Crunching The Numbers

303
Tue, Nov 27, 2012 - 4:04pm

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

    About the Author

    Founder
    turd [at] tfmetalsreport [dot] com ()

      303 Comments

      Refresh
    ratioarbitrage
    Nov 29, 2012 - 4:16am

    All That For One Dot

    One measly dot. One single outlier 4 hourly dot. I hope it did not cost them too many extra contracts. I suspect they did manage to cover whatever they opened. Lost pride maybe.

    I have finally made sense of the last couple of days: a shallowish downsloping ellipse from 19:00 on 11/26 to 02:00 today. The gash is of no consequence other than confirming the curving uptrend on the monthly candles and wasting time.

    This may be (probably is) the first part of a consolidation down from the November high. In view of the strength (and historical analogies) of the preceding surge, its own wave 2 peak may exceed its starting point and its wave 3 may end up roughly where it started, forming an ellipse with a roughly horizontal axis. It should take a couple more days.

    By the time it is finished the right hand wall of the parabolic resistance will be in the very high 30s and I would expect it to be revisited at that level. Even if that parabola is now failing (which I actually doubt, but the steeper it gets the more likely this becomes), it will at the very least be approached just to confirm its failure.

    atarangi
    Nov 29, 2012 - 3:27am

    @ foggyroad - - -

    Most of the P.H.D.s have proven themselves wrong. Time has a way of sorting the wheat from the chaff. Theory can be useful in the right hands. Truth is, 99% of theory is the last bastion of the empirically challenged. Fofoa is full of shit, Prechter has blown it, and numerous other clever dicks are all piss and wind. Turd is at least human and that is something we all understand and appreciate. All the best mate.

    foggyroad
    Nov 29, 2012 - 2:16am

    I' ll let all youse rich

    guys argue the merits o freegold to Me it makes no sense, just a different kind of fiat.

    I want to store My wealth in My pocket a gold coin in one and a whack of silver junk coin in the other.

    I can trade my coin for your five gallon pail of beans.

    Simple straight forward no P.H.D. required!

    The concept can be grasped by anyone not just pointy-headed economists.

    Not that there anything wrong with pointy-heads..

    jmho

    atarangi
    Nov 29, 2012 - 2:07am

    Off to bed twice in one night - that's called sleepwalking

    Clive Maund at the top dog silver callers award ceremony. Clive collected the top dog award. Asked "What is your secret Clive ?" - - - "I'm finished with playing darts - - no more monkeying around with me - - just call me the Haund Dog"

    fertzeltwist
    Nov 29, 2012 - 1:30am

    My bad

    Time for bed-

    Key Economic Events Week of 5/18

    5/18 2:00 ET Goon Bostic speech
    5/19 8:30 ET Housing starts
    5/19 10:00 ET CGP and Mnuchin US Senate
    5/20 10:00 ET Goon Bullard speech
    5/20 2:00 ET April FOMC minutes
    5/21 8:30 ET Philly Fed
    5/21 9:45 ET Markit flash PMIs for May
    5/21 10:00 ET Goon Williams speech
    5/21 1:00 ET Goon Chlamydia speech
    5/21 2:30 ET Chief Goon Powell speech

    fertzeltwist
    Nov 29, 2012 - 1:30am

    My bad

    Time for bed-

    Gramp
    Nov 29, 2012 - 1:27am

    Thanks for that FertZl...

    But apparently the Duct Tape doesn't work over your mouth, 'cause u can still type.

    that's gross man.

    Copper standing strong... for now. If that continues, my guess is a short lived pullback in the PMs, followed by a 'Rip the Muppet's face off' snap back!

    fertzeltwist
    Nov 29, 2012 - 1:19am

    Nipple

    I've also discovered a pimple on my man-areola, my first EVER. Should I be concerned?

    fertzeltwist
    Nov 29, 2012 - 1:05am

    Painful

    Got this big, fn painful wart on the tip of my finger. Did the freezing thing, didn't do shit. Trying duct tape. Any suggestions? (sorry- a bit off topic)

    Subscribe or login to read all comments.

    Contribute

    Donate Shop

    Get Your Subscriber Benefits

    Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

    Key Economic Events Week of 5/18

    5/18 2:00 ET Goon Bostic speech
    5/19 8:30 ET Housing starts
    5/19 10:00 ET CGP and Mnuchin US Senate
    5/20 10:00 ET Goon Bullard speech
    5/20 2:00 ET April FOMC minutes
    5/21 8:30 ET Philly Fed
    5/21 9:45 ET Markit flash PMIs for May
    5/21 10:00 ET Goon Williams speech
    5/21 1:00 ET Goon Chlamydia speech
    5/21 2:30 ET Chief Goon Powell speech

    Key Economic Events Week of 5/11

    5/11 12:00 ET Goon Bostic speech
    5/11 12:30 ET Goon Evans speech
    5/12 8:30 ET CPI
    5/12 9:00 ET Goon Kashnkari speech
    5/12 10:00 ET Goon Quarles speech
    5/12 10:00 ET Goon Harker speech
    5/12 5:00 ET Goon Mester speech
    5/13 8:30 ET PPI
    5/13 9:00 ET Chief Goon Powell speech
    5/14 8:30 ET Initial jobless claims and import prices
    5/14 1:00 ET Another Goon Kashnkari speech
    5/14 6:00 ET Goon Kaplan speech
    5/15 8:30 ET Retail Sales and Empire State index
    5/15 9:15 ET Cap Ute and Ind Prod
    5/15 10:00 ET Business Inventories

    Key Economic Events Week of 5/4

    5/4 10:00 ET Factory Orders
    5/5 8:30 ET US Trade Deficit
    5/5 9:45 ET Markit Service PMI
    5/5 10:00 ET ISM Sevrice PMI
    5/6 8:15 ET ADP jobs report
    5/7 8:30 ET Productivity
    5/8 8:30 ET BLSBS
    5/8 10:00 ET Wholesale Inventories

    Key Economic Events Week of 4/27

    4/28 8:30 ET Advance trade in goods
    4/28 9:00 ET Case-Shiller home prices
    4/29 8:30 ET Q1 GDP first guess
    4/29 2:00 ET FOMC Fedlines
    4/29 2:30 ET CGP presser
    4/30 8:30 ET Pers Inc and Cons Spend
    4/30 9:45 ET Chicago PMI
    5/1 9:45 ET Markit Manu PMI
    5/1 10:00 ET ISM Manu PMI

    Key Economic Events Week of 4/20

    4/20 8:30 ET Chicago Fed
    4/21 10:00 ET Existing home sales
    4/23 8:30 ET Weekly jobless claims
    4/23 9:45 ET Markit flash PMIs
    4/24 8:30 ET Durable Goods

    Key Economic Events Week of 4/6

    4/8 2:00 ET March FOMC minutes
    4/9 8:30 ET Producer Price Index
    4/10 8:30 ET Consumer Price Index

    Key Economic Events Week of 3/30

    3/31 9:45 ET Chicago PMI
    4/1 8:15 ET ADP Employment
    4/1 9:45 ET Markit manu PMI
    4/1 10:00 ET ISM manu PMI
    4/2 10:00 ET Factory Orders
    4/3 8:30 ET BLSBS
    4/3 9:45 ET Market service PMI
    4/3 10:00 ET ISM service PMI

    Key Economic Events Week of 3/23

    3/24 9:45 ET Markit flash PMIs
    3/25 8:30 ET Durable Goods
    3/26 8:30 ET Weekly jobless claims
    3/27 8:30 ET Personal Inc and Spending

    Key Economic Events Week of 3/9

    (as if these actually matter)
    3/11 8:30 ET CPI
    3/12 8:30 ET weekly jobless claims
    3/12 8:30 ET PPI
    3/13 8:30 ET Import Price Index

    Key Economic Events Week of 3/2

    3/2 9:45 ET Markit Manu PMI
    3/2 10:00 ET ISM Manu PMI
    3/2 10:00 ET Construction Spending
    3/4 8:15 ET ADP employment
    3/4 9:45 ET Markit Service PMI
    3/4 10:00 ET ISM Services PMI
    3/5 8:30 ET Productivity & Unit Labor Costs
    3/5 10:00 ET Factory Orders
    3/6 8:30 ET BLSBS
    3/6 10:00 ET Wholesale Inventories

    randomness