Strategy, I don't like Silver, am I wrong?

[shaunm]

@LemmyMcGregor I came to with the same conclusion as you when I crunched the numbers as a fellow UK stacker. The numbers for Silver and the bull case theories just weren't enough to pull me over to having it as a large part of my portfolio and I plan to stack gold but get the odd collector silver coin that I have the gold version of such as the 2Oz Queens/Tudor beasts to match my 1Oz gold counter part and maybe one silver Britannia a year just to have the date in my collection for silver but other than that its 1Oz, Sovereign or Half Sovereign gold for me.

[LawrenceChard]

On 14/04/2022 at 13:57, LemmyMcGregor said:

I know, this topic has come up a million times, I searched the forum... the reason why I decided to post is that, while we are on The Silver Forum and I see many stacking Silver, I just don't see any reason in it and I'd like to make the case for it, mostly because I want to know if I've got a point or I have missed something and I am flat out wrong.

A little background:
To get started, a little about my background, which is none, as I have only recently gained an interest on the topic after discussing it at lenght with a couple of friends. I've done my first purchase nearly a month ago, getting 2 Silver Britannia from an online dealer (Bullion by Post) to get my feet wet and then I started researching, which is how I ended up with you lovely bunch of degenerates. I adore research, and Excel, I know, I'm a strange person. Anyway...

Define the goal:
The key component here is to define what we want to do and, as a stacker, I want to get the most value for the least amount of money.

Let's be clear, even as a stacker I don't see anything wrong in looking to diversify and getting different coins, as long as the price is right, when it comes to sell the worse you'll get for your 10 different 1oz coins is the same money, as they all are 1oz of precious metal, however, different coins could fetch different prices if offered first to a someone with a specific interest. On the other hand, someone might like to stack the same gold dollar and have a Scrooge McDuck bath, who knows. However, I'm going to ignore this and focus on one topic only, bang for my bucks.

The Theory:
1. Gold is King.
2. Silver bullions/bars for stackers are the worst possible option and should be avoided, I really don't see the point in it, the premiums are far too high.
3. If you want Silver, treat it as collection or buy scraps.

The Data:
I am planning my next purchase and I wanted to understand better this unholy topic that is premiums, so I went to the first website that came to mind and started looking at prices, for reference, I have used Atkinsons. Values were collected earlier this morning.

I have ported everything to grams so that I could compare 1oz coins with Sovereigns, which are listed in grams.

From left to right, coin type, weight (in either g or oz), conversion value (31.10 for oz to g, 0.9167 to get the actual gold weight in Sovereigns, as they are 22 carat), actual weight in grams, value at spot, price on the site, premium.
Left hand is Gold Sovereign and Britannia, right is Silver Britannia. Don't mind the 1/20 oz, I've seen some funny ones and included it here for curiosity, I might get a 1/20 Panda for a laugh one day, in the future, if I get really bored, and I win the lottery.

I am considering only British coins due to capital gains tax regulations, a collector might want to get Eagles, Pandas or whatever catches the eye, a stacker should look purely at value, Sovereign and Britannia.

I am looking at this from a low budget stacker perspective, so I have considered individual coins when discussing gold as I would not be able to purchase multiples, lower premiums means that you don't really get much of a discount online buying bulk, might change when dealing in person, I have no experience, so I'll stick to what I know. With Silver is worth looking at multiples as the premiums drops significantly, if I was on a budget and wanted to spend £100 a month in Silver, I'd rather wait 3 months and get 10 coins as the difference in premium is noticeable and would net me an extra ounce for the same money.

Looking at these premiums though, unless you really want Silver for whatever reasons, as a stacker Gold beats Silver hands down, there isn't even a game here, the worst premium on Gold is a Quarter Soverign at 21% versus the best premium for Silver at 45%, considering the same budget as above, going Gold I'd stretch it to 106 to get a Quarter Sovereign a month or, even better, get a half every other month. In a year, £100 a month side by side with Silver and Gold, buying in 10 x 1oz of Silver or Half Sovereign makes a huge difference.

At spot value, this is how you end up after 12 months:
With Silver you have 40 x 1 oz Silver Britannia, worth £778, and £52 change. £830 total.
With Gold you have 6 x Half Sovereign, worth 1,058, and £39 change. £1097.
It's huge, that's a 30% extra in net value, mostly VAT.

The missing factor, scraps:
There is one item that I have discussed several times with friends which I have not really seen discussed here, aside from one user that has done a very interesting post in a thread, which I really should have saved... I'll find it again, anyway, thatwould be Silver scraps. Sterling Silver can be sold easily and can be bought second hand without VAT, it should be worth to keep an eye out for auctions, drop the maximum you're interested in paying for the quantity and if you win is all gravy and you've got some nice Silver without premiums, however, I am going to ignore for the time being, haven't budgeted for this yet as it needs more research, I am considering getting involved in a few low value auctions for the sake of getting in and starting to learn about markings and metal identification, the best way to learn is by doing it.

EDIT: found the post I was referring to that made me think about premiums, only applied to Silver and Gold, rather than just Silver as in the original post, the user in question is Stefffana.

Conclusions:
My Strategy will focus on Full Sovereign for stack, I don't have the resources for Gold 1oz Britannia and the premium is the same so, why bother? Also, to the best of my understanding, Sovereign are sturdier due to being 22 carats.

I will look at skipping the odd Full Sovereign for some Quarter and Half, maybe once a year get one of each instead of getting a Full one, could be useful to have a few smaller denomination about.

For Silver I am going to nearly ignore it, I will look at getting a single Britannia for the sake of having the year and I might look to diversify into the odd release, throwing the odd quid at a Silver set twice a year doesn't sound too bad, in the future could be worth something to a collector, but I'm going to do that for entertainment and is going to be on a very limited budget, say 2 or 3 coins per year, nothing that would get in the way of the stack.

Have I missed anything?
Other than for the sake of collection, primarily due to VAT, I don't see any valid reason to buy Silver for stacking, am I missing anything? Is there something I am not understanding? As the only reasons why I see people getting on Silver, rather than gold, appears to be either budget, as they feel like they're getting more in their hands, or this idea that Silver will explode one day, but I don't really see any other reason. Am I wrong?

 

If you made it this far, thank you very much for your time, it is sincerely appreciated.

Thanks in advance anyone that is willing to contribute, I am here to learn.

I only noticed this post because @jultorsk had linked to it from a different post.

I agree with your analysis, and conclusions.

The thought and effort you have invested to gather your data, and to display it clearly in a spreadsheet are highly commendable.

My usual advice, for investors, is to buy at the lowest premium, within reason, which also coincides with your findings.

As you show, one ounce gold coins tend to have a slightly lower premium than (approximately quarter ounce) gold sovereigns, so for bigger investors, they are arguably the best buy, but otherwise gold sovereigns come very close, and could be considered as a universal choice.

One small factor here is that secondary market prices for bullion coins are usually at lower premiums than for the current year's newly minted coins, but are not always quickly available from stocks. If bigger investors wanting quick delivery are "forced" to buy new coins, then the premium differentials between sovereigns and one ounce coins is slightly greater.

As you correctly point out, one of the main reasons for silver being relatively much more expensive, is VAT, which applies in the UK and the EU. Paying 20% tax up front on an investment makes little sense.

Production costs are also proportionally higher for silver coins than for gold coins, which accounts for some of the differential.

There are a few other factors which are worth considering:

For larger investors, it is worth at least considering buying silver VAT-free for overseas storage. Obviously some investors may be uncomfortable with this, and it does introduce a slight counterparty risk.

The case for buying VAT-free platinum is even stronger than for silver, as the production costs are relatively lower, therefore premiums nett of VAT are closer to those of gold, and lower than for silver.

Probably the main factors in favour of silver are affordability, and collectability. Many collectors and stackers cannot easily afford to buy gold coins of a sensible size. So for those who appreciate the aesthetic appeal of many coins, collecting silver coins makes a lot of sense, as long as they don't view it primarily as an investment.

A large diameter coin can showcase an attractive design, and detailed engraving, far better than a small diameter one. It is possible to buy large diameter silver coins for much less than small diameter gold ones.

Also, because of the lower value, silver coins could be left out on display, to be seen, admired, and appreciated, on a daily basis, whereas higher value gold coins might need to be locked away in a safe or vault, and therefore rarely seen and enjoyed.

A monster box of silver coins can make a great doorstop, while costing a fraction of the price of a similar gold one such as a London Good Delivery bar.

There are other factors which may influence individuals in different ways, but I don't want to turn this response into too much of an essay!

😎

 

Edited April 15, 2022 by LawrenceChard

[Lyrinn]

On 14/04/2022 at 13:57, LemmyMcGregor said:

If you made it this far, thank you very much for your time, it is sincerely appreciated.

Thanks in advance anyone that is willing to contribute, I am here to learn.

Wor kidda! I like these kinds of topics where I can write a literal essay! *Ahem...*

I'm not sure what else can be said, having read the other posts here, but here I go anyway...

We each have person circumstances that dictate what we buy, where and why. Simple economics, but I never feel that this can be overstated enough.

If you're going in for a very strict "stacker" route (with silver) then coins aren't the way to go. You'd probably want bars, so that would be the first thing to separate out - bars come with lower premium, generally, as they don't need as much processing. You're also looking at 100oz (one hundred) or 1kg bars, so heavy and bulky. Also, some silver coins (pointing at the Great Engravers series) attract a higher value to both stackers and collectors - one can make an argument over what happens when hype dies down, of course. While gold coins are also available for this series, you have to also think about your market. Quite bluntly, the silver market is accessible to more people than the gold one. Therefore, basic economics mean that you will be able to liquidate your stack to a broader spectrum of people. Yes you can go to dealers, but things like TSF are unique opportunities for both private buyers and sellers to get a better deal than simply going to the local dealer (generally speaking).

Also, the argument on 800oz of silver, or 10oz of gold can almost be turned around. By this I mean, would you really want to be carrying 10oz of gold around with you to make a single transaction and cash out, or would you prefer to slowly trickle out your funds when you come to sell your stack? I think most people here are intending to use their stacks in one of two ways:

1) Leave it for the next generation - where you probably want it to be in smaller denominations for ease of breaking it up.

2) To use it as part of their retirement fund - where you will want the ability to slowly disperse it, rather than be forced to sell large "blocks" of it.

Basically, silver is more preferable to more people's intent (whether they realise it or not). Add to that a third point:

3) If you have to sell part of your stack to fund an emergency bill, is it not better to sell a proportion closer to the value of said unexpected bill? For example, I would prefer to sell 10oz of silver to cover a £250 bill, than I would a 1oz gold coin for £1,500.

Next we sort of loop back to the collector side of things...

Silver coin (or rounds) are also a bit of an art in their own right (sometimes literally). For example, the Temptation of the Succubus range from Pheli Mint (personal favourite), are bullion 2oz coins, but also collector items, so carry a slightly higher premium than normal, but by no means as high as other silver rounds. Now, premium is a funny one in my book, as I both stack and collect, because I view premium on silver like I do VAT. Example; if I want to stack silver Brits, then I have to accept that they come with VAT. However, when I sell them, the VAT doesn't magically disappear. When I come to sell my Brits (be it a week, a month, a year, a decade) the VAT will be passed onto the buyer (even if it's a dealer). You have to sort of wrap your head around the idea that it's better to think of the VAT as an almost artificial part of the premium. I have some coins that I have paid 300% (yes, three hundred) percent premium on. Why? Because I am expecting to simply pass them on in the future with the same premium. Now, this bit is a gamble and, rightly, you should only buy these sorts of things for your own enjoyment, considering them to be art, not bullion. Ultimately, I might only get the base metal value. I note that you are not going down this route, but it remains true that silver is easier to make into more creative designs - you only have to see some of the sales topics by the sponsors of the forum to get an understanding of how many varieties of things are made out of silver. Thus, you have a market here that you don't with gold - gold is too expensive to do this with, generally speaking.

Also, while we go into gold, what kind of gold are you going for? One thing that's been argued back and forth on the forum as to whether gold cast are better than gold minted bars, for example. Again, it comes down to how you view your purchases. If you are cautious and think only of metal value, then go for the cast bars (cheaper premium), but just as there will be a bigger market for silver, there is also always going to be a market for minted bars because they are more attractive to look at. The higher premium is also, just as the VAT on silver is, passed on to the buyer. This is especially true for private sales of minted bars, not so much for dealers (who will pay metal price, then sell it for the added premium!).

Next, let's go over inflation. Gold verse silver; super subjective, but let's jump in with two feet. I would say that, because of the size of the market, gold doesn't have as much room to grown as silver does - supply and demand. This is because people who are not experienced with PM's - if they opt to enter it when they start to diversify their portfolios - will buy silver until they are both comfortable. This is what you have done - though you have immediately opted to fully understand what is going on, rather than fumble about, which is not normally done. It is also because most people will not want to dump large sums of money into gold right away (they probably don't have the free capital to do so). I tend to think that people will follow a more typical route of slowly buying up silver until they have "a stack" and then move into gold. This mentality is the kind of cautious that I have seen from a lot of people employ - some have been badly bitten and sold their stacks at a loss too. It's the snowball rolling down a hill argument.

Now for investment. As always, the investment aspect is subjective. It comes down to timing and what you hold. For example, the silver I bought earlier this year is already showing me a return of circa 15-20% (if I wanted to sell it). Now, that's not bad at all. Is it as much as the 5-10% from my gold? No, but I have more silver than gold in my bullion stack and this alone means that I can withdraw a greater sum of money in smaller increments.

Ultimately, do what the rest of us do - just enjoy yourself and the feeling of physically holding your own wealth... well, unless it's locked in the vault (meaning that you only see it once a year) or if it was tragically lost in a boating accident...

Just a few thoughts for you!

Also, don't worry about trying to be seen as sane here. I have yet to meet anyone sane here (sorry, chaps!), but that's why I love my fellow silver apes. I get overloaded with knowledge on numismatics, then someone throws a poop grenade and we all laugh like kids.

I can already see my inbox filling up with people trying to convince me that they are the sane one here and it's everyone else who is the problem...!

[Gordy]

8 minutes ago, Lyrinn said:

Wor kidda! I like these kinds of topics where I can write a literal essay! *Ahem...*

I'm not sure what else can be said, having read the other posts here, but here I go anyway...

We each have person circumstances that dictate what we buy, where and why. Simple economics, but I never feel that this can be overstated enough.

If you're going in for a very strict "stacker" route (with silver) then coins aren't the way to go. You'd probably want bars, so that would be the first thing to separate out - bars come with lower premium, generally, as they don't need as much processing. You're also looking at 100oz (one hundred) or 1kg bars, so heavy and bulky. Also, some silver coins (pointing at the Great Engravers series) attract a higher value to both stackers and collectors - one can make an argument over what happens when hype dies down, of course. While gold coins are also available for this series, you have to also think about your market. Quite bluntly, the silver market is accessible to more people than the gold one. Therefore, basic economics mean that you will be able to liquidate your stack to a broader spectrum of people. Yes you can go to dealers, but things like TSF are unique opportunities for both private buyers and sellers to get a better deal than simply going to the local dealer (generally speaking).

Also, the argument on 800oz of silver, or 10oz of gold can almost be turned around. By this I mean, would you really want to be carrying 10oz of gold around with you to make a single transaction and cash out, or would you prefer to slowly trickle out your funds when you come to sell your stack? I think most people here are intending to use their stacks in one of two ways:

1) Leave it for the next generation - where you probably want it to be in smaller denominations for ease of breaking it up.

2) To use it as part of their retirement fund - where you will want the ability to slowly disperse it, rather than be forced to sell large "blocks" of it.

Basically, silver is more preferable to more people's intent (whether they realise it or not). Add to that a third point:

3) If you have to sell part of your stack to fund an emergency bill, is it not better to sell a proportion closer to the value of said unexpected bill? For example, I would prefer to sell 10oz of silver to cover a £250 bill, than I would a 1oz gold coin for £1,500.

Next we sort of loop back to the collector side of things...

Silver coin (or rounds) are also a bit of an art in their own right (sometimes literally). For example, the Temptation of the Succubus range from Pheli Mint (personal favourite), are bullion 2oz coins, but also collector items, so carry a slightly higher premium than normal, but by no means as high as other silver rounds. Now, premium is a funny one in my book, as I both stack and collect, because I view premium on silver like I do VAT. Example; if I want to stack silver Brits, then I have to accept that they come with VAT. However, when I sell them, the VAT doesn't magically disappear. When I come to sell my Brits (be it a week, a month, a year, a decade) the VAT will be passed onto the buyer (even if it's a dealer). You have to sort of wrap your head around the idea that it's better to think of the VAT as an almost artificial part of the premium. I have some coins that I have paid 300% (yes, three hundred) percent premium on. Why? Because I am expecting to simply pass them on in the future with the same premium. Now, this bit is a gamble and, rightly, you should only buy these sorts of things for your own enjoyment, considering them to be art, not bullion. Ultimately, I might only get the base metal value. I note that you are not going down this route, but it remains true that silver is easier to make into more creative designs - you only have to see some of the sales topics by the sponsors of the forum to get an understanding of how many varieties of things are made out of silver. Thus, you have a market here that you don't with gold - gold is too expensive to do this with, generally speaking.

Also, while we go into gold, what kind of gold are you going for? One thing that's been argued back and forth on the forum as to whether gold cast are better than gold minted bars, for example. Again, it comes down to how you view your purchases. If you are cautious and think only of metal value, then go for the cast bars (cheaper premium), but just as there will be a bigger market for silver, there is also always going to be a market for minted bars because they are more attractive to look at. The higher premium is also, just as the VAT on silver is, passed on to the buyer. This is especially true for private sales of minted bars, not so much for dealers (who will pay metal price, then sell it for the added premium!).

Next, let's go over inflation. Gold verse silver; super subjective, but let's jump in with two feet. I would say that, because of the size of the market, gold doesn't have as much room to grown as silver does - supply and demand. This is because people who are not experienced with PM's - if they opt to enter it when they start to diversify their portfolios - will buy silver until they are both comfortable. This is what you have done - though you have immediately opted to fully understand what is going on, rather than fumble about, which is not normally done. It is also because most people will not want to dump large sums of money into gold right away (they probably don't have the free capital to do so). I tend to think that people will follow a more typical route of slowly buying up silver until they have "a stack" and then move into gold. This mentality is the kind of cautious that I have seen from a lot of people employ - some have been badly bitten and sold their stacks at a loss too. It's the snowball rolling down a hill argument.

Now for investment. As always, the investment aspect is subjective. It comes down to timing and what you hold. For example, the silver I bought earlier this year is already showing me a return of circa 15-20% (if I wanted to sell it). Now, that's not bad at all. Is it as much as the 5-10% from my gold? No, but I have more silver than gold in my bullion stack and this alone means that I can withdraw a greater sum of money in smaller increments.

Ultimately, do what the rest of us do - just enjoy yourself and the feeling of physically holding your own wealth... well, unless it's locked in the vault (meaning that you only see it once a year) or if it was tragically lost in a boating accident...

Just a few thoughts for you!

Also, don't worry about trying to be seen as sane here. I have yet to meet anyone sane here (sorry, chaps!), but that's why I love my fellow silver apes. I get overloaded with knowledge on numismatics, then someone throws a poop grenade and we all laugh like kids.

I can already see my inbox filling up with people trying to convince me that they are the sane one here and it's everyone else who is the problem...!

yep, i read it all...... 👍

oh and by the way... succubus is the dogs b@ll@x..... 😂

[Bigmarc]

14 hours ago, GoldDabbler said:

I like the saying 'Never put your eggs in one basket' so I'm collecting silver in low denominations as well as gold.

Brilliant, I'm glad someone said it. Having a good balance is what it's all about. I have 100 kg of tin, wouldn't even get half the spot price for it at the mo, copper would get just over spot, my silver is worth well over spot and my gold is worth just over spot. All this can change at any moment.

As @MagnusOpum pointed out, the popularity of Lego and pokimon cards are on fire it has nothing to do with the spot price of what these items are made out of but how much they sell for. 

[Sharron]

On 14/04/2022 at 13:57, LemmyMcGregor said:

I know, this topic has come up a million times, I searched the forum... the reason why I decided to post is that, while we are on The Silver Forum and I see many stacking Silver, I just don't see any reason in it and I'd like to make the case for it, mostly because I want to know if I've got a point or I have missed something and I am flat out wrong.

A little background:
To get started, a little about my background, which is none, as I have only recently gained an interest on the topic after discussing it at lenght with a couple of friends. I've done my first purchase nearly a month ago, getting 2 Silver Britannia from an online dealer (Bullion by Post) to get my feet wet and then I started researching, which is how I ended up with you lovely bunch of degenerates. I adore research, and Excel, I know, I'm a strange person. Anyway...

Define the goal:
The key component here is to define what we want to do and, as a stacker, I want to get the most value for the least amount of money.

Let's be clear, even as a stacker I don't see anything wrong in looking to diversify and getting different coins, as long as the price is right, when it comes to sell the worse you'll get for your 10 different 1oz coins is the same money, as they all are 1oz of precious metal, however, different coins could fetch different prices if offered first to a someone with a specific interest. On the other hand, someone might like to stack the same gold dollar and have a Scrooge McDuck bath, who knows. However, I'm going to ignore this and focus on one topic only, bang for my bucks.

The Theory:
1. Gold is King.
2. Silver bullions/bars for stackers are the worst possible option and should be avoided, I really don't see the point in it, the premiums are far too high.
3. If you want Silver, treat it as collection or buy scraps.

The Data:
I am planning my next purchase and I wanted to understand better this unholy topic that is premiums, so I went to the first website that came to mind and started looking at prices, for reference, I have used Atkinsons. Values were collected earlier this morning.

I have ported everything to grams so that I could compare 1oz coins with Sovereigns, which are listed in grams.

From left to right, coin type, weight (in either g or oz), conversion value (31.10 for oz to g, 0.9167 to get the actual gold weight in Sovereigns, as they are 22 carat), actual weight in grams, value at spot, price on the site, premium.
Left hand is Gold Sovereign and Britannia, right is Silver Britannia. Don't mind the 1/20 oz, I've seen some funny ones and included it here for curiosity, I might get a 1/20 Panda for a laugh one day, in the future, if I get really bored, and I win the lottery.

I am considering only British coins due to capital gains tax regulations, a collector might want to get Eagles, Pandas or whatever catches the eye, a stacker should look purely at value, Sovereign and Britannia.

I am looking at this from a low budget stacker perspective, so I have considered individual coins when discussing gold as I would not be able to purchase multiples, lower premiums means that you don't really get much of a discount online buying bulk, might change when dealing in person, I have no experience, so I'll stick to what I know. With Silver is worth looking at multiples as the premiums drops significantly, if I was on a budget and wanted to spend £100 a month in Silver, I'd rather wait 3 months and get 10 coins as the difference in premium is noticeable and would net me an extra ounce for the same money.

Looking at these premiums though, unless you really want Silver for whatever reasons, as a stacker Gold beats Silver hands down, there isn't even a game here, the worst premium on Gold is a Quarter Soverign at 21% versus the best premium for Silver at 45%, considering the same budget as above, going Gold I'd stretch it to 106 to get a Quarter Sovereign a month or, even better, get a half every other month. In a year, £100 a month side by side with Silver and Gold, buying in 10 x 1oz of Silver or Half Sovereign makes a huge difference.

At spot value, this is how you end up after 12 months:
With Silver you have 40 x 1 oz Silver Britannia, worth £778, and £52 change. £830 total.
With Gold you have 6 x Half Sovereign, worth 1,058, and £39 change. £1097.
It's huge, that's a 30% extra in net value, mostly VAT.

The missing factor, scraps:
There is one item that I have discussed several times with friends which I have not really seen discussed here, aside from one user that has done a very interesting post in a thread, which I really should have saved... I'll find it again, anyway, thatwould be Silver scraps. Sterling Silver can be sold easily and can be bought second hand without VAT, it should be worth to keep an eye out for auctions, drop the maximum you're interested in paying for the quantity and if you win is all gravy and you've got some nice Silver without premiums, however, I am going to ignore for the time being, haven't budgeted for this yet as it needs more research, I am considering getting involved in a few low value auctions for the sake of getting in and starting to learn about markings and metal identification, the best way to learn is by doing it.

EDIT: found the post I was referring to that made me think about premiums, only applied to Silver and Gold, rather than just Silver as in the original post, the user in question is Stefffana.

Conclusions:
My Strategy will focus on Full Sovereign for stack, I don't have the resources for Gold 1oz Britannia and the premium is the same so, why bother? Also, to the best of my understanding, Sovereign are sturdier due to being 22 carats.

I will look at skipping the odd Full Sovereign for some Quarter and Half, maybe once a year get one of each instead of getting a Full one, could be useful to have a few smaller denomination about.

For Silver I am going to nearly ignore it, I will look at getting a single Britannia for the sake of having the year and I might look to diversify into the odd release, throwing the odd quid at a Silver set twice a year doesn't sound too bad, in the future could be worth something to a collector, but I'm going to do that for entertainment and is going to be on a very limited budget, say 2 or 3 coins per year, nothing that would get in the way of the stack.

Have I missed anything?
Other than for the sake of collection, primarily due to VAT, I don't see any valid reason to buy Silver for stacking, am I missing anything? Is there something I am not understanding? As the only reasons why I see people getting on Silver, rather than gold, appears to be either budget, as they feel like they're getting more in their hands, or this idea that Silver will explode one day, but I don't really see any other reason. Am I wrong?

 

If you made it this far, thank you very much for your time, it is sincerely appreciated.

Thanks in advance anyone that is willing to contribute, I am here to learn.

Ever thought of writing a book..it would be shorter.....🙂🙂

[Gordy]

16 minutes ago, Sharron said:

Ever thought of writing a book..it would be shorter.....🙂🙂

BOOOM!!! 😂

[flyingveepixie]

10 hours ago, Lyrinn said:

Wor kidda! I like these kinds of topics where I can write a literal essay! *Ahem...*

I'm not sure what else can be said, having read the other posts here, but here I go anyway...

We each have person circumstances that dictate what we buy, where and why. Simple economics, but I never feel that this can be overstated enough.

If you're going in for a very strict "stacker" route (with silver) then coins aren't the way to go. You'd probably want bars, so that would be the first thing to separate out - bars come with lower premium, generally, as they don't need as much processing. You're also looking at 100oz (one hundred) or 1kg bars, so heavy and bulky. Also, some silver coins (pointing at the Great Engravers series) attract a higher value to both stackers and collectors - one can make an argument over what happens when hype dies down, of course. While gold coins are also available for this series, you have to also think about your market. Quite bluntly, the silver market is accessible to more people than the gold one. Therefore, basic economics mean that you will be able to liquidate your stack to a broader spectrum of people. Yes you can go to dealers, but things like TSF are unique opportunities for both private buyers and sellers to get a better deal than simply going to the local dealer (generally speaking).

Also, the argument on 800oz of silver, or 10oz of gold can almost be turned around. By this I mean, would you really want to be carrying 10oz of gold around with you to make a single transaction and cash out, or would you prefer to slowly trickle out your funds when you come to sell your stack? I think most people here are intending to use their stacks in one of two ways:

1) Leave it for the next generation - where you probably want it to be in smaller denominations for ease of breaking it up.

2) To use it as part of their retirement fund - where you will want the ability to slowly disperse it, rather than be forced to sell large "blocks" of it.

Basically, silver is more preferable to more people's intent (whether they realise it or not). Add to that a third point:

3) If you have to sell part of your stack to fund an emergency bill, is it not better to sell a proportion closer to the value of said unexpected bill? For example, I would prefer to sell 10oz of silver to cover a £250 bill, than I would a 1oz gold coin for £1,500.

Next we sort of loop back to the collector side of things...

Silver coin (or rounds) are also a bit of an art in their own right (sometimes literally). For example, the Temptation of the Succubus range from Pheli Mint (personal favourite), are bullion 2oz coins, but also collector items, so carry a slightly higher premium than normal, but by no means as high as other silver rounds. Now, premium is a funny one in my book, as I both stack and collect, because I view premium on silver like I do VAT. Example; if I want to stack silver Brits, then I have to accept that they come with VAT. However, when I sell them, the VAT doesn't magically disappear. When I come to sell my Brits (be it a week, a month, a year, a decade) the VAT will be passed onto the buyer (even if it's a dealer). You have to sort of wrap your head around the idea that it's better to think of the VAT as an almost artificial part of the premium. I have some coins that I have paid 300% (yes, three hundred) percent premium on. Why? Because I am expecting to simply pass them on in the future with the same premium. Now, this bit is a gamble and, rightly, you should only buy these sorts of things for your own enjoyment, considering them to be art, not bullion. Ultimately, I might only get the base metal value. I note that you are not going down this route, but it remains true that silver is easier to make into more creative designs - you only have to see some of the sales topics by the sponsors of the forum to get an understanding of how many varieties of things are made out of silver. Thus, you have a market here that you don't with gold - gold is too expensive to do this with, generally speaking.

Also, while we go into gold, what kind of gold are you going for? One thing that's been argued back and forth on the forum as to whether gold cast are better than gold minted bars, for example. Again, it comes down to how you view your purchases. If you are cautious and think only of metal value, then go for the cast bars (cheaper premium), but just as there will be a bigger market for silver, there is also always going to be a market for minted bars because they are more attractive to look at. The higher premium is also, just as the VAT on silver is, passed on to the buyer. This is especially true for private sales of minted bars, not so much for dealers (who will pay metal price, then sell it for the added premium!).

Next, let's go over inflation. Gold verse silver; super subjective, but let's jump in with two feet. I would say that, because of the size of the market, gold doesn't have as much room to grown as silver does - supply and demand. This is because people who are not experienced with PM's - if they opt to enter it when they start to diversify their portfolios - will buy silver until they are both comfortable. This is what you have done - though you have immediately opted to fully understand what is going on, rather than fumble about, which is not normally done. It is also because most people will not want to dump large sums of money into gold right away (they probably don't have the free capital to do so). I tend to think that people will follow a more typical route of slowly buying up silver until they have "a stack" and then move into gold. This mentality is the kind of cautious that I have seen from a lot of people employ - some have been badly bitten and sold their stacks at a loss too. It's the snowball rolling down a hill argument.

Now for investment. As always, the investment aspect is subjective. It comes down to timing and what you hold. For example, the silver I bought earlier this year is already showing me a return of circa 15-20% (if I wanted to sell it). Now, that's not bad at all. Is it as much as the 5-10% from my gold? No, but I have more silver than gold in my bullion stack and this alone means that I can withdraw a greater sum of money in smaller increments.

Ultimately, do what the rest of us do - just enjoy yourself and the feeling of physically holding your own wealth... well, unless it's locked in the vault (meaning that you only see it once a year) or if it was tragically lost in a boating accident...

Just a few thoughts for you!

Also, don't worry about trying to be seen as sane here. I have yet to meet anyone sane here (sorry, chaps!), but that's why I love my fellow silver apes. I get overloaded with knowledge on numismatics, then someone throws a poop grenade and we all laugh like kids.

I can already see my inbox filling up with people trying to convince me that they are the sane one here and it's everyone else who is the problem...!

 

Diversification is definitely the right approach which means both gold and silver for all the reasons already mentioned by everyone else, and even with the VAT on silver you should still get your money back at the very least provided the spot price doesn't drop too far.  Check out the average selling price for silver Brits on ebay : the VAT is always accounted for and they sell well enough. 

I was never really one to consider myself as holding an actual portfolio and always thought it sounded a bit toffee nosed when I hear people yakking on about it, but I suppose you have to consider everything you have, and when you lump it all together it does become a kind of portfolio, whether it be coins in silver or gold (for some reason I can't feel the attraction to platinum or palladium yet), bottles of whisky, rare banknotes, stamps, guitars and amps,  or even just a stash of food in tins as future proofing against price hikes.  It's all got it's own worth.  I have a big box of scrap copper out in the garage which I had until this moment never considered to be part of any portfolio - it's just a big box of old 15mm pipe, scrap cable, and bits out of old fuseboxes which I'll take along to the scrap dealer when I have enough of it.

Bottom line : whatever you hold,  if it's sellable for a good return it's all got worth and value, and silver not least of all...😎

Edited April 16, 2022 by flyingveepixie

[LemmyMcGregor]

Thanks to everyoine for taking your time to reply, I am honored to see your words in here. I am being extremely busy over the bank holiday weekend and I won't have the time to reply properly for the next couple of days, however, I have had the time to read and I would like to stress one point, which I should have probably have highlighted better in the opening post, my apologies, I shall make an edit in the original post to make this more evident, as it appears that it could have gone unnoticed.

20 hours ago, Lyrinn said:

If you're going in for a very strict "stacker" route (with silver) then coins aren't the way to go. You'd probably want bars, so that would be the first thing to separate out - bars come with lower premium, generally, as they don't need as much processing. You're also looking at 100oz (one hundred) or 1kg bars, so heavy and bulky. Also, some silver coins (pointing at the Great Engravers series) attract a higher value to both stackers and collectors - one can make an argument over what happens when hype dies down, of course. While gold coins are also available for this series, you have to also think about your market. Quite bluntly, the silver market is accessible to more people than the gold one. Therefore, basic economics mean that you will be able to liquidate your stack to a broader spectrum of people. Yes you can go to dealers, but things like TSF are unique opportunities for both private buyers and sellers to get a better deal than simply going to the local dealer (generally speaking).
 

3) If you have to sell part of your stack to fund an emergency bill, is it not better to sell a proportion closer to the value of said unexpected bill? For example, I would prefer to sell 10oz of silver to cover a £250 bill, than I would a 1oz gold coin for £1,500.

Thanks, you make very good points, however, I would like to counter by quoting myself and adding a few lines. I'll cut out a couple of parts that I want to counter, I still really liked the whole post though, thanks for your time.

For the first part, as clearly stated in the opening post, see below, I am on a budget, the whole point of this exercise is to address this topic from someone that can't afford big quantities, meaning that heavy bars can't be in the picture, more so, I have actually considered them and I have previously replied that, even if they were in the picture, 1kg of Silver still comes with a heavy premium, more so, on a budget, when it comes to deal with security is probably going to be cheaper when having to secure smaller items.

https://atkinsonsbullion.com/silver/silver-bars/1kg-silver-bars/metalor-1kg-silver-bar

1kg Silver bar, £863.21
Current value of Silver, £632.10
863/632=1.37

Now, I could probably look in the forums and find it cheaper, say I find a bar for 700 shipping included, 700/632=1.11, I am paying 11% over spot, or I could pay 750 for 2 Gold Sovereign at 5% over spot, which replies to your second point, I have clearly stated that, based on my observations, my strategy will be to focus on Sovereign, which are not a 1oz £1500 Gold coin, but an 8g £380 Gold coins, more so, I have also pointed out that I will look at getting the odd smaller item, such as half and quarter sovereign, which still come at a better premium than Silver.

This said, again, please, I will be getting the odd piece of Silver myself and I don't want to imply that you shouldn't buy any, I am buying some myself, the point is that I am looking purely at capital conservation, and in this case Silver has no game.

Now, if we want to go in the imaginary SHTF situation, last night I was at the pub and I paid for a £4.30 pint of bitter with a £20 bill, I was given change and used some of that to play some Dolly Parton and Kenny Roger on the juke box, wonder if I could get some Silver change back from my quarter Gold Sovereign.

If we want to discuss how to strategise for such an eventuality, please, I'd be happy to do it elsewhere, in this case, as clearly stated, not only is none of my concern, but I would be covered anyway by way of getting some smaller units. There also some more fallacies in the SHTF argument, however, still, not relevant to this conversation, thanks for making the point though.

On 14/04/2022 at 13:57, LemmyMcGregor said:

I am looking at this from a low budget stacker perspective, so I have considered individual coins when discussing gold as I would not be able to purchase multiples, lower premiums means that you don't really get much of a discount online buying bulk, might change when dealing in person, I have no experience, so I'll stick to what I know. With Silver is worth looking at multiples as the premiums drops significantly, if I was on a budget and wanted to spend £100 a month in Silver, I'd rather wait 3 months and get 10 coins as the difference in premium is noticeable and would net me an extra ounce for the same money.
 

----

My Strategy will focus on Full Sovereign for stack, I don't have the resources for Gold 1oz Britannia and the premium is the same so, why bother? Also, to the best of my understanding, Sovereign are sturdier due to being 22 carats.

I will look at skipping the odd Full Sovereign for some Quarter and Half, maybe once a year get one of each instead of getting a Full one, could be useful to have a few smaller denomination about.

 

On 15/04/2022 at 00:35, SilverPlatinum said:

No other metal on earth can match ❤️Silver❤️ in these properties:

--- Silver conducts heat better than any other element.
--- Silver conducts electricity better than any other element.
--- Silver is the most reflective metal on earth.
--- Silver has antimicrobial properties, so it kills bacteria quickly, this is why they used to gift silver spoons to babies (to keep their teeth healthy). Copper kills bacteria too but at much slower speed than Silver.
--- Silver tarnish and produce beautiful colorful rainbow patina (which no other metal can match).

P.S. During ancient times, silver was more valuable than gold primarily because it was more difficult to find in its natural state as well as to extract from its ores.

I LOVE ❤️SILVER❤️.....

 

You win the thread ❤️

Edited April 16, 2022 by LemmyMcGregor

[dicker]

Your points make sense but I would highlight that there is silver that I think has done better than people realise.  
 

The one coin that I consistently see selling for great prices is the Morgan Dollar, particularly if in Unc grade.  It’s a beautiful coin and I think the market has been very keen on Morgan’s over the last couple of years.

Otherwise for investment terms, Sovs close to spot or Britannias.  Appreciate there are some CGT nuances but you will find Perth Mint Nuggets / Kangaroos very well priced in the secondary market.  Nuggets in particular are under valued in my opinion with even Proofs with very low mintages going for close to spot.

Best

Dicker

 

 

[goldsilverdash]

I also stay away from silver now because of the high premiums. If I had to pay full VAT as well on top of that like you do in the UK, I would never buy it. But if you could still get VAT-free silver and the premiums went down to pre-Covid levels, would you not buy silver then? I bought most of my silver in 2018, I now wish I had bought more back then.

[Darr3nG]

1 hour ago, LemmyMcGregor said:

play some Dolly Parton and Kenny Roger

Good choice. Some might even say 'golden' 😁

[ArgentSmith]

1 hour ago, LemmyMcGregor said:

1kg Silver bar, £863.21
Current value of Silver, £632.10
863/632=1.37

Now, I could probably look in the forums and find it cheaper, say I find a bar for 700 shipping included, 700/632=1.11, I am paying 11% over spot, or I could pay 750 for 2 Gold Sovereign at 5% over spot, which replies to your second point, I have clearly stated that, based on my observations, my strategy will be to focus on Sovereign, which are not a 1oz £1500 Gold coin, but an 8g £380 Gold coins

If you can buy Silver kilos (current market) for 700 inc post you could quickly sell on here for an instant profit but good luck getting your money back on sovs at £380 each. Just sayin.

Stop fixating on spot, is not like for like.

[goldsilverdash]

My point above is that the analysis presented here is based on current numbers only, but nothing is static. Over time, everything changes - premiums, spot price, tax laws....

One could ask under which conditions silver would be attractive. Completely VAT-free silver seems to come to an end also within the EU soon, but the "margin scheme" will probably continue. I'm hoping that premiums on silver will go down a lot, and spot price down a bit as well, and that I will be able to buy silver at a good price again some time in the future from say Germany, VAT-benefitted.

Edited April 16, 2022 by goldsilverdash

[DeepSpace]

Some great answers on here, as a relative newbie myself I enjoy reading all the differing perspectives. Personally and on a pragmatic level I like gold for the lower premiums, no VAT and CGT exemption. It is also far easier to store.

I do buy silver coins and I will even occasionally buy a silver proof, not really as an investment I just enjoy the aesthetics of them. This wasn't something I intended to do, I originally intended to just buy a few coins, stick them in the bank and forget about them for 30 years but the more I looked around and researched where I should be spending my money the more I just started loving all the different designs and the history of numismatics. I ended up in the rabbit hole.

I guess I'm saying my goals changed. I just wanted to diversify a modest portfolio and ended up investing myself into a completely new hobby.

[Dazlenk]

2 minutes ago, DeepSpace said:

Some great answers on here, as a relative newbie myself I enjoy reading all the differing perspectives. Personally and on a pragmatic level I like gold for the lower premiums, no VAT and CGT exemption. It is also far easier to store.

I do buy silver coins and I will even occasionally buy a silver proof, not really as an investment I just enjoy the aesthetics of them. This wasn't something I intended to do, I originally intended to just buy a few coins, stick them in the bank and forget about them for 30 years but the more I looked around and researched where I should be spending my money the more I just started loving all the different designs and the history of numismatics. I ended up in the rabbit hole.

I guess I'm saying my goals changed. I just wanted to diversify a modest portfolio and ended up investing myself into a completely new hobby.

That's exactly what's happened to me as well m8!

[HerefordBullyun]

I reckon nobody has educated themselves in the book the silver bomb.

Uranium and silver are STILL the most undervalued assets on the planet. IPSO FACTO as David Brent said.

[Airhead]

On 15/04/2022 at 00:35, SilverPlatinum said:

No other metal on earth can match ❤️Silver❤️ in these properties:

--- Silver conducts heat better than any other element.
--- Silver conducts electricity better than any other element.
--- Silver is the most reflective metal on earth.
--- Silver has antimicrobial properties, so it kills bacteria quickly, this is why they used to gift silver spoons to babies (to keep their teeth healthy). Copper kills bacteria too but at much slower speed than Silver.
--- Silver tarnish and produce beautiful colorful rainbow patina (which no other metal can match).

P.S. During ancient times, silver was more valuable than gold primarily because it was more difficult to find in its natural state as well as to extract from its ores.

I LOVE ❤️SILVER❤️.....

 

Silver is only the second best conductor of heat, the best conductor of heat is, surprisingly enough, diamond. Due to it being compressed carbon I suppose.

[HerefordBullyun]

42 minutes ago, Airhead said:

Silver is only the second best conductor of heat, the best conductor of heat is, surprisingly enough, diamond. Due to it being compressed carbon I suppose.

Also Silver is an industrial metal and majority of it goes to landfill, and doesnt get recycled. With more of it in demand due to EV and technology sector one day it will be rarer than gold. Gold is Gold the only demand is Jewelry and lumps of bars and some some technological products but not many.

[ady]

9 minutes ago, HerefordBullyun said:

Also Silver is an industrial metal and majority of it goes to landfill, and doesnt get recycled. With more of it in demand due to EV and technology sector one day it will be rarer than gold. Gold is Gold the only demand is Jewelry and lumps of bars and some some technological products but not many.

The Silver Bomb layed alot of this out. Had been collecting "junk" well before its release and turned me to reinvesting in PM for a pension & buying full ounces of shiney.

[SidS]

I totally agree with the original poster. Gold is a much better and consistent preserver of wealth than silver.

I don't buy bullion silver, merely stack collectable numismatic silver as bullion. So needless to say, I pay plenty in premium.

If what I've bought even fetches 2/3 to 3/4 of what I paid for it, then I'm happy. Strange you think?

Well if I hadn't spent it on silver, I would have blown it on holidays, cars, clothes, food and drink and other consumer rubbish that I'm told I need, but actually probably don't in reality. Some great experiences and great memories sure, but what tangible things are there afterwards? A hangover, a larger waist and a few holiday snapshots?

When I look at my silver stack, I think well, the 1/4 to 1/3 value I lost in premium is the price I pay for the joy of ownership. The remaining value is still there and if they appreciate in value over the next few decades then I might break even or maybe even scrape a few cents profit. So I totally get where you're coming from and I'd state strongly, stick with gold.

Don't do what I do and stack Britannia groats, there's no money to be gained there! 😁

[goldsilverdash]

13 hours ago, HerefordBullyun said:

Also Silver is an industrial metal and majority of it goes to landfill, and doesnt get recycled. With more of it in demand due to EV and technology sector one day it will be rarer than gold. Gold is Gold the only demand is Jewelry and lumps of bars and some some technological products but not many.

But, is silver irreplaceable for these industrial purposes? When it becomes too expensive, they will probably look to replace it with other metals.

[Bigmarc]

15 minutes ago, goldsilverdash said:

But, is silver irreplaceable for these industrial purposes? When it becomes too expensive, they will probably look to replace it with other metals.

When I was looking into stacking tin I tried to find if there is a alternative to soldering. One of the top answers industry is moving to is silver glue. It's glue with tiny flakes of silver in it. So I'm on a win win with what I hold 😁 

In industry silver is only used at the end of electrical contacts, the point where two electrical parts touch frequently, the rest is copper, It's used everywhere. Maybe they maybe able to use something synthetic in the future.

[SidS]

I've got about a kg of tin. My only reservation with stacking tin is that it can develop tin pest.

[SilverPlatinum]

23 hours ago, Airhead said:

Silver is only the second best conductor of heat, the best conductor of heat is, surprisingly enough, diamond. Due to it being compressed carbon I suppose.

Okay; I will revise my quote to be:

---Silver conducts heat better than any other metal.

Since Diamond does not fall into the metal category.