Monday, October 03, 2011

Silver at $30, Am I buying?

It looks pretty obvious that after two crashes $30ish is the new floor for silver and as such it is an excellent time to buy. Unfortunately for Canadians our dollar has taken a shit kicking over the last couple weeks so today’s silver sale is a little less sweet than it should be. (With a lower price and a higher currency Americans should definitely be jumping back in with both feet.)

What I can’t understand is the flood of money from the Euro to the U.S. dollar. That’s really akin to changing your cruise booking from the Titanic to the Lusitania, either way you’ll end up taking a bath. Regardless of reality, the trend toward the U.S. dollar and weakening commodities will continue to hurt the Loonie until such time as something major and disastrous hits the U.S. market, BOA failing perhaps? All we can do for now is ride it out.

So in answer to an email that asked if I'm buying? Hell yes!

But what to buy?

At the beginning of my silver investing I was overly concerned about the premiums on small bars and ended up with two many large bars, mostly 100s added to the junk I had already collected. While logical in that I was getting the most for my money I believed and still believe that fiat currency is destined to be destroyed and that silver and gold would once again be circulated as real money, in that situation the big bars I have aren’t very practical. Face it, when silver goes up to $200 dollars an ounce it’s going to damn hard to break a 100 ounce bar at Tim Horton’s or barter at the farmers market with a Kilo of silver.

With this in mind I’ve been focusing my purchases on smaller and infinitely more practical 5 and 10 oz bars as well as many 1 oz rounds which were generally the smallest sized silver you could find. Recently however a wide range of smaller sized pieces have been coming to market including ½ ounce rounds, 5g, 10g, ¼ oz and ½ oz bars from NorthWest Territorial Mint, both in their own brand and for Pan-American Silver. At this time the premiums on these tiny bars are quite high making an ounce of silver in ¼ oz bar form just shy of $48 us, or the ½ bars $36.66/ounce vs a full ounce round at $34.33. For Canadians there is also the issue of cross boarding shipping combined with the possibility of wrongly assigned duty because people don’t know their jobs. Curious if anyone else had new products I also checked out first Majestic Silver who now have their own ½ round (also from NWT Mint) at $35/ounce. Available in a previously hard to find size, under a 5 dollar premium, in country and quite pretty too, This is what I’m buying!

Added Oct 11

Ok I have recieved my 1/2 oz rounds last week and they are nice enough that I've reordered the maximum 10 rolls, plus some more 1oz rounds. I wish First Majestic Silver had an associate plan of some sort, I'd proudly sell these.

Monday, June 06, 2011

So we’ve had a correction, so what! There are bigger stories.

While I only posted it on Facebook (I was too busy working an election campaign to blog) I mentioned a number of weeks ago that we had gone too far too fast and I suggested selling silver equities between $45-50 silver and waiting for what seemed a guaranteed and much needed correction. It turns out I was correct in theory but was once again too busy to fully execute my devilishly cleaver (dumb luck) plan. I started to get antsy about $47 and pulled the trigger on my silver Wheaton, Arian, and a couple others but I didn’t get around to selling everything. Still it was a decent call and while fearful of catching the falling knife I re-entered the market and rebalanced my portfolio on the way up at about $35. I’m relatively confident we’ve seen the worst moves the year and it’s mostly up from here but this correction may not be the most important story of the year. I believe the bigger but largely ignored story is the state of the COMEX stockpiles which highlights two important trends

Total silver

While the total amount of silver in warehouses fluctuates as you’d expect, the total of silver on hand continues to trend lower. I believe total silver stocks will break below the 100 million ounce mark this year, a move which should be a major psychological milestone bringing much more ignorant chatter about industrial shortages to market.

Deliverable silver

The other trend has been the shift in delivery status of COMEX silver to a point where only about 30% of their stocks are in the registered category, the category that’s available to fulfill contracts. This is a strong signal that the owners of silver are either not interested in selling their silver at today’s price or perhaps not interested in delivery at any price. This reduction in deliverable silver will eventually be a big story, one which relevant or not will push the next wave well past $50 oz.

Reality vs….

Of course any talk of absolute shortages at this point would be total gibberish as smart silver users would have looked into direct mine/smelter purchases or created a large enough SLV position to demand delivery from London some time ago. As long as SVL is actually backed by bullion(?) and the rules allow large baskets to be delivered there will be no real shortage. This situation could however create additional hurdles for manufactures in both costs and complexity. Any COMEX shortage story will not necessarily indicate a real shortage but could in time turn into a self perpetuating prophecy as large players and greedy speculators (us?) start hoarding.

All said it could get nauseatingly volatile in the next year or so if you must speculate do so in cash and only in equities, hold on to your physical silver so tight your fingers bleed.

There will be a time to sell physical silver but not below triple digits or a Mad Max scenario.

Tuesday, January 11, 2011

10 Beautiful Silver Products

I thought I’d do something different for a change and discuss what I think are the most beautiful silver products. After all it might be many years until we hit our personal target prices so why not have an investment product whose beauty we can appreciated while we wait. This also gives us all a chance to see a few things not in our own collections. I encourage you to comment with links of beautiful things I’ve missed.

I’m not going to put these 10 items in any particular order as that just leads to petty arguments.

Scottsdale Silver’s Stacker-

I think this is a relatively new product and I can’t tell you how much I love the bevelled shape and utility of these uniform stacking silver bars. These are available in both a 10 and 100 oz bar and I’d love to add either size to my collection. I do wonder however if there is any wear or abrasion between the bars when you stack them, or do they have an adequately loose fit.

First Majestic Silver- 1 Kilo

You might not want an entire collection of these matt finished bars but as a contrast to all the high gloss products you already own I would highly recommend this product with its subdued sandblasted finish. The quality of First Majestic products is excellent but this is the only piece they make that stands out in terms of design and looks. I own many of their rounds and a few small bars but I’m not that in love with their design, this bar is the exception.

Wall Street Mint-

I can’t say that I add any extra sentimental value to this product due to the Twin Towers on the New York sky line but this is still a pretty bar. They came in 10 and 100 oz bars.

Mexican Libertad

Americans have far more exposure to the Mexican mint products than we do here in Canada and that’s a shame. The Mexican mint has quality products and absolutely stunning designs such as the Silver Libertad shown here. I’m sure it varies by year and demand but they have been released in 1, 2 and 5 ounce sizes as well as normal finish and proof.

As you can see here there is also an older design Libertad and while not anywhere near as attractive it’s certainly worth having both to compare.

Silver Canadian Maple

The Maple is a high quality coin with a simple bold image that is not lost in the clutter like many other coins or rounds. Production began in 1998 and coin has the distinction of a higher face value ($5 Canadian) and higher purity than many of its contemporaries 99.99%. There have been 3 different images of the Queen during its years of productions, small runs with special privy marks and 1 year where a 10oz version was sold to commemorate 10 years of production. sadly I missed one of these 10 oz coins on an eBay auction a couple of years ago failing at the time to realize how rare they were.

Australian Kookaburras

This is a nice series of coins with different Kookaburra images each year available in 1oz, 10oz and 1 kilo sizes. Some years images are better than others, premiums on this side of the ocean are high but it’s still a great addition if you want to enjoy the beauty of your investment

Silver Britannias

Some years I really like the images on these coins, other years not so much. I do however like coins that change it up and give you new images even if they can’t get it right every year.

Sunshine Mint

These bars have a good bulky look and a nice design that contrast the detailed coin like area with the brilliantly shiny back ground

Pan American bars/rounds

I really like the simplicity of design and the fetching contrast between the matt and shiny finish. It’s interesting to note that Northwest Territorial Mint makes these lovely Pan-Am products yet their own NWT branded bars/rounds are not attractive at all. In the end manufacturing quality does not matter if the design sucks.

Eagle/Peace Dollar

I’m not adding the American Silver Eagle and I know readers will shit all over me, too bad! I know it’s very popular and many people talk of its beauty but I just don’t like the design. I find the Eagle cluttered around Liberty’s head because of the flag and the bundle of crap over her left shoulder and to my eye they never look struck quite deep enough to give adequate contrast unless you get the proof coins. The proof works the normal coin does not. I also begrudge praise to a high end coin that wimps out by only using 99.9% silver.

Now a Peace Dollar with a nice patina is a beautiful coin suitable to be on the list, to bad you have to pay such a premium to buy one. Perhaps they should revamp the Eagle with this old image. The bird side of the Eagle is quite nice, just replace the cluttered Liberty

Beauty is in the eye of the silver-holder

When it comes down to it, sometimes it’s not the perfection of design that makes a particular product your favorite. While I see the beauty in all these products some of my favorite hunks of silver are odd shaped hand poured ones or the rare 10 oz Bache bar I picked up on EBay very early in my silver fixation. The Bache bar was uncommon, somewhat different in shape and was a piece of the Hunt Brothers story making it a favorite even if its not as shiny and pretty. I’ve never taken a good picture of my Bache bar but I found this little thumbnail online.