Lots of silver "stacking," not so much gold stacking

Here's a thought I've had for awhile. I am curious what other people think.

The concept of silver "stacking" in that lingo and hobby are relatively new. Reddit, Youtube, and other forms of social media have helped facilitate this as a bigger communal hobby for a whole new group of people. Forums like this and others have provided yet another outlet for amateur investors who stack to share their thoughts with each other.

This is going to sound very judgmental, but I do honestly want to hear what other people think. Lots and lots of people are "stacking" silver. They are doing so in pretty idiotic ways, with all due respect. They are buying on credit cards and paying a premium to do so. They are spending money they don't have to invest money that isn't actually theirs. It makes no sense. They are buying every random piece of crap from every Banana Republic that puts out its own silver coin, maybe in honor of a bird you've never heard of or a president of the United States you don't like. Their "stack" then is a patchwork of dozens or hundreds of different types of silver. They seem to have no direction or focus, and they overpay for most of it.

On the other hand, gold "stackers" are fewer and they seem to be smarter. Yes, they can make the same mistakes as the silver stackers, buying too much random stuff, buying on credit, or overpaying on premiums that make no sense for long term investment. However, gold "stackers" seem to be a less common group of people simply because of the higher cost of gold to silver.

Is everyone following this? Silver "stackers" are more likely to be amateurish and foolish than gold stackers, in my experience, due simply to the much higher cost of gold.

Thoughts?

 

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Designating a certain mentality to silver or gold stackers is whimsical.

 

In sum, the less disciplined mentality I observe in silver stackers comes from the lower barrier of entry into investing in the less expensive silver vs the more expensive gold. In other words, people with more money to spend (on gold) often are more disciplined and savvier than those with less money to spend (on cheaper silver).

 

I am not a bullion collector but I think people collect lots of things for reasons that don't necessarily have to make sense to anyone else. Some people like the thought of physically owning large amounts of a material that has throughout human history served as a consistent store of value (like silver and gold). A lot of newer collectors perfer silver because it is more accessible.

Also there is nothing wrong with buying stuff on a credit card. Every purchase I make on anything is on a travel card that I pay off at the end of every month. This way I get rewards toward my vacations. People who use credit irresponsibly, whether on silver or something else, will eventually have to answer for it. I think categorizing an entire group of hobbist into a narrow and negative definition of "stacker" is unfair.

 

I have approximately 500 ounces of foreign silver coinage. I do not care where it comes from and in what denomination. My only concern when I am buying it is whether or not I am getting it for around melt at the time for the Actual Silver Weight (ASW). I track what I purchase, for how much, and what the current value is. I may not retire on it, but I am certainly always ahead of the curve when it comes to value.

 

Not everyone fits so nicely into the categories in which you seem to be placing them. Many who use credit cards for purchases pay off the balance monthly and use them mostly as an added layer of protection. People who buy rounds depicting birds or a president ("you don't like"? Most buying such things usually "like" the individual) very well may be doing so because they enjoy them and people have every right to buy what they prefer regardless of how you personally view it. Your entire argument reads very much like metal politics, and as with actual politics today, too many are quick to lump others together based upon personal assumptions rather than respecting different approaches or fact. If you think "gold stackers" are "smarter", that's great, but do realize that someone could quite easily take the same narrow-minded approach towards said "gold stackers" in order to paint them as foolish as well.

 

I understand the theory that gold buyers are more intelligent.
But it is only a theory and how are you going to prove it?
You can't track sales of silver so how do you know who is making a nice profit?

 

I'm not necessarily talking about people who pay off their balances each month. That's a brilliant way to earn rewards. However, if you buy your bullion with a credit card, most dealers offer a 4% discount on cash purchases. So, suppose you are getting a 1-2% cash back or miles from your credit card in exchange for paying 4% more for your bullion purpose.

Sorry, but that's just bad money management. You're actually losing money that way.

 

We don't need no stinking discipline; we're artists.

 

The way you spend your rewards and what credit card you have will determine if it makes more sense to buy with a credit card or not but cash transactions IMHO are always a bad idea unless you trust the seller completely. With my strategy of redeeming rewards toward vacation purchases it's a no brained to use credit on just about everything.

If you buy bullion (or collectible coins) with cash you are taking a huge risk and putting a lot of trust in the seller. All it takes is one time getting scammed to cancel out all those 4% discounts and then some. Plus you have no rewards to use and you've lost the chance to continue building your credit score.

 

With all due respect -- and I mean that -- to all on this thread, the only way to buy an investment is cold, hard cash IMHO. Don't trade stocks on margin accounts and don't buy PMs on credit cards unless you pay the balances off monthly.

Also, it makes sense to me to take advantage of the cash discount for buying -- or should that be avoidance of the surcharge for using a credit card? Same difference, I suppose.

 

I respect everything you say on here as everyone knows you are extremely knowledgeable but I respectfully disagree that it's always a bad idea to buy PMs on a card. I get more value from the sum of my rewards + credit building than the additional charge. Plus I have peace of mind

100% agree with you on this!

 

As above stated, the price entry for silver is much lower than gold.
So it's much easier to buy 10oz of silver than 10oz of gold for most people. ie, it takes roughly 70oz of silver to equal the price of 1 oz of gold.

I certainly wouldn't mind looking at 70oz of silver versus 1 oz of gold.

Thus probably one reason the 1/10th Gold American Eagle is popular at roughly $135 each - it's cheap to buy even though it carries a larger proportionate premium. And you can get roughly 8 oz of silver for 1/10th Gold Eagle.

There are different mentality of people stacking silver.
Some basing purchases strictly on as close to spot as possible. Those people may also flip it quickly when the prices change.

Some base purchases on different designs that they like, thus last variations of things.

Some may buy only ASEs.
CRH

Some may buy silver for short term flipping, long term flipping, or just another type of asset to own for their net wealth balance sheet.

So it all depends.

But as mentioned, it takes more money to stack gold. But it's hard to know if anyone is more savvy. With those TV sellers selling gold and silver you never know. Plus you have retail places, online auctions, etc selling one product at various price levels.

Then there are people who stack "paper" silver and gold .. ie, PM ETFs. From the couple I've looked at you are paying fees here and there, plus buy/sell trade fees - so when/where is breakeven over a certain period of time.

 

There are a couple of reasons I stack Silver rather than Gold:

1) I buy and sell physical PM's and Silver is easier to sell because of the price point. It is more popular at coin clubs and coin shows.

2) I like having stacks in all kinds! 140oz of silver looks a lot cooler than 2oz of Gold.

3) Go back to my first point. Silver is more popular to the general public and thus more profitable. Volume baby!

4) OH, and by the way, the OP is totally condescending and sounds like a ____.

 

"Amateurish" is pretty harsh. Growing up on a farm in a family of 10, our money came hard and we all learned early the value of a dollar. And after 50 years of collecting, and in the last few years stacking, I think I pretty much know what (I'm) doing. I could never afford gold when I was younger and also never got an attachment to it. I still prefer the "look" of my silver over the few gold coins I do have. Not because I cannot afford gold, but just because. And if silver hits $50.00 an ounce again I would dump mine in an instant. But hey, that's just me.

 

I consider myself a silverstacker even though I have gold also, because I like silver more than gold. I always pay cash and never buy on credit, I only buy American coins and I don't own any from a foreign mint. My gold/silver ratio is 1/60, that's one lb. of gold to 60 lbs. of silver.

 

As far as the Credit Card thing goes whatever floats your boat. All the online sites and dealers I go to ding me pretty bad if I use them. But if you have a rewards program that makes sense more power to you. My only advice is to not buy PM's when you have debt! Pay it off before you buy. If you have to have silver while you are in debt coin roll hunt halves or something.

 

Privy has a point. To each their own, but I also see guys that state they are stacking for investment purposes, but dive in without a great plan. Heck, I was one of them. If you want a lesson in how to lose money and create a hodge lodge stack, I'm yer guy.

After many thousands lost and a recent headache in trying to sell a hodge podge pile, I've learned some things.

I'm an investor when it comes to bullion. My objectives are diversification and growth. While bullion has been a terrible investment for about 6 years, it's still an asset. So...

Here on out, I'm only buying American eagles in everything. I'm buying the most efficient size available (typically one ounce). The past few years, there was something screwy going on in platinum eagles that enabled me to get two - half ounce eagles cheaper than an single full ounce.

Clear cut pricing, and easier to move.


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Yep! Exactly SD1555.

I can only imagine the headache of trying to sell a hodgepodge stack of silver when I retire and want extra cash. On the other hand, taking in tubes and tubes of Eagles or Maples is quick, easily verifiable as authentic, and will garner a slight premium.

On the other hand, these amateurish stackers with their silly santa bars and embarrassing marijuana art bars are going to have a hell of time reselling.

This is why I have posted elsewhere bemoaning the fact that part of my silver stack contains random crap from The Franklin Mint I acquired as gifts years ago. Years ago when I started buying for myself, I purchased only (gold and silver) Maples with security features and well known silver bars. This is so I can easily sell them when/if the time comes.

I have attempted to further refine my process even more by forgoing buying more silver bars and sticking to just Maples from now on.

But lets be honest, the collector in me still may stray a bit and pick up a handful of silver Kangaroos or Philharmonics or something else from a respectable, verifiable mint.

 

Depends what your debt is.

I'm not going to pay my house off in a while even though every payment I make, with additional principal I'm knocking off about a month of the term. But still, I'm going to invest in other investments such as Silver.

The thing is, have a plan, even for your debt. I actually carry a load on my CC month to month. But this is due to credit building since a financial episode a few years back. The key is, for me, making sure that debt is below a 30% threshold for credit improvement.

I buy only American Silver Eagles for silver. This is an asset that the banks identify with, and you can use as an asset leverage to obtain better financing if needed.

If you are buying for flipping then buying as close to spot as possible is the primary goal.

I track and maintain spending habits in relation to
[1] asset wealth that maintains or increases in valuation over time (or hope so) (PMs, 401K, house, etc)
[2] assets that have depreciation (such as a car, etc)
[3] trinkets /general sundries - which have a long term wealth of nill. I stay away from these as much as possible unless necessary.

Silver is a small part of the #1 category. And if you buy when it seems low you would be set at least for the long term. I consider $20 or so the important barrier for Silver right now. If it goes above $20, I'll stop buying silver for "silver" Though for numismatic purposes I would still buy certain coins, maybe Proof ASEs, etc.

back when gold rose to around $50oz I actually kept my ASE silver as i bought it back when it was $7. Nostalgic I guess. LOL but my latest batch I don't have that Nostalga .. it'll be sold and converted to anther asset. LOL