bulk silver pricing... is this a good deal?

Geoman

I was at my local dealer today, and he showed me a big plastic bag full of circulated Franklin's and 1964's Kennedy's. I asked him about it, and he stated the face value was $250, which would make it 500 halves. He said the price was face X 3.8 so it would cost me $950 for the bag. I asked if he could do any better, and he said he would do face x 3.75 for a total of $938. I didn't buy it, but would have thought about it at face x 3.6 for $900 even.

What is a good price? I have never bought bulk silver before. Do most dealers sell at face x 3.8, or higher or lower? What price would you buy at? These are mainly circulated Franklins, with some 90% Kennedys. No walkers in it, as he told me he took those out, as they get a little more than 3.8 for bulk walkers.

Baley

why do you want a big bag of junk silver?

Placid

.36169 ounce silver in each half.
500=180.845 ounces.
Silver shows $5.13 a ounce at the moment.
$927.73 worth of silver.

Why not just buy a couple 100oz silver bars instead?

BigD5

If you want to sell it, no, it's a tough sell. Circ. Franklins aren't the hottest segment going in the coin industry right now, so you'd have a hard time finding a buyer at that level, where you could make enough to have it be worth your while. A dealer won't buy 'em. They would want to pay 3x (or even less, to be honest) face for the coins.
If you try to sell them as rolls, online, you wouldn't (in my opinion anyway) make enough on them to cover the auction fees etc.....

Geoman

Placid - thanks for the info. His price of $938 for $927 in silver doesn't seem too bad.

Baley - I just thought it would be fun to look through a big bag for silver. Thought about trying to put together a few sets of Franklins in the blue Whitman albums for the kids. Also, thought I could trade some of them at my local coin club meeting.

BigD5 - I am not trying to make money off of them, but I just don't want to get taken either. So dealers usually buy these for around 3 x spot. That is good to know.

Steve27

Based on this ebay auction Link, you dealer was making you a very good offer.

abuell

For $900 or so you could buy a nice coin for your kids instead of saddling them with a bucket of junk.

Geoman

I am kind of surprised at the responses so far. I do not consider a bag of Franklin's junk. Sure, they are circulated; but I think of the history, the places they have seen. Who knows whose pocket they have been in??? We all have our collecting preferences, and to each their own. Personally, I love going through bags of Franklins, wheats, etc.

Think of the fun little kids can have playing with all those Franklins. They can try and complete a set, and have fun popping them into the holes in a blue Whitman folder. They can trade them. Sure, maybe I could buy one coin for them, say a 1909-S VDB Lincoln in uncirculated grade fro $900. But what fun would they have looking at a slab, which would probably be in the safe deposit box anyways.

I guess I am surprised that when I say "bulk silver" people turn around and say "junk" or "why would you want to do that", etc. I bet my kids would have a blast with a bag of coins like that. Instead of "saddling" them with junk; I believe that I am enriching them.

dollardude

If it's for some kids, I think you should go for it. As an investment, you probably won't make any money on the deal. Decisions should not always be based on money.

abuell

I can't count the number of times someone has contacted me to ask me to take a look at 'grandpa's coin collection' that they inherited. Invariably it seems, grandpa's coin collection turns out to be a huge amount of junk. In these cases I tell them that 'in 1955 grandpa had a choice - he could have bought one really great coin, or he could have bought a new car. He chose the car. The car went to the junk yard sometime around 1965. Today the coin would be worth several hundred thousand dollars.'

eminem

Franklin might have even carried one of those halves in his pocket and took it out to remind himself what he looked like!

Baley

I'm not suggesting you buy one $900 coin, just that there are more interesting and liquid ways to spend that kind of money than a big bag of junk silver. You could buy a BU set of Franklins for half that, and have lots of money left over for a small bag of circulated barber, seated, and even a few bust coins.

Even if you love bags of circ. franklins, I just cant figure how a big bag of circ. franklins is more fun than a much smaller bag of circ franklins plus a bunch of different, older coins.

Just my opinion, which I thought you asked for opinions.

If your heart is set on it, by all means go for it.

dollardude

I would like to add a story to this thread. One time, I thought I would be really smart and invest in bulk silver. I purchased around 200 ounces in 10-ounce Engelhard bars (>0.999 fine). I got them for around $45-$50 per bar. Then, silver went up, and I sold them a few months later for around $50-$55 per bar. Smart, huh? Well, it wasn't so smart. By the time I had to pay eBay listing fees, PayPal fees, eBay selling fees, shipping, handling, and insurance, I came out about even (even though I charged the buyers sufficient shipping and handling and insurance fees). I made absolutely nothing. So, I think silver is a horrible investment unless you can somehow buy thousands of ounces at a time, wait until the price goes up significantly, sell it at exactly the right time, and recoup your investment plus expenses. Don't forget that your expenses also include insurance, safety deposit box fees, etc.

Edited to Add: I would like to add another bulk silver story. My stepfather told me that he also tried to make money in bulk silver. He purchased several hundred silver "rounds", or one-ounce >0.999 fine silver units. He held them for a couple of years, and the price fell. He finally gave up, and sold them at a huge loss. He was, however, able to claim a loss on his income taxes, which was the only bright spot. The fall in price, coupled with the buying commission, shipping costs, selling commission, insurance, and storage, made it a money losing scheme.

I just want to warn everyone who is thinking about investing in bulk silver that it is very, very hard to make money at this!

291fifth

As others have asked, just why do you want to tie up your money in this type of numismatic junk?
Are you expecting silver to go up? Who are you going to sell it to?

Geoman

I guess maybe I wasn't clear enough? I am not tyring this as an investment in which I hope for silver to go up. I tried that myself in the 80's with 10oz bars of silver, and lost money doing that. This isn't an investment, or hoping silver will go up.

But I wanted to know what dealers sold bulk silver for. What have you seen it going for? Etc... I wanted to know if face x 3.75 was fair, or outrageous compared to others. I really don't see it as tying my money up in "numismatic junk." Just thinking about buying something I know my kids will enjoy, and want to make sure I am not getting taken on the price.

abuell

This reminds me of when I was working on Mercedes Benz automobiles back in the 1970's. People would bring a car in and say, "I really like this car. Would you check it out for me?" We'd check it out and tell them right up front - This car is a total piece of sh**! These are all the things that are wrong with it - DON'T BUY IT!! Yea, you guessed it - a few days later they'd show up with the piece of crap saying, 'but I just love the car'

There's a lot of real good advice on these boards - it's free and comes with a double your money back guarantee if you don't like it (crap, we even throw in the postage free of charge!)

nickel

'junk silver ' is a term commonly used by dealers in refering to common date 90 % silver coin up to 1964 . it is bought and sold in whatever quantity someone is buying or selling . prices change often , and what someone sells it for depends on what he paid for it , or needs that day for whatever reason . not much different than day traders on wall st . buy and sell , hoping to make a profit . ps. 100 ounce bars are tougher to trade than an equal amount of silver coin

JoyofCollecting

At Dallas Gold and Silver Exchange today, they were asking 4.1x face and paying 3.55x face.

The offer the dealer made was very fair for 90% junk silver if that is what you want to invest in.

However, just like gold; I would think of it more as a hedge/insurance against financial system collapse than as financial investment that will provide a high rate of return. If our financial system were to collapse...your return will be very good indeed.

If the price of silver were to collapse completely...I mean completely...the coins would still be worth 1x face.

billiardmaster

Geoman,
You seem to have an honest dealer. Treasure him...............and a word of advice. Don't be a cheapskate. Those who tend
to "step up" make more money in the end. And of course, have much better collections. I think silver is a great investment
at this time and would let my mother by silver bags.
Rusty

ConstellatioCollector

I got, about 2 months ago, 3.19 x face value. I think you have a good dealer!

roadrunner

I'm always amazed at those who figure that since something performed poorly for the past 20 years that it will perform poorly in the future (silver, gold, etc.) Yet something that has performed well over the past 20 years (stocks) will continue to perform well over the next 10-20 years. Of course this leaves out the run up in silver from 1974-1980 as well as the run down in stocks from 1966-1982.

There has been no better time in the past 23 years to be in silver than right now. Whether it goes up or down remains to be seen.
The potential for a moon shot is there. Just as the potential for a moon falling exists in the stock market. The risk in silver is pretty small considering all you are giving up is the opportunity to lose more in the stock market or make 1-2% on a CD that is losing ground to inflation and the US Dollar tumble. Silver is a reasonalbe buy whether at 3 to 1 or 3.8 to 1. It is a well-thought out part of anyone's diversified portfolio. Sure, silver was a loser in the 1980's, especially with interest rates in double digits. Today is a new day.

roadrunner

bluespaceant

Drizzt

nice resusitation

calleocho

wow ....did you buy the bag?

morgansforever

I'm lost here, your telling me you had a chance to buy roughly 178 Ounces of Pure Silver for $950?

Silver is @ $13.45 why didn't you buy at $950? At $950 thats $5.33 an ounce, what are you waiting for.

AMPEX currently is selling $250 face 90% bags for $2400. I'm baffeled.

AMPEX

mrmom

<< <i>I'm lost here, your telling me you had a chance to by roughly 178 Ounces of Pure Silver for $950?

Silver is @ $13.45 why didn't you buy at $950?

AMPEX currently is selling $250 face 90% bags for $2400. I'm baffeled.

AMPEX >>




I got fooled too, check out the date

morgansforever

Boy do I feel like a fool. I didn't realixe it was an 03 thread, I'll slap myself.

SUMORADA

Me too! I starting reading and thought this guy must be a Nit Wit.....not to take the deal.........Jokes on me...

calleocho

i got to say ...roadrunner is a true bull

ajia

I thought the same thing, until I read the first response, then checked the date right away.

why do you want a big bag of junk silver?

I can think of a few (9.5X or more) reasons.

yellowjacket

Same here!

Garrow

BlindedByEgo

Gotta love the trip down memory lane. At least Roadrunner is consistant!

fc

lol this fooled me too. darn it. i was like wow, pull the trigger.

Deadhorse

Those were the good old days.

Back then I was buying all I could afford.

Sold out once at around $8 and bought back in at around $5+ on the last huge drop. That drop was probably the largest percentage-wise we've seen since the early 80's.

It was a calculated move, but I still feel a bit lucky and I continue adding to the hoard.

Silver is still going to double IMO in the next 18 months or less. I can see $25 an ounce in the not too distant future.

Time will tell, but this thread just shows how things can go.

Shortgapbob

Wow.....my jaw dropped before I saw the date of the post.

PrivateCoinCollector

Interesting, but not sure what itch we are trying to scratch? You could have pulled a thread from the 80's (yes, I know, if they exsisted) that shows a 70% drop compared to todays prices.

Deadhorse

<< <i>Interesting, but not sure what itch we are trying to scratch? You could have pulled a thread from the 80's (yes, I know, if they exsisted) that shows a 70% drop compared to todays prices. >>



The 80's was a completely artificial situation caused by a couple of guys who realized how much, or rather how little, actual refined silver there was and they beat the system buying up the physical and then the futures and demanded delivery. They broke the bank. Actually it was a very crafty move on the Hunt brothers' part.

The Government doesn't look kindly on such things and retroactively changed the laws to save their wealthy buddies/donors on Wall Street and large financial institutions.

I think those years deserve an asterisk next to them.

Today we really do have a widening gap between production and usage in gold to some degree and silver to a much, much larger degree.