I have been a “silver stacker” for many years. With money earned mowing lawns, at age 16 I started buying pre-1965 mint-date “junk” U.S. silver dimes and quarters in 1976 at a small local coin shop in Livermore, California. It was called Bob’s Coin Corner. Bob was patient in explaining silver coins to me. In 1979 I sold nearly half of my silver coins just after silver peaked, when spot silver was at $47.75 per Troy ounce.
I started buying some silver and gold again in June of 1987, when silver was at $8.98 per ounce.
A practical silver investor both buys and sells silver. I was warned by my Uncle Louis: “Never fall in love with any investment.” And he was right. It is foolish to say: “I’ll never sell.”
I sold most of my silver in early 1990, when was preparing to purchase my first ranch, near Orofino, Idaho. At the time, the price silver had seen a bump to $12 per ounce. In hindsight, I can see that that was not the best time to sell silver, but I needed cash to buy land. With my savings, the proceeds from the sale of that silver, and a loan from my mother, I bought a 40-acre property with a half-finished 3,000-square-foot house for $28,000. In the end, I did pretty well on that land investment.
It was not until 1996 — when I was back to full-time technical writing and with silver still just below $10 per ounce — that I resumed buying silver in earnest. I set aside a good portion of my earnings as a technical writer into gold and silver between 1989 and 2005. That was a period when the silver market was in its doldrums. Silver was seen as “cheap” and Wall Street hated it, so I stacked it. I’m what is called a Contrarian investor.
Calling The Bottom
At the depth of the silver market doldrums, I posted the following to the misc.survivalism Usenet newsgroup on February 8, 2001, under the title: Rawles Calls Major Bottom in Silver Price:
“I have come to the conclusion that the long-term bear trend in the price of silver has finally come to an end. Silver touched $4.55 earlier today. (Feb. 8, 2001.) If it closes in N.Y. at over $4.75 anytime in the next few weeks, that would be a strong bullish indicator. Look at the six month and ten year silver charts at www.kitco.com for the “big picture.” Once there is a strong bullish indication, don’t hesitate to buy a good chunk of silver, pronto. FWIW, I just made another silver purchase to take advantage of the recent dip. (I’d rather buy early than late.) For those of you living in these united States, I recommend buying silver in the form of pre-1965 mint date circulated U.S. silver coinage (dimes, quarters, and half dollars.) That is the best for barter purposes, and unlike bullion rounds/bars is less likely to be subject to government confiscation. See the free e FAQs at my web site for details: www.rawles.to. For the market fundamentals on silver, see: http://www.silver-investor.com (Some interesting observations on the lack of silver to meet demand.) And for general information and analysis on precious metals, see: http://www.gold-eagle.com/ (Note: I am not affiliated in any way with either of these sites.)
[Some commentary on interest rates snipped, for brevity]
I may not have called the bottom perfectly, (silver may sag down to $4.25 before it rallies), but beyond that, IMHO the downside risk is minimal. And what about gold, you may ask? In my opinion, silver is much more likely to double than gold…”
I wasn’t far from the mark when I cited $4.25 as the potential bottom. Silver actually bottomed just a few months later, at $4.19 per ounce. I was off by less than 2% in calling the absolute bottom in a 10+ year bear market.
During the silver market doldrums, I was buying serialized 100-ounce Englehard bars for less than $600 each. I bought the largest portion of my stack when they were just $515 each. And I could get junk silver for as little as 8 times face value. ($8,000 for a $1,000 face-value bag of 90% silver coins.) Back then, I was mostly buying from Camino Coin Company in Burlingame (then owned by Burt Blumert), and The Coin Broker in Palo Alto, California.
After those 10 years in the doldrums, silver has risen in fits and starts. In late 2006, I bought another ranch, closer to the Canadian border. To finance that purchase, I sold all of my gold coins and just a small part of my silver stack. At that time, spot silver was at $18.85 per ounce, and gold was at about $940 per ounce. I can now see that this too was a suboptimal juncture to liquidate, but I was again buying land. And that ranch has tripled in value, since then.
The 2010-2011 Price Run-Up
I sold some silver bars in September of 2010 when spot silver had jumped to $28 per ounce, but I decided to retain about 60% of my silver holdings. I missed a brief $52 spot silver peak in May of 2011, but I don’t regret that. After all, hindsight is 20/20.
Back To Stacking
I returned to stacking silver in 2014. And I have held on to nearly all of that. I still consider silver a long-term hedge against inflation. So I still take silver in trade, when I sell pre-1899 antique guns, through my side mailorder business, Elk Creek Company. Since 2020, all of that silver has just been added to the stack.
I still make most of my silver purchases with cash. But once in a while, when I see a bargain at a coin shop and I don’t have much cash in my wallet, I will use my Capital One credit card. (It is nice to earn frequent flyer miles, as I invest. It is also handy for determining my cost basis, when I do liquidate any of my stack.) That is what happened when I walked into a coin shop on a silver market “dip day” a few weeks ago, and I found that they were selling Australian Kookaburra 1-ounce silver rounds for the same price as their generic one-ounce coins. I bought two full 20-coin tubes.
I am fairly confident that the current bull market in gold and silver is still in its early stages. I have no plans to sell any silver until it again touches $40 per Troy ounce. But even then, I’ll probably save half of my stack for the long haul.
Thinking Of My Grandchildren
Now that I’m 63 years old, I look at silver as a multigenerational hedge. If the Lord tarries, when my wife and I pass away we’ll be leaving our children and grandchildren a house and some land, a nice gun collection, a big pile of ammo in cans, and a substantial stack of silver. Those are all tangibles that can be relied upon, regardless of what happens politically or economically.
Granted, I could have made more money if I had timed the stock market, or even if I had just dollar-cost-averaged into stocks. But I chose not to invest in stocks. I feel much safer investing in silver. I’ve always looked at silver as fire insurance on the Dollar.
The Bull Resumes His Charge
As I’m writing this (on March 21, 2024) spot silver is at $25.01 per Troy ounce. Meanwhile, gold futures just traded at a new record high of $2,225.30. It now costs $2,975 to buy a serialized 100-ounce Englehard silver bar — that is if you can find one. Most coin dealers are out of stock of bullion silver coins. Circulated junk silver $1,000 face value bags of 90% silver dimes, quarters, and half dollars are now priced in the range of $20,675 to $22,855. There is such strong demand that most coin shops don’t even have one full $1,000 bag available.
The bottom line: I don’t claim to have a crystal ball. Markets are fickle. And markets are often manipulated. But I feel truly safe, investing in silver. – JWR