Silver Purchase - Thoughts and suggestions welcome!

[Captain Kookaburra]

This has got me thinking .... Here is a thought experiment ....

If you know your term i.e. 3 years, on the expectation that Silver will double in that period before you sell....

Assumptions:

Understanding that coin/bar prices are made up of Metal plus Premium, with the Premium in some case being a fixed minting or barring cost.

You have $50,000 to spend now.

Currently 1kg bars cost $75 / kg to mint (Granulation fee, plus pouring - No Assay Fee)

Spot Now = $1000 , Spot in 3 Years = $2000

Consider the following 2 scenarios:

1) Buy unallocated metal in PMDP or in Goldstackers-like unallocated program and pay the mintage fee in 3 years.

2) Buy Kilo Bars immediately.

Which is better ?

1) You will purchase 50kg which you sit on for 3 years. After that time it is worth $100,000. You can sell two bars back to the depository at $2000 each, which gives you enough moula to bar the remaining 48kg (48x$75 = $3600) which gives you 48kg in nicely minted bars plus $400 spending money. (And you have incurred no storage fees)

2) You purchase 46 bars with $500 spending money left over. Which you will have to store for 3 years. (approx $800 at appropriate facilities)

You're at least 2 bars ahead using method 1..... Less stress on storage ... But ... Consider that ultimately physical possession is the only way to eliminate 3rd party risk.

I'd imagine you can apply the same method above to potentially purchasing 1000oz bars and sitting on them for 3 years. (Still have storage to worry about though)

Anyway ... That's enough mathematical musing..

If you just want cheap silver BUZZ me

 

[Turk]

If you were to spend $50k on Silver, what would you buy and why?

Hi Wilkes,

If it's just $50K I'd grab a couple of monster boxes of Eagles (500 oz each), or perhaps one box of Eagles and one box of Maples. i.e. Have some variety.

I'd spend the remainder on an assortment of 10oz bars (Perth Mint or Scotsdales) or any other coins or bars that happen take your fancy and seem a good price.

(Often 10-20 oz at a time gives you a good price point for many items).

The coins above will be dead easy to sell or barter at any time, and the other bits you choose are simply for you to enjoy and become familiar with. (Also, they might add some variety to your sales eventually).

I've placed a lot of orders with Bullion Bourse and so I can very thoroughly recommend them - but I believe all the dealers here on Silver Stackers are great to deal with.

Best Wishes!
Turk

 

[renovator]

A moster box of pandas & the rest in pamp bars.. Or all pamp 1kg bars Then go to the pub or buy some wine for you & the missus with the loose change..Factor in a decent safe that will hold your stash if you dont want to pay fees .Floor safes are the best imo but hard to find a decent sized one economically

 

[trew]

Just to be different, forget the silver and pay it off your mortgage (I'm assuming you've got one as you mentioned offset account)

Just trying to balance the obviously biased opinions you can expect posting such a question here

 

[hihosilver]

50 big ones! I'm impressed Yep the man has http://www.youtube.com/watch?v=7YUuyzQDmjY

As for Lynas (ASX:LYC) that stock tanked to below .90c two weeks ago and it's slowly creeping back up again but the Malaysian government could easily turn that site into a Westfield shopping centre so bigger balls are needed here :lol:

http://www.youtube.com/watch?v=wG6jas9g3mI&feature=related

 

[Nedsnotdead]

Just to be different, forget the silver and pay it off your mortgage (I'm assuming you've got one as you mentioned offset account)

Just trying to balance the obviously biased opinions you can expect posting such a question here

Ah yeah didnt see notice that. Best idea i reckon. Get rid of any non deductable dept first

 

[wilkes]

It's in an offset account, but debt isn't a problem as we have another property that can be liquidated and pay all outstanding debt whenever needed. Assuming real estate does well, our investments will do well. Assuming they don't do well, we will have another investment to jump to. Thanks for the thought though.

 

[backsideroyale]

Hmm I have a similar situation...Mortgage offset account so I have debt on an asset I plan to be rid of in a 1-3 year timeframe with at least a break even outcome including interest paid of course or a moderate profit. Cost of this debt is currently over half of my post tax income just paying the interest.

Allready own a considerable amount of silver and some gold/plat/pal but PMs are still less than 10 percent of my portfolio due to the leveraged real estate position crowding them out.

With borrowed money at the rate of a variable rate mortage (~7%) and with a mid-term timeframe in mind I think silver bullion will be a great performer if you can buy at sub 35 dollars for anyone who
a. doesnt own any or much physical silver allready and/or,
b. doesnt have such a large existing debt obligation

Of note are peoples posts above about buying some now at this price...but dont lock in a huge purchase at once. I agree. I only recently discovered that an offset account means you can hold these borrowed funds without paying intereset untill you use them so theres no hurry to swap your fiat for silver...Sure the price could fluctuate either way but you aint paying no interest in the meantime on any funds you decide to hold onto. This may well be common knowledge but now I am aware I am gonna hassle the bank for as much interest free money as possible....Next time we have a dragon mania situation or similar, instant credit at 7 percent could come in handy.

 

[alor]

I understand lots of stacking techniques.

But I still don't get 1966 50s.

Liquidity and low barrier of entry.

I've just always wondered how they get the premium they seem to get and haven't just dropped into the junk silver category.

its the 50c and round shaped.

you can use it to buy 50c worth of strings

there were not many bars around to collect before 1900... so coins were inherited from last generations

its more like everyone wants a few of those.

"the tide is turning" those who shorted silver will switch side to join the longs.

 

[wilkes]

I'm leaning toward a mix of PAMP bars, PM bars and monster box of Pandas.

 

[BBQ]

PAMP make some great stuff. I am thinking of buying some pandas, but I don't want to pay any sort of premium for them. CHINA = cheap goods

 

[wilkes]

Bulk Pandas can be bought in fairly similar prices to other popular coins such as ASE's or Maples, yet they can also attain numismatic value so they are a better deal!

Plus they are freaking beautiful coins!

 

[BBQ]

Bulk Pandas can be bought in fairly similar prices to other popular coins such as ASE's or Maples, yet they can also attain numismatic value so they are a better deal!

Plus they are freaking beautiful coins!

And no Liz on them!
Everywhere I've looked though, the premium for them has been at least a couple dollars more.

 

[jnkmbx]

established rare earth metal producer such as Lynas

It's not exactly established yet.
I used to hold LYC and then sold out at a profit early in the year near the high.
I don't like wasting time or money with companies that don't get on with the job, or people like Nick Curtis who are into shady deals (i.e. the Forge drama).

 

[940palmtx]

PAMP make some great stuff. I am thinking of buying some pandas, but I don't want to pay any sort of premium for them. CHINA = cheap goods

:| PAMP bars have the highest premiums of any bars on earth

 

[BBQ]

PAMP make some great stuff. I am thinking of buying some pandas, but I don't want to pay any sort of premium for them. CHINA = cheap goods

:| PAMP bars have the highest premiums of any bars on earth

Good point
I have gone PAMP with gold, but just once.
Not interested in going there again even though they are beautiful.

I don't think I'd go PAMP with silver unless those premiums came down; pretty much the same reasons I haven't bought silver pandas.
I guess buying one or two is OK to check them out, but I normally buy a stack when buying silver and it sort of hurts when you compare prices and one is hundreds more than the other

 

[RetardedMonkey]

I love buying PAMP stuff even with the premium. More often than not you can sell with the same premium when spot changes, so you're never really losing out.

The only time you won't be able to sell a PAMP without a premium is if SHTF and silver is 'just' silver.

 

[wilkes]

PAMP make some great stuff. I am thinking of buying some pandas, but I don't want to pay any sort of premium for them. CHINA = cheap goods

:| PAMP bars have the highest premiums of any bars on earth

Both UBS and Valcambi, Hereaus etc all hold higher premiums than PAMP. PAMP is one of the cheaper internationally recognised bars available, I have found. And you always sell them with the same premium.

What's Liz?

 

[BBQ]

What's Liz?

 

[BBQ]

The only time you won't be able to sell a PAMP without a premium is if SHTF and silver is 'just' silver.

I think that's what I'm a little concerned about.
At this stage I think I want to get as many ounces as I can without going to the ugly poured bar route and without paying excessive premium over other coins/bars of similar quality.