Understanding the Game

[brassmonkey]

Hi all,

As a Newbie I'm enjoying studying and learning all about the game of investing in precious metals but theres one or two things that have occoured to me which I cant fully understand.

This could be the wrong approach and may not be in keeping with the spirit of Stacking but what's stopping someone treating their stack in the same manner as Stock & Shares? 

Looking at the metal price charts over the last 10 years or so it seems both gold and silver have enjoyed a Bullish ride - so consider this example: Why wouldn't someone who has just inherited £10k invest it in gold with the intention of selling it on in 6 months to raise money for a deposit on a house?? Lets say their work has dictated they will need to re-locate...

This would be a much better use for the money than to have it staring blankly at you from a bank account.

It seems the VAT on silver might persuade short-termers into gold for this exercise, but to me it seems like a worthwhile solution when considering the options of where to store wealth until lifes next move is made.

Also in relation to the metal charts - why wouldn't a very wealthy private investor (such as Bill Gates, Warren Buffett etc), not invest heavily in the commodity of gold and silver??? To do so would give them gains of unspeakable numbers!

The incline of these charts look strong and healthy but yet it seems that only either Banks or regular, everyday folk engage in Stacking yet millionaires prefer to indulge in the (far riskier and less profitable) world of Stock & Shares.

It's almost as if theres something preventing rich people becoming a part of this.

Don't get me wrong - in many ways I am happy this is the case as it leave more mental to regular folk but I just cant fathom the reason why....

Precous metals is a very intriguing area to be part of and I would like to be involved for the remainder of my days but I'm learning from scratch and I'm hungry to know more and more.

Thanks in advance.

[Abyss]

Hi @brassmonkey welcome Silver Forums, physical metals have spreads between buy and sell price to dealer in case of Gold bought 1 oz from dealer today and sold back to the same dealer the next day (no movement in spot price) lose anywhere between 3-5% and in Silver be 20%. Not all Silver/Gold created equally some have numismatic value beyond the metal content and in your stack you could be collecting say the Queens Beast series make no sense from collectors perspective to sell the metals when you have not finished the series regardless of spot price.

As for the elite getting into PM they are but certain individuals the system will not allow them to enter into the PM market...https://sdbullion.com/blog/warren-buffett-silver-hoard-1997-to-2006

Lots of discussion on the forum about balanced portfolio with physical PM. Lots to read, study, watch (love YouTube) but word of caution the shiny metals can be addictive. Do all your due diligence set limits and priorities and enjoy world PMs and don't go to far down the rabbit hole.

[DoubleEagle]

Buffett once bought a bunch of silver, 130 million ounces of it. JP Morgan Chase currently owns 133 million ounces of it. In Buffett's case, he bought all that silver because it was cheap at the time, 1997 if I remember. And I think one of his businesses actually has a use for it.
But seriously, why would you want to sell your wealth? The idea is to have wealth instead of paper or digital currency. If you needed, you could sell in order to get some currency though.
Timing a market like gold and silver could be difficult. Much like stocks, the future price is unknown. So if you need currency in six months, it might be prudent to keep some currency for six months, instead of risking a loss on stocks or metals.

[5huggy]

37 minutes ago, brassmonkey said:

why wouldn't a very wealthy private investor (such as Bill Gates, Warren Buffett etc), not invest heavily in the commodity of gold and silver??? To do so would give them gains of unspeakable numbers!

See what George SOROS has loaded up on recently - that will answer that question!🙄

[5huggy]

42 minutes ago, brassmonkey said:

Don't get me wrong - in many ways I am happy this is the case as it leave more mental to regular folk but I just cant fathom the reason why....

Quite right my friend IMHO - - they , (the Mega's richies) prefer the perceived "LIQUIDITY" of playing paper - quick in and out 

When the "DAY" comes - those mega amounts of "fiat " will pile in and the likes of us "MINIONS" capable of thinking outside the BOX - will be smiling!!!

ALL IMHO

[HawkHybrid]

1 hour ago, DoubleEagle said:

JP Morgan Chase currently owns 133 million ounces of it.

 

this is not true. jpmorgan has 133M ounces on their

books. who owns it is still an unknown.

 

pm's is for saving money. investing in companies is

investing for the future and trying to increase your

worth. they both have different purposes.

 

HH

[Uksilverstackers]

130 million ounces of Physical or Paper?

[RacerCool]

Do we really know that the elites don't have gold and silver? How would we really know anything about what the rulers of the world have or what they do? All we can really know is that they're the ones running economies, and influencing world events. And they're probably the same ones who own the mines where we get our PMs, just like they own the oil wells, etc.

[HawkHybrid]

18 hours ago, Uksilverstackers said:

130 million ounces of Physical or Paper?

 

only pumpers of physical metal are obsessed with

physical delivery versus paper contracts. for every

one else it's not important.

 

HH

[Melon]

The spread of buy against sell is very high for short term investment. 

We don't know how the mega rich spend their money. However what we can say for certain is if those mega rich people you mentioned had chosen to stack PMs rather than invest in business/shares etc, they wouldn't be "mega rich" today. So lets not critique their decisions! 

[brassmonkey]

Some great replies here - I'm enjoying reading them! 

It seems the world of PM is like dating a beautiful and mysterious woman - lol! 

Well, ok. It looks like stacking can be used for a great many things which change prioties as peoples lifes evolve but ultimately it's a creation which reflect how individual stackers feel at that point in your/their/our lives.

1 hour ago, Melon said:

The spread of buy against sell is very high for short term investment. 

I do struggle with certain terms tho and not I'm not sure what the above quote means - anyone care to shed some light???

 

[swanky]

16 minutes ago, brassmonkey said:

I do struggle with certain terms tho and not I'm not sure what the above quote means - anyone care to shed some light???

Spread is the (relative) difference between the highest buy offer and lowest sell offer. Alternatively, the loss you would incur if you buy from a seller then immediately sell to a buyer.  "Because buyers want a bargain, while sellers want to get top price."

[HawkHybrid]

18 minutes ago, brassmonkey said:

I do struggle with certain terms tho and not I'm not sure what the above quote means - anyone care to shed some light???

 

he/she is saying that the short term profit margins

are too small. you need to wait for bigger moves

(over a longer time frame) because the difference

in your buying price is much higher than your selling

price(when there's no movement in the spot price).

when you buy, you are already at a larger paper loss

so need to wait longer for a larger spot price rise in

order to turn a profit.

 

HH

[RacerCool]

4 hours ago, HawkHybrid said:

 

only pumpers of physical metal are obsessed with

physical delivery versus paper contracts. for every

one else it's not important.

 

HH

Maybe I'm misunderstanding, but there are many of us who only want physical holdings instead of paper.

[brassmonkey]

45 minutes ago, RacerCool said:

Maybe I'm misunderstanding, but there are many of us who only want physical holdings instead of paper.

Yes - with you 100% on this as to me actually having something tangible to hold, discuss and to take care of is a huge part of the appeal.

I'll have an old motorcycle over paper any day - far more interesting (to me) than any numbers, graphs or pie charts could ever be.

It just somehow has more meaning...

[HawkHybrid]

53 minutes ago, RacerCool said:

Maybe I'm misunderstanding, but there are many of us who only want physical holdings instead of paper.

 

how does what physical/paper millions of ounces

jpmorgan hold affect that?

 

it's ok to choose physical over paper but you can do

that without pushing the pumpers line of how rare

physical silver is.

 

HH

[erv]

7 hours ago, HawkHybrid said:

 

only pumpers of physical metal are obsessed with physical delivery versus paper contracts. for every one else it's not important.

 

 

IMHO the whole point of stacking is to be out of the system in case the system fails.  I feel paper contracts can become as useless as fiat.  I do trade in some paper, but that is just for the short term.  My physical holdings are for the long term.   

[HawkHybrid]

30 minutes ago, erv said:

 

IMHO the whole point of stacking is to be out of the system in case the system fails.  I feel paper contracts can become as useless as fiat.  I do trade in some paper, but that is just for the short term.  My physical holdings are for the long term.   

you are all missing the point.

 

On 13/11/2019 at 20:39, Uksilverstackers said:

130 million ounces of Physical or Paper?

this post has nothing to do with stacking physical

versus paper.

the question: is jpmorgan holding 130 million oz

in physical or paper.

 

only a pumper of physical metal would be interested

in the answer to that(or someone who have been

watching too many metal pumpers youtube).

 

holdings is holdings. demand is demand. supply is

supply. there is no distinction between physical

metal holdings and paper holdings as the market

currently exists from a market making point of view.

only metal pumpers make the distinction in order to

encourage people to buy physical metal from them.

 

stacking physical metal has it's uses. trading paper

contracts has it's uses. they serve different purposes.

whether jpmorgan holds metal in physical form or

paper form is not about that. it's a holding of metal,

that's all there is to it.

 

HH

[RacerCool]

6 hours ago, HawkHybrid said:

 

how does what physical/paper millions of ounces

jpmorgan hold affect that?

 

it's ok to choose physical over paper but you can do

that without pushing the pumpers line of how rare

physical silver is.

 

HH

You said that physical silver holdings are only important to the pushers (or sellers?) of silver. And I said, no, it's important to many of us who are stackers. No matter how big or small the stacker is, we all want to physically own our PMs. A holding isn't just a holding, since there's a big and obvious difference in holding actual metal, or a piece of paper like a receipt.

[sixgun]

On 13/11/2019 at 18:39, brassmonkey said:

The incline of these charts look strong and healthy but yet it seems that only either Banks or regular, everyday folk engage in Stacking yet millionaires prefer to indulge in the (far riskier and less profitable) world of Stock & Shares.

It's almost as if theres something preventing rich people becoming a part of this.

Regular folk haven't got a clue - they are not investing in gold and silver. 

How do you know what 'millionaires' are really doing?
The financial system is run to support the USD. That means it is anti-gold.
The criminal banks create USD out of thin air - $trillions upon $trillions - the missing $21 trillion but who knows. The Fed is creating up to $250 billion a night to bail out the banks in the current Repo market symptom of collapse. 

They cannot do that with gold - so why would they want to make gold look good when they can create $trillions at the push of a button?

There is absolute corruption, absolute greed. Who knows what is going on. Just make sure you have gold, silver, food and shelter when the music stops.

[sovereignsteve]

On 13/11/2019 at 17:39, brassmonkey said:

millionaires prefer to indulge in the (far riskier and less profitable) world of Stock & Shares.

Incorrect. While some millionaires may do as you suggest, it is known that the world's "old" money has been invested and grown over centuries by splitting 33/33/33% in property/land, gold and fine art.

[Notafront4adragon]

4 hours ago, sovereignsteve said:

Incorrect. While some millionaires may do as you suggest, it is known that the world's "old" money has been invested and grown over centuries by splitting 33/33/33% in property/land, gold and fine art.

I would suggest "old" money invested in swords and men to use them. You then automatically get land art and gold.

Also what's the last 1% for?

[RichmondStacker]

On 13/11/2019 at 18:15, 5huggy said:

See what George SOROS has loaded up on recently - that will answer that question!🙄

And see where he also gives his money too. 

[HawkHybrid]

7 hours ago, RacerCool said:

You said that physical silver holdings are only important to the pushers (or sellers?) of silver. And I said, no, it's important to many of us who are stackers. No matter how big or small the stacker is, we all want to physically own our PMs. A holding isn't just a holding, since there's a big and obvious difference in holding actual metal, or a piece of paper like a receipt.

 

there is two parts to this.

1. I was saying that whether jpmorgan owns physical or

paper metal holdings is not important.

(stop quoting me out of context)

2. you assume a paper receipt is the same as fiat currency

in a collapse as that sounds plausible. this is not entirely

true. it all depends on who is backing it. hyperinflation

(read losing faith in local currency fast) in venezuala, the

us dollar is still holding it's own.

think about this: who circulated the idea that physical

metal is superior to paper contracts? was it not metal

pumpers?

 

each have their own uses. as a holding, it's not important

which form you choose. choose whichever form suits

your purpose best. don't say that physical is superior to

paper contracts, as that is plain untrue. they have different

uses.

 

(a metal pumper is someone who purposely spreads

misleading information in order to drum up artificial

demand. we're talking about dishonesty here, not your

average local metals dealer)

 

HH

[sovereignsteve]

4 hours ago, Notafront4adragon said:

Also what's the last 1% for?

Ha ha, yes, let's say they used it for wine, women and song😃

Couldnt be arsed trying to add the third of a percent to each share, which I'm sure you realised!😉