40% and War Nickels

penny4yourthoughts · February 14, 2011 1:27AM

Why have war nickels and 40% halves not caught on? Is it the math people have to do? Just not "enough' silver?

Some shun 40% halves...but I see them as a prime flipping opportunity because they are frequently underpriced.

Quite a spread on buy and sell prices on war nickels...It's just that apparently no one wants them.

konsole · February 14, 2011 1:45AM

Some don't like handling silver coins that are more then half some base metal and others worry about refineries not wanting the lower percentage silver. Me personally I just dont want to have 60%+ of some base metal but I think they shouldnt be valued for less then their silver melt value. Lower purity gold jewelry like 14k is valued at its melt value so I dont see why silver should be any different.

sinin1 · February 14, 2011 4:10AM

the cost of refining the other metals out -

and the extra weight for collectors, hoarders, shippers

tincup · February 14, 2011 7:13AM

From what I can tell, the refining process takes quite a bit of concentrated acids, which are used to dissolve the metal into solution. So if a bunch of lower grade silver coins such as war nickels are being refined, the amount of silver obtained for the same amount of acid used will be significantly less. Thus, more material cost and the time factor also. In that respect, I can understand why a lesser amount is paid for the lower grade coins.

However... if silver continues to be drying up like it appears to be doing, the lower grade material may bring better prices.... the refiners will want to keep the factory going....

piecesofme · February 14, 2011 7:23AM

I avoid it and ASE's like the plauge (is that how you spell plauge?).
40% just doesn't make sense to me and ASE's are extremely overpriced. 90% will be far easier to sell when it comes time to sell. I think that's a key thing that alot of people forget. They think they're getting this good buy on 40%. Well, there's a reason you're getting a deal on it and it's that the dealer has finally found someone to take it off his hands, i.e., dead money.
ASE's? I just cant see paying what has become a nearly 10% premium when if I wanted .999 that badly I can pay just a little over spot.
All jmho.

TexasNationals · February 14, 2011 11:59AM

I don't see a lot of .500 and .800 for sale either, when it is I think it brings %'s in line with War Nickels and 40% Kennedy's so the 1/2 base metal doesn't ring true in my book.

penny4yourthoughts · February 14, 2011 1:05PM

My interest in the 40% is mainly centered around the fact that I buy from other collectors who are looking to offload (at a fair price that is usually set by them actually) and then sell it to the bullion dealers. I can make a dollar per dollar of face on the flip with less capital and that is a good thing. The points brought up here do help me understand this now.

Overdate · February 14, 2011 4:39PM

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Plague.

How many war nickels have escaped from the melting pot? I think they likely have a higher attrition rate than 90% silver and 40% halves. Silver investors avoid them because they take up too much space. As a consequence, most war nickels turned in to dealers probably head straight to the refiners.

The war nickel melt began around 1963, a few years before the 90% silver melt. When silver reached $1.29 per ounce, dimes, quarters and halves were worth only face value, but each $2.00 war nickel roll contained about $2.90 worth of silver. As a result, it took only a few years for war nickels to largely disappear from circulation. After decades of additional melting, some of the low-mintage war nickels may be approaching the 1950-D in scarcity. But if the price of silver keeps rising, their scarcity probably will not matter.

goingbroke · February 14, 2011 5:12PM

I agree! Just last week I went to the bank and traded $650.00 face worth of 40% halves for paper money. No one buys them so I figured what the heck. The bank took them in trade with no problem!

kevinstang · February 15, 2011 12:35AM

<< I agree! Just last week I went to the bank and traded $650.00 face worth of 40% halves for paper money. No one buys them so I figured what the heck. The bank took them in trade with no problem! >>

Wow! I can sell them for about $4 each to the local silver buyer no problem here in NY state. Sounds like someone will hit the jackpot when they go to the bank you took them back at- where did you say you lived again? I was told the silver jewelry guys like them because they mix so many of the 40%'s and so many of the Silver eagles and they get the sterling .925 fine they need.

CaptHenway · February 15, 2011 12:41AM

The refiner I used for 25 years told me that 40% silver must be refined twice to get all the alloy out. This costs energy, and as you may have noticed energy costs are high these days.

CaptHenway · February 15, 2011 12:44AM

Warnickels are even harder to refine because of the manganese. The silver in them is a potential, but not a useable product. Imagine hiring a carpenter to build a house and handing him a truckload of fresh-cut logs and saying "Here! Use this lumber."

gecko109 · February 15, 2011 1:25AM

<< Warnickels are even harder to refine because of the manganese. The silver in them is a potential, but not a useable product. Imagine hiring a carpenter to build a house and handing him a truckload of fresh-cut logs and saying "Here! Use this lumber." >>

Excellent analogy Tom!

mkman123 · February 15, 2011 2:03AM

I'm thinking goingbroke must be joking about trading the 40% to the bank for face value.

57loaded · February 15, 2011 2:47AM

i had posted in another thread that years ago these could be picked off eBay (including shipping) for under melt.

i like 90% more than anything now myself, but still have a hoard of war and 40%.

Overdate · February 15, 2011 2:16PM

<< Warnickels are even harder to refine because of the manganese. The silver in them is a potential, but not a useable product. Imagine hiring a carpenter to build a house and handing him a truckload of fresh-cut logs and saying "Here! Use this lumber." >>

If the price of silver goes up faster (in percentage terms) than the cost of refining, the price gap between war nickels and 90% silver should narrow. As an extreme example, if silver reached $1,000 per ounce and refining costs remained the same, war nickels would be traded at close to their melt value.

Using your analogy, if you kept offering the carpenter more money, then at some point it would become worth his while to convert the fresh-cut logs to usable lumber and build the house.