Should I buy Silver and Gold?

[peanuts]

Is now the time to do it? What are some of the reasons for selling? What are the reasons for buying? If I do buy, should I buy physical bars of gold and silver? Should I just buy either the GLD or SLV ETF's? Are people crazy? What's going on with these commodities? Is one better than the other?

Here's an 8 year chart of Gold:


This is what Silver has done since January, 2000:


One day, I will inherit physical gold and silver. But I've been thinking of starting my own little stash of Silver bullion, today. What do you think? Should I do it?

[skiracer]

Is now the time to do it? What are some of the reasons for selling? What are the reasons for buying? If I do buy, should I buy physical bars of gold and silver? Should I just buy either the GLD or SLV ETF's? Are people crazy? What's going on with these commodities? Is one better than the other?

Here's an 8 year chart of Gold:


This is what Silver has done since January, 2000:


One day, I will inherit physical gold and silver. But I've been thinking of starting my own little stash of Silver bullion, today. What do you think? Should I do it?

I bought the gold ETF, GLD, a couple of years ago at $46 when it first came out. still holding 1000 shares of that ETF.
about 25 years ago i acquired about 100 10 oz. bars of silver ingots that were cast by an outfit called Sunshine Mining. I took them from a friend to settle an old debt. I credited him somewhere between $2.50 and $3 an oz. just to get the debt settled because that was all he had left to offer. he was a gambler and had been on a really bad slide and was down on his luck. That price was just a bit lower than what silver was selling for at the time. I remember that year I was giving them away as stocking stuffers for Christmas presents. as it turns out it wasn't long before the Hunt brothers tried to control the silver market and the price shot up from around $3 to $50 an oz. Each bar, I had about 80/90 of them left after what i gave away as Christmas presents, went from about $30 each for a 10 oz bar at $3 per oz. to almost $500 for a 10 oz. bar at $50 per oz. I took them to a dealer and sold them for $400 per bar cash. I still have about 10 or 15 of them left laying around the house. I use them for paper weights. I sold 65 of them at $400 each during that run up. two weeks after i sold them the bottom fell out of the silver market and the price dropped back down to under $10. the guy that i got them from originally ended up commiting suicide by shooting himself in the head with a 22 cal. pistol. I went to his house one morning to check on him and to see what he was up to and to see if he needed a stake to get back on his feet and found him dead in his bed. he had been dead for about 3 days. the pistol was still in his hand.

[peanuts]

Ed, your life amazes me! You've got both good and bad things to talk about. I gain appreciation for the things you say with every story you tell. Thanks for sharing the story. It sounds like your friend needed more people like you to check up on him. 3 days? Life isn't fair, but it sounds like it really wasn't fair to him, and then kicked him a few times while he was down.

What do you think about buying gold or silver? Are you considering to sell the GLD?

[skiracer]

Ed, your life amazes me! You've got both good and bad things to talk about. I gain appreciation for the things you say with every story you tell. Thanks for sharing the story. It sounds like your friend needed more people like you to check up on him. 3 days? Life isn't fair, but it sounds like it really wasn't fair to him, and then kicked him a few times while he was down.

What do you think about buying gold or silver? Are you considering to sell the GLD?

there is more to this story peanuts. don't feel sorry for that guy. i'll tell the rest of it later tonight.

[billyjoe]

Peanuts,
If I wanted to buy gold or silver it would be in U.S. coin. That way there's no controversy when selling. A 90% silver U.S quarter contains about $3.30 of silver at a silver price of 17.27. It's 17.9? today. These coins , dimes quarters, and half dollars are 1964 or earlier. Also there were some silver nickles 1942-1945. The going e-bay prices for rolls of these give you a good idea of the silver price. A mixed roll of silver quarters just sold for $135 a few minutes ago. Silver was over $20/oz. for a while a week ago. I've got some I'm thinking about selling. Look at those charts. Are you willing to sit on these metals for years with 0 gain such as silver from Jan.00- Jan.'04?

-------------billy

[peanuts]

...I've got some I'm thinking about selling...

Why are thinking of selling some? Planning to average out of your position, need cash, or are you speculating of an upcoming decline?

...Look at those charts. Are you willing to sit on these metals for years with 0 gain such as silver from Jan.00- Jan.'04?

-------------billy

I thought the same thing about buying into commodities now... What if they are flat for years? I've decided that this will be a long term investment of at least 30 years. During that time, as personal funds permit, I will average into a position. Then I will dump the position at a time of "irrational exhuberance"

I've made some calls to local coin shops that also have bullion. They are selling to customers at spot price plus .15 to .75. They are buying from clients at 10% discount from spot. Ebay buyers are paying (including shipping costs) anywhere from $22 to $29 per Troy ounce of .999 silver bullion. Spot silver closed at 17.88 on Friday.

It seems like a good market environment for sellers on Ebay, and buyers of silver from local coin shops...

If you decide to sell those coins, let me know. I might be your buyer

[skiracer]

there is more to this story peanuts. don't feel sorry for that guy. i'll tell the rest of it later tonight.

the guy i was talking about made zillions betting sports. he had an uncanny ability to handicap sports teams and how they would match up against other teams. a brilliant guy but had to many bad habits. whatever he won on sports he would lose playing cards or craps or spend on women, booze, and nightlife. it seemed he always spent more than he had so no matter how much he won he was always in debt to someone and someone was always chasing him for their money. until his wife and kids disowned him he lived a pretty lavish lifestyle and always had the best of everything. i saved his life a hundred times by interceding or paying off a debt for him. at the end he was suffering from lung cancer and owed alot of money to a number of sports books. i place alot on friendship and loyality to your friends but he had worn out his get out of jail card with me and alot of his friends by the time the end came so it was just as well that he ended it and the misery that he brought to everyone.

within 2 months of his death my mother in law calls me to go with her to one of her rental properties to see about collecting back rent from them. the place looks abandoned when we get there and after ringing the doorbell and getting no answer and looking around the place she decides to go in and uses her key to let us in. when we open the door the stench almost knocks us over and she calls out for anyone and no answer so we go in. no one is there and i walk into the kitchen area and she goes into the bedroom area. the next instant i hear her scream and i rush into the bedroom and there is the guy lying on the bed with half his head blown off. this guy took a 45 cal. pistol and shot himself in the head. you cannot imagine the mess. blood, brains, and bone everywhere. a note on the night table next to the bed explained that he had invested everything that he could muster up and borrow and bought silver at around 45 an oz. and the bottom fell out right after he bought it. and this was the 2nd suicide death i called in within two month and silver had something to do with both situations.

anyway i'm holding on to GLD for awhile longer to see which way the wind is going to blow with the geo-political and economical situation worldwide. I wouldn't be a buyer of gold here because of the price but silver doesn't seem to be overpriced so there might be a play in silver.

[IIC]

I'm sorry Nuts...But I actually fell out of my chair when I read your post...Do you have any idea what the markup is on buying physical gold???

I doubt it...otherwise you would not have asked the question...You will pay 30-40% above the spot price if you want gold bars or the like. And then when you want to sell it you'll pay another markup.

Physical gold, unless you are planning on investing 7 figures has always been known as a Sucker's Bet.

I don't expect you to believe me...Check out http://Goldline.com You will not find the true costs there...But call...Ask every question in the book...And then maybe you'll come to realize why some of these hucksters make mid 6 figures.

If you want in on precious metals I'd suggest that you look at the stocks and ETF's...You are nowhere ready to deal in the physical product...But if you must then please stick to the coins.

[IIC]

Surprised my post showed up...Site went down...I'm in/out watching UCLA kick X's butt

[skiracer]

Surprised my post showed up...Site went down...I'm in/out watching UCLA kick X's butt

you only pay the markup if you deal thru a legit broker or dealer. everyone is buying and selling gold and silver, including the legit brokers and dealers, on the black market or under the table. if you have cash or the product you don't pay street or market prices but then you're not going to sell or buy in 1 oz quantities either. anyone that has the physical product, either gold or silver, is stupid or doesn't know what they are doing, if they pay any markup on selling the physical product when they have it. you could stand on any corner in NYC with a sign around your neck stating you have gold for sale and you'll find a buyer at the right price in cash without any markups on either end. it's a regular market nowadays.

[skiracer]

Why are thinking of selling some? Planning to average out of your position, need cash, or are you speculating of an upcoming decline?



I thought the same thing about buying into commodities now... What if they are flat for years? I've decided that this will be a long term investment of at least 30 years. During that time, as personal funds permit, I will average into a position. Then I will dump the position at a time of "irrational exhuberance"

I've made some calls to local coin shops that also have bullion. They are selling to customers at spot price plus .15 to .75. They are buying from clients at 10% discount from spot. Ebay buyers are paying (including shipping costs) anywhere from $22 to $29 per Troy ounce of .999 silver bullion. Spot silver closed at 17.88 on Friday.

It seems like a good market environment for sellers on Ebay, and buyers of silver from local coin shops...

If you decide to sell those coins, let me know. I might be your buyer

are you interested in taking possession of some bars of silver bullion. 10 oz bars.

[dmk112]

I think the commodities right now are in a 'bubble' just like tech was in 90's, housing in 2000 . Eventually it will crash and crash hard. I just heard on the radio the other day that brokers are getting the largest outflows of cash from mutual funds into gold. This is the same activity that happened in 2000 right before the crash.

[peanuts]

I'm sorry Nuts...But I actually fell out of my chair when I read your post...Do you have any idea what the markup is on buying physical gold???

First of all, you should get your ears checked out. It's my understanding that the fluid in them helps your body to maintain balance.

Secondly, I thought my post was pretty clear: I have done basic research to the buying and selling of physical silver. I did not indicate that I have done the same for gold, nor did I post about that, both of which would imply that I have not researched gold. Furthermore, I actually posted the question, "Is one better than the other?" Thanks for your information regarding the hucksters. Based on what you posted, and the research that I did, it seems that silver might offer a better market.

And really, get those ears checked out... and maybe your eyes, too.

...If you want in on precious metals I'd suggest that you look at the stocks and ETF's...You are nowhere ready to deal in the physical product...But if you must then please stick to the coins.

What makes you think that I am experienced enough to evaluate the condition of coins which can drastically affect the intrinsic value? I would rather buy bullion. At least I can look up the daily value on Kitco Metals, and that way the value is not up for interpretation.

You come off as very presumptuous in your post, Douggles.

ps. Kiyosaki seems to really be a great investor. I remember seeing a show from him a little more than a year ago- when he suggested to dump property holdings and buy gold. He was doing that for his own portfolio. He bought physical gold, but still kept the creme of his crop of property.

[peanuts]

...anyway i'm holding on to GLD for awhile longer to see which way the wind is going to blow with the geo-political and economical situation worldwide. I wouldn't be a buyer of gold here because of the price but silver doesn't seem to be overpriced so there might be a play in silver.

Another amazing story, Ski. Thanks for sharing!

I'm interested to know more from you regarding your statement of geopolitical / economical situations. Can you elaborate?

[dmk112]

FYI, I'm short GLD. (Caution: I only swing trade).

But I still would not be a buyer here at these levels, it should test the 200 DMA and see what happens then.