The perennial debate. There's no one right answer, but I read a few posts I can't find now yesterday that put forward the ONLY BARS, no emotional attachment, will sell at the top of the market and be done with it argument. Each person will have to decide for themselves what is right, but consider that in the case of confiscation, that bars are more at risk since they have no official collectible status (yes there are people who collect different bar types) but a set of coins, that are RAM or other will constitute a collectible to the owner and so may be spared such a fate. There are always plusses and minusses in all these things. To see things through one lens is also a liability.
From a dealers perspective, 10oz bars have been outselling 10oz coins on the Gold Stackers website by a factor of about 10 to 1 in the last few days, even though there's about $1.25/oz difference between a poured bar and a Dragon.
For me it is bars. I'm not trading whatsoever. Silver isn't speculation or a hobby for me but wealth preservation. Lowest price to spot means I can squeeze out every last cent I spend on as many ounces as possible, be it gold or silver. Every ounce is a little powerhouse that works to preserve my wealth in an inflating/deflating market. And as you said, this is an economic decision that should be untainted by emotion. So the uglier the silver, the better, provided it is .999 If gold or silver shoot skywards, then those extra ounces are like extra rocket fuel in your tank. Premiums on coins and collectors items are not going to be growing at the same pace when that time comes, if ever. In fact, I think they may actually fall. Can you imagine for example, that Mike Maloney sends out a "sell" signal and an army of stackers begin offloading? How many gold and silver dragons will flood the market at once and what do you think that will do to the premium currently enjoyed by those coins? I think astute stackers should be selling these premium items in the current environment for that bonus fiat which then enables them to get more ounces. Provided of course, your aim is wealth preservation.
I try to keep it simple. Bars = boring core position Coins/Rounds = gives stack a bit more character/diversification (im staying away from numismatics though) When it's time for me to exit, the bars will be the first to go.
I have already stated my detailed reasons often before. Bullion coins with numismatic potential now and when the premiums seem to peak, swap the coins for bars.
I generally advocate ounces over premium as a generalised strategy. The opportunity cost on rising spot going simply for more core ounces will generally outperform collectable premium over the long term, as long as the ounces you buy are easily identifiable and certified representations of what they are. Without naming names, let's take for example 10oz of the current flavour of the month coin vs a 10oz poured bar. The 10oz of the collectable coin will set you back around 800-1000 in the current market. The poured bar, 380 - 400. For the sake of arguement though, let's pick a spot price of $35 per oz. Now shift spot up to $300 per oz. The 'spot' value of your 10oz is $3000. You sell the $380 10oz bar for spot, $3000 - up 790% odd. Your 'coins' are spot value $3000 too, but since you paid $100 per oz, your percentage gain is only around 300%. If you want to match the basic poured bars just on spot, you're going to need to make up around $4900 extra just on that 'collectable' premium to match the poured bars on spot alone. Think you'll do that realistically? This is one of the main reasons why I'm an advocate against the recent mania concerning certain coin types being flogged around here of late being 'best option'. 'Best option' in terms of liquidity maybe, but as long as your bars/rounds are easily identifiable, it doesn't really matter. That said, if you can acquire coinage for a small premium over it's bar or round equivalent, it's generally the better buy because of future proofing liquidity and verification, along with the government backed 'guarantee' on your metal. A 'coin' by definition is legalised tender with a government guarantee which if obtained for a small premium makes for ideal investment options. ie If you can get a Perth Mint 10oz poured bar at close to spot price, this is a terrific option. But if you can get a Perth Mint 10oz minted COIN for only a buck or two extra per ounce, this is even better IMHO as you get a minted coin, with government certification & encapsulation for only a small fee. I'd never pay 2x, 3x spot and more for a 'collectable' coin, but a small premium for a minted coin is definitely worth the bikkies IMHO. Being a fundamentalist on stacking, I go out of my way to avoid the 'hype' which has gotten out of hand around here of late and making a small fortune for the opportunist. I find it unbelievable that when people were scrambling over each other to pay 2-3x issue price for certain coins around here over the last month that the fractional silver (ie Pre-decs and 1966s) were basically being fobbed off as 'junk' and could be picked up for spot price and lower. If you're in this for the long term people, every ounce counts. Just make sure your metal is easily identifiable with a verified backing to maintain liquidity down the line and you'll do fine. At the end of the day it's all silver and it's all destined for the same melting pot. It pays to remember that.
Just imagine its the year 2000 and you are given $1 mill in cash. With that money one could have bought 10 - 15 houses in a 'poorer' suburb or you could have bought 3 - 5 houses in a 'richer' suburb. Fast forward to 2007. The gains on on those 10 - 15 houses were larger than on the 3 - 5 houses.
Well I'd like to take this opportunity to recommend Roo then since you're being ripped off. He sold me a ten oz dragon for $367 when spot was around 32. At that time his 100oz Sc bar was 3500. So Yeah I think there's some exaggeration going on here.
The best I have found is one 10 oz silver dragon for $385 from a local bullion dealer. A 10 oz bar from Perth Mint is currently $355. ... Shit. At $3 per ounce extra, I think I'll get those dragons! Is my feebay account still active?
That's very interesting. I would have thought that most people would look at the extra $12.50 for a 10oz coin as a small price to pay for greater upside potential and less downside risk. A "2010" 10 oz bar sells for spot plus X, same as an 08, 09 or 2011 bar. A 2010 10 oz Kook slightly more and a 2010 10oz tiger more again. Try finding any previous 10oz lunar for only $12.50 above what you can buy a 10oz bar for today. The 10 oz Dragon doesn't have an unlimited mintage, it's limited by the amount they can produce and sell until the snake comes along. It may end up being a high mintage number but not unlimited. From my point of view, $1.25/oz is a small premium to pay for the extra potential these coins have.
I strongly agree with Auspm and agree with Earthjade. More bang for the buck I may pay premiums on certain bars, but I do not expect to recover those premiums. I see the premium as simply a way to increase the likelyhood of a quick sale due to recognition (e.g. PM/PAMP). Also, I don't go looking for anything smaller than a kilo. Every dollar adds up if one continously buys smaller denominations. @_@
