Complete nOOb - Need an answer to a very basic question!

Discussion in 'Silver' started by Myles & Myles, Mar 22, 2014.

  1. Myles & Myles

    Myles & Myles New Member

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    Hi everyone. This is my first post. I'm completely new to stacking and this is going to seem like a stupid question to most of you so I apologise for that. However, I'm confused about something:

    After doing some research and thinking, I have decided to buy some 1 oz 2014 Koalas. Currently spot price is about 22 point something, but the Perth mint and most of the bullion companies seem to be selling these for something in the low 30s even if you buy 100 of them. However, in a few different articles and books (e.g. Mike Maloney's book) I've read it says that you shouldn't pay more than 8% more than the spot price for silver. However, if the spot price is 22 and I shouldn't pay more than 8% above spot, then that means I shouldn't pay more than 24. However, I can't find anyone who is selling it for anything near this price.

    Is there anywhere in Melbourne that I can physically get a 2014 Koala 1 oz for about $24?

    I don't understand. Can someone please explain this to me in simple language without the jargon. (I hope this post is also helpful for other newbies too who may happen to read this.)

    Thank you.
     
  2. Caput Lupinum

    Caput Lupinum Well-Known Member Silver Stacker

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    Yeah but what kind of silver is Maloney talking about when he says you shouldn't pay over 8% spot price? From what I've seen of him he tends to buy ASEs buy the box so they probably do work out to be less than 8% per coin
     
  3. worldbubble

    worldbubble Active Member

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    I'd bought kookaburras ...
     
  4. bull_bear

    bull_bear New Member Silver Stacker

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    Hi Miles,
    If you want to buy silver for that sort of premium, you need to buy larger bars. Not collectable legal tender coins.
    A 10oz perth mint bar is around spot+10% and a kilo bar around spot +8%.
    If you want cheaper 1oz coins, you need to look for silver "rounds" or bars minted by private mints.


    In melbourne, minimum you will pay from a dealer for a 1oz size will be around spot +$3.10 (goldstackers.com.au low premium)

    Go and have a chat to goldstackers or wdavis and they will be able to sort you out.
     
  5. House

    House Well-Known Member Silver Stacker

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    Unless you find a desperate seller you won't find a koala at that price.

    Maloney may have been referring to larger sizes such as 10oz or kg bars. The lower the size, the higher the premium (extra cost above spot). Direct from the Perth Mint, a kilo bar is about 9% over spot.

    He may also have been referring to generic silver which I wouldn't classify PM bullion coins to be. Something like the 1oz buffaloes would be closer to the 8% you're looking for.
     
  6. Aureus

    Aureus Active Member Silver Stacker

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    This is the best advice you will read in this thread mate:

    Forget Mike Maloney
     
  7. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    +1000
     
  8. Caput Lupinum

    Caput Lupinum Well-Known Member Silver Stacker

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  9. W Davis & Son

    W Davis & Son New Member

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    If you can buy them at $24 bring them to us and we will pay you more.
    You could buy most silver bullion product at 8% or less world coins at about 10% but if you want a premium product like Perth mint we can't sell it under $28 to $30 due to supply and demand at the current spot price.
     
  10. Pirocco

    Pirocco Well-Known Member

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    Judging spot itself sometimes can make a much bigger difference than judging premiums. :D
     
  11. atlas

    atlas Member

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    Perth mint bullion coins attract a higher premium than the US/Canadian generic coins because of aspects like changing designs, lowish mintages, artistic quality, etc. They are also kind of exotic to US buyers. The ASEs and Maples are bread and butter coins and they are produced on a massive scale compared with Perth Mint coins - meaning unlike Lunar series coins or Kookaburras, they don't appreciate in value year to year. Also, our market is much smaller than the US. Less competition and choice = higher prices.

    The closest thing we have to an ASE or Maple leaf is the Koala, but it still earns a premium over those coins because of the changing design.

    Spend plenty of time learning about stacking, think about your reasons for doing it and try to work out a strategy.

    Cheers!
     
  12. atlas

    atlas Member

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    Oh yeah, and like some other members pointed out - don't buy into the Mike Maloney narrative too much.
     
  13. funman1

    funman1 New Member

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    plain and simple, if you want low premium then you can't buy high premium rounds.
    Kooks and Kolas are not low premium... They are collectable
    You want to stay at 8% that's pretty HARD unless you buy Large bars.

    Here is a small snapshot of my excel file and % over spot I paid.
    Some of these were collectable rounds so the % is MUCH higher than generic
    All of these were 1oz coins/rounds

    [​IMG]


    EDIT: I also include shipping into my prices,
    so if I paid shipping then I divide my shipping against all that I bought and add to the cost of each.
    So these are my "Out The Door Total Prices"
     
  14. Gucci

    Gucci New Member

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    Well, as a big investor myself if you follow Mike M. which I follow him myself (FOLLOW PETER SCHIFF!!!!!!) yes the 8% thing is true (not really) but he forgot to tell you a big important factor. You need deep pockets. NO NO NO not deep like this hole here>

    [​IMG]
    Source:

    Deep like this >

    [​IMG]
    Source:

    You see in order to get silver cheaper you need to be able to buy a large amount at once. The more you buy the cheaper it can become. But if you are the average person (in which he forgets about) then the small hole is for you where you will usually pay a few bucks over spot. Another thing he is referring to is - not buying numismatic coins which the premium can be over 15%
     
  15. Myles & Myles

    Myles & Myles New Member

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    Ok, thanks everyone for your help. When I read that thing about not paying 8% over spot I didn't realise that it is referring to big bars rather than things like small collectable coins. I suppose that like a lot of things the more you buy the cheaper things are, and it requires much more work and costs to sell a small coin than a big bar. So that makes sense now. I have already made up my mind to buy some Perth 1 oz coins but I just wanted to make sure that I wasn't getting ripped off. Again, thanks everyone for your helpful comments and explanations! :)

    Oh, and regarding Matt Maloney, I will explain:
    As mentioned, I'm a complete newbie to stacking. Therefore, I am trying to educate myself from the very basics but didn't know where to start. Therefore, a couple of months ago I found this forum and read the article that is in the 'Sticky' section, which was written for people just like me. I found it quite helpful and it recommended that a good book to read for further information is Maloney's book. So I ordered it and read it this week. I also ordered and read Doug Eberhardt's book 'Buy Gold and Silver Safely', as well as read some articles about PMs by Peter Schiff. (Incidently, Schiff also said something similar about not paying more than about 8% above spot.) I did find Maloney's and Eberhadt's books and Schiff's articles helpful but of course I'm not going to take them - as well as everything else I read - as gospel.
     
  16. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    How many kilograms of silver per purchase would get you classed as a large investor? The biggest bars I have seen readily available are 15 kgs. I have no idea if that is considered big in the world of serious silver stackers.
     
  17. House

    House Well-Known Member Silver Stacker

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  18. Myles & Myles

    Myles & Myles New Member

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    Can you explain why?

    And if I should forget him, who would you recommend to pay more attention to instead?
     
  19. screaming eagle

    screaming eagle Active Member Silver Stacker

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    If you're making purchases of 1000oz bars or similar, I think you'd be considered a SERIOUS investor (or industrial user) and be getting prices at or very near spot.
     
  20. Aureus

    Aureus Active Member Silver Stacker

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    He sells bullion, he's a permabull and he talks shit.

    As to who you should pay more attention to... that's up to you, I listen to myself personally. If you need to listen to someone else for investment advice then keep your money in the bank or prepare for hurt.
     

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