Stacking philosophy: Bullion vs collectibles

Yeti Hunter

Yeti Hunter

Member
I'm interested to learn why most coin stackers seem to go for the "semi-numis", kooks and the like. I only ever seem to find these for sale at (to me) ridiculous premiums over spot - 50-100% over is not uncommon, even 200% with some coins. This seems more like collecting art than PM. Nothing wrong with art, of course, but that's not why I'm here.

I prefer to nab bullion coins like florins or round fiftys. Can easily find them for spot+10% or lower. Proven track record in use as a medium of exchange (yes, I'm a fiat catastrophist), easily identifiable, hard to counterfeit due to known weight, mintage in the millions, and they look great in a small wooden pirate treasure chest. I think having to keep my silver in little plastic cages would take all the fun out of it!

Basically my stacking philosophy is all about ASW with little regard to beauty, and none to collectible value. But I'm curious to learn about other strategies people use for their stack. Maybe I should branch out :)
 
I think your strategy is a sound one. Stick with what floats your boat, you know? My basic premise of stacking semi vs. simple bullion is there is less of an impact with the volatility with silver prices. In the scenario of the collapse of the dollar, the person with the biggest stack I'm assuming wins. I'm just not so sure it is as imminent as most 'doomers' think. Could be, but some speculate it could be a decade out. Who knows. I stack too, but with semi's (kooks). They have a low mintage, they have a collectible element, they are legal tender, they change image yearly, and more people around the world are getting interested in the stacking/collecting of coins...completing sets. I got rid of all my eagles, maples, wolves, cougars, phils, elephants, and all other misc coins and sank all the proceeds into the kooks. I think longer term this was the better move for me personally. Plus, there is a stacking element to it as well. These are legal tender...and yes they are nice to look at. Anyway, I do stack, but with a different mindset...art does matter to me, and I think to more people who care to admit it. However, I don't fall so 'in love' that I forget the true nature of stacking...preserve my wealth. I wonder what happens in a collapse scenarios with a gazillion eagles flooding the market? I'm sure a rare kook will command a bit more in a barter scenario...but who knows. Good luck
 
Silver is silver is a philosophy that has left nasty burn marks on the paws of many a silverstacker. Investing in 1oz kooks/any lunars (apart from 1kg) has been a very effective hedge against silvers price correction. e.g. 1oz buffalo purchased in 2010 may be worth a couple of dollars more after 3 years... a lunar tiger or 1oz 2010 kook on the other hand.

Silver aint silver
 
thatguy said:
Silver is silver is a philosophy that has left nasty burn marks on the paws of many a silverstacker. Investing in 1oz kooks/any lunars (apart from 1kg) has been a very effective hedge against silvers price correction. e.g. 1oz buffalo purchased in 2010 may be worth a couple of dollars more after 3 years... a lunar tiger or 1oz 2010 kook on the other hand.

Silver aint silver
Click to expand...

Bravo. Simple but powerful statement.

On the flip side, if today I sank 10,000 in buf's vs. 2013 kooks, and the price went to 50 in 2 months, I think the buff dude would get the greater gain (if they both sold at that point). But if the price sank back to 22, the price volatility would be less painful in the kooks...especially as time grows 'older.' If that make sense. I prefer the semi approach.
 
barsenault said:
thatguy said:
Silver is silver is a philosophy that has left nasty burn marks on the paws of many a silverstacker. Investing in 1oz kooks/any lunars (apart from 1kg) has been a very effective hedge against silvers price correction. e.g. 1oz buffalo purchased in 2010 may be worth a couple of dollars more after 3 years... a lunar tiger or 1oz 2010 kook on the other hand.

Silver aint silver
Click to expand...

Bravo. Simple but powerful statement.

On the flip side, if today I sank 10,000 in buf's vs. 2013 kooks, and the price went to 50 in 2 months, I think the buff dude would get the greater gain (if they both sold at that point). But if the price sank back to 22, the price volatility would be less painful in the kooks...especially as time grows 'older.' If that make sense. I prefer the semi approach.
Click to expand...
too true

images


I'll have what your having pls :D
 
I'm more in the camp of barsenault and thatguy. That said, people may have different time frames and reasons for buying pm blobs (bullion) or art (semi-numis).

I see my purchases of pm items as investing. In fact, I don't even buy the poor argument that some die hard stackers are attempting to make where they claim that pm's are a "store of wealth and not an investment. If you are looking for a store of wealth you are invariably hoping that that commodity which you are storing will maintain greater value than other items of value. Stackers hope that at some time, their stacked items with have a greater value that fiat currency for example. By definition, what the stacker is doing is investing in certain precious metals.

What range do people envision when they buy pm's is kind of wide open. Some say immediate, some, a few short years, others say for a minimum of 10 years and of course there are those who see their investment in blobs of metal bullion as only touchable when doomsday arrives....whenever that may be.

Stacking blobs of bars is fine and if you are one who believes that doomsday is imminent, then that strategy is the better one. On the other hand, if you believe that doomsday is not imminent (yet possibly inevitable) then semi-numis and numis may very well turn out to be the better strategy (and in fact in recent years, very much so the better bet).

I diversify. I am still very new to the consciousness of fiat currencies and buying pm's as a store of wealth. My first semi-numi purchase in earnest was in the late summer / early Autumn of 2012. I quickly learned that I came into this knowledge when the spot was still quite high and so it made no sense to me, believing that the prices will go down, to buy blobs of metal bullion....for obvious reasons. The only more sensible thing was to buy semi-numis until spot drops significantly then I can start buying blobs of metal bullion.

In time I will know whether my strategy was sound or not. At this point, it seems like the more sound strategy based on my belief that doomsday is not imminent and that silver and gold actually do not have intrinsic value (although of course they are valued by many individuals).
 
barsenault got it spot on

Bullion is best if the price of silver rises - get maximum exposure to rising spot with maximum ounces in hand

Numis are better if the price of silver falls - coin premium as a pct rises as spot falls so total loss is less
Also there is some chance of getting lucky with the right numi that really takes off (eg lunars)


Best is to buy numi coins as close as possible to bullion prices so there is a built in buffer from day one but this requires much more effort
 
Yeti Hunter said:
...

Basically my stacking philosophy is all about ASW with little regard to beauty, and none to collectible value. But I'm curious to learn about other strategies people use for their stack. Maybe I should branch out :)
Click to expand...

Semi-numis (e.g. Pandas) often don't depreciate as fast spot does, and some have kept pace with spot (or exceeded it).

Often when spot drops, the purchasing power of semi-numis increases.
E.g. You can sell your semi-numis, and get even more bullion than before.

E.g. A 2010 Panda at release was only a few percent more expensive than a 2010 ASE.
At present, 2010 Pandas routinely sell for more than $50AUD, and a good quality one (i.e. MS70) will sell for more than $100AUD.
At present, 2010 ASEs, only sell for around $28AUD.

With bullion, you can only make fiat when the price of spot goes up.
But with semi-numis, you might be able to increase your precious metal holdings even in a downturn.
 
2010 spot was about $US18 (~$AU23 at the time) before the big spike later in the year. Say you got a panda for $30AU in 2010, and sold it this year for, say, $60. Double your money in three years, therefore yearly ROI = 2^(1/3) = 26%. With cash averaging about 5-6% over the same timeframe, that's got "too good to be true" written all over it. I would be uncomfortable basing my stacking strategy on the assumption of strongly market-beating returns such as that continuing.

But... doomsdayers don't stack to make fiat, but to make bullion. I grant you can't do that with just bullion! The concept of buying bullion when silver is down, and bartering into semis when it is up, may have some merit. Maybe a "bullion/semi ratio" would be a useful measure for a semi.

Hmm, pretty solid drop in spot as I write... Time to buy bullion :)
 
When I first started stacking about 1-2 months ago, I was in the mind set that silver was cheap at these levels and I should therefore be buying silver as cheaply as possible.

But now my view is simply semi numismatics. You can get kooks for example for only a slight premium but they hold their value very well and increase in value over time, and and not effect that much by the drop in silver prices. However, they still contain an ounce of silver, so if silver prices would to rocket I would still get the benefits of the rise of the market, plus also a premium.

I am certain that semi numismatics are the best way to stack. And I will be buying a load of the Lunar Series Horse when they are released, and also some kooks when I can.

But any silver purchase when the price is where it is at the moment is a great investment in my eyes. You have to also look at how easy it will be to sell in the future, a generic bar of silver might even take a while to get a buyer at spot. But you will have no problem selling any kook at spot price.
 
barsenault said:
I think your strategy is a sound one. Stick with what floats your boat, you know? My basic premise of stacking semi vs. simple bullion is there is less of an impact with the volatility with silver prices. In the scenario of the collapse of the dollar, the person with the biggest stack I'm assuming wins. I'm just not so sure it is as imminent as most 'doomers' think. Could be, but some speculate it could be a decade out. Who knows. I stack too, but with semi's (kooks). They have a low mintage, they have a collectible element, they are legal tender, they change image yearly, and more people around the world are getting interested in the stacking/collecting of coins...completing sets. I got rid of all my eagles, maples, wolves, cougars, phils, elephants, and all other misc coins and sank all the proceeds into the kooks. I think longer term this was the better move for me personally. Plus, there is a stacking element to it as well. These are legal tender...and yes they are nice to look at. Anyway, I do stack, but with a different mindset...art does matter to me, and I think to more people who care to admit it. However, I don't fall so 'in love' that I forget the true nature of stacking...preserve my wealth. I wonder what happens in a collapse scenarios with a gazillion eagles flooding the market? I'm sure a rare kook will command a bit more in a barter scenario...but who knows. Good luck
Click to expand...

I agree with your silver plan entirely!
 
chrissilver said:
a generic bar of silver might even take a while to get a buyer at spot.
Click to expand...

I disagree - that would sell in a heartbeat on the forum and to many dealers.
 
Phiber said:
chrissilver said:
a generic bar of silver might even take a while to get a buyer at spot.
Click to expand...

I disagree - that would sell in a heartbeat on the forum and to many dealers.
Click to expand...

^^^
This is the main reason to keep generic bars.

2 For Sales at the same time -

10 x 10oz Bars

or

10 x 1oz Kooks
20 x 1oz Dragons.... and so on.

From my experience when you need to cash up quick bars are hands down the way to go.

If you have the luxury of time to sell you semi numis that is fine, but look at a lot of the people selling mixed lots and they are still selling them updating etc... While the person selling the bars has already done their next deal !
 
@Austacker, Depends where you live and what blobs of bullion and what semi-numis you own. For some, selling semi-numis is the far better choice. When I'm good and ready to sell my semi-numis some day, I will list through my active eBay account. I'm confident I will make out just fine. Look at Perth Lunars as one good example....they have been getting their sellers a good return in most cases for years. My blobs of silver bullion bars will always be tied to spot and as we have already seen, spot fluctuates wildly and is manipulated immensely.
 
Humm, obviously there will also be a demand for silver, but I just think that there will also be a higher demand for silver in the form of something nice like a kook as it appeals to both collector and investor and stacker. I think it would be more liquid if selling both at spot price.

Also I am in the UK so bars all have 20% VAT where as coins can be bought for 7% VAT in Germany.

So for me, and others in the UK, coins are better than bars. I can get a 1kg Perth Mint coin cheaper than an unbranded 1kg silver bar. And I know the 1kg coin will sell easier.
 
Yeti Hunter said:
2010 spot was about $US18 (~$AU23 at the time) before the big spike later in the year. Say you got a panda for $30AU in 2010, and sold it this year for, say, $60. Double your money in three years, therefore yearly ROI = 2^(1/3) = 26%. With cash averaging about 5-6% over the same timeframe, that's got "too good to be true" written all over it. I would be uncomfortable basing my stacking strategy on the assumption of strongly market-beating returns such as that continuing.

But... doomsdayers don't stack to make fiat, but to make bullion. I grant you can't do that with just bullion! The concept of buying bullion when silver is down, and bartering into semis when it is up, may have some merit. Maybe a "bullion/semi ratio" would be a useful measure for a semi.

Hmm, pretty solid drop in spot as I write... Time to buy bullion :)
Click to expand...

Not realistic to expect to sell a 2010 ungraded Panda for $60AUD, unless the AUD drops a lot more this year. Through a client, one of my buy it now auctions will be a sheet of 30 2010 Pandas for about $45USD/coin. Good price, but I have clue if they will sell. Panda prices are all over the place and I have seen some ungraded 2010s go very cheap. Since these are 1 owner Pandas and appear to be free of milkspots, hopefully $45 is in the correct price range.
 
chrissilver said:
Humm, obviously there will also be a demand for silver, but I just think that there will also be a higher demand for silver in the form of something nice like a kook as it appeals to both collector and investor and stacker. I think it would be more liquid if selling both at spot price.

Also I am in the UK so bars all have 20% VAT where as coins can be bought for 7% VAT in Germany.

So for me, and others in the UK, coins are better than bars. I can get a 1kg Perth Mint coin cheaper than an unbranded 1kg silver bar. And I know the 1kg coin will sell easier.
Click to expand...

If selling both at spot, then sure the higher premium will sell quicker - if you were to sell a numi at spot, then it would sell even quicker! (Maybe not if it's coloured though haha), but you get my drift.
The whole point is to let the premium grow and not sell at spot.
If you want to sell at spot later, you might as well go for some generic rounds and save cash in the first place.
 
But if you don't think that selling for spot is the right move for you, then don't focus on buying blobs of bullion...go for numis and semi-numis.

The point is, semi-numis / numis have made much better money for many people than bullion blobs in times like this. I've looked at ended auction listings for almost 9 months and I'm seeing lots of money being made on numis / semi-numis. Who's to say that will be different 5 years from now...10 years from now....20 years from now? I don't see why it would be.
 
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