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

    pourty
    Nov 27, 2012 - 8:01pm

    OK, I'll weigh in here

    My overall DCA for silver is $37.85... yeah, I was "that guy" a few times. My purchases were sporadic, and I bought lots at the "wrong" times. Oh well.

    My 2010 Average buy price was 29.24

    My 2011 Average buy price was $40.03

    My 2012 Average buy price (so far) is $35.04

    Do I care? Not really. Yes, I got a bit excited in August of 2011 and bought when I should have held, oh well. I'm older and wiser now.

    I also have bought a few "numismatics" that were way overpriced. Of course, I knew that, I just wanted a few "pretty" coins, so I don't consider those as much an "investment" as the rest. I could recalculate to remove those, but frankly, that's probably only 10 or 15 ounces out of the lot, so it won't affect the averages much.

    I never expected to sell soon anyway, I will hold until until all those folks who tell me I'm crazy start asking me how to buy the stuff, then I'll start considering when to exit this investment and change it all to gold and/or land. By my calcuations, given the current premiums, I'm down about 5% overall on silver. But my thesis from early this year still holds true: Any PM's I've held longer than 2 years are above water, significantly so. It's only the stuff from mid-2011 (and a few ounces I bought in September this year) which are under water.

    Funny, every ounce of gold I've ever bought is showing a profit (and has been almost all year). Of course, I don't buy that as often, even though I have more fiat sunk into gold than silver at this point.

    I've also converted all my 401K assets into the sprott funds over time. They're about the same averages as my physical.

    Turd's got me thinking, though, maybe I should go on the bi-weekly or monthly purchase plan... Looks like a winner overall, and less excitement.

    But I'm a true believer in the end of the great keynesian experiment, so I'm holding fast, and have no ill will toward folks like Turd, just the opposite, in fact.

    Keep Stackin'!

    ETA: I guess this means I'm one of the "Dumb as a box of rocks" guys!!! LOL!

    atarangi
    Nov 27, 2012 - 8:06pm

    Relative wealth - - -

    It is true that gold and silver may not increase the wealth of its holders. Those who don't hold it could end up with nothing.

    Bollocks
    Nov 27, 2012 - 8:14pm

    What What What ????

    old tradesman to katie rose:

    "soft and hard recipe for cheese coming in private message tomorrow"

    Secret cheese recipes being exchanged at Turdville????

    We can't have that going on!

    Cheese can be a killer. Everyone needs to be included in case there's some dodgy shenanigans going on behind the scenes.

    I hope all Turdites agree. This is serious.





    muscrat
    Nov 27, 2012 - 8:26pm

    Suppose you decided to start

    Suppose you decided to start a long term savings plan denominated in silver. And suppose you started at the worst time, bought $3,000 of 90% silver at each year’s high, and over paid. 33 years later (but not including this year)...

    mackBollocks
    Nov 27, 2012 - 8:35pm

    do not cut that cheese

    could be aromatic!

    Nov 27, 2012 - 8:38pm

    Check this chart

    Courtesy of some guy named Nick Laird and lifted from the Harvey Organ Report.

    Pretty much says it all!

    Somebody ought to send this off to Thunderlips and get his "expert" opinion.

    punchbowl
    Nov 27, 2012 - 8:53pm

    turd

    He can't talk about that as it is part of the ongoing (ie. into perpetuity) investigation.

    You don't want to jeopardize that, do you?

    And besides he only works for that toothless little regulatory agency that is part of the federal government that works for the banks. Who are those small position traders?

    Interesting graph nonetheless.

    my mothers keeperfertzeltwist
    Nov 27, 2012 - 8:57pm

    john wayne

    to hear tell, he was in fact a stacker, and helped tulving get started...

    rtabit
    Nov 27, 2012 - 9:04pm

    Nick Laird

    Runs some chart website with some pretty cool charts, has free 3 week membership or something like that. Also has really interesting free charts that are hard to find, my computer broke a few weeks ago so I don't have links (except intraday one below that was in one of my emails) until I load data from old broken computer to new computer, which I really hope arrives tomorrow, going through really bad charting withdraws.

    https://www.sharelynx.com/

    https://www.sharelynx.com/chartstemp/IntradayGCManipulation.php

    ¤
    Nov 27, 2012 - 9:06pm

    John Wayne - 'Silver' Screen

    Rancher Tim Clark borrows money from Bob Russell, who then rustles Clark's cattle so he will be unable to repay the money. Thus Russell is able to cheat Clark out of his ranch.

    Clark becomes a prospector for silver and ultimately comes to settle accounts with Russell and crooked deputy Bendix.

    Video unavailable

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