Did you do it?

[Jonflyfish]

Did you hedge long ago and start laying off some of the hedges, taking the gains to buy more PMs?
We talked a lot about that in the past. Met some harsh criticism, but that's alright.
Hope nobody fell for the huge premium rip offs we talked about recently. Met some harsh critics about that too.
That's alright. Markets are markets. Premiums paid by retail buyers to cover dealers who didn't hedge. Some were happy to oblige.
Now with stock being replenished at lower cost, the premiums are much improved.
Nice checking in. Hope all is well.
Best to you.
Cheers!

[Engineer]

Hope nobody fell for the huge premium rip offs we talked about recently. Met some harsh critics about that too.
That's alright. Markets are markets. Premiums paid by retail buyers to cover dealers who didn't hedge.

My criticism was in relation to your attacks on the members who happen to be dealers, but we'll let that pass for now.

As for the "premiums to cover dealers who didn't hedge", I'd suggest you could learn a bit from a trip to the APMEX site. They do hedge, and are currently paying 11+% over spot for our lowly "junk" silver. It's down a bit from when they were paying 15+%, but still much better than they're paying for large industrial silver.

While you may disagree, I'm of the opinion that the market for "coins" isn't the same as the market for bullion...and you can miss great opportunities by limiting yourself to good delivery bars rather than investing in semi-numismatic coins which act as their own hedge.

Cheers!

[Sheikh_yer_Bu'Tay]

I bought all I could during the run up to $18 per ozt. Then I slowed down, and even stopped at $22.

My best buy was 100 ozt bars at $17. I sold them at $47.35.

Now, I am reinvesting in my business and hope to acquire more of the shiny stuff real soon!

[scyther]

I'm surprised to see you back so soon, JFF. I still don't get how you think premiums are a rip off or extortion. If there were a simple way to buy large amounts of junk silver without a premium, I think APMEX would know about it. If dealers can't get it anywhere without a premium, how can you expect them to sell at a low premium?

[Engineer]

I'm surprised to see you back so soon, JFF. I still don't get how you think premiums are a rip off or extortion. If there were a simple way to buy large amounts of junk silver without a premium, I think APMEX would know about it. If dealers can't get it anywhere without a premium, how can you expect them to sell at a low premium?

There IS a simple way to buy junk silver at low premiums...just buy it when the physical market says paper is priced too high.

This isn't exact and I'm sure some people could find a way to argue the technicalities, but 90% is to spot as bonds are to stocks. 90% moves slower both up and down, and while it limits your upside, it also limits the clobbering you would have received if you'd been in 1000 oz bars during this latest dip.

[scyther]

I'm surprised to see you back so soon, JFF. I still don't get how you think premiums are a rip off or extortion. If there were a simple way to buy large amounts of junk silver without a premium, I think APMEX would know about it. If dealers can't get it anywhere without a premium, how can you expect them to sell at a low premium?

There IS a simple way to buy junk silver at low premiums...just buy it when the physical market says paper is priced too high.

This isn't exact and I'm sure some people could find a way to argue the technicalities, but 90% is to spot as bonds are to stocks. 90% moves slower both up and down, and while it limits your upside, it also limits the clobbering you would have received if you'd been in 1000 oz bars during this latest dip.

That does seem to be true...

[Jonflyfish]

Hope nobody fell for the huge premium rip offs we talked about recently. Met some harsh critics about that too.
That's alright. Markets are markets. Premiums paid by retail buyers to cover dealers who didn't hedge.

My criticism was in relation to your attacks on the members who happen to be dealers, but we'll let that pass for now.

As for the "premiums to cover dealers who didn't hedge", I'd suggest you could learn a bit from a trip to the APMEX site. They do hedge, and are currently paying 11+% over spot for our lowly "junk" silver. It's down a bit from when they were paying 15+%, but still much better than they're paying for large industrial silver.

While you may disagree, I'm of the opinion that the market for "coins" isn't the same as the market for bullion...and you can miss great opportunities by limiting yourself to good delivery bars rather than investing in semi-numismatic coins which act as their own hedge.

Cheers!

I did not "attack" any dealer in specific, and certainly and absolutely did NOT attack any dealer here. Either way, I don't think being a dealer somehow gives you a rite of passage.
And YES the premiums were a rip off and it was extortion in the retail market. But, if you care to turn a blind eye and paid more then than now that's your choice. I simply pointed out the obvious about the premiums and many people here were all excited to support and justify them. Such premium bubble has been deflating. Dealers (retail) generally do not hedge. The margin was there to pay them to not lose their shirts. Now their supply is being replaced at lower cost and you see lower premiums. It is that simple.

I never said Apmex didn't hedge, but thanks for the "I'd suggest you could learn a bit" efforts about their retail operation. I'm always willing to learn.
I don't bother with so-called "semi-numismatic coins" and don't believe they are self hedged. I see nothing in any valuation models that suggest such departure.
Perhaps you can teach me about that.
Cheers!

[scyther]

And YES the premiums were a rip off and it was extortion in the retail market. But, if you care to turn a blind eye and paid more then than now that's your choice. I simply pointed out the obvious about the premiums and many people here were all excited to support and justify them. Such premium bubble has been deflating.

Plenty of us said at the time that it would deflate IF the price stayed down for a while. I expected this, and I'm only surprised that premiums haven't come down faster. I doubt I'm the only one. But that wasn't known for sure. If it had been a momentary price dip, that really would have been the best time to buy, despite the premium. And you still haven't showed how it's a rip off or extortion. If dealers can't acquire silver without a premium, why should they sell it without a premium? If their cost (over spot) to acquire it goes up, why shouldn't they make up for that by charging more?

[Jonflyfish]

And YES the premiums were a rip off and it was extortion in the retail market. But, if you care to turn a blind eye and paid more then than now that's your choice. I simply pointed out the obvious about the premiums and many people here were all excited to support and justify them. Such premium bubble has been deflating.

Plenty of us said at the time that it would deflate IF the price stayed down for a while. I expected this, and I'm only surprised that premiums haven't come down faster. I doubt I'm the only one. But that wasn't known for sure. If it had been a momentary price dip, that really would have been the best time to buy, despite the premium. And you still haven't showed how it's a rip off or extortion. If dealers can't acquire silver without a premium, why should they sell it without a premium? If their cost (over spot) to acquire it goes up, why shouldn't they make up for that by charging more?

Perhaps I'm clueless about retail folks and their desire to get ripped off. You said I haven't shown this. Well, consider the basis spread and imagine if you will any reasonable explanation to support it during an asset liquidation. Dealers can and DO acquire silver without a premium. That's my point friend. It's economics 101. If you choose to believe that extortion makes sense for a roll of coins in a declining market then it would stand to reason that it makes sense to get ripped off at the pump too.

Cheers!

[scyther]

And YES the premiums were a rip off and it was extortion in the retail market. But, if you care to turn a blind eye and paid more then than now that's your choice. I simply pointed out the obvious about the premiums and many people here were all excited to support and justify them. Such premium bubble has been deflating.

Plenty of us said at the time that it would deflate IF the price stayed down for a while. I expected this, and I'm only surprised that premiums haven't come down faster. I doubt I'm the only one. But that wasn't known for sure. If it had been a momentary price dip, that really would have been the best time to buy, despite the premium. And you still haven't showed how it's a rip off or extortion. If dealers can't acquire silver without a premium, why should they sell it without a premium? If their cost (over spot) to acquire it goes up, why shouldn't they make up for that by charging more?

Perhaps I'm clueless about retail folks and their desire to get ripped off. You said I haven't shown this. Well, consider the basis spread and imagine if you will any reasonable explanation to support it during an asset liquidation. Dealers can and DO acquire silver without a premium. That's my point friend. It's economics 101. If you choose to believe that extortion makes sense for a roll of coins in a declining market then it would stand to reason that it makes sense to get ripped off at the pump too.

Cheers!

If they can and do acquire it without paying a premium, why are they offering to pay a premium on their website?

[Copper Member]

Wow, I for one haven't missed this guy. This doesn't even warrant a rebuttal. Just ridiculous.

[Jonflyfish]

If they can and do acquire it without paying a premium, why are they offering to pay a premium on their website?

Two words- retail arbitrage

I am very intrigued by the narrative here. It actually amazes me.

Cheers!

[Jonflyfish]

I bought all I could during the run up to $18 per ozt. Then I slowed down, and even stopped at $22.

My best buy was 100 ozt bars at $17. I sold them at $47.35.

Now, I am reinvesting in my business and hope to acquire more of the shiny stuff real soon!

That's excellent. Good work and good luck with the business!

Cheers!

[Jonflyfish]

I'm surprised to see you back so soon, JFF. I still don't get how you think premiums are a rip off or extortion. If there were a simple way to buy large amounts of junk silver without a premium, I think APMEX would know about it. If dealers can't get it anywhere without a premium, how can you expect them to sell at a low premium?

There IS a simple way to buy junk silver at low premiums...just buy it when the physical market says paper is priced too high.

This isn't exact and I'm sure some people could find a way to argue the technicalities, but 90% is to spot as bonds are to stocks. 90% moves slower both up and down, and while it limits your upside, it also limits the clobbering you would have received if you'd been in 1000 oz bars during this latest dip.

That does seem to be true...

You have a fundamental misunderstanding about markets and how they work, especially the parallel you described about junk vs .999 spot silver having the same relationship as stocks vs bonds. What you described is like saying 90% is to spot like crude oil is to potatoes.

Cheers!

[scyther]

You have a fundamental misunderstanding about markets and how they work, especially the parallel you described about junk vs .999 spot silver having the same relationship as stocks vs bonds. What you described is like saying 90% is to spot like crude oil is to potatoes.

Cheers!

Yeah, actually I just meant I agree that it gains a high premium when the price falls, and loses it when the price rises, more so than other types of silver. I don't know about stocks and bonds.

[Jonflyfish]

And YES the premiums were a rip off and it was extortion in the retail market. But, if you care to turn a blind eye and paid more then than now that's your choice. I simply pointed out the obvious about the premiums and many people here were all excited to support and justify them. Such premium bubble has been deflating.

Plenty of us said at the time that it would deflate IF the price stayed down for a while...

And why do you suppose this would be true? Could it possibly be that AFTER retail buyers paid the inflated premiums (extortion) to compensate for MtM basis losses after a generally non-hedged balance sheet decline by (most) retail dealers (small timers), the new inventory was replaced at much lower cost (and flatter forward curve) then sold at lower basis differentials?

Cheers!

[Jonflyfish]

You have a fundamental misunderstanding about markets and how they work, especially the parallel you described about junk vs .999 spot silver having the same relationship as stocks vs bonds. What you described is like saying 90% is to spot like crude oil is to potatoes.

Cheers!

Yeah, actually I just meant I agree that it gains a high premium when the price falls, and loses it when the price rises, more so than other types of silver.

Agree friend. It's the life and times of making the retail market what it is. Some folks will argue that paying extremely high commissions is honorable.
I prefer to take harsh criticisms and ire invoked stabs and jabs for disagreeing and warning my fellow friends of the contrary.
To me, there is more honor in that. I prefer to be lynched in a forum knowing that I did something to avoid my neighbor from getting ripped off.
Cheers!

[IdahoCopper]

What is the premium on 1000oz COMEX bars? If one buys a "postion" in those, how soon can one stand for delivery?

[Jonflyfish]

What is the premium on 1000oz COMEX bars? If one buys a "postion" in those, how soon can one stand for delivery?

Spot (hence where the term originated), Readily.

Cheers!

[theo]

And YES the premiums were a rip off and it was extortion in the retail market. But, if you care to turn a blind eye and paid more then than now that's your choice. I simply pointed out the obvious about the premiums and many people here were all excited to support and justify them. Such premium bubble has been deflating.

Plenty of us said at the time that it would deflate IF the price stayed down for a while. I expected this, and I'm only surprised that premiums haven't come down faster. I doubt I'm the only one. But that wasn't known for sure. If it had been a momentary price dip, that really would have been the best time to buy, despite the premium. And you still haven't showed how it's a rip off or extortion. If dealers can't acquire silver without a premium, why should they sell it without a premium? If their cost (over spot) to acquire it goes up, why shouldn't they make up for that by charging more?

Perhaps I'm clueless about retail folks and their desire to get ripped off. You said I haven't shown this. Well, consider the basis spread and imagine if you will any reasonable explanation to support it during an asset liquidation. Dealers can and DO acquire silver without a premium. That's my point friend. It's economics 101. If you choose to believe that extortion makes sense for a roll of coins in a declining market then it would stand to reason that it makes sense to get ripped off at the pump too.

Cheers!

With respect to premiums the simplest explanation is often the closest to reality. You seem to deny the simple idea that market conditions are different in the retail silver market than they are in the paper/futures market. Instead you choose a vague, unsupported accusation of some type of price gouging.

[scyther]

And YES the premiums were a rip off and it was extortion in the retail market. But, if you care to turn a blind eye and paid more then than now that's your choice. I simply pointed out the obvious about the premiums and many people here were all excited to support and justify them. Such premium bubble has been deflating.

Plenty of us said at the time that it would deflate IF the price stayed down for a while...

And why do you suppose this would be true? Could it possibly be that AFTER retail buyers paid the inflated premiums (extortion) to compensate for MtM basis losses after a generally non-hedged balance sheet decline by (most) retail dealers (small timers), the new inventory was replaced at much lower cost (and flatter forward curve) then sold at lower basis differentials?

Cheers!

Or it could be that when the price drops, they sell out (or start running low), and it takes a while to get new inventory in. When the price drops, more small time physical holders want to buy than sell. And there might not be enough silver in one ounce/ten ounce form available to meet demand. I think it says on Provident Metals that they had 100,000 new rounds made to meet demand. That takes a little while to do.

And even if you want to say the dealers are all conspiring to "extort" us by charging the market price, how can you fault us for buying (I didn't, by the way- haven't since the day before the fall) when we didn't have a cheaper alternative for physical short of taking delivery of a 5,000 ounce contract, and the price might have come up again before premiums went down? Were we supposed to miss the opportunity to buy at multi-year lows to protest high premiums?

[scyther]

Agree friend. It's the life and times of making the retail market what it is. Some folks will argue that paying extremely high commissions is honorable.
I prefer to take harsh criticisms and ire invoked stabs and jabs for disagreeing and warning my fellow friends of the contrary.
To me, there is more honor in that. I prefer to be lynched in a forum knowing that I did something to avoid my neighbor from getting ripped off.
Cheers!

Wow, we must have really upset you that you have to come back here a month later crying about it. People didn't agree with you. Get over it.

[scyther]

What is the premium on 1000oz COMEX bars? If one buys a "postion" in those, how soon can one stand for delivery?

Spot (hence where the term originated), Readily.

Cheers!

Don't you have to buy 5 of those at a time to take delivery? Not many of us can afford it. Also, is there a charge for taking delivery?

[neilgin1]

. enjoy....great film.

[IdahoCopper]

Today Spot =$22.26
Tonight, I'm expecting $282M in FRNs to come in, after taxes.
That works out to over 12,665,000 ounces, or 2,533 five-thousand ounce contracts.

If I place my order for 2,533 contracts on Monday, how long do I need to wait before I send my armored cars to go pick them up?