(Only on physical silver!)
Silver Stock Report
by Jason Hommel, August 19th, 2008
As of my calculations, Spot Silver stands at $12.72.
As of this early morning, August 19th, Kitco.com is advertising 100 oz. silver bars for sale at $1382.
https://online.kitco.com/bullion/completelist.html
At this moment, just after midnight, ebay.com has 4 100 oz. silver bars being bid on by the public, in auctions that will close within 48 hours, at the following prices:
$1666
$1650
$1630
$1776
Average ebay price: $1680.
(Search “100 ounce silver” at ebay, or click here:
http://coins.search.ebay.com/100-ounce-silver_Bullion_W0QQcatrefZC12QQdfspZ32QQfromZR40QQftrtZ1QQftrvZ1QQsabfmtsZ1QQsacatZ39482QQsaobfmtsZinsif
(I excluded one ebay bar at $1650, for lack of bidding history.)
(I excluded two other ebay bars at $1744, because it’s a “buy it now” price, with no bid history.)
The spread between Kitco’s price, and Ebay’s free market price, is $298 per bar. That’s a 21.5% spread, or premium.
If you bought from kitco, and sold via ebay, 4 bars a day for a year, you could make $298 x 4 x 365 = $435,810. Or much more if you sold more, or less if the premium drops, of course.
This business would not require much capital to start. If you wanted to make sure you had at least 1 week’s worth of inventory, that would only be 4 bars x 7 days x $1384 = $38,752.
You could make ten times your money, with very little to start, if there is no silver shortage.
There’s only one big problem. I’m sure you can figure out what it is. Good luck finding the silver.
On the other hand, if you are patient enough to wait 2.5 months for silver, you might need 2.5 months worth of inventory to start, which would be much more expensive, as follows: 10 weeks x 7 days/week x 4 bars/day x $1382/bar = $386,960. Also, you’d have to be willing to risk that entire amount to resupply.
At coinnet.com, there are numerous people looking to buy 100 oz. silver bars at $1 over spot. There are no sellers.
I would urge my readers to strongly consider selling your 100 oz. bars at ebay, and taking the money to buy 90% silver bags, which are much cheaper, and are selling closer to the spot price of silver. You’ll end up with more silver. I’m considering doing that myself, but I’m lazy. I like to buy or sell 100-200 bars at a time, not 1-2/day.
On the other hand, the entire silverstockreport.com barely brings in $400,000/year in subscriptions, so this is something for me to seriously consider.
I checked it out; ebay has a diverse group of buyers, who bid consistently on silver items, like 30 times a month. Many of my readers tell me that they feel that ebay is their only source, since the coin shops in their area are always out of silver, or are worthless, and they trust ebay’s anti-fraud provisions. If you, or I, did this, we would provide a valuable service.
Before I enter the ebay fray, I might wait another month. I’ll let my readers go first, if you like.
This is an opportunity that is available only to those people who actually have silver. This opportunity is not available to those people who have paper silver, nor is it available for people who write for companies who claim to have silver.
A man recently argued with me, saying there are “arbitration” opportunities in paper silver. I think this might be a much better “arbitration opportunity” in physical silver.
Next item, but somewhat related, regarding the risks of paper silver.
I must warn people about MONEX, one of the nation’s largest precious metals dealers. They also hold people’s silver for them, like Kitco, but in leveraged accounts.
Unfortunately, they are being sued by the IRS.
U.S. sues Monex for $378 million in back taxes
June 24th, 2008
http://ocbiz.freedomblogging.com/2008/06/24/us-sues-monex-for-378-million-in-back-taxes/
I’m not going to predict what may happen, if MONEX loses the lawsuit. I’m sure you are smart enough to consider the risk.
Speaking of the Feds, remember the Liberty Dollar Raid?
Liberty Dollar No Longer at Liberty
The Raid on the Headquarters of the Liberty Dollar Nov 15, 2007
http://www.associatedcontent.com/article/450012/liberty_dollar_no_longer_at_liberty.html
What use is a paper promise if the place gets raided? The risk of them not having the silver in the first place is only one of many risks and lost opportunities.
Sincerely,
Jason Hommel