Is Silver Too Expensive at $30/oz

Silver is Money

Silver is Money

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Silver Stacker
Looking at the price of silver as it rises reminds me of a story in Rich Dad's Prophecy where he was buying a property a number of years ago. It went something like this...

Robert Kiyosaki was looking to buy a house for $160,000 and while doing his research he spoke to an older gentleman who was one of the neighbours and the old man said that he remembered when the property sold for $30,000.

Kiyosaki said to the old man that he should have bought the property back then for $30,000 and he would have made a lot of money on the deal. The old man replied that it was too expensive at that time and that's why he never bought it. Kiyosaki said, well why don't you buy it now. The old man replied that at $160,000 it was still too expensive. :(

I know that not everyone has the finances to buy silver at these levels, but if you are able to do this without placing undue financial pressure on yourself, then you really need to seriously consider it. The question you need to ask is... can you live with your decision if prices increase 30% in the next 12 months. Will you be like the old man and rue the day when you had the opportunity to buy silver at $30 per oz, but didn't?

There's no argueing that at some point we will get some level of correction in silver and gold prices. The $64 question is... from what price level will this happen. Will it happen tomorrow... or will it happen at $50.

The point is that no one knows what is going to happen in the future, but I'd rather be in at $30/oz and then watch it go down to $20 than not be in at $30 and watch it go to $40. If it does go down to $20 from today's price level, then I can live with it because it'll give me an opportunity to buy more for less in the future. But that's just me and it's horses for courses I suppose :D
 
When it comes to investing strategy, the term "expensive" is not the correct way to analyze the value of an asset. Silver at $30 maybe "expensive" if you compare to how much groceries you can buy with that money... But if silver going to $50, $30 being 'expensive' is irrelevant.

The same goes with investing in stocks, if a share of a company is priced at $50/share, oh boy 50 bucks a share most people will say it is expensive. But what if that $50/share goes up to $100 in a few months? Can anyone say $50 is expensive anymore?

The 'expensive' term is being used over and over again by mainstream media to discredit Gold.
 
adrenalin said:
If you knew it was going to go up in the short term, Would you go all out and use your credit cards to buy up?
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Absolutely not. Like I've stated many times on this board... only invest with money you can afford to lose.

A good indicator I use to determine if I'm over invested is to think what would happen if the price of PM's was to fall 50% overnight. If it would causes finanical stress, then you're over exposed and you need to sell. If not, then all is fine. :)
 
I think that if you pose such a hypothetical you either are (a dealer baiting lambs to the slaughter (which is unlikely) or perhaps you yourself have a war chest of fiat burning a hole in your pocket, waiting to spend it, however, you don't truly know if it's the right time to pull the trigger with all the ups and downs of late. By speaking out loud long enough you'll convince yourself you made the best decision at that moment in time but have yet to make that decision. As for suggesting "if the price goes down you'll have more to spend the next time round" you might be saying "Darn!, Blast!, G'Damit! I blew my war chest and now I"m left with a loss that I have to make up for"

Anyhow, I think we all fight those demons inside all the time and I'm a bit like that little older gentleman at the moment:)

Funny though, if you were new to buying silver and entered at $30.00 you wouldn't feel so bad would you? I haven't and it's hard to make that choice too - it's all in the mind.
 
It looks like silver is swapping from speculative commodity to 'money', but that still means speculators will take a lot of money from silver coin gatherers.

Personally I think you need to decide if $30 for one dollar coins is too expensive for wealth preservation, considering other demands on your fiat and the potential for those coins to lose half of their value at least, or that $30 rounds are too expensive for speculation. It's as simple as that.

If you're happy to put away 1966ers, silver dollars, state coins, etc. anything with recognition and face value and you believe inflation is on the way, then $30 isn't much of a barrier to buying in my opinion.

As for 1000 ounce bars at $30.... not sure about that one at all.

Actually I think anyone with a couple of hundred thousand debt free dollars will be sitting in a real estate candy shop by mid 2012 and gold, at least, will preserve your 200 from becoming 180 over the same time. Silver. Not sure, but long term it will be a good place to store money at the very minimum.
 
hihosilver said:
I think that if you pose such a hypothetical you either are (a dealer baiting lambs to the slaughter (which is unlikely) or perhaps you yourself have a war chest of fiat burning a hole in your pocket, waiting to spend it, however, you don't truly know if it's the right time to pull the trigger with all the ups and downs of late. By speaking out loud long enough you'll convince yourself you made the best decision at that moment in time but have yet to make that decision. As for suggesting "if the price goes down you'll have more to spend the next time round" you might be saying "Darn!, Blast!, G'Damit! I blew my war chest and now I"m left with a loss that I have to make up for"

Anyhow, I think we all fight those demons inside all the time and I'm a bit like that little older gentleman at the moment:)

Funny though, if you were new to buying silver and entered at $30.00 you wouldn't feel so bad would you? I haven't and it's hard to make that choice too - it's all in the mind.
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You're not even close HiHosilver, so don't give up your day job ;)

All I am trying to do is point out that while silver may seem to be high in today's dollars, in the future it could be much higher, in which case a lot of people will be kicking themselves for not boarding the train earlier than they did.

That's the problem with crowd mentality. In the early stages of bull markets, most people believe it's only a passing fad and prices will correct back to where they started. During this time they bash anyone who tries to tell them otherwise. Then when prices continue to increase it starts to pique their interest and they begin to sit up and take notice, but they still don't take action. Finally when prices explode that's when 90% of the people (mum and dad investors) jump in with both feet.

The only trouble is that this is when prices start to correct from there highs and sadly those that came late to the party end up losing their money. That's what this post is all about. All I am trying to do is to suggest that rather than waiting to jump in with the crowd, perhaps it may be a better option to get in now BEFORE it becomes mainstream - if you can.

It's virtually impossible to pick the bottom or the top, so yes there will be times when prices fall below what you paid and you will begin to doubt your judgement. But this is exactly what the "sharks" want you to think. This is how they make their money, by "stealing" your wealth during uncertain times.

The secret to investing is to ride out the short term ebbs and flows and focus on the long term. When the signals indicate a top is near, then yes you need to start looking at other investment options. But in my opinion the PM's still have a long way to go before we're at that point.
 
Love to give up my day job Silver as Money :D but alas, still waiting for what I believe is a good price to pounce back in.

I thought when the price fell briefly to $28.?? on the 27th Dec was the time but I was let down by an online website which should remain nameless. There you go I thought about the $28 mark was my level but I also feel my level is now fastly approaching $30

I'm even willing to share that $31 million lotto draw this Friday. Wouldn't that be great - slapping $1m down of fiat for bullion eh!
 
Yeah read your post about the drop in silver price and the business website not taking orders during this time. It's a real bummer when this happens. Who knows, you may get another opportunity to buy at this level in the near future, but then again you may not. This uncertainty is the challenge of investing. If it was easy, everyone would be doing it :)
 
hihosilver said:
I'm even willing to share that $31 million lotto draw this Friday. Wouldn't that be great - slapping $1m down of fiat for bullion eh!
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Just let us know before you do it so that we can plan for a shortage in bullion supplies :)
 
If silver quietly gets to $40 the way it got to $30 I'll say it's not expensive. If at $40 it's in every paper and on everyones lips then it's too expensive.


C
 
I've been a "bug" for so long the conversion rate to fiat is no longer a REAL measure. The conversion rate of fiat to hard money is of daily interest.
 
mmm....shiney! said:
hihosilver said:
I'm even willing to share that $31 million lotto draw this Friday. Wouldn't that be great - slapping $1m down of fiat for bullion eh!
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Just let us know before you do it so that we can plan for a shortage in bullion supplies :)
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WHAT !! Out of $31mill ud only buy $1m worth of PM! :)
 
I generally pay well over spot for semi-numis but they tend to be more stable in the silver market. For example if you pay $65 for a privy mark Kook & the price of silver drops to $25.00 the coin will still be worth $65.00 due to it's numismatic value. If your a bullion stacker you'll get hit by the spot price reduction immediately. Something I have noticed recently is the obvious upward price trend on ebay. I don't often buy from there but it's interesting to see a trend developing. It's common to see people bidding well over spot for silver lately. One ounce bullion bar around $45 plus freight. What kind of customer is willing to pay these prices ?

Here's a perfect example.

http://goo.gl/HcKiE
 
The weak US Dollar is keeping it cheap! What's the historical AUD/USD average? 0.70? Silver could be close to $40 AUD.
 
If it were the Melbourne Cup, would you back a horse that was 8,145,060 to 1 ?

Basically that's a blind donkey, with 2 legs strapped to rocket pointing in the opposite direction to the winning post.

I'm only going to purchase 1 draw simply to cover off the saying "if you are not in you certainly can't win" but as for winning :lol

I'm even willing to share the winnings with other 31 people who pick the same numbers as I do...
 
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