Somebody Argue With Me, Please (And I Know You Will)

Unless, of course he already is sitting on $1,000 in 40% half dollars

Nice post! So are you saying one should diversify their junk silver holdings accross denominations and compostion to hedge against dropping silver prices. How would War Nickels factor in?

I don't actively by any of the 40% halves or War Nickels, but I surely love to find them in roll hunting. I do keep them as well!

How about them 35% nickles? Those are my favourite.

When silver was running near $40 an oz a couple years back, my LCS would pay $1.50 ea for 40% halves. I listed 3 rolls of 40% on Craigslist then, they sat there for 3 weeks @ 20% below melt, I received one reply, and ended up selling at 70%. In general, dilluted silver coinage is just not in demand.

Back in 1980 the Hunt bros wanted as pure silver as possible. You couldn't give away 40%. Refining costs eat up profit. Not that I'd throw 'em back today, but they are the only coin I even consider selling (or giving away lol).

I don't have many 40% Kennedy halves. Maybe in ounces terms it is 10% of my constitutional silver coins.

I think the market price for these is better than what I have read here.

I know my local LCS sells these for just a hair under melt. The 35% nickels are more heavily discounted from melt. Those are retail prices.

Below is an advertisement for a dealer (no clue on this dealer, just found it on the internet) from yesterday buying 40% halves wholesale at $4.79 / $1 face value. Currently melt is $4.92. That is 97.4% of melt. The same advertisement is buying 90% at $12.08 per $1 with a melt of $12.87, or 93.8% of melt. Relatively speaking, this dealer is paying a premium for 40% as opposed to 90%.

As for War Nickels the advertisement is buying them at 78 cents each while they are melting at 94 cents, or 83.0% of melt. Clearly this dealer would rather have 40% or 90% than 35% War Nickels. You are taking a 10 - 15% hit when you sell War Nickels vs 40% - 90% silver. If you do think of this as an investment, you need to understand this and make it up on your purchase. You just can't pay melt for War Nickels and hope to flip them for profit unless silver runs up probably 15 - 20% from where you bought it, and that would be to barely break even. That doesn't include any selling fees / shipping either. End of the day if you actually did turn a profit, you didn't earn that and to be fair you owe a third of it to Uncle Sam and the IRS.

Here is that advertisement. Pretty good look at dealer buy prices if you aren't familiar with them.

http://www.upstatecoins.com/v/dealer.pdf

All apologies if this link is inappropriate for posting. Nothing remotely wrong with a coin dealer buy ad in my opinion, but this isn't my house either.

Full disclaimer, I am not a dealer nor local to the dealer in the advertisement, nor do I know or have any affiliation with the dealer. I have no idea if they are honest or not. Merely trying to interject some market pricing commentary to a great message board.

$2.50 for 40% halves is basically current silver melt value. If silver was $5, melt value would be 75 cents. So your figures above basically just work out to buying the silver halves as pure bullion with a price floor of about $3.25 an ounce where the melt would equal face value. I think you do have a point in that a 90% half or dollar will not equal face value until silver drops to about $1.40 an ounce, but Morgan and Peace dollars carry a premium due to their age and will likely always have that. I don't know how you can be very confident in your future calculations of value for those coins. Morgan and Peace dollar values haven't dropped 25% along with the drop in silver price so far in the past few months. 40% silver obviously doesn't carry a premium in low grade because it's selling for melt value now.

Based on my experience over the last 35 years, no.