TRADIE'S GUIDE TO GOLD AND SILVER BUYING

REDBACK'S TRADIE'S GUIDE TO INVESTING IN GOLD AND SILVER..(The word investing on SS is interchangeable with the word buying or hedging for simplicity's sake)

Like measuring in mm instead of cm there are some things that are handy to know and a lot of things that are totally useless and confuse the issue.

Ok lets start with the basics.

TROY OUNCES
This is not the same as the Ounces/Kilo's we used to buy in trade school.
Here's the difference!


1 Ounce = 28.3495231 Grams
1 Troy Ounce = 31.1034768 Grams


1 kilogram=32.1507 troy ounces

"PRECIOUS METALS ARE WEIGHED IN TROY OUNCES"


PM=Precious Metal=(ie Gold,Silver,Platinum,Palladium)

Spot Price=The price of Precious Metals's set daily by some dudes far far away.
Spot price is given in $$$ per ounce.
Example Spot price of Silver at 9am Monday morning is $30.89c per ounce.
Ohhh Question dude-"Why cant i buy at spot price most of the time"
Because most Precious Metals are made into a more sellable form like a coin or a bar so people want to get paid for that value adding work so they add on a couple of $$ on top of the spot price for their product.Like a street girl putting on lipstick and a nice dress.

AUD=Aussie Aussie Aussie Oiu Oiu Oiu currency

USD=Yankee currency

PESSO,NZD,Rp= Nobody cares currency

GSR=Gold Silver value ratio(ie The value of Gold in $$ per ounce expressed as a ratio to the value of silver in $$ per ounce)
Trading at GSR value requires caution as someone is always going to get raped.
For example if value of Gold is $1650 per ounce and
Value of silver is $31 per ounce
Then 1650/31... i.e. 1650 divided by 31 =53.2258 ounces of silver can be swapped for one ounce of gold.
Gold owner(Rape= +1)
Silver owner(Raped= -6)
Its a little like a Balrog or pit fiend meeting a low level sorcerer in Dungeons and Dragons.

-----------------------CHARTS AND GRAPHS---------------------------------------------------

---Charts-----Something you refer to when you get insecure and start to try to over complicate the price movement of Gold and Silver.

---Graphs-----Something you over analyze when you cant understand the erratic behavior of the manipulated Gold and silver market.

----Preaching about Graphs and Charts-----Something you do when you want to give the impression that you understand the movement of Gold and Silver.

----Publishing Graphs with superimposed personal inflection lines-----Something you do when you have been really lucky in a couple of trades and you think you are the Messiah and can predict the future movement of Gold and Silver.

If you decide to go ahead and use Charts & Graph's then you need to understand the word.... parabolic.....This point is really really important,it will make you sound smart in a conversation and you can mix it with simple words to make them sound important.
Eg.
'Parabolic rise'
'Parabolic fall'
'Parabolic point'
'Parabolic blow off'
"That Parabolic and Alcoholic rhyme are no coincidence." and the more you drink the more Parabolic speak will make sense to you until you reach the Parabolic paralytic precipitous.

--------------------------------------COMMON SENSE------------------------------------
"Not applicable,vehemently opposed in all area's of the PM world"



----------------------------------------------KISS------------------------------------------------------------------
Our KISS rule,Keep it Simple Keep it Stupid doesn't apply here either mate.The simplest things are over complicated over analyzed and stretched out into Limousine size explanations.........
Why?
Makes people feel way smarter at the family dinner table
--------------------------------------------EXPERT--------------------------------------------------------------
This one's a crack up,you know how any tradesman with 50 years Plus experience in their chosen field wouldn't dare call themselves an expert!!!....Weelllllll not so in the PM world mate.
Their are Expert traders,
Expert forecasters
Expert financial advisers,
Expert Accountants,
Expert journals,
Expert publications,
Expert altercations,
Expert this,
Expert that........it just goes on and on...and you can start calling yourself an expert the moment you convince 5 or more people you are one...... :lol:

BUT.....here's the best part!!!!!!
(Shhh,Keep this to yourself or the whole system might collapse!)
You don't even have to be good at what you do and you can call yourself an expert!!!!!.....
But wait it gets even better.......You don't have to practice the advice you give or eeeevvvveeeennn the facts you preseeeennnt :lol: :lol:
You just have to write about them!!!
'CHIPPY'- "How do you get a cushy ass job like that?"......
'REDBACK' "Never let the facts get in the way of a good story for starters."

Lets move on.....................more definitions!

---------------------------------INFORMATION NIGHT---------------------------------
A meeting where people are trying to establish wether you have money.

---------------------------------------SEMINAR-------------------------------------------
A meeting where people are trying to help you help themselves to small amounts of your money.

---------------------------------------------SYMPOSIUM----------------------------------------------
A larger meeting where more people are trying to help you help themselves to large amounts of your money and you have to pay them for the privilege.

SYMPOSIUM...This is a really tricky word to pronounce
Lets give it a shot---
Symposter...
Symbioticmoneymakingventure....
Simpsonsepisode....
Symonsaysihavealltheanswerssobuyfromme.
Nah,cant do it.
I'll try again later.



----------------BUYING PRECIOUS METAL---------------------------------------
Ok once you have attended meetings,Seminars and Symposiums you are ready to jump into the world of PM buying.....
Thats of course unless you are already accustomed to bargain shopping in supermarkets for grocery products.Then you can just simply apply the same logic and price checking techniques and skip Meets,Sem's &Sym's.

Keep that to yourself...Nobody likes being labeled a heretic!

Buying at around 5% to 10% above the daily spot price of Precious Metals is a good place to start.
You can get into the 15%-45% brackets latter when you have more experience but you have to do your research,research,research.


---------------------------------STORING PM's---------------------------------------------

********************Just a quick touch down on Storage************************
1.Safety deposit box spaces@Banks
-Available from banks, starting price approx $70pa for a laptop size space.
Generally the space will accommodate a minimum size key entry cash box length 300mm x width 250mm x 100mm deep.

-Complete storage solutions-Available from specialized storage companies like 'Guardian Vaults' in Melbourne.They offer an extensively more comprehensive service with a comparable price to service ratio

2.Home Safe's-Safe's are a viable alternative to the above.
You will hear that safe's aren't safe and risky,but there are a couple of large holes in the anti under 250kg safe crowd's argument.

Here are a couple of Simple recommendations that will make your safe 99% Burglar proof.

The 1% failure will apply to any size safe as equally.

A. Have an alarm Box mounted on the front of your property in a visible location(You don't need the alarm just the $30 box as a visual deterrant)
B. The ownership of a safe should be on a tight leash/need to know basis, ie no one needs to know
C. Install it correctly,this is your best 2nd defensive protection.Bolt it down securely in an area that restricts space around the safe if possible.The tighter the working space from side to top access the harder it is to use tools to extricate.

D. Consider the size of your safe carefully,you will be amazed how quickly you can fill it.Have a long hard think about what you intend to store in the safe and space requirements
Storing $20,000 in gold can be achieved in a coffee jar
But try storing 20k of silver and the logistics of size start to intervene.

This is real life not the movies,no safe cracker will be interested in little old you.
The junkie,friends,friends of friends and relatives will.Therefore keep your mouth shut as to ownership,contents and location.

A one ton safe can be circumvented as easily as a 50 kg safe

Don't forget there are tens of thousands of under 150kg rifle and pistol safe's out there that do their job perfectly well providing the above precautions are heeded.

E. Old security firm adage- 'The weakest link to any security system is you'

F. Posting photographs of your stack on a public forum,enough said.
Trusting information about security to young children,enough said.

-----------LIQUIDITY,LIQUIDITY,LIQUIDITY-----------------------------------------


This should be your most important consideration after setting your Budget.

How fast can I dump what I have for cash!!
In a booming market like that of April 2011 this does not apply,in a tightening market like now November 2012 'Cash flow is King'

If you need to liquidate without cutting into your profits you better be holding stock that can sell fast.

Reality check here-Most gold and Silver can be offloaded to dealers but realize they are in business to make not loose money so don't expect a premium payment for your PM's.You will receive a fair market value which can be anywhere from spot to below spot to a couple of percent above spot.
ebay will hit you with approximately a 10% fee for selling once dusted.
SS will be easy on your pocket 'If the buyers are there'.
The lower your price the more buyers will be there.


Here is a generalized list of Precious metal forms,from HARDEST to liquidate to EASIEST."Hardest" first-
Before we go any further there are a few exceptions to the rule in each category but for the main this will give you a good indication of where the main products are at

1. Platinum
2. Palladium
3. Numismatic coins of the common variety such as highly priced release issues from Various Mints.

"Numismatic coins of the rare variety are highly collectable and command high premiums depending on condition,but these are not in the majority of coins out there-So don't go screaming Adelaide pound at me.la la la la i am not listening."

4. Sterling silver and .800 fine silver and other lower purity's.
-Paraphernalia in silver not falling into the 'Antique category'> An Edwardian Silver jug is not going to be sold at spot!

**********Now were starting to get into LIQUID PRODUCTS********

5. Gold Nuggets-Non specimen collectibles.
Be careful here as nuggets of good weight/structure and shape will sell extremely well commanding high premiums for the collect ability factor(These are not included in 5. and require market experience to discern the difference between common garden variety nuggets and good investments)

6. 22ct and below coins for gold,granules of .999 silver non stamped
7. 999 & .9999 &.99999 Silver & gold bars,coins,hallmarked chains etc

8.A roll of one hundred dollar bills

9. Salma Hayek table top dancing.

-----------HOW MUCH MONEY DO I SPEND ON PM's---------------------

You need to really plan this one out,its all to easy to get caught up in Euphoria,Hype and bad Scotch moment decisions!
My personal approach would be to start with the the popular book 'Richest Man in Babylon' 10% of your earnings rule.
If you haven't read the book grab one.
I won't recommend other books as each book calls to us differently depending on our belief structure and these lists have already been covered in an excellent way.
Back on topic-If you buy PM's with your credit card,you can get caught with your pants down not to mention paying the extremely high funding costs if repayments kick in.

There is no right and wrong rule to funding strategies,these suit the individuals like or aversion to risk taking and gambling.
Question what decision and outcome can you live comfortably with?
Take the time to seek advice from other buyers/Sellers it costs nothing- then make up your own mind.
Never hand the power of decision making over to someone else and if you do don't blame them if things turn sour.

Written for Sparky's,Chippy's,Plasterer's,Concreter's(Who don't own 24 properties or a share in a 150 acre Pot plantation),Painters,Tilers.alright i'll include Plumbers to

REDBACK

Disclaimer,the information expressed here "DOES NOT" reflect the Views of The owners of Silver StackersThis is a Rogue post only

SYMBOLISM OF POWER..Still difficult

Symbullsht.not yet but close

 

A kg is like 32.1oz isn't it?

 

woah...somebody been on the piss

 

Sorry typo 32.1507oz

woah...somebody been on the pissNo not till friday then all bets are off!


REDBACK

 

Who is troy ?

 

Ask Brad Pitt

 

There is no such thing as a troy kilogram.

1 Kilogram = 32.15 troy ounces

 

Its a trades guide mate :lol:

Edited without the Beer!

 

This made me laugh! Good work.

 

This guide is great but where do you even start when someone asks you

"How many ounces in a Sterling of Silver?"

 

You say i'll buy and thats it..

 

22 carrots

 

Yeah, but I reckon Rebeka would be a better name for it, (A female name would make fondling it just a little more comfortable) :lol:

Well done on the Tradie guide Redback +1, a segment on ratio equivilants in regards to cartons v ounces would make for a good addition as well- (< my full stop stopped working ?)

 

Thanks Redback Made me laugh and appreciate at the same time.

But you are lucky you included Tilers

 

Who's Troy....Brilliant.

 

I laughed out loud at this:

Thanks Redback, I have a tradie friend who'll enjoy this.

 

Your a Rippa,REDBACK!

If I wasn't smiling... I was laughing...

 

:lol: very funny REDBACK,

thanks.

 

Yeah thats the bit i liked ....ah the commonsense of tradies