I bleed maroon said:

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I think I'm officially a convert to precious mineral ETFs, as opposed to physical bullion. My journey:

I bought several hundred silver one ounce mint coins, along with a few gold one ouncers back in 2013-2014. I pay for a large safe deposit box to store them (I have found that silver weighs a lot!). They have appreciated pretty well. I'm not unhappy with my results, HOWEVER:

- I would have done better by investing in silver and gold ETFs (which I also hold in my investment portfolio). ETFs have much lower transaction costs, and you could argue lower ongoing expense ratios, while providing easy and immediate ways to liquidate holdings if needed. NOTE: metals are merely a small asset class in my portfolio, to hedge against inflation and help ensure diversification.

- The premium paid for buying minted coins, the super-wide bid/ask spreads for physical metals, and the personal hassle to buy, sell, and ship the product pretty much ensures that ETFs will outperform every time. The fact that there are no dividends paid limit the upside of metals overall, and make them useless as an income-generating asset, UNLESS you have an ETF where you can write covered calls, for example.

- The doomsday scenario never made any sense to me. If the stuff really does hit the fan, and safety, security, and sustenance are at a premium, bartering directly for those will be how it works - no intermediary means of exchange will be needed if we reach that basic level. If the stock market is gone, canned goods, guns, bullets, etc. will be where the value would be. If there is a nuclear war, we're probably all dead anyway, so who cares who has the biggest gold stash?

At some point in the near future, I will sell the physical coins - I'll post on here to avoid the horrendous discounts that bullion dealers insist on. I'm converted, but not too unhappy with the status quo.

Convince me I'm wrong, if you please!

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09Ag said:

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What reasons besides the lesser premium?

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AggieT said:

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I also like Britannias. Great looking coins, easily recognizable.

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09Ag said:

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Makes sense. Why is a monster box of Leafs $17,400 on APMEX and $16,200 on monument metals? Seems like I'm missing something with that big of a difference for the exact same product.

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09Ag said:

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I'm new into stacking silver and I was looking at monster boxes of silver oz and it looks like ASE are about $1700 more than every other type of sovereign. Is there a logical reason for this high of a premium? It seems like going with Krugerrands or Leafs would make more sense with that big of a discount.

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AggieT said:

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Essentially the same thing.

Just as recognizable.

Prettier.

Cheaper.

Isn't supposed to get milk spots.

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jagvocate said:

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09Ag said:

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Makes sense. Why is a monster box of Leafs $17,400 on APMEX and $16,200 on monument metals? Seems like I'm missing something with that big of a difference for the exact same product.

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APMEX is usually the highest priced online. They sell silver on Walmart.com at much lower prices, however, and if you make it to VIP status you can get emailed deals that are competitive with other online retailers, but that takes a while.

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I bleed maroon said:

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Brewmaster said:

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I came on here to try and prove you wrong. I did the math this morning. SLV vs spot prices, SLV is almost identical.

Now here's the interesting part, take a small silver miner like FSM vs silver per oz, FSM blows it away. No comparison. I think what most here like, is they have the physical asset either in their possession or stored in a place they trust. I'd suggest own a bit of both, but that's just my personal preference.

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I think you missed my comparison (which was SLV vs. actual bullion), but you raise some other interesting issues.

Looking at APMEX (a reputable bullion dealer), they have the following prices:

-Spot price $29.67 (actually not that meaningful, except when comparing to the past, or if you're able to trade actual silver commodity futures)
-American Silver Eagles $39.66 ask
-SLV $27.12 (not a comparable rate, except compared to itself in the past), but highly correlated to the spot price, as you mention
-100 oz. silver bar = $32.16 (closer to spot pricing, but still significantly more expensive)

Miners - while they are heavily influenced by the price of the metal, there is also a huge impact from the quality of their management and operations, their lease terms, capital structure, and many other normal business factors which should be analyzed like any other public company. They're not a pure silver play, and not all miners perform equally.

My issue is that every alternative to SLV, you arguably get worse to much worse value for your dollar. This is before adding in transaction costs, potential for forgery, shipping fees, storage, and then repeating those when you sell. Physical metals makes people feel good, but it is simply not the best economic alternative. If you get joy out of looking at your stash now and then, by all means, go for it. BUT, if you want to treat it like an investment, an ETF is the only way to go (unless you find a low-fee futures trading approach, which again is usually traded "on paper", not involving actual physical delivery).

SLV is not perfect - it too has expenses, reflected in an expense ratio. While very liquid, it may not have perfect supply/demand balance when YOU want to buy or sell, so there is some potential wastage there. but, it's way better than physical in every way (see my dismissal of the doomsday thoughts above - your mileage may vary).

By the way, I have a mix of physical and ETFs, and am not dissatisfied - just trying to share a different perspective with the board.

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Outdoorag011 said:

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6 years ago I was buying gold for $1200 at coin shows. Times have changed…..

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Outdoorag011 said:

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If you were skeptical before, you really wouldn't believe me when I say a lot of us used to buy gold and silver below spot. Sometimes dang near half off. All my OG eBay buyers that signed up for Ebucks know what I'm talking about.

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