is different for each of us.
  15. goldcollector

    goldcollector Member

    Thank you. You are way too easily triggered anyway.
  16. HawkeEye

    HawkeEye 1881-O VAMmer Supporter

    Like stocks you need to be a long term investor to get a payoff outside of bullion. Here is an exercise I did for my own education. Take any Morgan Dollar (or any coin series) and look at the population report at the TPG for that date/mint. For each there is a break point where the number of graded coins for a grade drops dramatically. At a macro level, below that grade you are collecting, and above that grade you are investing.

    For many modern gold and silver the break point is unfortunately at grade 70 and this only works if the issue is smaller than normal. But for nineteenth century coins it can be any grade based on Mint production, circulation, retention by collectors, etc. But focus and becoming an expert on something also provides some protection because you have superior knowledge of the subject matter.

    I am sure others have different ideas, and there are a lot of ways to crack this nut. Sticking to bullion is one way but it also puts you at the mercy of the metals market which none of us can really influence. Good luck with whatever road you take.
    Stevearino, sakata and Bman33 like this.
  17. baseball21

    baseball21 Well-Known Member

    This is just flat out not true. Silver buys nothing, neither does gold. Both have to be converted back into money to make a sale. If you want to spend ASEs at face value sure you can buy things with them otherwise you have to have them converted and the idea that no matter what happens they would buy more than the money you would have had is just false.

    Is there a way to play metals for the investment angle absolutely, this idea that it is fool proof though is just wrong
  18. Santinidollar

    Santinidollar Supporter! Supporter

    All I can add is make sure your PMs are only part of your portfolio. Never put all your eggs in one basket.
    SchwaVB57 likes this.
  19. sakata

    sakata Devil's Advocate

    What if you don't eat eggs :D
  20. Santinidollar

    Santinidollar Supporter! Supporter

    Then, hope the price goes up!
    sakata likes this.
  21. goldcollector

    goldcollector Member

    Yesterday silver down, gold, platinum, and palladium all up 1 % - 3%. Silver down.

    This morning silver down, everything else up.

    When this thread started GSR 68.93 Now 72.02.
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