Crunching The Numbers

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.

    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.


    About the Author

    turd [at] tfmetalsreport [dot] com ()


    Nov 28, 2012 - 6:33am

    preservation of value VS investing

    gold/silver held n held n held preserves value.

    gold/silver turned into something else[rare earth miners at a dime on the pre-crash dollar?.......real estate?] at its finally-sheeple-driven HIGH in this Kress/Kondratieff long wave cycle 'low' an investment and will grow your asset value.

    you think i want to die with this stuff?.................what for?..........

    i want to die having spent every investment increased dime.........mainly on travel[but thats just me....i don't know whats important to YOU]

    and that's what i continue to tell my old mother to do.

    its HER money[gold, silver,....earned asset, whatever you want to call it]

    when she's gone we can sell her possessions n get a little fun money from them........and if she needs help paying basic bills towards the end...... we will BUY her house from her AHEAD of time................private reverse mortgage.[i am hoping my rich bro n sis will do that for ME if i need it]

    i expect nothing from someone who changed my diapers n put me thru college n did more loads of laundry than i ever will.

    i don't want to die owing her any MORE than i already do.

    inherited money the least appreciated asset and most poorly spent.........on a par with lotto winnings[a tax for the mathmatically challenged]............there's non of your sweat on it............its even worse than trading profits or drug[decades ago for me] profits..............least there's some end-user sweat there.

    Nov 28, 2012 - 6:55am

    The waking of the sheep...

    ....Is way more than a little ways off in the future. Just read where the MOST SEARCHED NEWS STORY on Bing this year is about.....The I-Phone. News, really? Really

    Nov 28, 2012 - 7:03am

    stocks dead, bonds deader

    but i guess johnny dow knows more than these guys, afterall they only handle 2tril$

    and while i give the dow an even chance to bounce of '07 high in last ditch koolaid run,

    "Now Bill Gross and Mohamed El-Erian, the co-CEOs at the $2 trillion Pimco money managers, are citing the same biblical warning to jar investors awake and prepare for the coming lean years of slow, low growth and austerity. Except in Pimco’s new warning, the future just got much, much darker for investors — no recovery until 2022."

    Nov 28, 2012 - 7:04am

    How many times does a Fool say goodbye?

    And move it from the end of a thread to a new one.

    "I decided I would stop posting here once it stopped being fun. We have now reached that point." TF

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

    I say NOT - you can't even be trusted to stop posting when you promised. But I will persist in getting in the last word, as I promised. The Fool and Victor have an agenda: don't buy silver and let the banks hold the gold. I say buy both - paper is paper and gold and silver are hard assets, that have frequently been used directly as money.

    Sorry, but these guys are agents of disinformation and I will not let it stand.

    Btw, it was never fun in the first place, arguing with a Fool.


    Nov 28, 2012 - 7:32am

    Monkeys at work

    I hate contract expirations.. always volitile.

    People are talking about when to get out of the metals here? During hyperinflation.

    Get out to what? Do you sell for paper? doubt it.

    Nov 28, 2012 - 7:38am

    Pros and Cons of silver over gold?

    We all agree that silver has more potential to rise faster than gold but are they equal?

    I know that they are both considered real money but will they both be viewed the same when the SHTF and the crooks

    decide they need to make a real money backed system after they expertly have destroyed this one?

    I think we should have both metals for different reasons.

    thoughts on that?

    Big Buffalo
    Nov 28, 2012 - 7:45am


    Looks like a good a spot as any to buy a little. How much further down could it go today? (Famous last words)

    ratioarbitrage sixdollarsilver
    Nov 28, 2012 - 7:53am

    @sixdollarsilver: parabola inflection point

    Thanks sixdollarsilver. I just realised that there is more than one possible parabola.

    1) My original thought: I was ignoring the April 11 peak as an outlier and extrapolating from the remaining three points to give the current ceiling at not much above 35.

    2) As an alternative, the April 11 peak could be included (which I consider to be good practice when possible) which gives an inflection point in the white space between February and September this year. In my experience these "silent inflection points" do often occur.

    The interesting part about possibility 2 is that since the left-hand half of the parabola is virtually straight, the curve to the October peak is then violent. The later this occurred, the higher the current maximum would be. Such a parabola would appear meaningful only in retrospect - once two points in the right-hand half are well defined.

    Looking at past analogies, I actually think 2) is more likely. Allowing for wishful thinking (since a decent spike in the next 12 months would be useful to me), I will just keep both in mind.

    PS edit: the current 1 month parabola arrives at $39 at around the same time as the ellipse peak. So we have the 1 month parabola and the 4 month ellipse apparently in agreement, and an interpretation of the 1-year parabola that permits the same outcome but does not require it. This, together with the August 10 analogy which is still persisting, adds up to a persuasive case for me.

    If this does play out, I would expect an effort to restrain the spring top to at or just below the previous highs, thus capping the move for 2013. This would force a 3-year peak, which would probably go disorderly as in 2011. Anything causing the failure of such restraint and allowing a 2013 peak well above $50 would become binary: immediate mania or severe collapse eliminating the possibility of above-$100 for a couple of years. So the boys have a choice: slippage of control in the short term - with a risk of a mania - and another chance at a fully profitable recovery, or complete control in the short term, a loss-making but safe exit from the short in Summer 2013 and a disorderly high in 2014 from which they could perhaps even benefit. It is a risk/reward call. That is assuming they are free players.

    Nov 28, 2012 - 7:55am

    Come on 20's

    I have my cart all loaded up over at Provident. How low will you go? I love silver sales!! Every year I buy those Christmas rounds for my childrens' stockings. Since it seems the Santa design is the same as last year, I guess I will go with the Snowman coins this year. Now, what to get for Daddy's stocking? Blythe, please go heavy with your filthy, criminal manipulation today, Daddy likes a heavy stocking!!!!

    Nov 28, 2012 - 8:03am


    Silver lovers - Professor Fekete, a titan among Goldbugs, has written the below. I give it the strongest possible recommendation, truly enlightening...if already posted and widely read, apologies.

    Xty, I would love to see the TwighlightZoners chime in on this puppy.....somehow I think you and I know they wont be taking professor Fekete on!!

    An excerpt:

    No satisfactory explanation has been offered in the literature for the fact that the closing of

    the Mints to the free coinage of silver was the starting point of an unprecedented

    destruction of wealth world-wide, due to the relentless fall in the price of silver during the

    following 55 years. To make matters worse, it was destruction of liquid wealth. Not only did

    silver lose more than 80 percent of its purchasing power; it also ceased to be a monetary

    metal. As a consequence, silver became so much harder to sell. Worse still, the steadily

    falling price caused panic-mining of silver. Miners were anxious to sell before the price fell

    even more. As a result, almost all silver mines were mined out prematurely. Thereafter all

    silver output came as a byproduct of mining other minerals. These effects compounded and

    made the destruction of monetary values, that is deflation by another name, so much worse.

    The collapse of the silver price was a major historical event affecting the entire globe and all

    trading nations of the world. It caused the impoverishment of the indigent classes in India,

    China, and elsewhere in Asia. But it also wiped out the credit-worthiness of the middle

    classes in Europe that lost their landed wealth as a consequence. Monetary historians failed

    to treat this aspect of the demise of the silver standard with the seriousness it deserved.

    They also misdiagnosed the deflationary bias that the monetary system showed in the first

    half of the 20th century. The gold standard that arose on the ashes of the old monetary order

    in the wake of the destruction of the silver standard was less than satisfactory. Silver

    demonetization has made all hoarding demand fall upon gold. This imparted a deflationary

    bias to the international gold standard that enemies of sound money were able to exploit

    with all consummate skill. (My emphasis added)

    Freegolders........anyone......? Hellooooooo

    Big Buffalo
    Nov 28, 2012 - 8:03am

    News affecting metals today

    10:00AM US:New Home Sales Actual: K Forecast: 0.387KPrev: 389K 10:00AM US:New Home Sales Actual: 307K Forecast: KPrev: 313K 10:30AM US:EIA Petroleum Status Report Actual: M barrels Forecast: M barrelsPrev: -1.5M barrels 2:00PM US:Beige Book 6:50PM JP:Retail Sales

    Actual: % Forecast: -0.6%Prev: 0.4

    Nov 28, 2012 - 8:16am

    What an interesting history!

    Thanks, Tabberto!

    Nov 28, 2012 - 8:23am


    Flying monkeys are here

    Nov 28, 2012 - 8:23am


    Please step aside, nothing to see here!!!

    Nov 28, 2012 - 8:24am

    $25 in one minute at Comex Open


    Paging Thunderlips.

    Re Events affecting metals.

    8:20 Comex Open

    10:00 London Close

    1:30 Comex Close

    Nov 28, 2012 - 8:24am


    Was looking for a takedown to $1735 and $33.75. So far they seem to be holding.

    (NB: This post may need to be revised anytime )

    EDIT: Arse! Dammit! For crying out loud!

    Nov 28, 2012 - 8:24am



    Nov 28, 2012 - 8:24am

    how do you like them apples?

    what a joke.. monkeys are playing hard ball.

    8000 contracts smash

    11,000 contracts less than 5 min.s

    Hey Bart put your stinking glasses on!!!

    Nov 28, 2012 - 8:25am

    Absolutely Blatant


    Nov 28, 2012 - 8:26am


    in 5-8 years.

    and buy beer, a new outboard motor, gasoline enough to drive me anywhere i want to go.........maybe a Sprinter longwheelbase standing head room van to convert to a mobile living platform..........more beer.............alot of food.............maybe a little electric car to buzz around the homestead in................more on on-open-water-houses for a month at a time..............more beer............

    Nov 28, 2012 - 8:26am

    Ah, the smell of Raid the morning. Blood pressure is unchanged because I have become desensitized to Raid.

    Nov 28, 2012 - 8:27am

    Buying opportunity

    Nothing like a drop in price when I am ready to add to the stack to make my day! Bring in on.

    Nov 28, 2012 - 8:28am


    The dollar is spiking. Any offers on why?

    Nov 28, 2012 - 8:28am

    You just knew this week would be loaded

    CRIMEX OE. GDP. Bernanke speech. The high open interests and short positions...

    Next week we have BLSBS so the monkeys will have fun for a while.

    Nov 28, 2012 - 8:31am

    12,000 contracts in 5 mins

    I just thought I would sell a couple today along with the rest of the traders..

    Duhh.. Hey Nadler, get a life.

    Does this make you ANGRY OR WHAT?

    Nov 28, 2012 - 8:32am
    Nov 28, 2012 - 8:35am


    "8:28 AM Flash crash in gold? The yellow metal dives $20 in the space of a few trades" - Seeking Alpha. Get real:- "Engineered flash crash".
    Double Bogey
    Nov 28, 2012 - 8:37am


    picked up some uslv at 36.30 pre-market. I'm feeling bounce time.

    Nov 28, 2012 - 8:37am

    If the price continues to drop you can blame me.

    Just ordered some more to bury in the backyard.

    Nov 28, 2012 - 8:39am

    New bank of england governor

    Very good article from MoneyWeek..

    You've no doubt heard.

    On Monday, chancellor George Osborne named Mark Carney, governor of the Bank Of Canada, to be Mervyn King's successor as governor of the Bank of England (BoE).

    You might feel that with a package worth £624,000 a year - more than twice as much as Sir Mervyn, and a 50% rise on Carney's current deal - he's a little overpaid. You might feel it's rather hypocritical to appoint a non-national to a position like this, as well as detrimental to national confidence. You might feel that an appointment as significant as this should be subject to some kind of electoral process.

    You might, like me, be a little baffled as to why Osborne is making this appointment when the BoE is supposed to be independent. (If you can enlighten me, please do. I'm sure there's good reason).

    For complete article go here


    Donate Shop

    Get Your Subscriber Benefits

    Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

    Key Economic Events Week of 5/20

    5/20 7:00 pm ET CGP speech
    5/21 10:00 ET Existing Home Sales
    5/22 2:00 ET FOMC minutes
    5/23 9:45 ET Markit PMIs
    5/24 8:30 ET Durable Goods

    Key Economic Events Week of 5/13

    TWELVE Goon speeches through the week
    5/14 8:30 ET Import Price Index
    5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
    5/15 9:15 ET Cap. Ute. and Ind. Prod.
    5/15 10:00 ET Business Inventories
    5/16 10:00 ET Housing Starts and Philly Fed
    5/17 10:00 ET Consumer Sentiment

    Key Economic Events Week of 5/6

    5/9 8:30 ET US Trade Deficit
    5/9 8:30 ET Producer Price Index (PPI)
    5/9 10:00 ET Wholesale Inventories
    5/10 8:30 ET Consumer Price Index (CPI)

    Recent Comments

    by Winder, 13 min 24 sec ago
    by Outback, 42 min 42 sec ago
    by Outback, 52 min 24 sec ago
    by Outback, 1 hour 1 min ago