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

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    turd [at] tfmetalsreport [dot] com ()
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      303 Comments

    brad_pitts_betterlooking_brother · Nov 28, 2012 - 8:39am

    re: $25 in one minute at Comex Open

    don't worry.

    i'm sure bart chilton and his compadres are "looking at it."

    Groaner · Nov 28, 2012 - 8:41am

    I think we need to reconsider the COT reports

    Also the amount of contracts. So far the huge increases still tell us that a RAID is imminent 

    Groaner · Nov 28, 2012 - 8:43am

    All you loyal subjects of this government

    You get what you pay for. dont ya just love it?

    tmosley · Nov 28, 2012 - 8:43am

    Just what I needed.  I need

    Just what I needed. I need to make my monthly buy before the end of the week.

    ag1969 · Nov 28, 2012 - 8:44am
    indosil · Nov 28, 2012 - 8:46am

    Indian Blues

    As soon as Silver Raid began......Indian MCX logged off..so the Indians can't trade right now....pt to ponder???

    philipat · Nov 28, 2012 - 8:47am

    @Mantis

    Because Goldman decreed it so??

    boatman · Nov 28, 2012 - 8:48am

    AT 8:30 the 2nd estimate on Q3 GDP

    was announced at 2.8% versas 2.0% Last estimate.........WHOOOOPPPPEEE! WE'RE SAVED!...........tho the concensus was for 2.8% anyway[a blatant lie, BTW]...............

    it was all that was needed for the algos, HFTs, monkeys n all the usual cast of criminals to attack.

    MrGuboci · Nov 28, 2012 - 8:50am

    This is getting OLD

    Who in their right mind would continue to play this bullshit ?? Guys , I am getting tired of waiting and hoping for a change . IT WONT COME UNTIL THERE IS NO PHYSICAL LEFT ON THE PLANET .

    ag1969 · Nov 28, 2012 - 8:50am

    Hmmm

    I have had my cart all loaded up at Provident since this morning when silver was down .30. I just refreshed and the price in my cart did not change to reflect the raid. I guess I need to start over to get the sale pricing?

    ag1969 · Nov 28, 2012 - 8:50am

    Hmmm

    I have had my cart all loaded up at Provident since this morning when silver was down .30. I just refreshed and the price in my cart did not change to reflect the raid. I guess I need to start over to get the sale pricing?

    billwilson · Nov 28, 2012 - 8:54am

    Who is surprised?

    Miners weak the last few days ... especially yesterday. The best predictor of a forthcoming raid.

    If miners open lower then rally then we will have the PMs follow. These kind of waterfall selloffs on nothing are typically market signals to buy.

    Bollocks · Nov 28, 2012 - 8:54am

    ag1969

    Prices usually get locked when they get added to the cart. At least that's what happens where I buy (not Provident).

    Rui · Nov 28, 2012 - 8:58am

    Obama just interviewed Jamie Dimon yesterday

    Obama: "So you want to be the next Sec. of Treasury, huh? Well, prove to me you are up to the job."

    Dimon: "Piece of cake. Watch gold & silver price tomorrow morning."

    ivars · Nov 28, 2012 - 9:01am

    Was I wrong. Did not take the

    Was I wrong. Did not take the wishful thinking factor in account. A bit too early.

    On other hand , some selloff was needed to move forward.

    Should not move down too much.

    Mantis · Nov 28, 2012 - 9:05am

    Free gold

    I want the last word!

    Heed my words, or not. Free gold is a scam. Whats that fool got against silver anyway? I'll tell you, silver is the bankers achilles heel, why else is it suppressed even more so than gold.

    :-p

    Mantis · Nov 28, 2012 - 9:07am

    philipat

    Goldman Sachs rules the world!

    Goldman Sachs rules the world - Trader Interview BBC
    · Nov 28, 2012 - 9:11am

    FUBM

    Coming soon to a chart near you.

    recaptureamerica · Nov 28, 2012 - 9:15am

    Leaked info?? The drop

    Leaked info?? The drop started before the official release of info..as usual..

    treefrog TF · Nov 28, 2012 - 9:17am

    fubm

    bring it on!

    cavalier · Nov 28, 2012 - 9:21am

    How soon for a FUBM?

    my options are bleeding me to death!

    Do I have to wait until next week after first notice day?

    GoldMania3000 · Nov 28, 2012 - 9:21am

    According to time and sales

    According to time and sales this break was caused on 7700 contracts being sold. This may have been liquidations ahead of December first notice day – all longs need to be out by tomorrow close to avoid delivery. As longs exited no strong bids were present resulting in a opportunity to run stops. 

    Groaner · Nov 28, 2012 - 9:22am

    Leaked??

    You mean the phony numbers leaked? Does not matter, they had to shake the trees hard to keep people from taking delivery.

    Same old, same old. 

    Definition of Kleptocracy.. blatant stealing in view for all to see..

    https://www.zerohedge.com/news/2012-11-28/if-820-am-then-sell-sell-sell-...

    Silver Alert · Nov 28, 2012 - 9:24am

    cavalier - It's Turd's fault

    Or so Robot trader's Mom says: https://www.zerohedge.com/news/2012-11-28/if-820-am-then-sell-sell-sell-gold#comment-3017025

    The only way you're getting fucked is on options, which raises the question, why would you throw money at a game you know is fixed? Because some guy named 'Turd' told you it's a good entry point?

    (p.s. - Don't shoot the messenger!devil)

    robov · Nov 28, 2012 - 9:27am

    What is the reason...

    Other than massive commercial shorts that need to be covered and December 1st day notice tomorrow? What I want to understand is that if they are already massively short how do they get these waterfall declines without adding further shorts to cause the waterfall and run the stops.

    Byzantium · Nov 28, 2012 - 9:27am

    @Groaner

    jugular.

    brokerk22 · Nov 28, 2012 - 9:29am

    No major moves

    Whatever happened to "no major moves up or down." Looks like that went all to hell today.

    Groaner · Nov 28, 2012 - 9:29am

    The dam broke.. waterfall action kiddies

    going for the juggler..

    another 3000 contracts in gold and 1200 in silver.. in a seconds

    As you can see when you have an 18 ticks rise in the USD you get a $36 sell in gold and $1.05 in silver.. all things being equal it makes sense.

    · Nov 28, 2012 - 9:31am

    Finding a floor

    Looks like we get to see if the floor for silver has climed a bit.

    I should have known. I bought yesterday at 34.

    Groaner Byzantium · Nov 28, 2012 - 9:32am

    you will have your work cut out for you..

    iin correcting my grammer and speeeeelllinng

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