Diminishing Returns

J

Jislizard

Well-Known Member
Silver Stacker
A bit of background.

I have been buying silver in small amounts (up to 400 post 46 sixpences at a time was the largest purchase) This was when it was $14/Troy Ounce.

An opportunity came up to buy 23 kg of 50% coins for around $19/troy ounce, about $1 below spot.

After a lot of persuasion I got my wife to go along with the purchase. By the time the deal was done the cost had 'risen' to about $26/troy Ounce, well over spot, the equivalent of about 2 years of price rises going by previous rates. I thought it would be years before I made the loss up but my wife was beside herself.

As soon as the price of silver started to go up she kept telling me to sell it, every time! It got a bit tedious so I said I would offload it all when silver hit $50 and we could get our money back. I figured it would take years, (it still might, we aren't there yet).

Needless to say I have not been allowed to buy any silver since then, fortunately, new silver coins look very much like old silver coins to my wife and once they are in the house, who is to know?

Thanks to this forum I now know that selling X% when silver reaches $X/Troy ounce is just plain wrong, even if the fiat currency I sell it for happens to be doing very well against other fiat currencies.

My dilemma: if I sell the bulk now, early, I will cover all my costs and still leave me with a couple of Kg if silver prices go crazy high. If silver prices correct against the fiat currency in the near future I will not be out of pocket. More importantly I will be able to prove my wife was wrong, and this is more important than all the fiat currency in the world. Plus once I have proven I can turn a profit she will probably let me do it again.

But if I sell now, I will only want to buy more silver. At the moment a lot of my silver purchases have more than doubled in value. The majority of my silver has gone up by over 30%. From an investment point of view I am a great success. I just happenned to be in the right place at the right time, people were selling silver for less that spot price on eBay, I figured I could always take it to the mint and still make a profit. I never expected it to double in value in such a short space of time. I looked into it once prices started to rise and felt it was a better investment than gold at the time, so just kept going until eBay ran out of silver at less than spot.

But it hurts to buy silver at $35+, plus if silver goes up to $40 and hovers around, I will only net a small amount, still a profit but not very noteworthy. If however I buy silver at $35 and it goes down in value I will wipe out any profits I have made, and worse, it will prove my wife right.

I am not asking anyone to predict the future but the value is shooting up very fast and there doesn't seem to be any reasonable reason for it, market manipulation, historical ratios etc. seem a little too convenient and light on substance to explain such a meteoric rise.

At what price will it be better to just to stop buying?

If prices continue to rise my fiat money will not buy me as much. The money would be better spent on things I need that are not rising in price so quickly. The higher the price the less I can afford so the less profit I can make.

If prices don't rise then I will not be making any profit as I will be buying high and not earning any interest on my investment. The longer the price stays the same the more interest I have lost

If prices drop then I will be losing money, the more I buy and the higher the spot price, the more I will lose.

I am not greedy so I will honour my agreement with my wife and dump a load of silver at $50 when the time comes.

Has anyone else set a dollar limit, however arbitrary, on the amount they are prepared to spend on silver? I have already broken my limit twice, once was at $15 and once was at $20, I also said I wasn't buying any at today's prices but what do you know?!?
 
Hi JisLizard,

Welcome to the forum.

Thanks for sharing your story so clearly with us. I think many here will highly relate to your situation.

You are NOT alone

First of all, congratulations on your successes!!

My advice will be brief - keep stacking!

You ain't seen nothing yet!

(I won't be thinking about selling until a need arises or silver passes the USD $500 mark.)

Whenever you doubt silver's future just look at the 10 year chart.

Best Wishes
Turk
 
Ask your wife to go and find a savings account that gives a better rate of return on your investment and tell her you will sell it all when she does. (and keep buying on the sly) :lol:
 
If you want to take the stress out of the situation, and the marriage, I would start selling 5% of your stack every week until you have regained your seed money. About half I reckon. Give that to your missus and then start stacking in your own right. :cool:
 
I like the sound of that Sammysilver, I usually go all or nothing but unloading a bit here and there sounds like a good hedge, especially on eBay where you can get well above spot for rubbish.

My aim is to offload a lot of the 50% junk silver coins and keep the .999, .925 and numismatic items.

I just need to find the right amount to sell at one time, too many coins puts of the cautious newcomers and too few wouldn't be worth the while of the serious stacker.

If I replace the junk straight away with the good stuff I should be able to upgrade at little cost (and halve my storage requirements)...once I pay off the seed money of course!

And apparently I now have to buy my wife something nice with the excess profit, I wonder if she likes silver coins.
 
My Wife's and child's trip to Europe to see her parents is in the form of silver now - about 3-4 months from now !! - ( and she knows it )
If it tanks there will be issues !!!

:)

Just show her the 1 & 5 & 10 yr graphs !
 
THUCYDIDES79 said:
My Wife's and child's trip to Europe to see her parents is in the form of silver now - about 3-4 months from now !! - ( and she knows it )
If it tanks there will be issues !!!

:)

Just show her the 1 & 5 & 10 yr graphs !
Click to expand...


Funny that i have the same issue , Missus + 2 off to Sweden in June and the spending money is all in Silver at the moment . I put most of it in Numi's so hopefully even if it tanks I can still realize the outlay, going by current prices on the bay tho I should actually come out ahead.
 
southerncross said:
Funny that i have the same issue , Missus + 2 off to Sweden in June and the spending money is all in Silver at the moment . I put most of it in Numi's so hopefully even if it tanks I can still realize the outlay, going by current prices on the bay tho I should actually come out ahead.
Click to expand...

Do you need some Swedish Kronor ?!
;)
 
Jislizard said:
on eBay where you can get well above spot for rubbish.
Click to expand...

You also have to pay fees though.

Work out how much the fees are using a calculator like this one: http://ecal.altervista.org/en/fee_calculator/ebay.com.au/
then discount the price by that much and sell it here.

I think most people work on the basis that eBay/PayPal will take 8-12% of the final sale price so "well above spot" becomes "a little bit over spot" pretty quickly.
 
I think most people work on the basis that eBay/PayPal will take 8-12% of the final sale price so "well above spot" becomes "a little bit over spot" pretty quickly.
Click to expand...

So I can pay well over spot but not make well over spot? I knew there had to be a catch!

Thanks for the calculator link, I have been a long time consumer on eBay but only ever sold two items. That calculator will come in handy, I can now see how much it will hurt me in quick time, no need to wait for the end of the auction!

I pay 10% at our club night Tender Sale and those guys will only pay up to spot for junk silver, and there is a lot more competition on eBay.

Thanks again
 
THUCYDIDES79 said:
southerncross said:
Funny that i have the same issue , Missus + 2 off to Sweden in June and the spending money is all in Silver at the moment . I put most of it in Numi's so hopefully even if it tanks I can still realize the outlay, going by current prices on the bay tho I should actually come out ahead.
Click to expand...

Do you need some Swedish Kronor ?!
;)
Click to expand...


LOL, already have some , SHMBO's main worry is the price of a beer at the moment ( over ten $ AU ) thats what we defined the spending requirements on as it is a good guide for exchange rates . That and the fact that the Swedes don't have very liberal pub hr's . I keep telling her not to worry if silver tanks as little blonde kids have a high premium and she can always save on the return ticket for one of them , helps keep the kids in line too. ( just joking people) :D
 
sammysilver said:
If you want to take the stress out of the situation, and the marriage, I would start selling 5% of your stack every week until you have regained your seed money. About half I reckon. Give that to your missus and then start stacking in your own right. :cool:
Click to expand...

Seriously consider this suggestion...Finance is a game that is already too difficult to master, you dont need demoralisation and nagging everyday, you need to buy her off...

I have a supportive partner, I explained her everything once, and that's all it took. Well she still likes her Mimco but now understands how a zombie consumer she had been most of her life, living under a rock...If after all your efforts she is not understanding it, I think she needs to be re-assured, and it sounds like she can only be re-assured materialistically. I would suggest if you made the initial purchase from your joint savings, just sell enough to BUY HER OFF, and ask her kindly to leave you alone with the rest in your endeavour to do the best for your family...

If you are after numbers, it is easy, $50 is nothing, silver will at least hit the inflation adjusted nominal high, whether it will pass that mark strongly or not is a test we will all be observing...Yes it is getting much more difficult but I will continue stacking as much as I can...Good luck with your missus, dont let her confuse you, and dont try to prove anything to her, you already know that you are doing well, just buy her off, put your initial capital to a joint account at ubank and let her enjoy seeing +$100 a month in interest. Everyone is happy, perhaps you to a lesser extent but it sounds like she wont be easily convinced out of her smaller calculations...
 
I think you may be right Skyblues, whenever I say silver has gone up by X and we have made $X she says well I don't see it, I guess it would be worth parting with potential future earnings to secure some present peace and quiet.

I have tried explaining how money in the bank is being eaten away by inflation, I even showed her some of my all time favorite films, Fiat Empire, Zeitgeist, Money as Dept, anything about Fractional Reserve Banking etc. but as she also sat through some of my 911 conspiracy theory films I think I lost a lot of credibility. I don't think she will ever quite grasp the fundamentals but if I can show her the results, even in fiat currency it might work.

I just don't want to get rid of the silver and still hear about it!

I reckon I could probably get away with a weekend break and still have enough left to stack.
 
Turk and Skyblues are spot on. The research can easily be done on the internet. Don't even have to listen to the crazy End-Of-Dayers much to realize it almost HAS to rise astonishingly. 30% gains are all well and good for shorts and other commodities but there's enough information out there to predict a much higher return. Even keeping all those junk coins might be helpful if the SHTF and you need to do small trades for necessities. I'm definitely long on silver and just keep buying bars and the occasional numismatic.
My wife had similar sentiments to your partner initially. I just asked her to do her own research. Now we save every spare cent for silver. Even if the POS hits $50-75, we'll still be there buying, the returns will still come.
 
Jislizard.... RUN LIKE THE WIND. Grab your silver and bolt ... get far far away...your silver is nice... it never puts you down.. it loves you without question.. its allways there for you.... its shiny. Never let the dark side win....
 
I am sure she is doing what she is doing to protect the family etc, it might be a noble effort but dont forget that peace of mind is gold, ehemm, silver mate...This issue must have been eating away from the relationship, so if you are to spend the rest of your life with her you will need to find a suitable solution soon...Because if you are not crystal clear on terms and limits for the upcoming even more volatile times, domestics might follow...Keeping your own silver-play-money separate is a way, but this might offend her and crack the relationship as well, women are way too complex at times after all...

There are quite a few female stackers on the forum, gaining their perspectives and insights into all these is important.
 
I think you underestimate what is driving your wife's disquiet. If she doesn't trust you with your family fortunes then listen to her and find out the real story. I doubt it is a dollar amount.

BUT starting to sell so that your silver is held 'free' of debt is a wise move anyway so sit down and discuss the options with her on how to clear as much of the original liability as she is uncomfortable holding.

If you think she is a fool for forcing security and conservatism on you, then you can be assured she thinks you are a blind idiot for holding so much of your families well being in a commodity that has been seen to fluctuate so wildly in the past.

You really need to work this out because:
1. you make a pile by ignoring her opinion and she hates you for it
2. you lose a pile by ignoring her opinion and she hates you for it.

Option 3 is that you approach this as a joint partnership venture and you both get most of what you want.

p.s. Agree 911 conspiracy shows was not a good idea.
:)
 
LIzard:

1-No matter what you do women are never happy.You wont win (lol)

2 - Cash in and prove her wrong.

3 - If/when Silver goes ballistic then prove her wrong again.(without the huge gains, but have the satisfaction of saying .."i told you so")

GM
 
bsides said:
maybe u could melt the silver into a silver dildo........
Click to expand...

HAHAHA :lol: Well I guess that may be one way to keep them both happy.

Silver > more sex

you'll make it back when you cash out, think longterm ;)
 
You must log in or register to reply here.
Back
Top