Gold/Silver

bradgator2 · Mar 8, 2019

What is your stance?

Do you buy some and just hold on to it?

Do you actively try to keep acquiring some throughout the year? If so, what do you actually try to buy?

DG and I have talked about gold and silver a little bit.

I have some. Pretty much all in the form of roll after roll of junk silver coins. The problem I always come to is: how the heck would I actually ever use it... or when?

maheo30 · Mar 8, 2019

I've wondered the same thing. I look forward to the board's response.

TheDouglas78 · Mar 8, 2019

A guy I used to work with bought everyone's new kid a silver coin. He himself owned quite a good amount, and when silver or gold had a temporary drop would pick up more... It is part of his retirement plan, but there are several places around our area were you could cash out at value. I went with him a few times to a local shop, and he would buy coins.

bradgator2 · Mar 8, 2019

TheDouglas78 said:
A guy I used to work with bought everyone's new kid a silver coin. He himself owned quite a good amount, and when silver or gold had a temporary drop would pick up more... It is part of his retirement plan, but there are several places around our area were you could cash out at value. I went with him a few times to a local shop, and he would buy coins.

So his mindset is it a pure commodity. Buy it low, and simply sell it when the time is right. I have never come across or seen a place to cash out at value. That has always been my biggest hangup: How do you sell it without getting raped?

That doesnt stop me from always picking some up though. It sure is pretty. :lol:

TheDouglas78 · Mar 8, 2019

bradgator2 said:
So his mindset is it a pure commodity. Buy it low, and simply sell it when the time is right. I have never come across or seen a place to cash out at value. That has always been my biggest hangup: How do you sell it without getting raped?

That doesnt stop me from always picking some up though. It sure is pretty.

He always knows the value, and knows the places he could go.. one was close to our building. The key I guess is be an informed consumer.

no1g8r · Mar 8, 2019

Gold & Silver seem to be popular with the doomsday prepper crowd. The argument is that it has always held its value across the ages. An example that I've seen used is that a silver dime would buy a dozen eggs in 1920, and will still buy a dozen eggs today (current melt value is around $1.20)

bradgator2 · Mar 8, 2019

no1g8r said:
Gold & Silver seem to be popular with the doomsday prepper crowd. The argument is that it has always held its value across the ages. An example that I've seen used is that a silver dime would buy a dozen eggs in 1920, and will still buy a dozen eggs today (current melt value is around $1.20)

Yeah, I have heard the same argument. My counter argument would be: in a doomsday/Madmax situation.... would silver/gold actually be used as currency? We just dont know. For the person that gave up the dozen eggs, that silver doesnt do jack shiit for them.

I would guess for doomsday there would be only 1 currency: bullets.

no1g8r · Mar 8, 2019

I remember reading blog posts from Ferdinand Aguirre (aka "Ferfal", who lived in Argentina during the 2001 collapse. He talked about how black market traders had set up to exchange silver and gold, mostly jewelry and coins, for either goods, US dollars, or Euros (stable currencies instead of the hyperinflationary Argentinan currency)

I don't disagree about bullets as an initial currency in a true SHTF scenario, but in a situation where the early symptoms are the economy and currency collapsing, precious metals might be worthwhile.

The trouble is, precious metals have been lousy investments over time, as they hold their value, for the most part, without appreciating. But when compared against the purchasing power of currencies and even equities, they are better quite a few other investments.

backstop13 · Mar 8, 2019

My take is that gold/silver produces nothing. you buy at $x and hope someone else will buy at $x+y.

with stocks and bonds and property, you buy and it produces revenue of some kind. dividends, yields, rent or whatever. precious metals produce nothing. and over the long-term, metals don't keep up with inflation.

...a dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars. All this is in real terms, taking inflation into account. Meanwhile, a dollar invested in gold in 1801 would by 1998, be worth just 78 cents. The phrase, “as good as gold” can be misleading as the phrase “money in the bank”, when talking about the long run.

Thomas Sowell, Basic Economics (2007)

Regarding currency collapse, I can't recall the book but read something years ago about how precious metals have not been used as a means of exchange -- on a wide scale -- since the collapse of the western Roman empire ca. 450 AD. Black death in Europe? Nope. Taiping rebellion and cultural revolution in China? Nope. After the US Civil War? Nope. During and after WW1 and WW2? Nope. After famines, floods and other natural disasters all over the world? Nope. Nowhere in the aftermath of crisis has gold or silver been widely used for currency or barter in over a millennium.

Physical gold/silver is difficult to store from a storage standpoint too. It's hard to liquidate. If you really want to have a diverse portfolio and are dead set on some sort of PM, I wouldn't put more than 5% of my portfolio towards it and I'd try to use ETF's instead of actual physical coins/metals.

no1g8r · Mar 8, 2019

I'm the first one to say that gold and silver are lousy investments over the long haul.

At the same time, you can't really compare fiat currency vs. gold as compared to fiat currency vs. stocks/bonds as fiat currencies are a moving target.

I look at all of them as tools in my toolkit. My retirement portfolio is mostly stocks, bonds, and options. I keep a bit of precious metals (well under 5%) in the unlikely event that there is some problem that severely devalues my retirement portfolio (economic/currency collapse, or something like that). I also like having the PMs for their "tangibleness". It's fun to handle some shiny gold coins, or pick up a small but heavy sack of junk silver coins.

bradgator2 · Mar 8, 2019

backstop13 said:
Physical gold/silver is difficult to store from a storage standpoint too.

So usually after a long night of drinking, my buddies and I always seem to end up on MadMax scenario. Where are we going to meet, how are we going to get there, what are you going to take, etc, etc. Currency always come up. One night, I finally drag out a box (about half the size of a shoe box) of silver and weigh it. 50 pounds. If you are on foot... that is going to royally suck :lol:

no1g8r · Mar 8, 2019

bradgator2 said:
So usually after a long night of drinking, my buddies and I always seem to end up on MadMax scenario. Where are we going to meet, how are we going to get there, what are you going to take, etc, etc. Currency always come up. One night, I finally drag out a box (about half the size of a shoe box) of silver and weigh it. 50 pounds. If you are on foot... that is going to royally suck

Maybe consider small denomination gold coins? 1/10 troy ounce gold coins would have a melt value of about $130 right now. 10 pounds avoirdupois in your shoebox would be worth about $11,700. Throw in a couple of rolls of 1 oz silver dollars, and for a little over 12 pounds of weight you have over $12k in value

I'm not a doomsday kind of guy, I'm more of a well-rounded planner. But I would think silver would be best if you are sheltering in place, and gold would be better if you were on the move.

gator1946 · Mar 8, 2019

When my dad died he had accumulated a large, very large, trove of silver coins. They were worth significantly more than base silver value if you chose to cash them in with a coin dealer. He just threw them in a shoe box. My 15 year old daughter found the shoe box, figured it was just like the other change we left around and spent every dime, quarter, and half dollar. :suicide:

I no longer consider investing in silver.

bradgator2 · Mar 8, 2019

gator1946 said:
When my dad died he had accumulated a large, very large, trove of silver coins. They were worth significantly more than base silver value if you chose to cash them in with a coin dealer. He just threw them in a shoe box. My 15 year old daughter found the shoe box, figured it was just like the other change we left around and spent every dime, quarter, and half dollar.

I no longer consider investing in silver.

Holy crap noway. My dad dabbled as an numismatist. I actually have fond memories of going into some very grundgy, smokey coin shops and sifting through penny cans while he was sifting through Morgan dollars. I now have all of it. It took years to convert his notebooks of notes and convert them into excel spreadsheets to create a proper inventory.

I have told my wife: If I die, for the love of God.... dont sell any of this

gator1946 · Mar 8, 2019

Up until the age of 12 I was really into coins. I have a complete set of lincoln head pennies up to 1958 when I discovered there were better things to do than search through rolls of pennies. I found every one of them, except a 1909 S vdb which I bought later when I could afford it. I even found a 1914 D (very fine). That of course doesn't include the weird mistrikes. I don't have any of those.

Your comment about smoky coin shops brought back memories. I don't think there was any coin shop that wasn't clouded with smoke, complete with a dealer behind the counter puffing on a stogie. My son now has my collection in a safe. It's worth quite a bit. I'll probably never see it again but at least he has it and he has no intention of selling it. He also has my dad's stamp collection which he put together as a kid. It's worth a ton.

Pablos Tunnel · Mar 9, 2019

bradgator2 said:
So his mindset is it a pure commodity. Buy it low, and simply sell it when the time is right. I have never come across or seen a place to cash out at value. That has always been my biggest hangup: How do you sell it without getting raped?

That doesnt stop me from always picking some up though. It sure is pretty.

Buy local, sell on eBay when prices peak or build a relationship with a local dealer. You will always pay above spot or sell below. The dealer has smelting and or other expenses to cover. Its no different with any other asset.

Pablos Tunnel · Mar 9, 2019

gator1946 said:
When my dad died he had accumulated a large, very large, trove of silver coins. They were worth significantly more than base silver value if you chose to cash them in with a coin dealer. He just threw them in a shoe box. My 15 year old daughter found the shoe box, figured it was just like the other change we left around and spent every dime, quarter, and half dollar.

I no longer consider investing in silver.

Most common circulated silver coins are not worth much more than spot price. So don’t feel too bad. Damn kids!

no1g8r · Mar 9, 2019

Pablos Tunnel said:
Most common circulated silver coins are not worth much more than spot price. So don’t feel too bad. Damn kids!

You do realize 1946 is saying that his daughter sold these assets for face value, about 9 cents on the dollar versus spot price. I’m guessing a shoe box will hold over $500 face value in silver coins, so the loss via ignorance was over $5000. Given that it was something accumulated over a lifetime, i’d be Pretty sick about it. Not just for the financial loss, but the waste of the effort to have collected them in the first place.

Pablos Tunnel · Mar 9, 2019

no1g8r said:
You do realize 1946 is saying that his daughter sold these assets for face value, about 9 cents on the dollar versus spot price. I’m guessing a shoe box will hold over $500 face value in silver coins, so the loss via ignorance was over $5000. Given that it was something accumulated over a lifetime, i’d be Pretty sick about it. Not just for the financial loss, but the waste of the effort to have collected them in the first place.

I do now. Ugh. Sorry 1946.

78 · Mar 9, 2019

To quote Buffett about precious metals:

"Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility."

Doesn't pay a dividend either.

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