Pricing question

[thesilvertiger]

With the possibility of a host of new hoarders chasing a shrinking amount of copper pennies in circulation, we may have to start looking at some of the rounds and bars that some of swore we would not buy. I went to my LCS yesterday to pick up my usual two bags of pennies to sort. He sorts change the public brings in for 8%. He searches the halves, quarters and dimes before bringing them to his dump bank. However, he simply counts and bags the pennies in the plastic bags in $50.00 increments. Well, I walk into the store and he starts grinning from ear to ear pointing at one of his cases. I get closer and notice it is full of copper rounds and bars. The pennies are the only copper of non-numismatic value he has ever sold there. The sizes vary from 1/4 oz rounds at 75 cents to kilo bars for $22.50. I started saving my pennies several years ago before I was lucky enough to find this website. My question is whether or not to take a chance and keep sorting pennies from circulation until the numbers drop too low to be feasible or to pay the prices of the rounds and bars now before the price rises. I'm leaning towards doing both by sorting as much as I ever have in pennies and turning some of my zincs into 1/2 ounce and one ounce rounds. If this helps, I never pay taxes on my total and there are never any receipts even for my gold purchases. Just looking for a little advice. Thanks in advance for the great advice this place site is known for.


Geaux Tigahs! Beat Bama!

[natsb88]

I can beat his prices, even considering shipping. I have 1/4 oz rounds on sale for $15/tube ($0.60 each), 1 oz rounds for $30/tube ($1.50 each), 1 pound bars for $8.50, and 1 kilo for $18.20.

[thesilvertiger]

WOW ! ! ! Those prices are awesome!

[Verbane]

With the possibility of a host of new hoarders chasing a shrinking amount of copper pennies in circulation, we may have to start looking at some of the rounds and bars that some of swore we would not buy. I went to my LCS yesterday to pick up my usual two bags of pennies to sort. He sorts change the public brings in for 8%. He searches the halves, quarters and dimes before bringing them to his dump bank. However, he simply counts and bags the pennies in the plastic bags in $50.00 increments. Well, I walk into the store and he starts grinning from ear to ear pointing at one of his cases. I get closer and notice it is full of copper rounds and bars. The pennies are the only copper of non-numismatic value he has ever sold there. The sizes vary from 1/4 oz rounds at 75 cents to kilo bars for $22.50. I started saving my pennies several years ago before I was lucky enough to find this website. My question is whether or not to take a chance and keep sorting pennies from circulation until the numbers drop too low to be feasible or to pay the prices of the rounds and bars now before the price rises. I'm leaning towards doing both by sorting as much as I ever have in pennies and turning some of my zincs into 1/2 ounce and one ounce rounds. If this helps, I never pay taxes on my total and there are never any receipts even for my gold purchases. Just looking for a little advice. Thanks in advance for the great advice this place site is known for.


Geaux Tigahs! Beat Bama!

I think you're comparing apples and oranges.

My thoughts: While all copper does hinge on spot price, Copper bullion price is controlled more by premium than spot copper. Copper cents price is controlled more by demand than spot copper. As long as copper cents are still to be found under spot, I would concentrate on sorting.

[slara512]

Why wouldn't Nickels come into the equation? I understand the 75/25 copper nickel melting argument, but doesnt that make more sense still versus paying so much more per pound for the rounds. Even at Nates really good price for the rounds, the per pound cost of pennies and nickels seems "safer" since you get the ability to spend them at face value when copper is low. Or am I missing something? I know its very expensive to refine the copper into rounds, but if one is hoarding for the sake of accumulating the most real value relative to time, I still end up back to the nickels argument.

[Copper Catcher]

I know I sound like a broken record...I realize some on the board love collecting nickels because no sorting is involved and you might find an occasional war nickel or buffalo....

Looking in Coinflation: http://www.coinflation.com/coins/baseme ... lator.html

$25.00 in nickels has a melt value of $26.34

$25.00 in 95% copper pennies has a melt value of $58.83

Thinking about the time value of money, are you excited about $1.34 or $33.83 in value over face? Yep, more work is involved but I'd think most would agree it is worth the extra effort.

[slara512]

I know I sound like a broken record...I realize some on the board love collecting nickels because no sorting is involved and you might find an occasional war nickel or buffalo....

Looking in Coinflation: http://www.coinflation.com/coins/baseme ... lator.html

$25.00 in nickels has a melt value of $26.34

$25.00 in 95% copper pennies has a melt value of $58.83

Thinking about the time value of money, are you excited about $1.34 or $33.83 in value over face? Yep, more work is involved but I'd think most would agree it is worth the extra effort.

Copper Catcher, I'm in complete agreement with you regarding the preference of 95% copper pennies. I guess my response with the nickels was to the context of the question above regarding the assumption that copper pennies decline in circulation and one still seeks copper as a holding.

and to be clear,
When it comes to circulating coins ranks,
1.Copper pennies
2. Nickels (trading near FV and as high as 9 cents per nickel)
3. ZInc Pennies (even zincs at one point were above face value when zinc was over 1.80/lb, so can be better than paper)

Metals at spot (other than copper):
1. Gold (Coins over rounds)
2. Silver (Coins over rounds)
*I dont buy the 16:1 silver to gold relationship argument, because if 16:1 does happen, copper would also benefit

[natsb88]

When people ask me to recommend how to apportion their base metal holdings, I first say I'm not a financial advisor, and then say that I think 75% - 80% should be in coin bullion (US copper pennies, Canadian copper pennies, Canadian .999 nickel), and the remainder in bars and rounds. Coin bullion is relatively safe because it has a floor of face value, and a big potential upside, but does have its challenges for the time being (the melt ban and the fact that it can still be found in circulation are holding the value down). Base metal bars and rounds are more expensive, but the price doesn't jump up and down as severely with fluctuations in spot, so they lend some stability to the portfolio, and two big factors in their price are the cost of labor and the cost of energy, neither of which are likely to go down anytime soon.

Ask yourself what your exit strategy is, and find a balance that suits it. If you plan to dump big chunks at certain price levels, want to deal in bulk with dealers or refiners, and are confident that the factors holding prices down now will be resolved by the time you exit, then your main focus should probably be on coin bullion. If you want to sell little bits and pieces here and there, and prefer selling directly to other stackers rather than to dealers, then perhaps bars and rounds can play a larger role in your portfolio.

[slara512]

When people ask me to recommend how to apportion their base metal holdings, I first say I'm not a financial advisor, and then say that I think 75% - 80% should be in coin bullion (US copper pennies, Canadian copper pennies, Canadian .999 nickel), and the remainder in bars and rounds. Coin bullion is relatively safe because it has a floor of face value, and a big potential upside, but does have its challenges for the time being (the melt ban and the fact that it can still be found in circulation are holding the value down). Base metal bars and rounds are more expensive, but the price doesn't jump up and down as severely with fluctuations in spot, so they lend some stability to the portfolio, and two big factors in their price are the cost of labor and the cost of energy, neither of which are likely to go down anytime soon.

Ask yourself what your exit strategy is, and find a balance that suits it. If you plan to dump big chunks at certain price levels, want to deal in bulk with dealers or refiners, and are confident that the factors holding prices down now will be resolved by the time you exit, then your main focus should probably be on coin bullion. If you want to sell little bits and pieces here and there, and prefer selling directly to other stackers rather than to dealers, then perhaps bars and rounds can play a larger role in your portfolio.

excellent answer. It really does depend on the person investing/holding.

do you have any opinion on zinc? I dont think zinc will make new pennies worth anything anytime soon, but when I think of the potential, It makes me want to sit longer before depositing zinc pennies back.