My silver analogy....

If you are reading this post then there is a very good chance that you collect or stack precious metals of some type. By reading all of the posts everyone seems to have a different take on how to do it, not that there is a right or wrong way. Just keep stacking or collecting, that’s what is important. I know that @phelimint has written some nice and informative posts on the subject. Well this is going to be the start of my take on things.

Definition of a “Silver Stacker” is one that collects or invests in the act of stockpiling silver.

Now with that being said, there are so many different sub topics on how to go about it, so I’m just going to start.

Consistency

No matter what style of stacker you are if it’s collector coins, government issued bullion or generic bars and rounds. The goal is always to increase your stockpile. So whether your budget is one ounce a week or a monster box each month, steadily increasing your position is the key. Set yourself a budget that is within your means and do your best to stick to it. Rome wasn’t built in a day and neither will your stack. Watching your stack grow over time is very gratifying. I suggest you take a pen to paper and come up with a plan and goals. You can have many goals, short term (3-6 months), medium term (1-2 years), long term (3-5 years), and then what you currently think your end goal is. Believe me that end goal will change many times, i know mine has. I’ve always tried to meet or exceed my short and medium term goals and have been quite fortunate so far. You should evaluate and re-access your goals if necessary, but i would give it atleast a solid year before that decision is made.

Variety of silver to buy

Silver comes in all shapes and sizes, but we will concentrate on the most commonly stacked items for now. First up is “junk silver” this is any silver coin which is in fair to cull condition and has no numismatic value or collectability other then it’s silver weight. It can be from any country and each one has its own percentage of silver content. Example: All US coinage prior to 1964 has a 90% silver content. Next up are generic bars and rounds, these are bought for just pure weight and have a low premium over spot price. These come in all different shapes and weights from 1 gram to 100 ounces being the most common you’ll see on the market. A grade up from this category are premium bars and rounds. These bars and rounds are designed with security features and the rounds have wonderful high relief strikes. Examples: Scottsdale Mint, Geiger, Johnson Matthey and Engelhard. To end the bar category is hand poured bars which are my personal favorite. These bars have a very high premium in comparison but are all works of art and each is unique. There are many companies out there both large and small and even hobbyist from across the globe. Examples: Atlantis Mint, Monarch Precious Metals, Prospector Gold & Gems, Yeager Poured Silver, MK Barz and our very own community member Pit Bullion. There are many hobbyist that create some amazing pours that i can’t wait to get my hands on personally, many are members of this great community. Government issued bullion coins are next on the list. These are coins produced by governments with legal tender denominations, but are sold solely for their precious metal content. Most of these coins have a reasonable premium to purchase. Examples: American Silver Eagle, Canadian Silver Maples, Britannia’s, Philharmonics, Australian Kangaroos. From my experience through the years, this category is the easiest to sell if you are ever in the need for money quickly. Any LCS will buy these at spot or if you have a good report with them then you may even sell it for slightly above spot. The last category is collector coins. There are many sub divisions within this category which i will breakdown on another post. Collector coins includes semi numismatic, numismatic, graded slabbed coins, limited edition coins, proof coins, and medals. All of these categories carry varying premiums based on condition, mintage, grade and collectability. The price of most of the items in these categories has no bearing on the precious metal content they have.

Why silver???

Silver has been trading in a range between $14-$20 an ounce since its high of nearly $50 an ounce in May of 2011. It has been beaten down by both the big banks such as JP Morgan & Deutsche Bank and by the paper silver market which they manipulate. The gold to silver ratio is over 80-1 which is ridiculous considering that it comes out of the ground during mining at a rate of 9-1. For those of you that do not know what the gold to silver ratio is: it’s the amount of ounces of silver it would take to equal an ounce of gold by price. If you listen to the metal extremists they say it should be 10-1 or 15-1. While that would be a HOME RUN for all of us “Silver Stackers” it is way to unrealistic in my opinion. Most of the true logical precious metal analysts think more along the lines of 35-1 or 40-1, which is not out of the realm. The ratio has been under 50-1 twice in the last 25 so that quite possibly could be the true target range.

I hope that you enjoy this post. Please comment if you agree, disagree or have something to add.

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Thank you