Buying Cull Coins

[aztecstargazer]

I have all but abandoned the idea of buying generic silver. These rounds and bars are entirely to difficult to sell. You either have to sell them back to the company you purchased them from; Or you have to sell them on the third market. Don't get me wrong, there are some extremely beautiful rounds available. But, you are going to be limited in where and when you can sell them. 

That being said, I am thinking of building a short and long term PM portfolio. I personally have begun buying APMEX mint direct products, in particular the New Zealand Star Wars Coins. These are coins I want to hold for a long time. At least until the series is completed. Which will of course take years. But I do feel I have gained enough experience to start trading silver. The pros would probably recommend I go into the ETF's. This has the inherent problem of "if you don't hold it, you don't own it". 

So I have been shopping around and started to notice culled or damaged coins are extremely cheap. I know this is because they are not going to appreciate in value like an MS 69 or MS 70 kind of coin. They will pretty much be tied to the spot price, similar to generics. The thing is that these are still coins at the end of the day. It took me a long time to wrap my head around why coins carry a premium. This is because coins are produced by governments. The penalty for counterfeiting the coin is severe, which dissuades criminals from creating fakes. It is the liquidity which is so important. 

My question here is if anyone has any experience with cull or damaged coins? Remember I am seeking an item which is not going to be held for long periods of time. Are these coins still still considered BU? Are these coins still liquid? I am also not looking to see rapid appreciation of a coin. I am looking to trade in and out of a position within a couple of months to a few weeks. Any input or discussion would be appreciated. 

[Silverhunter]

"This is because coins are produced by governments. The penalty for counterfeiting the coin is severe, which dissuades criminals from creating fakes". 

I wish this part was true

[aztecstargazer]

17 minutes ago, Silverhunter said:

"This is because coins are produced by governments. The penalty for counterfeiting the coin is severe, which dissuades criminals from creating fakes". 

I wish this part was true

I'm not suggesting people don't counterfeit coins. I'm just saying it is far less common and the degree of detail and such makes it more difficult to counterfeit them as well.

[HawkHybrid]

2 hours ago, aztecstargazer said:

I am also not looking to see rapid appreciation of a coin. I am looking to trade in and out of a position within a couple of months to a few weeks.

 

I'm not sure I understand this bit.

if you want to trade/speculate on the price of silver

then I assume a trading account might work best.

imo selling physical silver in any form can be a pain. you

either need to sell it at a significant discount or be very

lucky to have someone interested on being on the other

side of the trade. it's just not that liquid.

 

HH

[ilovesilverireallydo]

On 30/01/2018 at 18:56, aztecstargazer said:

My question here is if anyone has any experience with cull or damaged coins? Remember I am seeking an item which is not going to be held for long periods of time. Are these coins still still considered BU? Are these coins still liquid?

I buy culls and damage coins when I get them at spot. It’s still Silver so still have metal content value, and can be sold at spot. 

They aren’t considered BU, not sure why they would, they are damaged circulated usually. 

They are quite liquid, any pawnshop, LCS or scrap Silver merchants would buy them, as would Silver Stackers in most forums, but their value would be intrinsically linked to spot. As a pure stacking weight purchase they are not a bad option, especially for short term holds. 

However if you are based in the US, then you have more options than the rest of us, buy spot deals regardless of the Silver item, Apmex, JM Bullion, SilverGoBull, Provident, all have spot deals on often, including first time buyer offers on 10oz buys. These deals allow you to stack a range that MAY also go up in value more than spot, and more interesting to stack than culls. 

[ilovesilverireallydo]

On 30/01/2018 at 18:56, aztecstargazer said:

It took me a long time to wrap my head around why coins carry a premium. This is because coins are produced by governments. The penalty for counterfeiting the coin is severe, which dissuades criminals from creating fakes.

I would argue that they are more commonly known, globally bought and sold, and usually bought en masses by institutional investors rather than generics. The fact that there are legal currency has tax considerations in most countries including the US and UK.