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What is your favorite exposure to precious metals?

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October 11, 2010 – Comments (12) | RELATED TICKERS: SLW , SLV , AGQ

What do you guys use?  I have made decent money buying options on the GLD (about 45% in the last 2 months) and UGL, AGQ, SLV, PHYS, and SLW.

 

However I am a little uneasy about holding GLD long term as I am a little unsure of what they actually hold if a real squeeze on gold happens, I dont want my ETF to just be a piece of paper with three letters on it.

UGL and AGQ are the same to me...they are all leveraged, I am not sure what really backs that up except some abstract theoretical increase that is in line with what silver and gold do.

So my main choice is SLW and AEM for silver and gold, respectively.  However, although I am short term and medium term bullish on equities, i think that major inflation might  destroy stocks, and it is had to judge miners because they either have way too high p/e's or lose money.

Which makes me want to buy physical gold and silver coins.  However I only have like $1000 to invest in precious metals.  I want to put a down payment on a house next year.  So i have $3300 to invest but $2300 of it is medium term (about 10 months)so I am trading around with that money and buying deep discount stocks (Compton petroleum and DJSP)

With $1000 to invest in PM's, if I buy it on apmex, they are going to charge me about 2% over spot price.  Even if Silver straight up doubles in price, I feel that the shipping, storage and mark up (and then consequently the mark down when I have to sell it back) is going to eat away a lot of my profits, which makes me want to use leverage (like options and 2x etf's).  Also that is a lot less liquid.  If a company I have been watching is trading at $10, and I think it is fairly priced, and some over reaction send its to $1, I am going to sell my soul to buy it, and it would take me weeks to send the silver back in and turn that into cash and deposit it into my bank account and then transfer it to my brokerage.

Which brings me in a full circle.

 

What do  you guys the most? For me right now I either want physical silver, or SLW. 

Also, cant decide if I should wait for a pullback or buy it now.

12 Comments – Post Your Own

#1) On October 11, 2010 at 1:32 PM, BillyTG (29.15) wrote:

2012 SLW calls on dips.

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#2) On October 11, 2010 at 1:42 PM, Valyooo (99.35) wrote:

Good call, those were what I am looking at. I think you know more about me than PM's....do I wait for a pullback on SLW or buy it now?

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#3) On October 11, 2010 at 1:43 PM, BillyTG (29.15) wrote:

FYI, just called APMEX out of curiosity, since I've been pricing physical lately: commissions, spot price used (real time, prior day close, etc), shipping, in person pickup.

Anyways, apmex said they are online only and don't allow an option to pickup in person. They are based in Oklahoma and store and ship from OK. It's far from me, but I might be driving that way in a couple months, so I asked "What if I pickup in person, or have it shipped, say to your front desk?" They said no. I'm trying to avoid shipping fees too. I live near a foundry that charges an outrageous commission, so finding a place where I get charged low commission and can pickup in person is key.

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#4) On October 11, 2010 at 1:45 PM, BillyTG (29.15) wrote:

I don't know enough about PMs, and have no idea what SLW will do...sorry. I'm kind of hoping for a stock market drop that sinks PM stocks enough for good buying opportunities, but hoping isn't really a good plan!

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#5) On October 11, 2010 at 1:48 PM, 100ozRound (29.40) wrote:

I heart APMEX!!

But if you want convenience, why not look at your local coin shop? 

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#6) On October 11, 2010 at 1:49 PM, vriguy (68.37) wrote:

At $1300/oz gold or 130 GLD seemed expensive to me, but I still wondered if Sinchiruna et al. were right when they projected 2500/oz gold.  My approach was to buy a Jan 2012 180 call option contract on GLD last week.  I might buy another 1-3 contracts on any pullback.

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#7) On October 11, 2010 at 1:50 PM, Valyooo (99.35) wrote:

Yeah, its hard to find a low commission foundry.  The spread they charge you will eat away your profit.  I live in NYC.  We should grab some picks and start mining ourselves, or get a metal detector.

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#8) On October 11, 2010 at 1:57 PM, Valyooo (99.35) wrote:

http://cgi.ebay.com/1-2-TROY-LB-999-PURE-FINE-SILVER-BULLION-MINT-BARS-/180566006009?pt=LH_DefaultDomain_0&hash=item2a0a9298f9

Silver selling for below spot on ebay...good deal?

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#9) On October 11, 2010 at 2:06 PM, BillyTG (29.15) wrote:

Hmm, Kitco showing silver spot price at $23.34/oz.

Ebay guy says he's selling 1/2 troy pound and says a troy pound is 12 ounces. So 1/2 troy pound is six ounces, for $175.87. $175.87 divided by six ounces equals $29.31 per ounce.

Looks to me like he's got it marked up about 25% over spot, but maybe I'm missing something.

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#10) On October 11, 2010 at 2:08 PM, 100ozRound (29.40) wrote:

Actually, that looks like $6 over spot

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#11) On October 11, 2010 at 2:33 PM, Valyooo (99.35) wrote:

Woops, I accidentally did the calculation of troy ounces in regular ounces and did it as each ounce being 1/16th of a pound rather than 1/12th.

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#12) On October 11, 2010 at 2:39 PM, BillyTG (29.15) wrote:

Based on his pricing being near spot for EIGHT ounces (1/2 of a normal pound), I'm guessing he's hoping a lot of people make that calculation!

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