Facing a self induced fork in the road.

piecesofme

What’s your opinion on holding, it’s really more like collecting, harder to find .999 silver bars that carry a typical Spot + $10 minimum premium vs. the more common, but still can be desirable .999 bars that can be had for Spot + $1 or so?
I’ve found myself debating if it’s worth doing the “collectible” silver bar thing, because when it comes time to sell those bars, they are much harder to sell than to buy. You have to hope that that right person comes along to see the value of the collectible bar vs when trying to sell more common bars, you can get rid of them quicker and with a more realistic selling price, which is more of just a purer Silver play.
I guess what I’m saying is maybe I’m learning of myself that I am not a collector of silver, but more of a person that wants to “trade” it, physical though, not paper. I think I’d rather buy some typical .999 and just hold it and wait for a bounce in the value of it and sell it.
But the collector in me loves the cool old pour variety of bars that you rarely come across too.
Have any of you even gone thru this fork in the road of what to do going forward with your pm holdings and what did you ultimately do and do you regret doing so, or not? I’m looking for some advice and I figured what better place to ask.
I should also disclose that ultimately I am a coin collector. A good part of the profits of buying then selling 90% silver coinage & more common .999 Silver goes towards building my coin collection.

Downtown1974

Rich...While I am still fairly new to PMs, I have already gone through what your feeling. Thats when I changed all of my silver holdings to SAEs. No crazy premiums when your buying, and easy to get rid of when you want to sell. I never liked the idea of paying huge premiums on say...something like a 2 oz poured Engelhard. Thats just me though.

You can still "collect" silver, just start collecting Eagles.

Edited to add: Premium bars are cool to collect, but IMO...those that are paying high premiums for those bars are going to be the ones to lose their shirt in a true SHTF scenario.

bestmr

I do both. I have my ASE's, maples and 90% for silver but I also have an album of kookaburra's. They have a hefty premium but like the designs on them. Granted, I only get one for each year so it's not as bad as collecting a bunch of art bars..

perkdog

I will not spend extra money on "old pours" I also think its ridiculous that Engelhard and Johnson and Mathis get premiums, bottom line Silver is Silver the way I see it. I am very suprised at the BINS on Ebay for these items.

Baley

it won't be long until someone decides to "authenticate and grade" collectible silver bars to tap into the numismatic premium

Got MS70?

LukeMarshall

I think that it's all about what makes you happy.

I've had Things that I've purchased with high premiums, and I enjoyed them for a bit, but when it came time to move on I found the market soft... I had to wait for that certain individual.

But there is a collector for everything, just maybe not in your time table with the fast paced metals market.

#1. If your looking for maximum turnover, then by all means go for the maple, ase, 90% and focus on your coin collection.

#2. If you focus to much on the old pour, art bar, with too little of #1, then that will take time away from your coin collecting.

But to keep things interesting why don't you do a nice ratio of 80% #1, and 20% of #2? Or even a 90/10 ratio...

It's just when you look at your stack and see that you're 45% into slow moving items for a specialized market you have to wonder how much extra time have you devoted to something that ultimately will not be in your collection long term.

Edit:Your to You're

Wingsrule

Collect what you like.

I have an emergency fund set aside so I don't "have" to sell something if I don't "want" to. If it takes awhile to get the price I'm looking for, so be it.

piecesofme

You can still "collect" silver, just start collecting Eagles.

I thought about doing this, but I fell out of love with ASE's when I felt the premium for them got too large for what they are. I'd rather pay more of a premium for something that truly has some rareness to it. But I understand completely what you are saying because I think ultimately I may start doing it.

I will not spend extra money on "old pours" I also think its ridiculous that Engelhard and Johnson and Mathis get premiums, bottom line Silver is Silver the way I see it

That's what I'm starting to lean towards, but I look at the old pours (they dont even have to be Eng's or JM's) the way a Morgan Dollar collector looks at a '89 CC or 93 S Morgan. A curse I suppose.

It's just when you look at your stack and see that you're 45% into slow moving items for a specialized market you have to wonder how much extra time have you devoted to something that ultimately will not be in your collection long term

Bingo!

57loaded

if you like the "odd" or more collectible bars...great. i woudn't make it more than 20% of my silver (just a swag, maybe less). when/if POS goes up like it did last year, did the spread of these collectibles stay the same? increase? or decrease? i think you'll find your answer there as well as your liquidity issues.

more and more i like ASE period. i understand the advantage of buying 90%, too.

ricko

People collected beanie babies too.. some were selling a $5K - guess where that market is now. If you are in it for investment, it is risky. Fast turnover's are safer since the market can cool suddenly. ASE's etc are far more liquid, and stacking a good amount is like insurance. Cheers, RickO

nibanny

I like Silver Eagles, though they tone and develop milk spots. Hence, they are not for me to collect.
From an investment point of view, 90% and JM/Engelhard struck bars - better if sealed - are always liquid (at least in the US, not so in Europe).
Just my 2¢.

PerryHall

I don't mind paying a small premium for older or unusual bars but there is no way I'll pay multiples of melt for what is still essentially silver bullion.

mkman123

Been there done that a while back. Just think about what you like and go for it. Don't always think about money, etc.

jmski52

I still don't understand why anyone collects bars, but I support your right to do it!

fivecents

If silver goes high enough per ounce it could absorb all or most of the premiums of the collectable bars.

tydye

I am a big fan of JM and Engelhard one and 10 oz bars. As well as ASE and other government rounds. Silver with $1-$2 premiums. I have found the premiums relatively consistent and very easy to move when time to sell. This is the stuff I stack.
Now the odd size Engelhards, JM, old pours, Coca Bars etc. - items that sell for a good 25% or better - I will generally resell in order to grow my stack. I do allow myself a small box of "collectible" silver for fun. Nearly all of it found without the premium though

OnlyGoldIsMoney

Rich, your decision has to be based on your personal circumstances and the goals you set for the money you invest in metals.

If you are stacking silver as long term wealth protection it cannot hurt much to pay a premium to own some cool old poured bars. I don't expect to sell any of my common stamped silver bullion until at least 2020. If the price of silver rises substantially in the interim, something I expect, paying a hefty premium for perhaps 3% of my total stack won't much matter.

If liquidity is a concern you might want to focus on key date coins like 1909-S VDB Lincolns or 1893-S Morgans. All coin collectors know their value and they always sell.

In the long run I don't think you will lose money on scarce poured silver bars. My observations tell me that collector interest in poured bars has increased substantially since 2010. Just consider the number of bids when a 4 oz or 7 oz Engelhard appears on ebay. There may be just 30-50 serious silver bar collectors ready to bid up scarce bars. That's just a pittance compared to Lincoln and Morgan collectors but still dwarfs the number of collectors working on date sets of obscure 19th century coin series (like mine).

1970SilverArt

I am a collector and my goal in life when it comes to PMs is to buy what I like because that is what makes me happy. I love to collect silver art bars and that is what makes me happy. If/when I find a silver art bar that I like, then I will hold on to it because I like it. My self-induced "fork in the road" came in August 2008.

In January 2007, I started out as a regular bullion buyer and bought plain .999 silver but in August 2008, I went through a phase myself when I was at a coin show and I saw some silver art bars that got my attention at that time from that point on, I seriously started collecting silver art bars and never looked back. I ended up selling all of my regular bullion (SAE's, Maples, Engelhard, JM, etc.) and bought a bunch of silver art bars thoughout the years and in 2011 and during various times of this year, I sold most of my common-minted silver art bars (Madison Mint, Hamilton Mint, Holiday-themed bars, etc.) to several local dealers and used the proceeds to buy the very rare silver art bars that are on my silver art bar wish list from other local dealers, at coin shows, and on ebay.

Currently, I am a silver art bar collector that concentrates on buying very rare and very popular silver art bars (The Mint, Greathouse, Coca-Cola, etc.)

piecesofme

All good sound advice everyone, and I appreciate it.
It's just so hard to try and do it all. What I mean by that is fulfill all of my collectible silver and coin desires. The only thing rich about me is my name, so having many collectible ambitions makes me feel like I'm at a point where I need to choose a direction and focus on it in order to grow and satisfy that urge to have really nice coins and poured bars.
I really think I'm going to get away from purchasing the high premium poured bars and just do the ASE thing for my silver desires, and focus more on rebuilding what once was an awesome coin collection, because at heart numismatics is still number 1 with me.

66Tbird

Easy of liquidity during high metal value times is why I do silver in bars and 90% at a minimum over spot. I've noticed premiums on collector bullion and NCLT items tend to evaporate during elevated values. jmo

1970SilverArt

<< <i>Easy of liquidity during high metal value times is why I do silver in bars and 90% at a minimum over spot. I've noticed premiums on collector bullion and NCLT items tend to evaporate during elevated values. jmo >>



Yeah I have also noticed that too on ebay when it comes to certain silver art bars. When spot was at $49+, the premiums on certain silver art bars (ex: certain Coca-Cola bars) shrank but when silver took a plunge from $49 and bottomed at $26, the premiums on the some bars either stayed the same or slightly went down when spot went down. There are also just some rare ones in that the spot price movements are a non-issue. From my point of view, generally speaking, when spot silver goes up and is near its nominal high (ex: when it went up to $49+ in April 2011), the best scenario as a silver art bar collector is to buy very rare collectible silver art bars at a LCS or at a coin show for .999 generic premiums because if/when silver takes a plunge (ex: like it did when it bottomed out at $26 in Sept. 2011), then you will have some downside protection from a plunging spot silver price because the ebay premiums will either stay where they are or will move very slowly downward since collectors will still be willing to pay a huge premium on collectible silver. With that said, It depends on the silver art bar and it is not an easy thing to find very rare art bars (ex: Coca-Cola, Greathouse, Green Country Mint, old poured Engelhard, etc.) for .999 generic premiums at the LCS or at coin shows.

konsole

Just my opinion but I think the higher silver goes, the less premium those collectible bars will hold. A rare 3 oz silver bar may have a melt value of $100, but since people might be willing to pay $150 for it means it has a premium of 50% right now. If silver reaches $100, then that bar will have a melt value of $300, but I highly doubt people will still be willing to pay the 50% premium at that point. So its my assumption that the higher silver goes the less the collectible premium will be.

I think its human nature to look at dollar amount instead of percentages. This is probably why gold gets the spotlight on a particular day even though silver went up a higher percentage. A move of $100 is about 6% for gold, wherease a move of only $3 is 10% for silver. Even though silver increased almost twice as fast as gold, the average Joe is much more impressed with the $100 move in gold.

So I think people look at the 50% premium on that 3 oz bar right now and don't think a $50 premium is that much, but for whatever reason will look at that bar when silver is $100 per oz, and not be willing to pay a premium of $150, even though in both cases the premium is 50%.

OnlyGoldIsMoney

<< <i>Just my opinion but I think the higher silver goes, the less premium those collectible bars will hold. A rare 3 oz silver bar may have a melt value of $100, but since people might be willing to pay $150 for it means it has a premium of 50% right now. If silver reaches $100, then that bar will have a melt value of $300, but I highly doubt people will still be willing to pay the 50% premium at that point. So its my assumption that the higher silver goes the less the collectible premium will be.

I think its human nature to look at dollar amount instead of percentages. This is probably why gold gets the spotlight on a particular day even though silver went up a higher percentage. A move of $100 is about 6% for gold, wherease a move of only $3 is 10% for silver. Even though silver increased almost twice as fast as gold, the average Joe is much more impressed with the $100 move in gold.

So I think people look at the 50% premium on that 3 oz bar right now and don't think a $50 premium is that much, but for whatever reason will look at that bar when silver is $100 per oz, and not be willing to pay a premium of $150, even though in both cases the premium is 50%. >>




People are consistently paying $300+ for Engelhard 3 oz bars now with silver around $32.

konsole

<< <i>People are consistently paying $300+ for Engelhard 3 oz bars now with silver around $32. >>



I wasnt trying to use perfect examples, just trying to convey my point that I dont think the premium will hold at much higher silver prices. So they are paying a 200% premium now but will they be willing to pay $900 for that 3 oz bar when silver is $100/oz ?

I have a feeling that most people view a $200 premium now (with silver at $33) as alot different then a $600 premium later (when silver is at $100), even though the percentage premium in both is the same. I could go even further and say that if silver hit $1,000/oz then that 3 oz. bar will most likely not sell for a 200% premium or $3,000. I know that might be a little high for silver in some peoples opinion but I think you get my point.

OnlyGoldIsMoney

<< <i>

<< <i>People are consistently paying $300+ for Engelhard 3 oz bars now with silver around $32. >>



I wasnt trying to use perfect examples, just trying to convey my point that I dont think the premium will hold at much higher silver prices. So they are paying a 200% premium now but will they be willing to pay $900 for that 3 oz bar when silver is $100/oz ?

I have a feeling that most people view a $200 premium now (with silver at $33) as alot different then a $600 premium later (when silver is at $100), even though the percentage premium in both is the same. I could go even further and say that if silver hit $1,000/oz then that 3 oz. bar will most likely not sell for a 200% premium or $3,000. I know that might be a little high for silver in some peoples opinion but I think you get my point. >>



I suggest not using percentages based on the change in spot silver. The change in the collector base is the most important factor to me.

A 3 ounce Engelhard selling for $300 today is $200 over spot. As late as January 2011 I could purchase those same bars for around $150. My rarest 3 oz bar was purchased below $225. What changed was collector interest.

When silver is at $100 an ounce I expect collector interest will further increase. I would expect the most common 3 ounce Engelhard poured bars to sell at that point for $600-700.

My point is that you are not going to lose money on rare silver bars as the colletor base has been increasing.

piecesofme

Both excellent points by OGIM & konsole. Totally opposite ways to look at it, but I can see where both are valid.

Zubie

From my experience, I had a very hard time trying to sell my premium silver when silver was only at $35-40/oz.
I had to sell almost all of it on eBay. I'll never do that again. When I reload starting this summer, I am only buying gold and silver eagles and just a few Perth items to satisfy my collector habit.
When silver hits $100 down the road, the premiums are going to be a lot smaller on those rare bars and it will be hard to find a buyer.
In a true SHTF situation, it will be so much easier to sell and trade ASEs and AGEs.
I'm going to try and do 40% ASEs, 40% AGEs, 10% Plat/Pald and 10% collector silver. I am avoiding all premium silver less I can get it close to spot.

66Tbird

Interesting points, my NCLT low mintage platinum with a small collector base sure didn't hold a premium when spot went near 2x spot. For Art Bars what you say may be true, because I don't know the series at all. What I do know is I could of bought many low mintage plats and gold at spot during that peak at spot. Thus defeating buying at a premium early on if one needs/wants to sell during sudden upturns.

So to me it comes down to collections are just that and carry a price and stacking to hedge inflation is more a numbers game that can work in today's environment. Combining the two is a compromise.

TheBigB

I love selling scarce silver items that I acquire for high premiums, I never pay them nor do the local dealers.

jmski52

As Yogi Berra said, "When you come to a fork in the road, take it."

Premiums are affected by demand, and they are affected by volatility. If demand increases, premiums will increase. The higher the price goes, premiums will shrink (and so will demand). If the price jumps all over - premiums will rise, buy-sell spreads will stay wide apart. Only when prices have stabilized and trading becomes boring - that is when premiums shrink. All of these factors are in constant flux.

It would be worth your time to learn about backwardation in the precious metals markets, and what it implies. Give this concept time to sink in, because it is important.

gold is also now in backwardation