Would someone give me a crash course?

RobertS · April 27, 2011 1:43PM

Hi all,

This is a serious question, i know there will be some joking but I will appreciate a crash course on our economy and its relation to precious metals. More importantly, if you had some extra cash what would you buy? I am considering the tulving offer on the 2011 ATB is that a bad deal? Should I be looking at something else? Silver seems to be getting expensive really fast. Supply seems to be drying up.

Thanks

derryb · April 27, 2011 2:00PM

start here

then go here

and here,

and here,

and here,

and here

In a nutshell: Buy low, sell high. Supply and demand determine prices and wages......until government interferes. Interference is at an all time high which has the US dollar near all time lows which has PMs near all time highs. The name of the game in making investment decisions is what's gonna happen next. To correctly guess that you need knowlege. To gain knowledge you read and study everything you can about the market(s) you are interested in. The internet has made this a breeze, it just takes time and your personal interest.

Silver: Tulving has about the best prices when buying physical silver in quantity. With silver at 48.50 you're looking to spend $53,290 for the minimum order of 1000 ozs. of ATBs. With the cheaper silver eagles having an availability problem, it is not a bad deal, but then again you're paying $4.79 an oz. over spot. You need to consider safe storage of this much silver, it will take at least two large safe deposit boxes, maybe three. Gold eagles on the other hand require much less storage space and are more readily available. You're looking at spending a lot of money on PMs while they are at or near all time highs, so be sure you have studied up on them and their outlook. PMs are priced at a premium over spot depending what form the PM takes. You can see this in tulvings price list.

Live chart I use to keep an eye on spot price, need to refresh each time you visit

Do not rule out investing in equities (paper) that move in price with PMs. Most everyone is going to tell you to only buy physical metal. Make that decsion for yourself after research. I personally hold physical for long term and paper for short term. Paper has its advantages, learn them. It also has its disadvantages, learn them as well. I can get in and out of paper with the push of a button. It takes a shipment to get into or out of physical.

Kitco.com has a pool account for metals that I can recommend from experience. It is the perfect tool for you if you are looking to get in quickly and easily. It is how I started out and it enabled me to get in right away until I could learn more and increase my investing knowledge. It will cost you .20 cent an ounce premium to buy all the silver you want and kitco holds the silver in an unallocated account (the bars don't have your name on them, but they are there). It will cost you another .22 cent to sell each ounce of silver. This means silver has to go up at least .43 cent for you to see profit. That is not asking too much at all in this bull market. You trade on-line in your pool account and can make your trades over the phone during normal hours if you prefer to. This is the route I recommend you go with some of your cash until you learn more.

RedHerring · April 27, 2011 2:01PM

There's much good info in this thread. It's a start!

CU PM Thread

jmski52 · April 27, 2011 2:13PM

Silver is seeking a new price equilibrium, and the problem is that it's way up already. Nobody knows what "fair value" is going to be. We just saw a 10% swing and almost a complete recovery with virtually no struggle. That tells me the volatility will increase more next time around, i.e. - a drop of 20% and another recovery to these levels or higher - wouldn't surprise me now. I don't think that the new price level has been determined yet, and it could still be higher or lower.

I would be very very hesitant to jump all at once. My suggestion would be to use no more than 20% of your "excess cash" position to buy silver at this point, and to save the rest for the next pullback, which probably will be fast-moving in both its drop and in its recovery.

I'm afraid that you will have to work diligently at finding a supply and to achieve prices that reflect what the market is doing. No dealer is going to sell without a fat margin to protect himself now. The best you can hope for is for pricing to stabilize for a few weeks and then to keep nibbling away when prices aren't all over the map. You will be the one who is making the new rules of engagement and you will be the one to determine what a fair buy-sell spread should be, because this market is not the same market of 6 months ago.

In my opinion, the best thing to do right now is to track the market closely without buying alot and nibble when you see a brief opening.

I would treat this the same way I would treat silver at $6.00/ounce if I were establishing a new position - slowly and somewhat deliberately. Remember that volatility is the definition of risk. Risk doesn't mean you automatically lose, but it does require that you be careful about your money management.

RobertS · April 27, 2011 11:07PM

Wao, Thank yo so much for the sound advice, will get to reading today!! Thank you even more for providing links!

derryb · April 28, 2011 4:43AM

Its just advice, you have to make it sound with your own decisions.

InYHWHWeTrust · April 28, 2011 7:31AM

<< <i>Wao, Thank yo so much for the sound advice, will get to reading today!! Thank you even more for providing links! >>

You got some great free advice here, and some great links,and lots of threads to search on your own by the regular posters here- on both sides. Now you have to match your risk tolerance with your positions and read, read, read some more. DYODD!

Thanks for posting, because there were probably more lurkers who wanted to-- and you saved them some major hassle. Best to you to in these best of times.

Would someone give me a crash course?

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