Crunching The Numbers

Lately, it seems that a day doesn't go by without me receiving a comment or an email from somebody complaining about how they're "still getting their butt kicked in silver because they bought in April of 2011". Since I've consistently advocated the regular stockpiling of physical metal for over two years now, I thought it might be fun, and worth the time, to crunch some numbers to see just how bad it could be for some folks.

First of all, I don't think that anyone whose only purchases of silver came in April of 2011 is still a regular reader of this site. Additionally, that this disgruntled, non-reader of the site would then take the time to email me seems a little far-fetched. Nonetheless, let's roll with it.

Below is the hard data. I began this blog/site on 11/11/10, so, let's measure two things:

  • A Turdite who decided, based upon my strong convictions, to purchase a tube of eagles every two weeks, regardless of the cost.
  • A Turdite who decided to take $500 out of his/her paycheck every two weeks to purchase as many Eagles as $500 would buy, based upon the current price.
  • I have not included premiums or sales tax. I'll let you adjust and figure that out for yourself.

DATE                PRICE            TUBE COST             OR                OUNCES BOUGHT           COST

11/12/10               25.94                   $518.80                                                              19                            $492.86   

11/26/12              26.70                     534.00                                                               18                              480.60

12/10/10              28.58                    571.60                                                                17                              485.86

12/24/10              28.88                   577.60                                                                17                               490.96

1/7/11                   28.66                    573.20                                                                17                               487.22

1/21/11                 27.42                     548.40                                                               18                               493.56

2/4/11                  29.06                    581.20                                                                17                                494.02

2/18/11                32.30                    646.00                                                                15                               484.50

3/4/11                  35.32                    706.40                                                                14                               494.48

3/18/11                35.06                    701.20                                                                 14                              490.84

4/1/11                   37.74                     754.80                                                                13                              490.62

4/15/11                42.57                     851.40                                                                 11                               468.27

4/29/11                48.58                    971.60                                                                 10                              485.80

5/13/11                 35.01                    700.20                                                                 14                              490.14

5/27/11                37.86                     757.20                                                                 13                              492.18

6/10/11                36.33                     726.60                                                                13                               472.29

6/24/11                34.64                    692.80                                                                14                                484.96

7/8/11                  36.54                     730.80                                                                13                                475.02

7/22/11                 40.11                     802.20                                                                12                                481.32

8/5/11                  38.20                     764.00                                                                13                                496.60

8/19/11                42.43                      848.60                                                               11                                 466.73

9/2/11                  43.02                      860.40                                                               11                                 473.20

9/16/11                 40.78                     815.60                                                               12                                 489.36

9/30/11                30.04                     600.80                                                              16                                480.64

10/14/11               32.14                      642.80                                                               15                                482.10

10/28/11              34.07                      681.40                                                               14                                476.98

11/11/11                34.67                     693.40                                                                14                                485.33

11/25/11               31.01                      620.20                                                                16                                496.16

12/9/11                 32.17                      643.40                                                                15                                482.55

12/23/11               29.04                     580.80                                                               17                                 493.68

1/6/12                   28.65                     573.00                                                                17                                 487.05

1/20/12                 31.65                     633.00                                                                15                                 474.75

2/3/12                   32.73                     654.60                                                               15                                  490.95

2/17/12                 33.20                     664.00                                                               15                                  498.00

3/2/12                  34.48                      689.60                                                               14                                  482.72

3/16/12                 32.57                      651.40                                                                15                                 488.55

3/30/12                32.47                      649.40                                                                15                                 487.05

4/13/12                 31.38                     627.60                                                                 15                                 470.70

4/27/12                 31.35                     627.00                                                                15                                   470.25

5/11/12                 28.86                      577.20                                                               17                                   490.62

5/25/12                28.37                     567.40                                                                17                                  482.29

6/8/12                 28.46                      569.20                                                                17                                  483.82

6/22/12               26.66                      533.20                                                                18                                  479.88

7/6/12                 26.89                      537.80                                                                18                                   484.02

7/20/12              27.28                      545.60                                                                 18                                  491.04

8/3/12                 27.79                      555.80                                                                 18                                  500.22

8/17/12                28.00                    560.00                                                                 17                                   476.00

8/31/12                31.37                     627.40                                                                  15                                  470.55

9/14/12                34.60                    692.00                                                                  14                                 484.40

9/28/12               34.52                     690.40                                                                  14                                 483.28

10/12/12              33.63                     627.60                                                                 14                                  470.82

10/26/12             32.01                     640.20                                                                 15                                  480.15

11/9/12                32.59                     651.80                                                                  15                                  488.85

11/23/12              34.11                      682.20                                                                 14                                  477.54

If you had purchased a tube of Eagles every two weeks since this blog/site began, you would now own 54 tubes or 1080 ounces of silver. This would have cost you $35,524.80 and your average cost per ounce would be $32.89.

If you had decided to, instead, buy $500 worth of Eagles every two weeks since this blog/site began, you would now own 810 ounces of silver at an average cost of $32.29.

If you came late to the party and only began your tube-every-two-weeks extravaganza on 4/15/11 with the price at $42.57, you'd now own 860 ounces at an average cost of $33.50/ounce.

What if you only bought a tube on 4/15/11 and 4/29/11 and then took the summer of 2011 off? You were then lured back in by the S&P downgrade of 8/5/11 but scared off again after the steep drop in September. Convinced we'd seen the lows by late 2011, you then bought a tube every two weeks in 2012. If so, you'd have 600 ounces of silver at an average cost of $33.23/ounce.

Maybe you did precisely as above, buying only six times and on those exact same dates in 2011. Then you only restarted buying just as price peaked in late February of this year. You'd now own 520 ounces at an average cost of $33.49/ounce.

And what if you're just the unluckiest sap on the planet. Dumb as a box of rocks and easily duped into buying only when ole Turd gets over-the-top excited. You made just 12 purchases and you bought on 4/1/11, 4/15/11 and 4/29/11, 8/5/11, 8/19/11 and 9/2/11, 2/3/12, 2/17/12 and 3/2/12, 8/31/12, 9/14/12 and 9/28/12? In that case, you'd be the proud owner of 240 ounces of shiny silver at an average cost of $37.78.

Feel free to fiddle with these numbers as much as you'd like. Construct your own best case and worst case scenarios. Add in an acceptable dealer premium and your local sales tax. Whatever. Have fun with it. The point is this:

Your best strategy is to be consistently buying physical metal, either gold or silver, regardless of price. Sometimes you'll buy high and sometimes you'll buy low. Most importantly, however, you'll be slowly accumulating a sizeable position in the only assets guaranteed to protect your savings and purchasing power against the constant devaluation of the dollar, brought upon us by our politicians and bankers.

BTFD or BTFR, it doesn't matter. Just buy.

TF

304 Comments

Motley Fool's picture

Cya Turdville

While rational thought has never held sway over belief, I still think some parting advice might be of value.

For those of you who do not, I suggest at least a 1% allocation in terms of value to physical gold.

I will make no further argument of the relative merits of silver vis-a-vis gold, but such a small diversifaction cannot be unwise and combined with a silver holding for the other 99% should establish at least break even in the worst case scenario.

Heed my words, or do not, as you prefer.

Peace

MF

philly's picture

Finally...

Second!

Although I haven't followed as strict a regimen as Turd illustrates, I am an inveterate stacker.  Since I have a memory of hearing that for a person to be considered rich, they must own their weight in gold, my goal is to first accumulate my weight in silver. At least then I'll have a chance of being the richest guy in the trailer park!! A man has to have a goal!

WarningShot's picture

Thurd

Glad to see iStack is alseep at the helm for once this month... :-)

The further the beach ball is suppressed under the surface, the higher it will propel once it breaks free...keep stacking

Fr. Bill's picture

Furth?

Hot dog! Furth!!

But I only rack the brain for a limmerick for thurd or better. Shift+R improves the quality of this image. Shift+A improves the quality of all images on this page.

ancientmoney's picture

@Turd

A year from now, those average prices will seem absolutely tiny, I think.  Like half the then-current price.

Outfitter's picture

Fifth

I need a fifth

Bollocks's picture

Hey, I ...

read all that and still came in fifth!

edit: Arse Arse Arse angry.

Quisp's picture

Top 10 ?

7 was always my lucky number.  Edit:  And yes, I read Turd's post first, but I'll settle for 8th.

Mr. Fix's picture

Sixth?

Maybe...not.

Nine it is.

El Gordo's picture

Crunching my own

My weighted average cost during 2011, including S & H and everything, is $40.28.  For 2012, $35.91.  Two year weighted average $37.83.  Looks like I fall beyond the unluckiest sap, dumber than a box of rocks, easily duped silver stacker.  Fortunately, I started a couple of years before that, so I have a small plus overall when the entire book is considered.  And I did not include the ones that were lost on the boating trip as that would have skewed the numbers even more. 

Admiral Ag Bar's picture

owning metals is easy decision, once you understand the facts

Our currency (and the rest of the developed world's) is being printed into oblivion.  Why wouldn't you own something tangible that is a store of wealth?

99% of folks are brain dead debt slaves. We will be proven right in the end.  Its always going to be tough taking the contrarian point of view.  But isn't that the point?

R man J's picture

I bought 10% of my stack in Apr 2011

Still under $30 on avg.

What does it matter. Many industry veterans are looking at $100+ medium term, and $450 by end of bull market in extreme scarcity...

Set an ounce goal and continue purchasing. In the above scenario 2,250 oz is $1 million.

...build the hedge.

S Roche's picture

Well crunched!

Good rebuttal to the Turd Leads Lemmings Off A Cliff meme.

Revelation's picture

Read This - SilverFinger

murphy's picture

Hey MF'r

As Xty has said, VtC must have now tagged you and you are it.  I thought you said you were leaving? Another purposeful misstatement imo.

Istack's picture

My plan

my plan is to own my body weight in silver and to eat at mcdonalds every day. super size me!

AJwhiteshirt's picture

Taking personal responsibility

The case is well made  that average accumulation has not shorted anyone for the past two years. In the end, we all have to take individual responsibility for investing. TF metals is a beacon. There are several other good sites for info.

But don't blame others. The FINAL decision to invest in silver/gold is yours.

No regrets here at all.

fertzeltwist's picture

John Wayne

Would be a stacker, if he was still around.

ivars's picture

Spike in silver volume after

Spike in silver volume after hours on Netdania- hourly volume= same as biggest intraday hour.

Any ideas? Is that true, or again some mystics with data?

Quisp's picture

@AJw - agreed

Taking responsibility for your own actions is a lost concept today. The blame game prevails. 

I did not buy small amounts every 2 weeks, or even monthly. 2 purchases make up 75% of my modest stack. I have since continued to buy in smaller amounts, but my avg (including shipping etc) is around $36/ozt. So, I guess I'm in the 'dumb as a bag of rocks' crowd. But I'm okay with that. Hard to argue against the truth. blush When silver is over $100/ozt, I don't think I'll care. 

Xeno's picture

All In

My education funding came through, my future was looking bright, I was full of life and could do no wrong, I was invincible and laughed at death. So I went all in.

On April 21st, 2011, I maxed out my student loan and credit cards and got myself 2000 oz. of shiny for the modest cost of 92,000 frn's at an average cost per ounce of $46.00.

Now I'm destitute, loosing silver fast to pay bills, my baby left me and my mule got lame, and I lost all my rent money in a poker game.

I hate silver and anyone who says it's going to the moon.

http://www.zerohedge.com/news/2012-11-27/scariest-chart-quarter-student-debt-bubble-officially-pops-90-day-delinquency-rate-g

(the above is a fictional account. any actual comparison to your situation is purely coincidental. no names were given to protect the...)

Did the letters you get sound anything like that TF?

bucktooth's picture

Cornucopia

From a post by Eric Original many many moons ago .... "buy 2 monster boxes and your cornucopia will be overflowing".  I took his advice and have been averaging in.

All ASE: Bought at 20.00, 21.75, 21.35, 20.79, 23.85, 28.69, 31.52, 31.20, 37.35, 38.67. 45/57. 48.47. 49.40, 42.60, 46.36, 33.32, 38.17, 35.13, 31.26, 32.10, 36.91, 35.15 and on Friday 36.85.

Average cost:  $31.18

Wish I had bought more than 10 at the $20 price and none at the $49.40 price, but on an average cost, I am damn happy. 

Thank you to all who have helped with sound advice over the past few years. 

old tradesman's picture

did I do something wrong

with shipping and all comes to average of $18.  Now if I could only find that map!

Swift Boat Vet's picture

Hey Furtz ! John Wayne was a stacker ----

"The Duke" lived just 'down the road a piece' from Tulving and purchased gold on a regular basis from them.  I know the article I read years ago said that, but there was no mention of silver at all.  Check it out.

Swifty

silvercity's picture

I am one of the 49r's

I am a new member.  I am one of the ones that made the mistake of buying at the top of the market.  I also live in Panama where premiums are very high.  Premiums were 12 to 15% at the time of my purchase.  Metals trading here is very thin.  I also use BV and made a silver purchase in July of 2011 at around 38 bucks per oz.  I know now that I made a mistake by buying in at high prices.  Hind site is 20-20 they say?  Oh, premiums here for phyzz have even gotten higher lately, now they are asking 20% premiums for silver eagles for example.  I am standing pat on my investments with hopes of higher prices in 2013.  I don't listen to the permabulls or top callers anylonger.  I am just trying to be patient.  My intentions now are to wait until silver reaches 49 dollars per oz and then sell half of my paper BV silver and convert that to gold.  I feel now that being all in silver is not a good idea.  So, I am in waiting mode.  Luckily I can afford to wait.  Its just nerve racking to be underwater for such a long period of time.  By the way, great site.

Katie Rose's picture

I feel grateful...

I feel grateful if I can purchase $100 worth of silver every month. I'd love to allocate $500 every two weeks! Wow! That would be fabulous!

I suspect that there are some here who are in my position. I don't feel discouraged at all. I just know that every little bit helps, and I have made my decision that food and garden seeds in the future will be extremely valuable as well.

So this morning I "borrowed" a beautiful 8 month old buckling. Rather than taking the girl goats to the boy, I brought the boy to the girls. I'm hoping the fence holds up. My girls were certainly the aggressors once I got him unloaded. wink

What I've learned is that "Preparing Accordingly" takes a lot of money and a lot of time. The learning curve is straight up. I've had dairy goats for four years and this is the first year that the hard cheese has been edible. I had no idea what a time consuming, exacting process making hard cheese is. blush

I may be very, very foolish, but it sure seems as the dollar collapses that food and the knowledge of how to grow and preserve it will be every bit as valuable as a stack of PM's.

I'm hoping you all are stacking food along with PM's. I keep remembering the folks from Sandy digging through dumpsters looking for food. It is unbelievable to me that with foreknowledge of the storm, they did not even have a week's worth of food on hand!

And, Turd, Thank You! so much for all you do for us day after day!

The Watchman's picture

TRUE

Bad Luck Funny Motivational Poster

fertzeltwist's picture

Simple

My investing strategy is simple. I have never traded a single stock. I am just a dumb contractor. I simply do the opposite of what I am told, and it has served me well. Someone posted Carrol Quigley's '71 lecture a few days back, and I read it from beginning to end (as dry as it was) it was still fascinating to me. The elites go by a type of history only taught in elite universities (macro history). The parallels written about by the elite academic insiders cannot be overlooked when comparing our current situation, and as it was written decades ago, only makes it more prescient today. History always follows the same path, and the masses always repeat the same mistakes. The elite are well aware of this, and this is why they always prosper, no matter what the situation. While we look far enough into the future to our next paycheck, they look at the future in 100 year cycles, which always play out the same. As for me , I choose to do what the elite do, not what they say to do. no matter how funny the sheep in my life my find that to be.

thisismynewname's picture

I went all in...

Maxed out some low interest (life of the loan) credit cards to push the last of my FRN's in.  My average is $6.55 and I'm still paying off one of those cards.   My mistake was buying monster boxes when the premium was $1.50 (about 30%) per coin.  I could have gotten a lot more shiny buying the bars early and the eagles later.

The Watchman's picture

I Think SILVER is a Better Buy

uses-cows-funny-sign.jpg

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