40% versus 90% silver bags
 

I thought there was a thread on this previously but couldn't find it. Can anyone point me to a thread/article discussing the pros and cons of holding 40% bags instead of 90% bags?

Thanks.

Re: 40% versus 90% silver bags
 

The pros and cons are insignificant. If you have a lot of capitol and not much storage space it doesn't make sense to buy all the copper in 40%, especially if you don't love lifting heavy objects. If you are a young investor, the 40% has some minor advantages in some cases. If the price of copper goes thru the roof 40% might start demanding a copper premium. I like 90% myself.

Re: 40% versus 90% silver bags
 

Hmm. This is an interesting excercise. At Ag=$7/oz, and Cu=$0.11/oz:

$1000 invested in 90% buys you 143 oz of silver and 16 oz of copper
$1000 invested in 40% buys you 140 oz of silver and 210 oz of copper

If silver stays flat, and copper doubles to $0.22/oz, then

The 90% investor has holdings worth $1005
The 40% investor has holdings worth $1026

If silver goes from $7 to $10/oz, and copper doubles to $0.22/oz, then

The 90% investor has holdings worth $1434
The 40% investor has holdings worth $1446

If silver goes to $10/oz, and silver skyrockets to $1/oz (up 800% from current price), then

The 90% investor has holdings worth $1446
The 40% investor has holdings worth $1610

It seems a tossup as to whether doubling your bulk weight is worth the gamble on a massive copper breakout. Like hoarder, I prefer the 90%.

Re: 40% versus 90% silver bags
 

Silver takes up enough room. Why buy all this other stuff in addition? The only positive I can see would be to pass the stuff off down the road as Silver to some poor unsuspecting bartar boy. :cool1:

Re: 40% versus 90% silver bags
 

I bite everyone of my one oz silver round to be sure they were all real...... hummmmmm I think that's with gold????? upsssssss no wonder I don't have any teeth left. :Sorry: oh yeah? :chat: talk to my hand.

Re: 40% versus 90% silver bags
 

Sparkly,

I tend to look at it a little differently. For your same $1000 investment using today�s sell prices of 5.075 x face for 90% (7.10/oz) and 2.07 x face for 40% (7.02/oz) from CNI ($1000 bags) I can purchase the following:

90%
FV ......OzAg ........LbsCu ..............Value of Cu @1.55/lb .............Ag cost net of Cu
$197 ...140.855 .....1.09 ......................$1.68 ....................................7.087/oz

40%
FV ......Oz Ag........ Lbs. Cu ...............Value of Cu @1.55/lb .......Ag cost net of Cu
$483 ..142.485....... 14.69 .....................$22.77 ..............................6.858/oz

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Not only do I get more silver, I get more Cu too. It looks like a win/win situation. It gets more interesting if you use bag quantities also, or discount the Ag/oz by the Cu value, and that brings me to the questions:

1) At what point will the smelters start paying for the Cu value? Today, if you were to take 4 bags of 40% are they going to pay you for the 120+ lbs (120*1.55 = $186) of Cu? What about if Cu were to double ($372)?

2) At what point will the smelters start preferring the 40% bags for the extra Cu?

As you can tell from the questions I know nothing about smelting but I am still trying to figure out what to exchange for gold once the ratio gets back down to 55 or lower. If the 40% will start to have a Cu premium at the smelter level I might not want to exchange them at a coin dealer since the Cu premium may / may not get passed on to me.

<o:p></o:p>
65GT350

Re: 40% versus 90% silver bags
 

Interesting analysis. It shows that there is a small premium for buying 90%. I guess the premium is for dealing with less bulk weight. But you're right, at some copper price, the premium would go to the 40%. I think that's quite a ways away; probably will need at least a 4-fold increase in the copper price.

Re: 40% versus 90% silver bags
 

I think I found a difference between 40% and 90% Kennedy Halves:

http://www.safehaven.com/article-3497.htm

Re: 40% versus 90% silver bags
 

Another difference is that when you sell the 40% bag the buying dealer does not have to report the purchase. As of now the dealer only needs to report the purchase of $1000 face value 90% bags. In a previous post someone said that you just remove a dime and the dealer does not have to report the purchase.

65GT350

Re: 40% versus 90% silver bags
 

Has anyone noticed that Tulving has now increased the minimum order for 40% to 3 bags. Do you think is only because he is still recovering, and do you see them lowering to minimum back to 1 in the future?

Also, in the past you could purchase the bags .05 - .10 under spot and now they seem to have a .05 or greater premium over spot.

Any thoughts on the MOQ and the pricing?

65GT350

Re: 40% versus 90% silver bags
 

I'll take some wild a** guesses for the sake of discussion. I have no first hand knowledge of the dealer business.

(1) The minimum order quantity has to do with a rising cost of shipping in response to substantial increases in the cost of fuel??

(2) The selling price in relation to spot is a short-term inventory phenomenon related to supply and demand for 40% bags??

Street

Re: 40% versus 90% silver bags
 

Tulving's silver rounds and bars used to be 50 cents over spot. Now they are 70 cents over spot.

Here are some historical prices for his bags (date, spot, 90%, 40%):
July 2, 2004: $6.00 $6.10 $6.12
October 31, 2004: $7.29 $7.23 $7.17
November 19, 2004: $7.59 $7.52 $7.45

It seems to me that he is probably not handling his silver sales himself, but sending his orders to some other dealer for fulfilment. That would explain the higher markups, anyway.

Re: 40% versus 90% silver bags
 

Just thought I would bring this post back about the 40 versus 90%.

It appears that Tulving has lowered the min bag to a single bag. It was down to 2 bags for a while (1 week).

I also noticed that the premium on the 40% bag is higher than the 90% bag. Could this be the start of the copper premium?


65GT350

Re: 40% versus 90% silver bags
 

90% all the way, Im already limited on space.

Re: 40% versus 90% silver bags
 

.999 all the way here, Im even more limited on space.

Re: 40% versus 90% silver bags
 

Hmm. The copper in 40%/90% has probably been regarded as free up until now, in the sense that it's not figured into the price of the coin, which is priced according to silver content.

But if there's more copper associated with each ounce of silver, surely the price of the coin (per ounce of silver) ought to reflect that.

Looks like too small a difference between 90% and 40% to be sure what's going on yet. The historical data above show that this has happened before: that is, the small premium on 40% over 90%.

I don't believe that refiners will pay you for anything but the main metal found in the coin or bar. Traces of other things, such as platinum, gold, and copper, go toward the refiner's bottom line. So there is little reason at this point to add a copper premium to 40%.

Re: 40% versus 90% silver bags
 

The clad takes up too much room. I have enough problem with Silver.

Re: 40% versus 90% silver bags
 

The higher premium for one bag of 40% is probably because the buyer will pay it. The only Tulving deals for less than the report limit of $10,000 are 500 SAEs or the new minimum of a single bag of 40%. The premium for 40% junk is much less than the premium for SAEs.

Re: 40% versus 90% silver bags
 

There is NO federal reporting requirement on selling of 40% bags, regardless of the quantity involved. 90% bags and fine silver are the only things mentioned in the regulations. 40% seems to have slipped through the cracks in "the system".......:aetsch: