Long Position on Silver and Gold?

[encorehunter]

I'm sorry, but I am not understanding all of this. You say locally, you can buy $3-5 over spot price. You pay 10-20% more (at $25/oz) than what it is worth, but when you want to sell it, you take a 10% hit. So what I am reading is you need a minimum of 30% increase just so you can break even. I have some silver, maybe 20oz, but all has been bought from individuals at spot price. I guess I am hopeful it will go up, but when you are 30% behind when you start, it makes a person wonder.

[davsel]

I'm sorry, but I am not understanding all of this. You say locally, you can buy $3-5 over spot price. You pay 10-20% more (at $25/oz) than what it is worth, but when you want to sell it, you take a 10% hit. So what I am reading is you need a minimum of 30% increase just so you can break even. I have some silver, maybe 20oz, but all has been bought from individuals at spot price. I guess I am hopeful it will go up, but when you are 30% behind when you start, it makes a person wonder.

There will come a time, within my lifetime, in which no amount of dollars will buy one ounce of the silver I hold.

[BushMasterBoy]

The silver I bought in 2006 for $4 is now worth over 500% what I paid for it. As the mortgage meltdown approached it kept climbing and peaked near $50 an ounce. I have some silver I paid $30 for. Truth is I bought something I hope I never have to use. So yes, some of my silver is worth 30% less than I paid, but I can almost guarantee you that 10 years from now, I will be way ahead financially. It is not something I bought planning to sell next week. And as for trading for real goods, I see all the time "will trade for precious metals".

[kidicarus13]

I'm sorry, but I am not understanding all of this. You say locally, you can buy $3-5 over spot price. You pay 10-20% more (at $25/oz) than what it is worth, but when you want to sell it, you take a 10% hit. So what I am reading is you need a minimum of 30% increase just so you can break even. I have some silver, maybe 20oz, but all has been bought from individuals at spot price. I guess I am hopeful it will go up, but when you are 30% behind when you start, it makes a person wonder.

That's the retail scam of precious metals. The buyer is losing 25% to 30% of their investment before they get to see tomorrow's price that may go up or down.

[encorehunter]

That's the retail scam of precious metals. The buyer is losing 25% to 30% of their investment before they get to see tomorrow's price that may go up or down.

This is what I am talking about. I don't mind investing in silver, but why do I have to be the 25-30% behind before I even start. I think you are right, it is a scam.

[roberth]

i understand where you're coming from.

For instance, spot is 21, the markup is 5.50 for 26.50 and then add 10% sales tax for a grand total of 29.15

I think spot will go above 30, I just don't know when.

[hatidua]

I don't mind investing in silver, but why do I have to be the 25-30% behind before I even start. I think you are right, it is a scam.

No, it's not a scam any more than the grocery store is a scam, Home Depot, the car dealer, the gun shop, or the farmer with a vegetable stand is a scam - buy any of those items today and try to sell them tomorrow for exactly what you paid for them today. You don't get to buy other retail things at wholesale, why should PM's be different: the dealers have lights to keep on and space to rent, if they sell it to you at $20, and buy it back from you at $20, how are they supposed to keep the store open?

If you bought a case (5,000rds) of .22 ammo in January of 2012 for $200, you couldn't sell it back to the vendor the next day for $200. However, if you saved that case until January of 2013, you could have very easily sold it for $600. Now, would buying a case for $200 that I couldn't flip the next day for $200 be a scam? or would waiting 12 months and flipping it for 3X what I paid simply be construed as gouging?

[Sawin]

No, it's not a scam any more than the grocery store is a scam, Home Depot, the car dealer, the gun shop, or the farmer with a vegetable stand is a scam - buy any of those items today and try to sell them tomorrow for exactly what you paid for them today. You don't get to buy other retail things at wholesale, why should PM's be different: the dealers have lights to keep on and space to rent, if they sell it to you at $20, and buy it back from you at $20, how are they supposed to keep the store open?

If you bought a case (5,000rds) of .22 ammo in January of 2012 for $200, you couldn't sell it back to the vendor the next day for $200. However, if you saved that case until January of 2013, you could have very easily sold it for $600. Now, would buying a case for $200 that I couldn't flip the next day for $200 be a scam? or would waiting 12 months and flipping it for 3X what I paid simply be construed as gouging?

ding ding ding

[Sawin]

Like I've said before, and some of you already get it, I'm buying physical PM's along with useful goods and learning practical skills, as an insurance policy... all of this could turn out to be a positive investment at some point in my life, or it could turn out to be a bad one, but either way, I have at least some form of "wealth security" beyond the dollars in my bank... that's all it is.

If you bought an ounce of silver for $25 this week, would you miss the $25? Would your budget suffer? If so, don't buy it... if you wouldn't miss it and still eat well, and would spend that $25 on something else with zero tangible value, then I would ask "why not?".

[ChunkyMonkey]

This is what I am talking about. I don't mind investing in silver, but why do I have to be the 25-30% behind before I even start. I think you are right, it is a scam.

LOL. Silver like your mortgaged house are not investment. All appreciating items are leverage against the USD. A great example was during the melt down... gas price was skyrocketing.. Your USD dropped in value. Meanwhile I used a monster box of American eagle to purchase one of the rental condos. (2009 a box of silver was $4750.. Post melt down was $23000.)

Now the clear and free condo is my own lil money printing machine which returned my initial cost of $4750 within 10 months.

Hatidua explained it very well on the mark up part.