PMs vs. stocks
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Thread: PMs vs. stocks

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  1. #1

    Apr 2008
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    PM's vs. stocks

    Nobody can deny how well stocks have been doing for the past few years, as PM's have been dragged down. However, in the past week or so I cannot help but see just how much PM's are preferable to stocks when comparing which is best to own in a price downturn.

    What I mean is, as I watch Netflix (which creates an awesome product) this morning drop 25% in one day, why do I prefer PM's in general to any paper asset? The answer is this, no matter what happens to the silver price I have an ounce of shiny (or toned) metal in my possession. With stocks, if they go to zero I have a certificate to show for it (most people don't even hold the actual certificate in their possession though). Unless it is taken from me I will always have that ounce of metal to hold.

    Further, some folks here (and other places) have stated ANY asset is only worth what someone is paying for it (or something to that effect). These folks will say even sea shells have been money, or beads or tulip bulbs, etc. And that every item is only worth what someone is willing to pay for it. These folks will often throw out one exception, that is food and water, which have uses other than money and thus have some internal "value" completely apart from "money" or worth derived from that someone is willing to pay you for it. Since we need to eat to survive, who cares what you can get by selling said food and water, right?

    My view is that everything that is said for food and water can be said for silver (absent a Mad max scenario). Why? Because silver has so many uses (other than value storage and money) in that it can be used in medicine, solar panels, all electronic devices, fibers in clothing, etc etc etc. Thus, even if nobody wanted to hold silver for investment purposes, there are still hundreds of other uses that will GUARANTEE silver's demand by at the very least, industry. Maybe they will only need to pay $1 for this metal per ounce, but buy it they must IF we continue to evolve technologically, or even if we only keep the level we have now. The same though cannot be said for gold.

    Can this be said for any paper asset that you hold?-- I am not referring to the company or thing that said paper asset represents, but the actual paper thing you hold that represents what you bought. I will say to answer my own question the answer is NO. Just one quick example of this. Let's say you hold a stock of a company and said company goes into reorganization (like bankruptcy). If you hold the stock it can go to zero as the company shirks its debts and responsibilities. Then the company comes out of the reorganization process and gets to issue brand new stock; the old stock is now worthless--this is what happened to GM a few years ago. I know some poor old ba$tard$ that held their original GM stock as it dipped below $1 and these folks lost everything they had in said stock and most of their accumulated wealth (life long retired GM employees). Even though the underlying company is still around and now free of its past shackles, the former stock is now worthless. Such a dilemma cannot happen if you hold a physical asset that has many physical uses, like silver. As far as I know, the Gods will not let silver ever file bankruptcy. It is just not an option.


    Just my opinion.

    Jim
    Last edited by jim4silver; Oct 16, 2014 at 01:15 PM.
    R.I.P. Rich Hartford

  2. #2
    us
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    Now if we could just get it to pay a dividend......
    lastleg likes this.

  3. #3
    Charter Member
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    Well for me I'm all Physical right now but I am playing and learning with a small amount on the Miner stocks as eventually, if and when the spot price rises, I will dive into the Miners big time but again that's down the road and there is no way I'll touch the stock market right now. Keep Stacking

  4. #4
    us
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    Jim,
    You are so right on so many levels. I am now starting to buy more silver. I bought $100 in silver coins today for $150.

  5. #5
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    Darrin

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    What stinks about PM's is that you buy it at a huge mark up. Call any of the sellers and tell them you want $8,000 dollars of gold/silver coins. They'll sell you assorted coins. Turn around and say, alright, how much can I sell them back for? They'll give you about $5,500. Point being, when you buy PM's, the mark up is so high; it takes a huge jump in price just to get your money back.
    lastleg likes this.
    Trying to find the lost ~


  6. #6
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    Quote Originally Posted by TheRingFinder View Post
    What stinks about PM's is that you buy it at a huge mark up. Call any of the sellers and tell them you want $8,000 dollars of gold/silver coins. They'll sell you assorted coins. Turn around and say, alright, how much can I sell them back for? They'll give you about $5,500. Point being, when you buy PM's, the mark up is so high; it takes a huge jump in price just to get your money back.
    I very rarely buy for dealers. It is best to buy from individuals and most of the time I can buy it for a lot less.

  7. #7
    us
    Apr 2013
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    PM's vs. stocks?

    Broken record here (me). Own both, as well as bonds and cash (fiat, as this forum likes to refer to it), and real estate. DIVERSIFY, DIVERSIFY, DIVERSIFY.

    For the record, if I really did expect a SHTF event (which is when Jim's aforementioned logic would really become operable), I would be completely out of stocks, still hold some cash, load up on PM, and acquire copious levels survival basics (food, water, blankets, meds, alcohol, guns, etc..).

    Although I don't expect such an event in my lifetime, I still hold PMs and maintain a certain level of survival basics.

    NOBODY knows for certain what the future holds. Hedge your bet by diversifying financially, and by maintaining contingency supplies. That's my opinion.

    TCK
    Last edited by TheCoinKid; Oct 17, 2014 at 12:39 PM.
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  8. #8

    Apr 2008
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    Both Dman and TCK are right

    As far as buying from individuals that is the best bet if you care to deal with joe public. I am lucky I have a couple local coin dealers that treat me pretty much like a fellow coin dealer and let me buy from them wholesale on certain items they want to get rid of but don't feel like selling for retail in their shops.

    And I wish I had originally diversified more as I watched the stock market go up these past few years but unfortunately I listened to too many pundits and believed silver would be at 500 by now. Having said that, I feel very safe having much of my investment $$$ in physical silver.

    I do though diversify now a bit in ETF's and such. I have made a couple correct calls regarding the VIX and bear stock ETF's, but my profits aren't as much as I thought they would be considering how far we recently moved. But if we keep dropping I might get back in. Can't buy and hold those though.

    Just my opinion.

    Jim
    Last edited by jim4silver; Oct 17, 2014 at 05:06 PM.
    R.I.P. Rich Hartford

  9. #9
    us
    Feb 2008
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    Quote Originally Posted by Dman View Post
    I very rarely buy for dealers. It is best to buy from individuals and most of the time I can buy it for a lot less.
    Dman, I see your last deal you paid 1.5 X face for silver - excellent!
    Where do you find these sucker...I mean sellers?
    If I could find it for 10 X face I'd be very happy.

    The uneducated I run across think their common silver coin is worth THOUSANDS.
    Last edited by fistfulladirt; Oct 18, 2014 at 06:22 AM.
    Marchas45 likes this.

  10. #10
    Charter Member
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    Quote Originally Posted by fistfulladirt View Post
    Dman, I see your last deal you paid 1.5 X face for silver - excellent!
    Where do you find these sucker...I mean sellers?
    If I could find it for 10 X face I'd be very happy.

    The uneducated I run across think their common silver coin is worth THOUSANDS.
    I was thinking the same thing as the rate right now is around X13.80. Give me those deals all day long at X 1.5. I have been stacking for the past few years and I have never bought them that low. Great Beans. Keep Stacking

  11. #11
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    Quote Originally Posted by fistfulladirt View Post
    Dman, I see your last deal you paid 1.5 X face for silver - excellent!
    Where do you find these sucker...I mean sellers?
    If I could find it for 10 X face I'd be very happy.

    The uneducated I run across think their common silver coin is worth THOUSANDS.
    I have my on retail store and people bring me stuff on occasion they want to sell.

  12. #12

    Apr 2008
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    I've noticed that there are some pundits who over the past couple years were mostly wrong on all their PM calls (they were calling for higher prices) are now making calls on the stock market. I guess they cannot figure out what PM's are going to do so they will try guessing the stock moves. One I recently read who I consider a good contrary indicator (do the opposite of what he predicts) says stocks are going to take off again soon.

    I hope he is as wrong now as he has been about gold/silver over the past couple years. My VIX positions will benefit greatly if he is wrong.

    PS In a similar way many of the former PM bull pundits are now saying PM's will crash more. Hope they are wrong too, although I don't have enough PM's and wouldn't mind buying more cheaper. Once silver hits $20 or so again I am done buying (physical) and will be playing paper only (the physical gets stashed for long term holdings). Will flip the paper for fun and profit.


    Just my opinion.

    Jim
    R.I.P. Rich Hartford

  13. #13
    Charter Member
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    I'm with you Jim. I have started buying miners and boy don't be watching them on a daily bases. Lol Talk about up and down. Lol Then again I have to make some Fiat to buy but this year has been a let down so far. Keep Stacking

 

 

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