Generic vs (semi) Numis... again?

[vand]

I realise this has undoubtedly been covered from all angles, but I just want to throw my 2p in the ring on the generic vs bullion thing.

Personally I don't see why you would want to be mainly in generic/bars when semis and numis offer so much more.

Just doing the maths here.

Lets say spot is $15 and you buy bars, and that premium on bars will only ever be $1. You can buy 625 oz for a $10,000 budget.

Compare that to a semi-numi coin where the premium is, say $4, but will likely appreciate by $1 per year (a very modest assumption). So you can purchase 526 oz for the same $10,000 budget.

Let's forward 3 years and consider various scenarios.

Let's take very bearish scenario where silver falls 20% a year. in 2019, spot silver is $7.68 (not impossible imo - I have seen markets do all sorts of things that nobody thinks is possible). Generic bars are now $8.68, a -45.75% fall from the price you paid.  The semi-numismatic coin is $14.68, a fall of -22.74%, so you have reduced your downside by half. This becomes even more favourable if you stretch the timeline over 4 years or more, until such time as the numismatic coin premium becomes fully mature.

Silver price change of -10% pa for 3 years results spot at $10.94 and bars depreciating by -25.41% vs just -5.61% for the s-n coin.

On the flip side, if silver goes up 20% a year then after 3 years, spot will be at $25.92, the bars will be $26.92, so an increase of 68.25%. However it is still beaten by the s-n coin thanks to its in-built premium appreciation which takes its value to $32.92, or a 73.26% increase. Assuming the semi could still keep increasing by $1/year, you would have to have 7 years of increase in the spot price to $53 before the generic bar outperformed the semi-numismatic.

Even under stupid hyper-inflationary scenarios, the generic's outperformance is not that great. Eg, if prices go up 50% pa for 7 years, spot will reach $256, the bars will have risen x16 times, but the semi-numismatic will also have been dragged up x14 times. You're doing good no matter what you're holding under those circumstances.

To me, the downside protection that a semi-numismatic provides is absolutely worth the premium. 

Of course, liquidity is the main advantage of generic silver, so having at least some is probably a good idea, but realistically cash is far better to hold if liquidity is your main concern. If you are looking to build "value" in your stack then for me it makes a lot of sense to accept that you cost/oz is going to be a bit higher but that you'll get quality bullion with value that is not wholely tied to spot.

The argument that premium value will go up in smoke in a SHTF scenario is not something that I agree with.. it's like saying the Mona Lisa will lose all value aside from the cost of the canvas and wood that its painted on.. patently nonsense... we have seen than scarce items tend to hold their value remarkably well, even (or especially) in tough times. 

as I said, just my 2p!

[Kman]

I fully agree with you but will add something obvious

Some new collectible coins series are already sold at a good premium on the secondary market but maybe they're a fad, perhaps once some time has passed they will be all but forgotten and lose their premium pulling power 

So I would say semi-numi yes, but not all semi-numis are equal

 

 

 

 

[Agpanda]

lots of generic series have lost a lot of its premium, Zombucks is one

It was priced high at start, now its a lot cheaper

[NUNKEST]

Any s-n silver series you would suggest for a beginner? I mean series that currently you'd like to buy even for yourself. 

Better if the serie is not totally new: I would like to avoid a bet on this.

Tnx!

[lightjaw]

Tired of coins, I prefer poured bars. I honestly couldn't give a monkeys chuff about the price difference/likelihood of increasing in price. 

I am a collector I suppose and after collecting for 3 plus years I have decided I prefer bars. You can hold them, fondle them and it makes no real difference to the price compared to a "reverse proof upside down hairy lynx coin from Botswana with a face value of 19.5 chickens and a mintage of only 1 million. Until we change our minds and decide to mint more because we can".

I will still buy the odd coin that calls to me, but on the whole it feels like a bit of a con.

[KDave]

If you buy bullion silver coins (or coin bars) you are taking a punt purely on the price of the metal. If the coins develop milkspots, get some tarnish, get damaged it doesn't matter - its just silver.

If you buy semi numis, you are taking a punt on the price of the metal and also have more potential upside from the collectors market. They seem to almost always appreciate but not always. Also if you are unlucky and they develop spotting, if they develop tarnishing or get damaged, any problems with coins at all and they are not worth as much, probably just worth bullion unless they have a large collectors market.

For me I like a mixture. I have my bars as a punt on the metal price. Then I have a small collection of premium coins that I like, and maybe one day they will be worth more but I am not banking on it, I just like them. I prefer bars for storage purposes. When you get a lot of silver (not something I have done yet) I can see storage being a serious problem, bars are my preferred investment because of that. If it gets serious you need to consider CGT implications as well, which means you are going to need to switch to bullion Britannias unless you like paying tax in the scenarios you have outlined. The alternative is flipping the coins as you go as could have been done with the lunar II coins for example and collecting the profit on your premiums as you go. 

There are lots of strategies. For a long buy and hold situation you need to consider storage and CGT- semi numis each one in a capsule don't tick either box for me. 

Just my thoughts on it. 

 

[silversword]

The whole "semi-numismatic" thing seems like a con to me: effectively saying that here's something only half-collectible, or to put it another way, it's collectible and worth more "because we (the seller) say so", rather than being of any particular historical or societal significance. It hasnt earned its value like an old coin, it's been designed to have one. "Collect these - it's painting-by-numbers for coin buffs".

Things made to be collected. Good income stream for producers and whilst enough people buy into it, premiums are maintained so makes sense to buy some in the assumption one can sell them on to anyone else who still believes the coin to be more than a generic bullion round with a picture and a date on it. Wouldn't want to count on those premiums forever though.

 

[BaldyBob]

I am in the process of removing anything in capsules from my stack, so that should tell you how I feel about semi-numi.

I am also getting rid of RCM products though, which means that although I like 1 oz coins that stack in tubes and don't mind a bit of tarnish/spotting, I find RCM unacceptably bad. Possibly a contradiction going on there.

Off on a tangent, but I love Phils because they have compact tubes and I am still yet to see a tarnished or milk spotted one.

I do not count Brits (or RM Lunar) & ASE's as semi numi when picked up at bullion prices, maybe others do?

[4Nines7Hills]

i like semi numi particular bought close to release so price difference is minimal but still there . 

They are harder to sell at a good price quickly , so in a temporary financial squeeze it maybe a good idea to get a quantity of cheap coins/bars that can be traded  quickly for spot

[Agpanda]

30 minutes ago, 4Nines7Hills said:

i like semi numi particular bought close to release so price difference is minimal but still there . 

They are harder to sell at a good price quickly , so in a temporary financial squeeze it maybe a good idea to get a quantity of cheap coins/bars that can be traded  quickly for spot

This is why I have gold, easy to get fast cash

[Nugget]

Although new to this I've decided that a bit of everything is fine by me.  I'm buying 1kg Silver coins to form bulk as they are cheaper than the bars from STG etc and seem to be around 10-12% of spot. I will buy some Semi Numis to hold for a few years with a view to flip and then rest of my stack will be Sovs. My next purchase will be Sovs and then 1kg silver, then more Sovs until 2017 semi Numis are released. I'm not back dating anything, especially at £40 per coin as things come in and go out of fashion  rapidly (as with any investment trend). I'm aiming to add 1-2oz in Sovs and 2kg coins prior to end of year. Then start 2017 with the 5 lots of 5 SN coins I've started collecting then back to kgs and Sovs

[vand]

I'm quite surprised at the hate for semi-numis here. Although of course, I guess it all depends what you consider a semi-numi.

For me it's anything with premium appreciation potential - while yesteryear's common/garden variety Britannias, Maples, Harmonicas & ASEs all command a slight premium above the current year, I'm really talking about coins like the Kooks, Pandas, Libertads, Elephants & the Wildlife  series that seem to have a very healthy secondary market, with premiums that are at least as much as the metal content.  However I don't much consider proof coins or anything painted, or sold with a certificate of authenticity - I want sufficient rarity so that it commands a premium, but not something that is so unique that it's difficult to price!

I understand that some people just want as many ounces a possible, which means getting the lowest possible cost/oz, but as we all emphasize, it depends why you stack.

Besides, at current spot price, a lot of current semi-numi coins are priced at a pittance anyway.. 

[HawkHybrid]

semi-numismatic coins are an investment based on your

judgement. many modern designs are quite bad for the

asking prices. if the coin is of good enough quality to

display and impress fellow collectors then it's worth a

premium. spotty coins impresses no one 

bullion buys are investment based on the timing of the

spot price.

 

@NUNKEST consider provident metals 2oz pirate coins

and maybe start with one panda and see what you think.

 

HH

[vand]

8 hours ago, NUNKEST said:

Any s-n silver series you would suggest for a beginner? I mean series that currently you'd like to buy even for yourself. 

Better if the serie is not totally new: I would like to avoid a bet on this.

Tnx!

 

It seems you can't really go wrong with scooping up Pandas, Kooks and the Perth Lunar series, which seem to be the premier series, as they always seem to go for much more on the secondary market just a couple of years later. However if everyone is doing it, you're going to be facing a lot of competition from other sellers, and buyers will look for other competing collections.

I would just say stack what you like the look of - I'm still quite new to stacking myself, but I have already amassed quite a few different bullion coins, and my favourites are the UK Lunar series (despite the milkspotting problems), Libertads and Somalian Elephants, so I will target them.

 

[Nugget]

13 minutes ago, vand said:

 

It seems you can't really go wrong with scooping up Pandas, Kooks and the Perth Lunar series, which seem to be the premier series, as they always seem to go for much more on the secondary market just a couple of years later. However if everyone is doing it, you're going to be facing a lot of competition from other sellers, and buyers will look for other competing collections.

I would just say stack what you like the look of - I'm still quite new to stacking myself, but I have already amassed quite a few different bullion coins, and my favourites are the UK Lunar series (despite the milkspotting problems), Libertads and Somalian Elephants, so I will target them.

 

I agree with this.

I got 2016 kooks, Koala and Elephants to flip and some Austrian and Canadian to form bulk. My 1kg coins will be kooks and Koala versions.

I also got a couple of the 1/10 Oz gold elephants.

If you diversify you can potentially benefit across the board.

[NUNKEST]

@HawkHybrid, @vand, @Nugget 

Thanks all of you, guys. I'm already digging the net