Converting Silver to Copper

[wharghoul]

I've been hitting the halves and dimes pretty hard for about 3 years now and I've had a great time doing it. I've enjoyed the ride so much that I haven't really given a lot of thought about the best long term savings strategy. In my mind, it's always been a foregone conclusion that I'll just keep them until I retire and hopefully sell at $50, 100, or more per ounce.

With the silver prices going up, the last few months have been a little more difficult in regards to accumulated halves (all the new competition) and I been giving other options some serious thought.

So, while dabbling in copper cent hoarding for a while, I've never really given it the attention it deserves, until now.....

Here's my plan: Going to sell about 20-30% of my 40% junk silver and use the funds to order boxes of cents. I'll order the boxes, probably in $200 increments, pull the copper, dump the zinc, repeat process until I've converted funds completely into copper.

For instance: Sell $100 face in 40%'s and fetch $750 (approx. melt @ $26/oz.). With the $750, order cents. By the time I've converted all $750 into copper, the melt value for the cents and my investment is now theoretically worth $1,966.

So, my initial investment of $100 turns into a hoard of copper cents around 495 lbs. Today, that $750 conversion would only be worth $850-890 (based on current sale price for rolls of copper on ebay). In the long term, that copper represents a value of around $1,572 (Current copper price of $3.90/lb x .80). The .80 represents the percentage return of what we'll likely get back from the smelters.

I based my example on selling $100 face in 40% silver. In reality, I would be selling much more. I'm saying this because one of the criticisms of hoarding copper is the overhead costs. Thus, the greater the investment, the lower the overhead cost per unit.

Although I think the Ryedale machine is a stroke of genius, I don't think I'll be buying one. I don't like the idea of how much time and effort it will take to make the return on investment. I've got plenty of time, think I'll just sort by hand, might pick up a few collectable coins while I'm at it.

Another quick example: Sell $1000 face of 40% silver = $7,200. Convert the $7,200 into copper, at todays melt it's around $16,000. Future melt of $0.10(per cent) would yield a return minus the spread of $0.08 per cent. That $7,200 would then be worth approx. $60,000.

Any thoughts?

 

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[AGCoinHunter]

Andy has a new cheaper machine out now. I am thinking of getting one. Its similar to the "Ace" (same stand) is hand fed but has a electronic comparitor. This might be the way to go over hand sorting which gives me hand cramps. I think its in the $120 range which is reasonable. I own the "Ace" but am thinking of upgrading to this one. Still manual fed (someone has come up with a way to automate this also) but having the comparitor is nice in my opinion.

 

[Generic_Lad]

The problem with copper is selling it and identifying it. Its pretty easy to sell silver to almost anyone because you can just melt it. With pennies you don't have that problem. Also, shipping costs are going to be expensive when you look at the fact a pound of copper is just a little less than $4. It doesn't have the ease of shipping via ebay and the like to sell through there. If you were really confident in the base metals market, it might be worth it to look at nickels, they are already worth 6 cents and there are no compositions you have to sort through and you might get some buffalo, V or war nickles while you are at it.

 

[Marchas45]

Andy has a new cheaper machine out now. I am thinking of getting one. Its similar to the "Ace" (same stand) is hand fed but has a electronic comparitor. This might be the way to go over hand sorting which gives me hand cramps. I think its in the $120 range which is reasonable. I own the "Ace" but am thinking of upgrading to this one. Still manual fed (someone has come up with a way to automate this also) but having the comparitor is nice in my opinion.

Where can I look at these machines? Thanks Charlie

 

[jrf30]

The problem with copper is selling it and identifying it. Its pretty easy to sell silver to almost anyone because you can just melt it. With pennies you don't have that problem. Also, shipping costs are going to be expensive when you look at the fact a pound of copper is just a little less than $4. It doesn't have the ease of shipping via ebay and the like to sell through there. If you were really confident in the base metals market, it might be worth it to look at nickels, they are already worth 6 cents and there are no compositions you have to sort through and you might get some buffalo, V or war nickles while you are at it.

I can put $75 into a medium flat rate box at the PO> that's $9.95 or something like that to ship.

NOt as bad as you think.

:-)

 

[FiresEye]

It's a great idea, however the only catch I can see is copper is a LONG term investment, and it's best to have both silver AND copper.
Also, one can get copper in many places, besides just pennies, which is what a lot of penny horders forget that they can scavange(legally) copper from the trash in lots of places, just keep your eyes open.

 

[Rakattack]

You interested in trading your silver for my copper?

 

[FiresEye]

You interested in trading your silver for my copper?

That's probably a NO because he said he does it for fun, the time, and for future gain.

 

[wharghoul]

Agcoinhunter,

Yeah, I've thought about getting the Ace. Maybe it's not too late to revise my Christmas wish list....

I'm not talking about converting all my silver to copper, simply diversifying a bit, maybe converting 20-30% of my stack.....and there's no way I'm getting rid of any of my 90% junk in the near future.

I think it would be kind of cool to have a 55 gal. drum or two out in the work shop full of copper. Just seal it up and forget about for about 20 years.

 

[SFBayArea]

Andy has a new cheaper machine out now. I am thinking of getting one. Its similar to the "Ace" (same stand) is hand fed but has a electronic comparitor. This might be the way to go over hand sorting which gives me hand cramps. I think its in the $120 range which is reasonable. I own the "Ace" but am thinking of upgrading to this one. Still manual fed (someone has come up with a way to automate this also) but having the comparitor is nice in my opinion.

I had written to Andy.. and he said only the $500 model is available. He said he's had a lot of orders for it of late which is good for him but not nessesarily for us. Recently when I pick up penny boxes, half of them are new shield cents. It means there is a shortage so they order new ones from the fed. Wonder why so many new ones. Anyhow, I would rather get copper and convert to silver. It doesn't matter that much in terms of what metal to own. They all follow each other in the charts.

 

[AGCoinHunter]

Where can I look at these machines? Thanks Charlie

I had written to Andy.. and he said only the $500 model is available. He said he's had a lot of orders for it of late which is good for him but not nessesarily for us. Recently when I pick up penny boxes, half of them are new shield cents. It means there is a shortage so they order new ones from the fed. Wonder why so many new ones. Anyhow, I would rather get copper and convert to silver. It doesn't matter that much in terms of what metal to own. They all follow each other in the charts.

Ryedale coin http://www.ryedalecoin.com/ is who has them. Andy may be in beta testing of them right now as they are very new to the market. You can check out realcent.org under the ryedale forum (have to be a member) to see the thread where Andy is announcing it. Like I said, its new on the market, same design as the ACE but has a comparitor. The problem with the ACE design was keeping it level. I never had too many issue with the ACE but I think I am going to pick up the newest one.

Yes, copper is catching on. Now that its up around the $4 range people are taking notice. Gresham's Law is in full swing.