Stacking Strategy: What has been your biggest mistake?

[Ryan]

Hi all, 

im totally new to stacking and have been been reading this forum for the last 4/5 days. i have found many extremely helpful and informative posts regarding stacking strategy and also many opinions, hunches and guesstimates. But what would be great to hear is what hasn't worked? Where have you went wrong? What has been your biggest mistake?

[sixgun]

i did not start an Excel spreadsheet soon enough for what i had. It would have been easier to do it from the start b/c it was quite a job to rave everything out to compile it and some of the information i could not remember.

Put the name of coin/bars - details - weight - grams or oz of gold/silver - maybe price - where you got and so on - all the details you might need. Do it early. It makes it easier to know what you have, what you might be looking for, average cost per ounce, total weight

i have a different section for gold and silver.

[Scuzzle]

I wish I'd just stuck with the cheapest bullion silver I could have got my hands on rather than deciding to diversify into the more premium stuff, the thinking was the premium stuff would increase and still give me profit even if silver spot did nothing but go down  but I've learned I don't have what it takes to identify what to get and the optimum time to shift it on so my life would have been a whole lot easier if I'd just stuck to silver Britannias got as cheaply as possible and just waited as long as it takes for the price to spike.

[Lowlow]

LOL deleted my own joke.

 

Ahem ... so, uhh, yeah, the important thing is to stack em high!

When in doubt, get more silver.

[lmwstamps]

5 hours ago, Scuzzle said:

I wish I'd just stuck with the cheapest bullion silver I could have got my hands on rather than deciding to diversify into the more premium stuff, the thinking was the premium stuff would increase and still give me profit even if silver spot did nothing but go down  but I've learned I don't have what it takes to identify what to get and the optimum time to shift it on so my life would have been a whole lot easier if I'd just stuck to silver Britannias got as cheaply as possible and just waited as long as it takes for the price to spike.

How interesting.  My mistake is just the opposite.  I started with just buying the cheapest generics but wish I had harnessed the power of premium coins earlier.  I don't buy premium coins when first issued.  Instead I look for them on the secondary markets from sources that may not know or care about the collector premiums.  I then try to sell them to collectors and put the profits back into purchasing coins.  I guess this just means that some mistakes are defined by one's purpose and method for stacking.

[vand]

I agree with @Scuzzle

I've been stacking for almost 3 years now. IMO I have done a lot right, but the biggest mistake I made was in assuming that the semi-numismatics that did well in the last 10 years would continue to do so (I'm looking at you, Pandas/Kooks). The new coins from all these series have gone absolutely nowhere since 2016, and I don't really expect them to either. Why would they? It's just silver at the end of the day. IMO the market is completely over-saturated with different series all competing with each other to be the next "hottie". None of them are as special as they would like you to think they are.

Buy what is cheap and what you like the look of, and take any numismatic appreciation you may get in future years as a welcome bonus, not a given.

 

[FoolzGold]

I guess I'm still flailing around making mistakes after only stacking for a few years now.

In terms of silver my first purchases were basic bullion coins (Britannias, Kangeroos etc) but I regret these now as the margins were just so high and they have zero numismatic resale value.

Then I dabbled in Kookaburras and the like but as mentioned above (@vand) these have not gone anywhere in terms of semi-numismatic value.

More recently I've leaned heavily towards the QBs but only time will tell if this was a good move or not. Personally I love the designs, so I prefer owning these to pretty much any other coin in aesthetic terms, but I'm also happy with the premiums which are really only a fraction higher than the basic bullion coins where they're first released. Even if they don't really hold any semi-numismatic value over time the extra investment is really quite small.

Maybe the QB series won't hold up its value long term but I would think at least for the next couple of years while the series is being released (through 2020) it's difficult to see the coins losing their appeal. I would think demand for the earlier discontinued coins will stay high or even increase as the series continues and more people start collecting and try to back-fill the set.

But what do I know? Maybe the best bet is old currency and knives and forks etc. I know nothing about old silver so I can only comment on bullion.

[lmwstamps]

4 hours ago, vand said:

I've been stacking for almost 3 years now. IMO I have done a lot right, but the biggest mistake I made was in assuming that the semi-numismatics that did well in the last 10 years would continue to do so (I'm looking at you, Pandas/Kooks). The new coins from all these series have gone absolutely nowhere since 2016, and I don't really expect them to either. Why would they? It's just silver at the end of the day. IMO the market is completely over-saturated with different series all competing with each other to be the next "hottie". None of them are as special as they would like you to think they are.

I agree 100%.  To purchase semi-numismatic coins with the hopes that they will go up is really just a gamble.  You might win on occasion, but I think more often than not you would be on the losing end.  With that said, there are opportunities in every "market".  I've found that in the area that I live (Southeastern United States), there are quite a few dealers who view semi-numismatics as if they were just another generic round.  This creates opportunities to purchase semi-numismatics at generic round prices and try to extract the premium by reselling to collectors.  If I am able to sell them, it's extra money to reinvest in my stack, but if not, purchasing semi-numi's at a fraction over spot is always nice.

[matrawr]

Vintage silver bars/old solver coinage....:)

[RoughDog]

I probably should of purchased the cheapest 1oz gold coins or gold bars I could find regardless of condition.  Same with silver.  I do like the designs of most things I own especially lunar 2 gold.

Ah well, I must of lost thousands over the years on material cr*p.  I don't even want to think about the time I have wasted.

 

[Tingles]

 

I should've started 20 years earlier and invested twice as much each year... and sold my crypto last December and bought big lumps of AU!!! 

[NewMSmatist15]

10 hours ago, lmwstamps said:

How interesting.  My mistake is just the opposite.  I started with just buying the cheapest generics but wish I had harnessed the power of premium coins earlier.  I don't buy premium coins when first issued.  Instead I look for them on the secondary markets from sources that may not know or care about the collector premiums.  I then try to sell them to collectors and put the profits back into purchasing coins.  I guess this just means that some mistakes are defined by one's purpose and method for stacking.

I think you are both right. @Scuzzle I think your strategy hinges on ( and does well!) when the price of silver fluctuates compared to the equity markets. However, a strategy like @lmwstamps where you buy the premium coins is much more a "collectible" bet. I've had poor success with some seemingly collectible coins and poor success with bullion but for different reasons. Likewise I've had winners on both sides. For me, American Silver Eagles in bullion are a winner, almost always, in terms of their ease for liquidation and ability to cover spot prices if held long enough. I can't say I've had a segment in the premium coins that is a winner, but when I switched from buying anything I thought would be collectible and appreciate to what I enjoy collecting, I had much better success. I think enjoying what you collect helps you understand that coin series/coin type in a way that allows you to buy and sell for a profit. Just my two cents...

[lmwstamps]

@NewMSmatist15,

You are correct, it is a collectible play, but a play with very little downside.  For instance, in the past 2 weeks among other things I've purchased a 2017 QB Griffin for $30, a 1996 and 1998 Maple leaf in original packaging for $17 apiece, and a 2004 Britannia for $17 as well.  These are all collectible coins with higher premiums.  Two have already been sold, but with the other two, even if I don't sell them, my premium cost over spot is only $1.50 more than buying the cheapest generics I can find right now.  Granted, it's not every day that these deals come along, but they come along often enough to allow me continually be buying, selling, and reinvesting in the stack.  I make no claims that this approach works for everyone, but it works for me.  I enjoy searching for deals and haggling and where I live, there are plenty of opportunities to both buy and sell.

[vand]

56 minutes ago, lmwstamps said:

@NewMSmatist15,

You are correct, it is a collectible play, but a play with very little downside.  For instance, in the past 2 weeks among other things I've purchased a 2017 QB Griffin for $30, a 1996 and 1998 Maple leaf in original packaging for $17 apiece, and a 2004 Britannia for $17 as well.  These are all collectible coins with higher premiums.  Two have already been sold, but with the other two, even if I don't sell them, my premium cost over spot is only $1.50 more than buying the cheapest generics I can find right now.  Granted, it's not every day that these deals come along, but they come along often enough to allow me continually be buying, selling, and reinvesting in the stack.  I make no claims that this approach works for everyone, but it works for me.  I enjoy searching for deals and haggling and where I live, there are plenty of opportunities to both buy and sell.

How scalable is this strategy, though?

If you want to put, say, 20% of your earning into PMs each month (as has been discussed in some other threads) are there enough coins to be scoured? 

[greektony]

6 hours ago, Tingles said:

 

I should've started 20 years earlier and invested twice as much each year... and sold my crypto last December and bought big lumps of AU!!! 

You and me both. I try not too think too much about December 2017 and the 'to the moon' talk that was everywhere!

[lmwstamps]

It's scale-able at some level.  I focus on .999 silver rounds and coins and in dollar terms I could probably find enough premium bullion material to spend on average about $1000 a month.  I pass up many coins that I could flip for lower profit.  At the same location I purchased the coins I mentioned, I passed up 2 tubes of older date silver eagles priced at 16 each.  At current spot prices and the selling venues that I have I can usually sell those for anywhere between 18 and 22 apiece.  There are opportunities for doing the same thing with vintage bars.  Someone else I know does much the same thing with low grade numismatic coins, purchasing lower grade Morgan and Peace dollars for 14 to 15 each and selling them for 17 on up. Using this process, I tend to be an opportunity based buyer rather than incremental time buyer.  The best places to find deals like this are at coin shows and there are at least 6 large coin shows near me every year.  The important part of this is also figuring out what sells and where.  My primary outlet for collectible high premium coins is ebay, but I also sell at local coin auctions each week and tailor my purchases to what the collectors are buying at those auctions.  No method for accumulating PM's is scale-able to everyone everywhere (and I know you aren't suggesting that).  If you have a lot of money available and little time, this won't work, but then again, if you have a lot of money, you may be accumulating gold more than silver.  I don't have a lot of disposable income, and this method allows me to increase my stack at a quicker rate than if I was just buying and holding.

 

[Tingles]

1 hour ago, greektony said:

You and me both. I try not too think too much about December 2017 and the 'to the moon' talk that was everywhere!

It’ll be back soon enough!

[vand]

Some further advice, if I might:

- DON'T overstretch yourself. Good stacking discipline is to buy what you can comfortably afford each month, not such a large amount that it leave you on bread and water for half the month

- Stockpile cash as well as PMs. Having a cash buffer is the best way to not have to worry about your short term obligations while you stockpile for your long term, and leaves you with the flexibility to able to take advantage of any opportunities that present themselves 

- Develop a long term mindset and strategy that turns it into a mechanical process and takes the emotion out of it.

- Don't view silver as a temporary replacement for gold or with a view to swapping it for gold at a latter date. Silver is its own metal, you should be prepared and happy to hold what you have bought. There will come a time when gold is the better buy, in which case buy gold and hold both. Yes, there may also come a time when the GSR is so stretched/compressed that it makes sense to swap one for the other but those opportunities only present themselves on average once every 5-10 years, far less often than you might think.

[StackingItAll]

I'm a month in and for me it's all about the cheapest deals be it on coins and bars. I buy bulk to avoid having to pay multiple postage costs. Find a good seller and see what they have coming in price wise. I have no interest in collectibles or graded as carry to much of a premium for me and my long term plans. Good luck with your stacking its a great way of investing in future wish I had started sooner.

[StackemHigh]

Look at mintages if there is bigger mintage every year then the potential goes down with every increase.

Obviously this is only one indicator.

[Ryan]

5 hours ago, StackemHigh said:

Look at mintages if there is bigger mintage every year then the potential goes down with every increase

What is a typical mintage? And what would you say would be the threshold for not buying. Like you said this is only one indicator, but would be good to get a ballpark figure. 

[vanderPoot]

2 hours ago, Ryan said:

What is a typical mintage? And what would you say would be the threshold for not buying. Like you said this is only one indicator, but would be good to get a ballpark figure. 

Up to 50.000 from a successful minth like perth minth will be good.

But it is hard to say in general, maybe you have a sleeper, maybe a dud, we are all looking for a hit. Mintage isn't everything of course, look at QB and Rwanda for example.

You also have to buy what you like, but that's more collecting than stacking. Strategies are very personal.

Personally I love Scottsdale coins, pure quality but doesn't seem to get a lot of love from the community, so I buy them for myself and who knows, maybe I catch a sleeper, if not... me likey 

[AppleZippoandMetronome]

I think my biggest mistake was losing interest for a long period of time. I got in to this when I was quite young 17/18 buying up old Canadian silver coins and other random bits that caught my eye. Did that for a few years but then I just seemed to lose interest as work ramped up and I moved to the UK. I can't complain too much as money went in to other endeavours like property, land and just general life experiences - late night drinking in London is expensive! 🤣 I'm glad for the other assets and very glad for having had a blast in my 20s but at the same time I wish I'd of stuck with it even to a small degree.