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 Replies: 18 / Views: 5,230 |
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Valued Member
United States
174 Posts |
I have never cared for 66-69 (40%) halves. However.... I was just sitting here thinking about risk balance (what's the up side, what's the down side?) If I look at silver, I can say: Morgans and Peace dollar carry a high premium over melt. The current melt is $13.25, and average ones go for 22-30 each. The actual US Cash value is $1.00 90% silver can be had at around 15x face. The current melt is around 12x face. The actual US Cash value is 1/15 of the buy price. However, 66-69 Kennedy halves can be had for ~2.50-3 each. The melt value is $2.50 and actual US Cash value is $.50, or 1/5 of the buy price. So, looking a high/low potentials in the silver price: If silver drops to $5 per ounce, I would predict the following: A Morgan/Peace would sell for about $5-8. 90% would sell for about 2-3x face, and 40% halves would sell for maybe $.75. If I took $1,000 and bought 40 morgans I would end up with about $200-250. With the 90% I would end up with $167. With the 40% halves, I would end up with $300. The lower it drops, the more the 40% halves make sense. On the upside, I recognize 90% will bring a larger premium, but don't think it's significant as compared to the insurance. The 40% will always be worth $.50. A 90% quarter will always be worth a quarter. But, if the bottom falls out, i'd rather end up with $1 for every $5 instead of 33 cents. Now, let's hear the counter points. (if you read all this accurately) |
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Pillar of the Community
Canada
1747 Posts |
I think you make some really valid points, I hope for your sake that not too many people clue into your ideas, and keep the premiums as low.
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Pillar of the Community
United States
1512 Posts |
Quote:
I hope for your sake that not too many people clue into your ideas, and keep the premiums as low. 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? |
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Pillar of the Community
Canada
1747 Posts |
Still, even if you had 10k worth of 40%, wouldn't you still want more? is there really ever too much silver?
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Pillar of the Community
United States
2168 Posts |
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! |
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Pillar of the Community
United States
4333 Posts |
@LeoS - you left out the 1965 and 1970 40% halves, of course the 1970 is much more rare, but I have found them in the wild. I come from a time when roll hunters passed up 40% silver half dollars, even @ $50 silver. They just weren't highly desired at that time (1980). I know why, anyone else? To this day I hold 40% in low regard, along with 35% War Nickels, even though I still hold several rolls of each, found at face value. When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
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Pillar of the Community
United States
6478 Posts |
How about them 35% nickles? Those are my favourite.
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Valued Member
 United States
174 Posts |
I LOVE War Nickels as well, but in a big price drop, the lowest they can go is $.05. I recently got a steal on 200 for $200. So, that's 20x face. I really think the 40% argument makes sense. The biggest problem is if silver hits $100 per ounce, what will they sell at? One would get right at or slightly under melt value, so still not too shabby. |
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Pillar of the Community
United States
4333 Posts |
Quote:
I really think the 40% argument makes sense. The biggest problem is if silver hits $100 per ounce, what will they sell at? One would get right at or slightly under melt value, so still not too shabby. 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). When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
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Pillar of the Community
Canada
3692 Posts |
40%ers are like pigs wearing lipstick. They're still 40% -> eww; Under 10 karats. I can't think of what this alloy was actually useful for other than to steal money from the public.
Sounds like you're flipping coins purely for profit.
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Pillar of the Community
United States
711 Posts |
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.pdfAll 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. |
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Valued Member
United States
134 Posts |
Interesting, academically. But I wouldn't worry from maximizing the downside when purchasing silver coins. It may be relatively high percentages of difference to hedge, but the absolute downside values for either type (90% vs 40%) is inconsequential. On War Nickels, my understanding of the higher buy discounts to melt is because these nickels are a three metal alloy (silver/copper/manganese). Therefore, harder and more costly to refine for the silver as opposed to the simpler copper/silver two metal alloys of 90% and 40% coins. Though the dealers I've been too want to sell to me at melt+ despite buying at 30-50% of melt. That doesn't make sense...especially since I can still find wars in circulation on a regular basis. |
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Pillar of the Community
United States
1158 Posts |
$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. |
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Valued Member
United States
174 Posts |
I totally think it's a good insurance on the downside. The real question is on the upside. If silver hits $50 per ounce, can one accurately assume that at/near melt could be had for these 40% coins?
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Pillar of the Community
United States
4333 Posts |
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If silver hits $50 per ounce, can one accurately assume that at/near melt could be had for these 40% coins? Based on my experience over the last 35 years, no. When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
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Forum Kid
Canada
1074 Posts |
The majority of people like a large coin, in which means a large quantity of silver, but the smaller denominations can be good, because they are a low in demand item!
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Replies: 18 / Views: 5,230 |
Posted 10/23/2014 1:29 pm
