Calling All Quants

[beauanderos]

I don't think I have the math genius to figure this out, but I'm gonna take a stab at it. I could break this down on a week by week basis, but month by month would
likely be almost as accurate. Here is the premise. If someone had dollar cost averaged into silver (just basing this on the spot price, forgetting whatever premium
might have been extant at that time) let's pick a number and say $1000 a month... what would their avg cost have been. How many ounces would they be sitting on?

The point of the exercise being not bemoaning the fact that you bought (since 2011) all the way up, held on (through nominal paper pricing losses) and kept buying
regardless of the manipulations. It's easy to slap your forehead with a facepalm, but when you realize that the peak wasn't that long-lasting... how much would the
individual in the aforementioned scenario actually have dumped into silver bullion in the overall scheme of things? Kitco has historical charts that you can look at
one month at a time if someone wanted utmost accuracy (say $500 biweekly the entire time). Math geniuses... the gauntlet has been thrown down. Who is worthy
of this challenge?



https://www.silverinstitute.org/site/silver-price/silver-price-history/2000-2010/
https://www.silverinstitute.org/site/si ... 1-present/

[beauanderos]

ok, so simply adding the average annual price each year, starting in 2003 up to 2014... provides an avg cost of $16.98 per ounce. At least it gives me an idea.

[68Camaro]

Easy enough to do if I get a minute but Im sure many others will be equally adept.

[beauanderos]

The bigger question might be, after factoring in what the premium would have been on junk silver on a biweekly basis each year, then... what would
you have amassed, at what avg price?

http://www.junksilverbook.com/?p=37

Probably the only times there were any kind of significant premium required to acquire junk would have been after Oct 2008 for perhaps a year, following May 2011 for
several months, and the current spate since about Nov 2014.

[68Camaro]

Ok - I'm done with dinner; on it. When did you want to start? Not that I can't make starting point change easily.

[mtalbot_ca]

Here is what I got:

Starting: Sep 2000
Ending: Aug 2015

Investing : 83.33$ per month or 1,000$ a year
Average cost: 9,63$ per oz
Total holding: 1557,4oz
Total investment: 15,000$


Assumptions:
- Transaction cost = 0$
- Average monthly price is the actual price paid.

[68Camaro]

Based on your OP, starting 2011 through Sep 2015, using Kitco London Fix, no premiums or other expenses:

58 months, $58,000, 2505 oz, average price $23.16

[68Camaro]

And by the way Kitco has the daily data summarized on a picture of a spreadsheet but not as downloadable data, so you'd have to have the patience to type it all in. I just did the monthly average.

[beauanderos]

Based on your OP, starting 2011 through Sep 2015, using Kitco London Fix, no premiums or other expenses:

58 months, $58,000, 2505 oz, average price $23.16

I actually started stacking in April 2003. The reference to 2011 was that was when the big spike occurred... but how many months did it actually remain lofty?

[68Camaro]

Starting Jan 2003, 154 months, $154,000, 12548 oz, $12.27 / oz 12690 oz, $12.14 / oz

Excel attempted to interpret a number as a date in one of the cells so I fixed that; new numbers above.

Also, average price for the range is $16.84

[TXBullion]

Is the answer 6?

[68Camaro]

Is the answer 6?

Sure - as the old adage goes, if you pick the right units it is... (Nerd joke alert)

[Rodebaugh]

Is the answer 6?

you know better......it is 42....and has nothing to do with silver.


On a serious note.....this is a excellent thread Ray. I think that the evaluation of DCA of periods of time is relevant and insightful.

[H2SO4]

If someone was able to propagate the monthly price data, I could do this. I guess I could just make estimates from the chart provided- but thats not very scientific!

[beauanderos]

If someone was able to propagate the monthly price data, I could do this. I guess I could just make estimates from the chart provided- but thats not very scientific!

Kitco has monthly price charting in their historical data.

Of course, such data represents only a ballpark figure. There is no way anyone would have had the discipline to "invest" the same amount of capital into the market every biweekly period.
There would be periods where your buying was heavier, counter-balanced by spates when you tapered off. I, for instance, have converted all discretionary cash to metals for the period, but
at times I was also purchasing gold or platinum. As others allude to, there are periods when one feels that one metal or another represents the best buying opportunity, which would heavily
influence the pools which wet your toes.

[beauanderos]

If someone was able to propagate the monthly price data, I could do this. I guess I could just make estimates from the chart provided- but thats not very scientific!

If one uses SLV as a proxy, Yahoo provides historical price charts dating back to its inception 4/28/2006

https://finance.yahoo.com/q/hp?s=SLV&a=03&b=28&c=2006&d=05&e=2&f=2006&g=d

[68Camaro]

See the kitco historical charts which have daily and monthly data going back to 1985 and yearly to 1792.

Edit: and the data is tabulated. You don't need to read it off a chart.

[beauanderos]

Starting Jan 2003, 154 months, $154,000, 12548 oz, $12.27 / oz 12690 oz, $12.14 / oz

Excel attempted to interpret a number as a date in one of the cells so I fixed that; new numbers above.

Also, average price for the range is $16.84

I got $16.82... close enough for horseshoes

[beauanderos]

So what insight can we gain from this little exercise? On a time-limited historical basis, spot silver is currently under-priced compared
to the average prices from the previous decade. A gift from (as Inflexion would put it) the Too Big To Jail bankers

Still an opportunity, although the clock is ticking till your Monopoly money will no longer be accepted.

[beauanderos]

Maybe this thread spiked silver?

anyone care to guess what the number would be for gold if we ran the same years?

Average price of gold for the same period would have been $1056.73

Silver represents a better buy!

[highroller4321]

Wouldn't the better exercise to be calculate buying 1 ounce per month? Instead of using a fixed number of X dollars, a 1 once calculation would give a better representation of the dollar cost average per ounce. I believe this would provide a clearer view of the pricing of silver.

[68Camaro]

Wouldn't the better exercise to be calculate buying 1 ounce per month? Instead of using a fixed number of X dollars, a 1 once calculation would give a better representation of the dollar cost average per ounce. I believe this would provide a clearer view of the pricing of silver.

That would just end up being the average price of silver. No need to recalculate.

[68Camaro]

Something else to remember (again). Except for the blip that was the Hunt Bros caper in 79-80, the price of silver this year is still the highest in history through 2009. It's only down relative to the 5 years of 2010-2014. So the 2015 price of silver, even as manipulated as it has been, is still the 8th highest price of silver in history.

[beauanderos]

Something else to remember (again). Except for the blip that was the Hunt Bros caper in 79-80, the price of silver this year is still the highest in history through 2009. It's only down relative to the 5 years of 2010-2014. So the 2015 price of silver, even as manipulated as it has been, is still the 8th highest price of silver in history.

I would like to have seen where silver would now have been if the hockey stick hadn't been shattered into splinters.