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Old 02-03-2014, 01:37 AM   #1 (permalink)
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Default Thor, why do you buy PM's?

Several people ask why I buy silver and how I make money buying and selling silver. It is a chunk of my portfolio and here are my thoughts. I welcome any constructive debate on prices or points I have made. I am a person prone to error and I certainly welcome any information that is educational

Market strategist, Steve Miller, sees risk of big stock market correction - YouTube

This video should sum it all up. I am weary of stocks right now as we have been in a bull run for a long time.. one of the longest ever. I honestly thought the last retrace was the start of a bear market but was wrong and the DOW continued north.

When markets crash people scramble to find safe havens and I believe silver and gold will be some of those safe havens. Silver and gold are very liquid as well and I feel safe with that. Watching the market for shorting ops as well is where I am laying my bets.

Silver and Gold are like any other commodities and they are investable and they make money as long as you know when to sell (I sold a large portion off at 38). I am not a doom porn type of guy I am a cycles guy. Follow the money and cycles and you will see what is to come as history repeats itself.
Silver is not an undervalued tech company prone to shoot up 1000% it is a market that trades in cycles. After 9/11 where did the money go and who was the safest? I know people in gold and silver were not scrambling nearly as much as people who were not in those markets.
QE tapering, the rise of interest rates (cheap money vanishing = no more lending at low rates), no real economic recovery, **** jobs reports, and how many other things can you insert here(_) all combined with a stock market that needs a true correction make me watch what is going on every day.

I do not think we are at the correction point YET. I feel that the DOW may move north to new highs causing silver and gold to fall farther which is why in my other posts I hope for 12-16$ silver. I am buying small amounts here but waiting to load the proverbial boat lower. However I believe if silver drops that low most places will not sell physical that low and require higher then normal premiums. Of course there is always a chance the paper silver market corrects and implodes upon itself causing silver to skyrocket to those crazy 150$ estimates but again I will play the cycle rather then the hype of people selling silver
Paper silver is another issue which I am sure has been discussed on this board several times.. no need to rehash that.

If silver drops that low I believe gold will be under 1000$ and I would be a buyer 1000 +/- 25$.
I hope some of you can learn from this discussion and I hope others will post their views and thoughts.
I have junk silver and bullion right now and I do not invest into any silver that is numismatic, I only care about silver content.

On a side note (I have edited this post a ton adding bits) physical PM's in my possession > money in a bank which is technically not your money after it has been deposited.
http://www.huffingtonpost.com/2013/0...n_2988648.html
http://www.zerohedge.com/news/2014-0...sh-withdrawals

Again I am not always right.. a few years ago I owned 2000 bitcoins... I sold before it ever hit 20$... Talk about kicking myself in the ass over that one 0_o


-Thor
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Old 02-04-2014, 03:28 PM   #2 (permalink)
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The DJI took a dump yesterday down 360pts.. dollar slides.. a bit of a recovery today.. lets see where she heads this week. Looking at all reports and indicators and hoping she recovers and starts what I believe will be the run before the bear market fall.

125 reads and no posts.. Id like to get your opinions if you have any
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Old 02-04-2014, 03:37 PM   #3 (permalink)
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Current market thoughts.....

Gold = Good
Silver = Gooder
Stocks = Less good than the other two.

Subject to change with the market.............
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Old 02-04-2014, 03:39 PM   #4 (permalink)
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Current market thoughts.....

Gold = Good
Silver = Gooder
Stocks = Less good than the other two.

Subject to change with the market.............
AHAHAHAH Thanks for the post
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Old 02-04-2014, 03:42 PM   #5 (permalink)
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...

I have junk silver and bullion right now and I do not invest into any silver that is numismatic, I only care about silver content.

...
How do you sell junk silver? seems you take a big loss off value if you try to sell at a coin store/pawn shop/etc (or one of the places that buy through the mail.)

At least with numismatic value, you can sell online and expect near fair market value (minus postage expenses/selling fees).
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Old 02-04-2014, 03:50 PM   #6 (permalink)
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How do you sell junk silver? seems you take a big loss off value if you try to sell at a coin store/pawn shop/etc (or one of the places that buy through the mail.)

At least with numismatic value, you can sell online and expect near fair market value (minus postage expenses/selling fees).
I buy and there are no premiums when I buy junk so when I sell when the market is up and everyone wants silver I make extra on the premium side while being the cheapest. I buy from locals/online in lots and I would be the person like the pawn shop coin store who pay less. I don't buy 500$ in silver I will buy much more then that hence the lowest or no premium.
I like silver bullion incl rounds and bars up to 100oz and I like junk silver.
Silver content to me is the most important. A premium for a graded coin does not interest me unless I am making profit instantly .If I am buying silver that means I expect the price to go up soon so that I may sell and base it off the paper market hence making a profit.
Again silver plays in cycles higher highs and higher lows are the key!

Hope that clears it up a bit?
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Old 02-04-2014, 04:32 PM   #7 (permalink)
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I always ask this question and never get a true answer.

1. Do people factor in storage overhead when trading physcial silver?

2. How much turn over are we talking about when buying physcial silver? I see people buying 1oz and 10 oz bars. But thats a few hundered dollar investment. What if you had like $500k to $1m to drop? How would you do a deal in physical?

I ask this question because I recently saw a proposal of someone moving massive amounts of physical silver in the form of 100z bars in the tun of $200k minimum purchases. I couldnt get my head around it when it came to factoring in storage and transportation costs.
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Old 02-04-2014, 04:45 PM   #8 (permalink)
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I always ask this question and never get a true answer.

1. Do people factor in storage overhead when trading physcial silver?

2. How much turn over are we talking about when buying physcial silver? I see people buying 1oz and 10 oz bars. But thats a few hundered dollar investment. What if you had like $500k to $1m to drop? How would you do a deal in physical?

I ask this question because I recently saw a proposal of someone moving massive amounts of physical silver in the form of 100z bars in the tun of $200k minimum purchases. I couldnt get my head around it when it came to factoring in storage and transportation costs.
That is a good question. First off shipping that much silver is not an issue as long as you are doing it business wise. I have insurance that will cover if fedex messes things up. FedEx will cap insurance at 5-10k depending on location. Shipping is no different and overnight on a large order is not too bad actually.

As far as storage I can't answer that b/c I do not have 500k in silver sitting around. If I buy a ton of silver on the paper market I am looking to cash in and am leveraged. For physical silver the most I have ever owned was about5000 ozs and that actually is small when its held. most were 100oz bars so it was not that bulky. When I decided to sell I took the majority of them down to the local assayer and was cut a check (have to pay those taxes and keep records) so its not that bad. You do lose a bit on the value side b/c they will only pay you spot/-1/-5% but I am not complaining if they are buying 10 100oz bars and my cost was 18$ an oz and am selling at 30$ an oz I am really not that worried about the margins.
The key for me is that on these dips I can buy free physical silver or paper silver and add to my stack and continue to play the market.
I like holding real silver as an investment just like I like to hold other forms of investment. You never want to be too deep into one play but rather spread your investments around.

A safe in your house is perfectly fine or at your store. Make sure you are covered on the insurance end as well and update your agent with how much you have to make sure you are covered.

On the other hand if you have that much to invest I would question why not breaking it up into gold and silver... it only makes sense.
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Old 02-04-2014, 05:00 PM   #9 (permalink)
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Originally Posted by thor_rider08 View Post
I buy and there are no premiums when I buy junk so when I sell when the market is up and everyone wants silver I make extra on the premium side while being the cheapest. I buy from locals/online in lots and I would be the person like the pawn shop coin store who pay less. I don't buy 500$ in silver I will buy much more then that hence the lowest or no premium.
I like silver bullion incl rounds and bars up to 100oz and I like junk silver.
Silver content to me is the most important. A premium for a graded coin does not interest me unless I am making profit instantly .If I am buying silver that means I expect the price to go up soon so that I may sell and base it off the paper market hence making a profit.
Again silver plays in cycles higher highs and higher lows are the key!

Hope that clears it up a bit?
Do you ever purchase rounds or bars that carry a premium? Such as Engelhard or Johnson Matthey?
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Old 02-04-2014, 05:04 PM   #10 (permalink)
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Do you ever purchase rounds or bars that carry a premium? Such as Engelhard or Johnson Matthey?
Yes I do. I like old pour Engelhard's. They come up for auction and are for sale at a few local places for a decent price. I bought 10oz EHs for 16$s which was spot ages ago and I bought 15 of them.

I buy some other things depending on the current value and premium prices but limit my purchases of those items b/c I am about silver content over anything else.

Another secret that I found out while selling some PMs is that pawn shops pay 50-70% spot for bullion. They literally offered me 50-70% of spot for 1oz gold pandas which I was blown away by. The shops I talked to said they buy it all the time and people always sell. I check in with them and can get premium rounds and bars at spot and if I buy enough 1-5% under spot. Idk if that is how it works where you live but its def worth checking out. It is also noteworthy CASH MONEY TALKS over checks or CCs when talking discounts.

EDIT TO THE POST YOU REPLIED TO:
What is also noteworthy is that in times when silver is "down" junk silver seems to be traded at a much cheaper premium if any and when silver is up it carry's a much higher premium so make sure you take that into account with your margins
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Old 02-04-2014, 05:12 PM   #11 (permalink)
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I'm not a "doom porn" type of guy either.

Great post.
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Old 02-04-2014, 05:43 PM   #12 (permalink)
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What would you suggest I do with a large collection of silver coins I inherited about three years ago. At the time I got them, the "melt" or "junk" value was about 12K. At that time silver was around 28-29 oz. When it hit 32-34 I sold a lot of the coins that really were junk, however I still have about 80% of them left. The reason I ask, is that the remaining coins are in what appears to be amazing condition. I have compared them to a lot of others on eBay and to some of the various photos used for grading estimates. They all appear to be deserving of high grades. None of them are particularly rare issues (I actually checked ALL of them) as far as I can tell, but what would be the best avenue to take with coins? I have 1000's of dimes and quarters, maybe two hundred half dollars and about 2 dozen silver dollars. I know you said that you don't really do coins, but I was just wondering what you would do with these. I have actually been curious to see what COMC has planned for coins. It would be interesting to buy/sell gold and silver on COMC. Hopefully they get this service up and running soon. The rest of the coins are definitely too nice to sell to a pawn shop or somewhere similar.
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Old 02-04-2014, 11:23 PM   #13 (permalink)
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What would you suggest I do with a large collection of silver coins I inherited about three years ago. At the time I got them, the "melt" or "junk" value was about 12K. At that time silver was around 28-29 oz. When it hit 32-34 I sold a lot of the coins that really were junk, however I still have about 80% of them left. The reason I ask, is that the remaining coins are in what appears to be amazing condition. I have compared them to a lot of others on eBay and to some of the various photos used for grading estimates. They all appear to be deserving of high grades. None of them are particularly rare issues (I actually checked ALL of them) as far as I can tell, but what would be the best avenue to take with coins? I have 1000's of dimes and quarters, maybe two hundred half dollars and about 2 dozen silver dollars. I know you said that you don't really do coins, but I was just wondering what you would do with these. I have actually been curious to see what COMC has planned for coins. It would be interesting to buy/sell gold and silver on COMC. Hopefully they get this service up and running soon. The rest of the coins are definitely too nice to sell to a pawn shop or somewhere similar.
This is what I call a grab bag play and I get these every so often. I go to an auction and buy a literal bag with 100-500$ in face value for xxx$ and sometimes there are rolls of silver dimes that look mint. I would sort through the winners and the losers as you did and pick the best ones for grading or sell them raw on ebay and let them bring market value.. I am not sure on the market so perhaps another member could advise you in the proper direction.
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