The Jekyll & Hyde of silver stacking opinions

[FourNinesFine]

Quick note of explanation up front (before I start rambling on in earnest). This is not a "should I invest in silver" thread or even a "is silver better than gold (or vice versa)". This is more about the very range of extreme opinions that seem to be out there about silver in particular.

 

Gold is considered by most people to be a 'safe' investment. A store of wealth, hedge against inflation, money over currency etc.

Opinions are generally balanced on the subject of stacking gold and all things being equal, it's considered to be a pretty sensible thing to be doing with your FIAT, if you don't have debts to pay down.

 

Silver on the other hand. Well it's a complete free-for-all in terms of opinions as to 'why', 'how' and 'how much'. It'd be a fair challenge to suggest I'm preaching to the converted on The Silver Forum, but even on here I've seen people suggest that any rationale for silver stacking is ultimately flawed... 'it will never be needed in barter circumstances,' 'the premiums don't make it a sensible stacking option', 'why even try and contend with the VAT' and 'forget any thoughts of it going to the moon'.

And yet, for others silver it's the holy grail.

"Just look at the ratio... silver's got to move up."

"They can't manipulate it forever and then it's anyone's guess how high the price will go"

And then there's those folks that are duking it out with the YouTube algorithm, with their must-click video headlines of "First £167 an oz, before a reset and then £5000+ an oz", and there are plenty of them out there.

 

I suppose the truth lies somewhere in the middle of all that. Or does it? Maybe one of the edge cases will be proved right?  In any event, diversification is a core tenet of any investment strategy so on that basis alone, it's got to make sense to own both, right! And I do; happily. But picking up that sovereign always feels sensible and grown up and proper. Like gold is the girl you meet and know you'll marry the first time you see her. Whereas buying another tube of silver Brits feels more... (not risky, that's definitely not it) but... your heart flutters that little bit faster and you question your motives. Like silver is the red-head that you know will leave you in a heap like a broken marionette, but you'll treasure forever the memory of those fleeting moments when she was pulling your strings.

Dunno. Maybe I'm letting all the noise discombobulate me.

As I say, this isn't about any single opinion on stacking silver... just a curiosity as to the variance in those opinions. From outright lunacy to feverish envangelism.

 

FNF.

[Gordy]

and your point is?

[CANV]

oh bollocks.. I married red head in 1989! 

[FourNinesFine]

44 minutes ago, Gordy said:

and your point is?

Not sure really. I'll just put it down to making conversation and shooting the breeze.

Occasionally, the clacking of my fingers on the keyboard quietens the voices in my head.

[flyingveepixie]

It's a good starting point for a discussion.  I've noticed the widely varied opinions on silver stacking too - who could miss them? 

Here's my tuppence worth....

Personally I stand in the camp of the more sceptical about the wisdom of investing too much in silver and hoping that it'll go to the moon.  I do have some physical silver, and I do find it attractive, but I make it a point to pass on all of those lovely Germania mint coins, silver Brits, Maples,  and the like that I see coming up for sale on here every day.

Silver spot price (and gold spot too, although to a much lesser extent) is totally sabotaged by the paper/digital silver market, which, even though the potential to make profit on your investment exists provided every investor doesn't suddenly demand to receive the silver they paid for in physical form(and IMO only I should note) is still just a great big scam, and even after two years of gobbling up all the information I can find to educate myself in economics and understand how everything works, I still struggle to get my head around the concept of investing in something that doesn't exist, especially when its imaginary existence is very much to the detriment of the value of the real entity which does exist in the real world, ie physical silver. Yet millions of people do invest in this way.  It's quite beyond me.  

Here's how I see it (sort of) : I have a silver coin which I present as being for sale. You may buy it, but you wont receive it, and I will hold it in my vault until you decide to resell it (you will pay a fee for me holding it, and an admin charge for both the purchase and resale) .  Buyer one comes along and buys it, pays the cost of the coin plus his fee, receives a certificate of ownership (or something to that effect) and goes off happily into the sunset.   I now re-advertise it and buyer two comes along and buys it. gets his cert and wanders off.    I do the same again for buyer three, buyer four, etc etc, ad infinitum, selling the same coin over and over again and making a stack of profit for myself, and in doing so, manipulating the price (or rather, value) of the real physical entity, to stay as artificially low as we see it in the real world. (Ponzi scheme anyone..?)  

My understanding of it to date is that It's a bit like money printing and debasement of the fiat system, ala fractional reserve lending and quantitative easing, which are (again IMO only)  nothing more than legalised counterfeiting and a good way of scamming us all on an ongoing long term basis by the government and the BOE.

 

Edited May 4, 2023 by flyingveepixie

[KleinerVogel]

I stopped believing the silver talk which claims it will be £100 an ounce,  or even £5000 an ounce right around the corner, any day now! I think if that did happen, a loaf of bread would be a tenner or something. For me silver is just a convenient way to hold a more fractional form of wealth. I don't see it as scheme to get rich. If anything I've lost money on silver at the moment (VAT and premiums will do that). Gold is the safer option for sure, it's been pretty clear to me since I've been in this hobby that the price is steady and seems to keep up with inflation really well. My first ever sov cost me £190 back in 2013 i think, now it's intrinsic value is about 380 quid at the time of writing this. So to me at least gold is the clear safe haven.

 

 

 

[FourNinesFine]

52 minutes ago, flyingveepixie said:

 even after two years of gobbling up all the information I can find to educate myself in economics and understand how everything works

 

Yes, I struggle here too. (so may have got the terminology wrong), but I always saw it just as a form of gambling. I'll borrow your 1ozt and sell (short) it a further 9 times in the expectation the price will fall. That's what I'm gambling on. If it does, happy days, I cover the short by purchasing the 10 ozt (1x original borrowed, plus 9x sales) at a lower price and I pocket the difference. No problem at all with that. And if they're made to cover their losses in the event they bet wrong, great. Better luck next time. The problem is surely that they get to muck about with the parameters of the bet before it gets settled.

If I bet on a sporting event and it's not going my way, I'm not allowed to change the rules in my favour. I don't know why derivatives / shorts etc. are different.