Posted on 03/12/2010 10:14:21 PM PST by Jet Jaguar
The $50 silver was a quirk because the Hunt(?) brothers cornered the silver market and manipulated it. [This is from my dim memories.]
Naaah- you got ta get into a gold mine; the silver `n platinum occur usually with the patina`d red gold, but the yellow not so much silver; the green gold I dunno. The daily take on red lazy type is 30%/mass; The purity is leachable to 90% or via mechanical. The daily Au take on Calif is usually 80-90% because it is nuggetized. The Australian gold is hot, usually a rocket if you get in before the strike. Older mines now reworked can give 80-90% due to new recovery methods. The Indians and Chinese are buying up all the gold. The Canadian belt is being rediscovered and reworked to high investment payoffs when gold was at 1100.
Invisible gold is also being reworked due to new methods of processing and analyses in Canada for a patina`d high recovery ROI. The patina`d platinum usually will pay % of operations cost.
“I just buy junk silver currently have 50 half dollars at 90% silver. By my math that is 22.5 oz”
You are making two errors:
1: weighing the gross weight of the coin, without figuring that only 90% of said weight is .999 Ag.
and
2: Using avoirdupois vs troy oz. Precious metals are measured in troy oz which are 31.15 gms vs 28.3 gms in avoir.
http://www.mountainviewcoins.com/gold-silver-content-us-coins.php
There are a few ways to calculate the amount of .999 silver in 50 qty pre-65 half dollars. Each contains .36169 tr oz Ag. By this method, your 50 halves (regardless of Franklin, Walker, Barber, or 1964 Kennedys) weigh gross 12.5 gms, net Ag = 11.25 gms * 50 qty = 562.5 gms/31.1 = 18.086 tr oz .999 Ag.
Or, each half contains .36169 tr oz .999 Ag. Hence .36169 * 50 = 18.0845 tr oz .999 Ag.
Or, a bag of junk silver ($1000 face) contains 723 tr oz .999 Ag but is always taken as 715 oz due to wear from circulation. (Loss = 1%) You have $25 = 1/40 bag * 715 = 17.875; but halves (eg; a bag containing 2000 qty half-dollars vs a bag of 4000 quarters *always* command a very slight premium because they are almost always worn less than quarters. If you take a roll-sized stack (eg; 40 qty) of 1939 circ quarters vs a stack of 1964 quarters, there can be as much as 5/8 inch height difference between the two! Pretty remarkable.
Junk silver has a lot going for it. Usually the smallest premium among rounds or Eagles or bars; easily divisible into smaller lots. And it has the not insignificant quality of being what I call “self-assaying”, meaning that nobody will ever ask you if a 1962 quarter is genuine. They *might* ask you if a 100 oz Englehard bar (you are trying to sell them) is genuine, and they *might* ask you to prove it, in the form of a $100 or so [per bar] assay fee. I own a fair amount of silver, about half a bag of junk, several ingots and rounds and Eagles, and about 150 lbs of sterling silver (.925) flatware.
^^^^^^^^
Now, you could work these numbers ten different ways, but the useful factoid to know is what you should pay for a pile of junk silver coins should you stumble upon them. Some easy ways:
www.amark.com . Top center, they quote the “ask” on bags of junk silver. Right now, this is $12,412, meaning 12.41 times face value since this is for a $1000 bag. So, if you can buy halves for $6 and small cents, that’s OK. This is pretty much how these coins are transacted...based upon a multiple of face value. Of course, this is dependent upon the current spot price for silver and will change. Ag spot is 17.07 x 17.17 and that’s a reasonable datapoint: When silver is $17.low, you can pay $6.25 for a half dollar, maybe $6.50 if you’re feeling generous. Don’t overpay. You could buy many hundreds of thousands of dollars worth with a phone call or two if you were so inclined and so capitalized.
Silver dollars are *not* especially good for junk silver, as they always command a premium. Even cruddy silver dollars sell for about $15-16, more often $18. They contain exactly double the amount of Ag as do halves. They are nice coins, everyone should own a few, it’s kind of neat to own 100+ year old SDs and there are plenty of very common dates that you can buy that are that old and in very decent condition. Tell you what, go to a coin show some day and blow off $2-3 admission for an afternoon’s entertainment. It will blow your mind how many silver dollars there are out there. Bazillions. They were minted in staggering numbers, many years well over 100 MM coins, and there were 5 mints and about 55 years as a WAG. (Not all years were made at all mints) Only a surprisingly smallish number of them are really, really rare. From the Comstock Lode, the US was literally awash in silver for many years. You can buy 1889 and 1878 and 1873 SDs for under $20 in pretty darn good shape as long they don’t have the fetishy mint marks. All day, as many as you want. You can buy many, many beautiful and shiny common-date 1870’s-1890’s dates of SDs for $30-$35. Of course, you are not buying junk silver when you do.
Another reason to limit your purchases of silver dollars for junk is that large numbers of fake Chinese (what else is new?) silver dollars have been appearing at coin shows.
They are silverplated pewter (essentially lead) and *some* are stamped “REPLICA” but many are not. Pewter weighs distressingly similar to silver, so the only way to tell conveniently is to drop the coin on a tabletop and listen for that ring that only silver has. Not that many coin dealers will be happy with this operation. *NO* coin dealer of *ANY* repute would *EVER* attempt to pass off Chinese fakes as real.
Whatever you do, do *NOT* play numismatist and junkman at the same time! If a rare 1921-D Walker is worth $350, DO NOT add $6.25 in silver value to that. It’s either a piece of junk silver or it’s a rare coin. It isn’t a rare coin if you melt it down, and it isn’t a piece of junk if it’s in a nice shiny holder for somebody’s collection. One or the other, not both.
mark
I beg to differ as to the amount of silver in a pre 1936 dollar to two pre 1965 halves.
1 - Morgan/Peace = 0.77344 troy ounces total silver content weight
2 - Franklin/Walker = 0.72338 troy ounces total silver content weight
per - http://www.coinnews.net/tools/automated-silver-coin-valuator/
and my 2010 red book
That's not exactly.
I stand corrected! You’re right.
You previous post was outstanding nonetheless.
Now if I could figure out how to pronounce avoirdupois. : )
You seem like the right kind of guy to whom to pose the following questions:
I am a retail investor in bonds (50%of total worth) and stocks (25% of total worth), the rest in cash. I am currently "toying" with the idea of moving into precious metals (up to perhaps 6-7%), amd have been looking mostly as junior gold producers, but also purely exploratory and development companies (who never intend to mine an ounce). Frequently, the gold ore is mixed with copper and other non-precious metals (actually, it's the other way around: The miners mine copper ore containing small traces of gold, approx. 0.5 grams per metric ton).
In the prospectuses I've examined, silver is rarely mentioned.
My question: Do you "like" any silver miners? Do you have any experience with them? Can you make comparisons vis-à-vis gold miners?
Also, I have some 1-troy-ounce "Universaros" minted in 1974, 0.999 fine. Last year, when I was back in the States, I stopped by a pawn shop and offered some of them for sale; the dealer wasn't interested. I got the impression that he didn't recognize the provenance of the coins (which were not, after all, ever legal tender), and so was doubtful of their authenticity.
So, my second question is: What experience do you have with less-familiar coins? (Should they even be referred to as "coins," since they were never legal tender? Aren't they just round, embossed ingots?)
Any observations or remarks you might wish to offer would be of interest to me.
Thanks!
Regards,
Since you mentioned the proportions of your port, I’m led to ask which “storage tank” (of bonds, cash, stocks) you would drain in order to move into PMs? That may sound like a goofy question, but I’d be in favor of *reducing* bond holdings, esp of longer duration, and *not* depleting cash to buy stocks in a frothy market.
I ask that question out of order, because not only am I not a financial advisor nor did I sleep at a Holiday Inn any time within memory, but I am more confused and uncertain as to what it’s “smart” to invest in at present than at any time I can recall. Also, the time horizon of whichever of the “move into” options has to be considered as well as your own personal ability to move quickly should an opportunity occur, and finally, whether you wish to opportunistically trade in and out (of stocks, primarily) as opptys arise. At whatever frequency you like. Do we have enough variables yet?
Here are my thoughts, not in any particular order.
I am not fond of junior miners *unless* you have a specific strategy of buying a basket of say ten of them and being perfectly prepared to see something like 4 of them do utterly nothing, three of them go BK = 0, two of them multiply x 2-3 or so, and one shoot the moon. And if you happen to miss the one that does the moonshot, the whole gameplan ends up being kind of a blah. I invested sort of like this for a while. To cut to the chase: Ehh. I do not think there are many of these that might be lying around “undiscovered”. They’ve all been pumped, most of them unjustifiably so. The alternative is to invest in really, really illiquid, stocks far under the radar screen, nonsense on the Vancouver exchange. I could never get into those. In an era where credit is tough and little cos could disappear over called loans, that wouldn’t be my preference.
The small miner strategy, as I see it is, you’re betting on either a buyout by a major, or, they hit the motherlode. Both of these aspects have a certain “long shot” element to them. There’s both an appeal and a non-appeal to that.
If I wanted to invest in PM miners, for which I am lukewarm only, I think I would prefer investing in the larger gold producers; GG, FCX, BHP, AEM, AUY, RGLD (not stated in order of preference, just the way they came out and I’ve possibly left out a few) for several reasons: 1: They might well pay you a dividend. 2: They have multiple locations, thus are geographically diversified 3: They are far, far better capitalized 4: Most of them have base-metals operations, meaning, they make plenty of money mining copper and zinc. Which means that your bet on them is also a bet on the recovery of the world economy or at least a longer term upswing in commod prices. In short, you get a copper bet along with your gold bet. Is that better than the long shot bet? If you’re a conservative investor, yeah. If you’re after the juice, no.
The small miners (and I am talking about the 37 cent and 65 cent stocks) and even much larger ones *always* figure out ways to lose money. They *always* trade at unjustifiable PEs. There is *always* some back-story, ranging from something that resembles an episode of Grizzly Adams, all the way to a flaming liar standing next to a hole in the ground that’ll make you wish you never heard of the slimebag who owns the joint! The day *YOU* hear about the 250,000 oz strike the co *thinks* they have intercepted at the 2500 ft level is usually about 1 week *after* the company decides to issue 3,500,000 additional shares with 1,000,000 of them going to the underwriter at a price 17 cents under the market so you get diluted, the stock does nothing or declines.
The major silver miners are PAAS and SLW and CDE and I dunno, these companies are 1 or 2 steps away from being jokes as far as I’m concerned. IMO most of the action has occurred in these. PAAS used to trade for $6-7 when Ag was $7-8, now silver is 2.5 times that or less and PAAS is 3x the old stock price. Huh? Where da value in that?
I own a fair amount of physical silver, but I’m not that eager to buy more. I think it’s probably smarter to invest in oil. Oil could well become a de facto currency. The PMs could really, really tank very briefly if there are big defaults in Europe and everyone runs to the USD. That is a moment, IMO, when one should have lots of cash ready, because stocks and gold and oil will TANK. Briefly! As I said, I am highly confused as to what to invest in here. I also think the stock market is pretty highish and though it’s not looking like it’s ready to sell off, I don’t consider there to be all that much upside. I think the stk mkt is already factoring in a roaring recovery which I frankly don’t see.
I also think you could be the smartest guy around and not be able to beat stupidly buying BP and taking a 5.9% dividend. IMHO, about 2/3rds of the gains in the stock market over time have come from dividends.
Read
Ting!!!
btw, your “universaros” are simply what are called “generic rounds”, yes, in effect just round ingots. They should not be called coins because they were never legal tender. I think I have a few of those. Year of mintage means nada, they’re just 1 troy ounce of .999 silver, no more, no less, end of story. If the one guy you tried to sell them to didn’t like or want them, the next guy will. If you want to never have them rejected, you could buy US Silver Eagles or Canada Maple Leafs. Generic rounds usually carry about a 60-90 cent/oz premium over spot, Eagles are usually about 1.75-2.50 over spot. This can vary. Eagles cost more, but fetch more when you sell them, so you kind of get the extra premium back on sale. Should silver really take off, no doubt the premiums on all forms will also get pumped, which means the $2 premium you pay for Eagles might turn into $3. or $3.50. So there’s this little angle where you’re betting on the extra boost in premium-over-spot should you wish to own physical in the form of Eagles. Big deal. You’d have to own many hundreds of lbs of silver to have a really meaningful amount of money. Eagles *can* be called “coins” because they actually are legal tender. Of course if you were insane enough to spend a silver Eagle for its one-dollar face value, you’d have far more serious problems than calling a “round” a “coin”.
[...] which “storage tank” (of bonds, cash, stocks) you would drain in order to move into PMs?That may sound like a goofy question, but I’d be in favor of *reducing* bond holdings, esp of longer duration, and *not* depleting cash to buy stocks in a frothy market.
As I explained, I'm contemplating moving only about 6-7% of my net worth into precious metals, so I don't think that it would really matter whether I sold a few stocks or a few bonds or dipped into my cash. I suppose that I'd take it out of my cash, which is being constantly replenished from dividends and interest payments, anyway.
And: No, I don't find your question "goofy." As far as reducing my bond holdings - I was talking about corporate bonds, most issued by a single company, which will mature in the year 2043, but which I can divest myself of at the drop of a hat.
I am more confused and uncertain as to what it’s “smart” to invest in at present than at any time I can recall.
Welcome to the club! My sentiment, exactly! I've always had a good nose for "bottoms" (like the invasion of Irak, or the low in March of 2009), but seem psychologically unable to exit the "highs" - I guess it's because I'm an inveterate optimist.
I am not fond of junior miners *unless* you have a specific strategy of buying a basket of say ten of them and being perfectly prepared to see something like 4 of them do utterly nothing, three of them go BK = 0, two of them multiply x 2-3 or so, and one shoot the moon. And if you happen to miss the one that does the moonshot, the whole gameplan ends up being kind of a blah. I invested sort of like this for a while. To cut to the chase: Ehh. I do not think there are many of these that might be lying around “undiscovered”. They’ve all been pumped, most of them unjustifiably so. The alternative is to invest in really, really illiquid, stocks far under the radar screen, nonsense on the Vancouver exchange. I could never get into those. In an era where credit is tough and little cos could disappear over called loans, that wouldn’t be my preference. The small miner strategy, as I see it is, you’re betting on either a buyout by a major, or, they hit the motherlode. Both of these aspects have a certain “long shot” element to them. There’s both an appeal and a non-appeal to that.
Yes, you've summed up the matter quite succinctly!
If I wanted to invest in PM miners, for which I am lukewarm only, I think I would prefer investing in the larger gold producers; GG, FCX, BHP, AEM, AUY, RGLD (not stated in order of preference, just the way they came out and I’ve possibly left out a few) for several reasons: 1: They might well pay you a dividend. 2: They have multiple locations, thus are geographically diversified 3: They are far, far better capitalized 4: Most of them have base-metals operations, meaning, they make plenty of money mining copper and zinc. Which means that your bet on them is also a bet on the recovery of the world economy or at least a longer term upswing in commod prices. In short, you get a copper bet along with your gold bet. Is that better than the long shot bet? If you’re a conservative investor, yeah. If you’re after the juice, no.
Your advice is quite reasonable!
The small miners (and I am talking about the 37 cent and 65 cent stocks) [...]
No, I would be very reluctant to invest in penny stocks. The "junior miners" to which I referred have market capitalizations of at least $750 million.
I own a fair amount of physical silver, but I’m not that eager to buy more. I think it’s probably smarter to invest in oil. Oil could well become a de facto currency. The PMs could really, really tank very briefly if there are big defaults in Europe and everyone runs to the USD. That is a moment, IMO, when one should have lots of cash ready, because stocks and gold and oil will TANK. Briefly! As I said, I am highly confused as to what to invest in here. I also think the stock market is pretty highish and though it’s not looking like it’s ready to sell off, I don’t consider there to be all that much upside. I think the stk mkt is already factoring in a roaring recovery which I frankly don’t see.
Yes, I've already invested approx. 7% in big oil companies, through a Closed End Fund for which I have high hopes (and which I probably will be psychologically unable to sell once the peak is reached!). But I want to cover all of my bases, hence my pondering precious metals.
IMHO, about 2/3rds of the gains in the stock market over time have come from dividends.
Yep, I feel ashamed of being so unimaginative, but while waiting for my next "inspiration," I have favored high-dividend-paying stocks.
Regards - and thanks again for your good insights!
Has anyone else bought from APMEX. Just wondering if you had a good experience with them.
I myself have never bot from APMEX but I have never in ten years of futzing with this stuff heard of a single complaint and have heard plenty of good reviews....and not just from their website. They are widely regarded as top-notch and they have just about widest varieties of forms you’ll find.
In the category of “read the whole deal” APMEX charges separate shipping which can get pricey on small lots. www.tulving.com (also flawless reputation) tends to include shipping but they have much steeper minimum lots.
One thing I like about APMEX (but have never taken advantage of) is that you can buy from them 24 hours a day. Which means that if gold takes a huge dump overnight (and it definitely has that characteristic) their ordering site will dip in price *some*...probably not as much as the market dump, but you can at least capture some of the dip.
My suggestion is to stalk their site for a while with an idea of which 2 or 3 forms you’re most interested in and become somewhat acquainted with the buy vs sell spreads...and how those spreads react to market volatility. Some forms of silver can be bot for 49 cents/oz over spot. Some types, 79 cents. Some types, higher. My own favorite way to buy junk silver is to go to coin show and hand cash over the table to a dealer and walk out with the mdse then and there. Sometimes you can find a few mispriced coins...not that anybody is going to retire by saving 50 cents on three 1962 quarters, but those little wins help you on those inevitable occasions where you’ll overpay.
Keep in mind that in most states, purchases of PMs under $1K are subject to sales tax ($2500 in some states)
Bump, thanks.
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