Hi everyone, I just wanted to share a few observations about the silver stackers forum, and share few thoughts about silver investing through the eyes of a newbie. So before I begin this is simply one mans opinion (my opinion). So please - no rants and raves, no rudeness about my views as it's only a opinion. Firstly a little background about myself. I'm a middle class family man in my mid forties with a wife and child. Spent most of my life operating my own business. By no means are we wealthy and at times things can get pretty tight. In life I've had the opportunity to own several collections. Over the years I have collected mainly vintage audio equipment. Now when it comes to collecting anything in life there is always plenty of "Snake Oil" sales pitches to make whatever you collect more appealing. You'll hear me refer to term "Snake Oil" several times later on. Anyway, in the last 5-6 months I have been acquiring silver for investment purposes only. After years of watching my superanuation diminish it was time to diversify. Having spent some reading the Silver stackers forum for several months, I began to notice there are three different kind of silver stackers....... 1- The Investor (myself) 15 year plan. 2- The collector 3- The silver hobbyist (who thinks he or she is both a investor and a collector) If you fall in the catagory of 2 and 3, then you may not find what I say applies to you. If you are a "INVESTOR" who is new to silver or investing for sometime in silver then this will be right up your alley. So here are some some tips...... 1- You will make mistakes by buying overpriced silver. I did, and it's almost inevitable you will. In time you will realise that you should buy at a the right price. Also, initially you'll find the attraction of owning physical silver alluring. Of course you can't resist pulling out your newly acquired coins or bars as your struck by silver fever. After several months hopefully this feeling should wane. If not then your beginning to become fully fledged "COLLECTOR" or "SILVER HOBBYIST", do not fall into this trap. 2. For new and old investors alike, don't be fooled by buying into silver that may have numismatic appeal. For example the Perth Mint lunars always have a higher premium than their Kookaburra counterparts. Don't get caught out by "Snake Oil" sales pitches of only 300,000 struck. They can restrike at time after they have sold out. The Kookaburra's are a great example of this. 3. A investor always chases the intrinsic value of silver. This means you should buy as close to the spot price as possible. I prefer coins over bars even if the premium is higher. Reason being, a bar has no numismatic value whatsoever, as even the most basic minted coin can gain some moderate numismatic value. And the price margins between a 10 oz bar compared to 10 oz of coins is becoming a joke. 4- From week to week , set a target to how much you can afford. Don't go overboard and blow your lifes savings or weelky pay packet. Having set a target to how much you can afford, make sure you buy the cheapest silver at close to spot price. Be prepared to shop around online and you will find that some weeks various minted coins can be bought $3 to 4 dollars above spot price. For example last week I bought 4 Canadian maples ( 1 ounce ) for $34.85 , while most other coins hovered between $36-$37. They were still cheaper than generic rounds. 5- Beware of buying silver from overseas even if it appears to be better value. Ozcooper's youtube channel on fakes sends out a dire warning of fakes out of China ( well worth veiwing ). I have only bought one Chinese Panda from a reputable dealer, but intend to buy no more. Besides, Panda's are priced well above other silver coins. Remember your a "Investor" not a "Collector" or "Silver Hobbyist" 6- Don't get suckered into buying off Ebay. You may strike the odd good deal, but on the whole you generally pay too much. Most of the time prices exceed dealers prices. Even the trades on Silver stackers, prices are higher than the dealers premiums. I hope not to offend any traders as some trades are based on numismatic value. However, many trades are too over priced for the investor. Most Silver Stackers trades are for the "Collector" or "Silver Hobbyist" 7- Avoid the "Snake Oil " sales pitches from Mints. For example - "Royal Mint Company "coins such as Andean Cats only 10,000 struck puriest silver, and the die tossed away so no more can be reproduced. Don't buy into this as you'll pay way more for that beloved pussy than a regular minted or generic round. Leave those coins for the non investor. Besides 10,000 IS NOT RARE. 8- Keep all receipts of purchases. They will have postage costs plus sales costs. These may be handy in the future for capital gains purposes if any significant gains made. Also, on the issue of postage. Postage more often than not is cheaper than pickup of your silver. Your more likely to blow more money on fuel crossing the over side of Melbourne to the bullion dealer than to have it posted. If you happen to be in the area, by all means pick it up. Remember if the travel is not logged you cannot make a claim for tax purposes in the future. 9- When to sell. Now this is a tough one. My long term plan is 15 years. So I havn't managed to acquire enough ounces to sell yet. However, with any investment a turnaround of 100% in ten years is worth cashing in on . So if you happened to buy at a time of $16.00 an ounce and you own 3-5 thousand ounces don't get too greedy , time to cash in. Your investment has served you well. Anything above 100% turnaround is a bonus, but it's also good to invest that money in your life, like holidays, restaurants etc etc............ 10- Finally, like myself you have made a choice to invest in silver for whatever reasons. Don't get sucked in by these smooth "Snake Oil" pitches from Michael Maloney or Robert Kiyosaki. As much as their books are informative and enjoyable to read don't forget there main focus is to get rich themselves before you do. Do you really believe Mike Maloney would really want to purchase your bullion at peak prices at GOLDSILVER.COM. That's the last thing he'd want. He'll be too busy off loading his own silver bullion. All these clichs " Cash is trash" and "Silver possibly exceeding $1000 an oz" , don't get caught up in it....Last time I used cash it served me very well buying food and paying for bills. CHECKLIST- 1- Don't get emotionally attached to silver. 2- Pay as close to spot price as possible. 3- Set a target on purchases. 4- Buy pure silver. 5- Avoid sales pitches 6- Don't pin all your investments into silver- ( diversify- Super, Real estate, savings ) 7- Try to sell at the right time. NOW YOUR A INVESTOR.............. IF YOUR DOING THIS- 1- Uploadling pictures or videos of your silver collection on the web. 2- Buying way above spot prices. 3- Buying coins or bars because the look nice 4- Find it hard to part with your silver. 5- Hoarding anything made of silver. YOUR A COLLECTOR OR SILVER HOBBYIST Regards.................................
Great post and welcome Silversearcher I agree with your thoughts and comments. However what I would add is experience is essential and until you do understand the collector or hobbyist area. Stick to bullion. Once you have a fair understanding use the we call it Numis market (includes PM coins, Lunars Cats, Cougars etc...) to your advantage and increase your stack. Which is the end goal anyway. There is a place for it, but like you said we all get burned and caught out by the pretty shiny things at the start. Then we do some bad deals loose a bit of money and learn. If you pick carefully and know what is hot, and what is not you can take advantage and increase you stack. I do think too many people enter with a 12 month time frame, I like your approach and strategy of 15 years. This is a feasible and fair time frame for your investment to grow. I look forward to seeing more of your posts. Aus
Hi Silversearcher! That would have to be one of the longest introductions on the SS.. I don't know where I fit in..I only stack silver because I believe fiat currencies will go to zero and not be worth the paper/plastic they are printed on. Good post..Will provide a lot of ideas and thoughts for new members. Regards errol 43
Great post, i am definitely a 3 i love silver coins and bars, if i end up cashing in im happy or if something happens to me my future kids can(and probably would) cash in. but i enjoy what i do and instead of putting coins into pokies i put money into coins
You forgot the 4th investor.......bought as much as possible when prices were very low such that you would not even buy at spot because it was too high and in the end the coins that others were selling 10% under spot which were purchased simply as bullion end up becoming collectable....
A cogent analysis About the only thing I can suggest, as a further means of keeping an emotional distance, is to make up a spreadsheet recording every purchase, with postage and any other cost reflected in one column and a final total for the item. Immediately next to that, put a column with a calculation of silver or PM value based on spot (entered in one place at the top of the sheet) and an adjacent column with the % difference. Finally, sum all expenditure, and show *that* with the percentage over spot. So you might have a total of (say) 200 oz, with spot at $31, showing a net profit of 3%. This disregards any numi component, which you can always add on the side item by item, but it's a useful tool for spotting the over-enthusiastic purchase and the lucky buy, and their *real* impact on your PM wealth. It helps prevent 'forgetting' those additional costs and fees. But having said all that, realise that there are going to be times when fondling and clinking are gonna happen Cheers
Great post, im very new to silver stacking about 3 months now and i entered it as an investor, everything you have said is pretty much how i have played it. Im lucky my friend who got me into silver had your exact same approach as an investor and explained it all to me at the start which im very thankful for. I have only ever bought 1 numistic coin a lunar snake, but thats because i own snakes hehe. This forum is great and also went to my first meet of the adelaide crew coupla weeks ago and also learned a lot and got some great deals to Welcome and appreciate you honest input
Like many others have already stated, I do not fit into any of those categories, prehaps "Hobbyist" would be the closest fit, and sure I have my "collection" of Numismatic stuff that I collect because I like it, but for the most part I use bullion as a hedge for myself, and as a "tradable" if the worst should happen, therefore I purchase items not so close to spot (specific items, I have a list of exactly how much I have and want [endgame] in specific denominations for gold, silver and platinum) because of this purchasing, I tend to pay a little more, same as for the 1TOz coins I purchase Koala's so a little more expensive than generic rounds but that is the way I have decided to go (cheapest AUS legal tender pure 1Oz coin I can find readily available). Fractional's are a little more expensive again. I am certainly not an investor, but I am neither a collector or hobbyist either, like I have stated above, I have my "collection" not that I would mind selling it if I needed to but the vast majority is a hedge, am I attached to it? yes but only in the sense that I have quite a bit of cash invested in it so I do not want it stolen, would I sell it if I needed to or there was a reasonable profit to be made, you bet I would.
This only waned for me because it was too much effort and hassle to retrieve them from the secret hidey hole each time! :lol:
Hi silversearcher, thanks for your thoughts. When I started out investing in Silver a few years ago, I held similar views too. Fortunately, through some profitable experiences and guidance, I gained a new perspective that has brought me significantly increased prosperity when investing. There are a few problems with your standard model though: Bullion is useful as a form of wealth preservation. But it does not generally create wealth, it merely preserves it. <-- This is very important to understand. A. Buying generic silver alone will not likely increase your purchasing power over time - but it will likely preserve your purchasing power. Eg1. A 1966 silver round back in 1966 would buy you lunch with a drink. In 2012, that 1966 silver round will still only buy you lunch with a drink. Eg2. Buying a single 10oz Silver Bar back in 2000 will only buy you a single 10oz Silver Bar today in 2012. B. Numismatics, can and often do increase real purchasing power with time. Eg1. A 1oz 2000 Mirrored Silver Panda back in 2000 was only a small premium above spot, but if sold today would be worth about $2000AUD (about 66x times above spot). [imgz=http://forums.silverstackers.com/uploads/675_2000mngc.jpg][/imgz] Eg2. A 1oz 2009 Silver Panda back in 2009 was only a small premium above spot, but if sold today could easily buy 2 or more ounces of generic silver. [imgz=http://forums.silverstackers.com/uploads/675_china-silver-panda-coin-pic.jpg][/imgz] I've given some Panda examples since that's where I spend a lot of time researching. But there are many other areas of numismatics that have increased similarly over time. [imgz=http://forums.silverstackers.com/uploads/675_1930detr.gif][/imgz] Bullion is useful as a form of wealth preservation. But it does not generally create wealth, it merely preserves it. <-- This was so important to understand, I wrote it twice If you are an average person trying to increase your purchasing power by buying generic silver, I wish you much success, but I doubt you will achieve it. Because whatever small or large fiat amount you manage to muster together, in 5 or more years, when you sell/barter your stack, it will still only be worth (in real purchasing power) what you managed to save (maybe even less, in real purchasing terms). [This is ok though, because 0% risk should equal a little reward]. But if you are an average person that wants to increase your purchasing power, by doing some research, I think you are likely to achieve a bigger reward. Are there risks? Yes, but the rewards can be big, and the risks can be managed. Here's an example: I recently purchased a few 1/2oz Silver 1995 Large Date Pandas for under $100AUD each (way above spot, but I felt it was ok since I saw their potential value). [imgz=http://forums.silverstackers.com/uploads/675_img_2770.jpeg][/imgz] Got them graded by NGC, and scored a nice MS70 which sold for above $1000AUD. Sure I got some dud bears too, but the gain has been significantly higher than the loss. Here's a past and future example: In 1984 a few thousand brass Pandas were minted, and sold for just a couple of dollars (for some people even less). [imgz=http://forums.silverstackers.com/uploads/675_1984handled.jpg][/imgz] This year Aurora Et Luna sold me that brass Panda for about $300AUD! Crazy price above spot! http://forums.silverstackers.com/topic-22575-auction-1984-chinese-pandas-medallion-s.html But it's value has more than doubled since purchasing it. [imgz=http://forums.silverstackers.com/uploads/675_1984ms69.png][/imgz] As an investor in silver, I find that numismatics have been the best performing part of my silver (and gold) portfolio. I hope that they will be the best performing part of your portfolio too.
I have to chuckle enzedda ! like most of us I have accumulated a reasonable stack, but I chose to stash mine in multiple places and like you the interest soon waned in dragging it all out. Then one day I shifted a container of dog biscuits and thought..gee that feels heavy. Investigation found 2 x1 kilo ugly abc bars I did'nt even remember I owned.
Although your ten tips basically apply, this and similar reasons create distinctly different groups to your starting assumption of "diversification" etc. It's a bit like thrash metal, death metal, black metal, progressive metal etc are all definitively heavy metal sub genres but they are all significantly different to each other (and some dislike the others with a passion). Edit: nice post still.
Hi Guys, There's beens some great level headed constructive comments made. I think the point made by "hyphenated" to have a spread sheet is excellent idea. That's well worth considering for any investor. And also "Austackers" comment about the Numis market is valid also, but as a newbie it's difficult to translate numi's into my silver investment at this time. Comments about the 4th investor and 5th investor should be stacked away in the sub genre section like "bordsilver" mentioned. Of course there are other investment sub-genres, but let's keep it simple. I want to hark back to "Austackers" comment about the numis market. Using collecting stamps as a analogy in reference to collecting numismatic coins. My father was a avid collector of Australian decimal and pre-decimal stamps mainly all mint. Strips and corner blocks, singles multiples of four, of each and every stamp etc etc.. At the time of sale most dealers only wanted to pick selected stamps, rather than purchase the entire collection. However, fortunately he did find a dealer who bought the lot. He sold his collection because Australia post went out of control by releasing too many series of stamps to make a quick buck. And this really did force down collective value of stamps ( Doe's this look and sound familiar ? )... Are the Mints doing this ? Of course they are. You'd need a wheelbarrow of $100 notes to keep up with all the numis the Perth Mint release. The experienced collector with knowledge and a keen eye may select the right coin that will make massive gains, but for the rest of us I doubt it. And at the time of sale the dealers will want to pick the eyes out of the collection, and most likely you'll be forced to sell the rest online or privately. Yet again it's only my opinion..... Regards
I think Yennus' points are highly relevant. IF you are buying physical for "diversification" reasons, which you have grouped as "investment" purposes, then I think the guidelines/rules are different if you are doing it as part of a Permanent Portfolio reason (which is largely set and forget) or you are adding what I deem a speculative element by trying to front run a market for additional profit. Again, many of the tips you make in your plan are the same for these two groups (sub-genres) but the mind set may change relative importance (especially timing and cost).
Excellent post,of course we all have some slight variation on strategy but I like your put yourself out their style.Well done mate. Great thinking Knew it wouldn't be long before an advertising banner for Panda's was stuck up.Yennus won't miss any opportunity :lol: REDBACK
