Gyroscopic Investing

My gold dealer looks to have a steal on fractional coins. As long as spot gold stays around $1700 or higher, he's willing to let go fractional coins at spot price. I was looking at the 1/10 oz. coins because these would have technically the highest premium over spot normally (according to APMEX, to buy a coin from them is 16% over spot and to sell to them is 7.9% over spot).

My idea is if I were to purchase these at spot, there's a good chance of selling at a premium higher than spot what I initially bought it at if I could sell it shortly. I can't say that I could profit from this in the short term because I would need to buy a ton of the small coins to actually make the shipping and insurance values a moot point for selling online but for buy and hold I would think this is a better plan than the 1 oz. coins as of now (because of the built in higher premium over spot for smaller coins to sell them normally).

Thoughts?

Sounds good.

The fractional coins would also be useful in a SHTF scenario when you would need them to barter for ammo, MREs and leather chaps.

MediumTex wrote:The fractional coins would also be useful in a SHTF scenario when you would need them to barter for ammo, MREs and leather chaps.

You know, throughout history 1/10th of an ounce of gold has always bought a quality pair of leather chaps.

WildAboutHarry wrote:

MediumTex wrote:The fractional coins would also be useful in a SHTF scenario when you would need them to barter for ammo, MREs and leather chaps.

You know, throughout history 1/10th of an ounce of gold has always bought a quality pair of leather chaps.

Thank you.

That pretty much says it all.

It doesn't matter if you're in Abilene, Kansas in 1874 or San Francisco in 1974--one tenth of an ounce of gold will get you a stylish and functional pair of leather chaps. 

I don't see that changing any time soon.

MediumTex wrote:

WildAboutHarry wrote:

MediumTex wrote:The fractional coins would also be useful in a SHTF scenario when you would need them to barter for ammo, MREs and leather chaps.

You know, throughout history 1/10th of an ounce of gold has always bought a quality pair of leather chaps.

Thank you.

That pretty much says it all.

It doesn't matter if you're in Abilene, Kansas in 1874 or San Francisco in 1974--one tenth of an ounce of gold will get you a stylish and functional pair of leather chaps.  

I don't see that changing any time soon.

1/10 an ounce is currently $170...

Behold the cost of real full grain leather chaps and not the costume chaps. Nothing but the best for my portfolio:

http://www.equestriancollections.com/pr ... de=WV00527

I think we may have stumbled on to something here.  I wonder if Roman toga chaps, medieval chain-mail chaps, etc. were also pegged at 1/10th ounce of gold?

I see a future history/economics Ph.D. dissertation along the lines of:  Fractional Gold and Garments: Fashion Becomes Inflation

Chaps be damned, but I swear I was thinking about fractional coins today. It's because of the runup in gold's price, of course.
I was thinking what a shame it is that the markup is more for fractional coins, but 1NV35T0R, (I'd feel more comfortable calling you Frank or something), it sounds like you have a sweet deal there.

dualstow wrote: Chaps be damned, but I swear I was thinking about fractional coins today. It's because of the runup in gold's price, of course.
I was thinking what a shame it is that the markup is more for fractional coins, but 1NV35T0R, (I'd feel more comfortable calling you Frank or something), it sounds like you have a sweet deal there.

My actual name is Greg dualstow (in case you're rather call me that than 1NV35T0R). I just thought it sounded like a cool name but Greg suffices as well. But I'm thinking I'll be able to purchase smaller amounts at a time this way as I get income in (as long as my dealer keeps giving me this deal).

I also was thinking about the fact as MediumTex said that if we do have SHTF that for trading items, you'd have trouble finding something that was actually an ounce worth of gold to you. Otherwise you'd just be walking around with a 24k Gold coin and a cheese grater to shave off change for the other barterer.

1NV35T0R wrote:

dualstow wrote: Chaps be damned, but I swear I was thinking about fractional coins today. It's because of the runup in gold's price, of course.
I was thinking what a shame it is that the markup is more for fractional coins, but 1NV35T0R, (I'd feel more comfortable calling you Frank or something), it sounds like you have a sweet deal there.

My actual name is Greg dualstow (in case you're rather call me that than 1NV35T0R). I just thought it sounded like a cool name but Greg suffices as well. But I'm thinking I'll be able to purchase smaller amounts at a time this way as I get income in (as long as my dealer keeps giving me this deal).

I also was thinking about the fact as MediumTex said that if we do have SHTF that for trading items, you'd have trouble finding something that was actually an ounce worth of gold to you. Otherwise you'd just be walking around with a 24k Gold coin and a cheese grater to shave off change for the other barterer.

If this is a concern, then instead of buying fractional coins buy junk gold chain jewelry. You can clip off the links necessary for barter to gold merchants in a crisis.

craigr wrote:
If this is a concern, then instead of buying fractional coins buy junk gold chain jewelry. You can clip off the links necessary for barter to gold merchants in a crisis.

True, but then that would involve me paying for a higher premium over spot due not just for coining as before but for craftsmanship and not sure I wanna pay that yet . Also I've thought at some point I'm going to purchase either a $100 or $250 face value bag of silver as a VP option and as Mad Max scenario.

The other nice thing would be with the silver coins perhaps I could have higher resolution to fine tune just how nice of a pair of chaps I want.

1NV35T0R wrote: My actual name is Greg dualstow (in case you're rather call me that than 1NV35T0R). I just thought it sounded like a cool name but Greg suffices as well. But I'm thinking I'll be able to purchase smaller amounts at a time this way as I get income in (as long as my dealer keeps giving me this deal).

I also was thinking about the fact as MediumTex said that if we do have SHTF that for trading items, you'd have trouble finding something that was actually an ounce worth of gold to you. Otherwise you'd just be walking around with a 24k Gold coin and a cheese grater to shave off change for the other barterer.

It's funny- on bogleheads, I've always thought too many people posted their first name in addition to their handle. It was too many names to deal with, and I stuck with handles. But, Investor is generic enough that I'll probably call you Greg, Greg.

Although I never think about the SHTF scenarios -- I have posted once upon a time that I assume I'll be shot and my gold will be taken from me -- a special on fractional coins presents an opportunity to buy where I didn't see one before.

dualstow wrote:

1NV35T0R wrote: My actual name is Greg dualstow (in case you're rather call me that than 1NV35T0R). I just thought it sounded like a cool name but Greg suffices as well. But I'm thinking I'll be able to purchase smaller amounts at a time this way as I get income in (as long as my dealer keeps giving me this deal).

I also was thinking about the fact as MediumTex said that if we do have SHTF that for trading items, you'd have trouble finding something that was actually an ounce worth of gold to you. Otherwise you'd just be walking around with a 24k Gold coin and a cheese grater to shave off change for the other barterer.

It's funny- on bogleheads, I've always thought too many people posted their first name in addition to their handle. It was too many names to deal with, and I stuck with handles. But, Investor is generic enough that I'll probably call you Greg, Greg.

Although I never think about the SHTF scenarios -- I have posted once upon a time that I assume I'll be shot and my gold will be taken from me -- a special on fractional coins presents an opportunity to buy where I didn't see one before.

It's perfectly fine if you want to call me Greg. I'm used to it. I just think handles are cool, like Goose or Maverick or Iceman.

And for the SHTF, I'm thinking I want a PP of SHTF. Perhaps 25% in gold and silver, 25% in guns and ammo, 25% in corned beef hash, and 25% in chaps. Makes a good VP play.

dualstow:

For your enjoyment, I now put my actual name in parentheses so that it's easier to write my name in the future. I've also realized 1NV35T0R takes an incredibly long time to spell and Greg is just much easier for everyone.

1NV35T0R (Greg) wrote: And for the SHTF, I'm thinking I want a PP of SHTF. Perhaps 25% in gold and silver, 25% in guns and ammo, 25% in corned beef hash, and 25% in chaps. Makes a good VP play.

I'm thinking my SHTF PP would be more like 25% land (woodlot, farmland, and livestock), 25% fortified house, 25% guns and ammo, and 25% gold and silver.

Pointedstick wrote:

1NV35T0R (Greg) wrote: And for the SHTF, I'm thinking I want a PP of SHTF. Perhaps 25% in gold and silver, 25% in guns and ammo, 25% in corned beef hash, and 25% in chaps. Makes a good VP play.

I'm thinking my SHTF PP would be more like 25% land (woodlot, farmland, and livestock), 25% fortified house, 25% guns and ammo, and 25% gold and silver.

The nice thing about livestock is that whether their market goes up or down, the female cows can at least produce dividend milk or a dividend calf for their dividend reinvestment plan.

Greg wrote:The nice thing about livestock is that whether their market goes up or down, the female cows can at least produce dividend milk or a dividend calf for their dividend reinvestment plan.

Not without the bull

Mmm, fractional cows.
I like the corned beef hash idea too, Greg. I might have to start stocking up.

Pointedstick wrote:

1NV35T0R (Greg) wrote: And for the SHTF, I'm thinking I want a PP of SHTF. Perhaps 25% in gold and silver, 25% in guns and ammo, 25% in corned beef hash, and 25% in chaps. Makes a good VP play.

I'm thinking my SHTF PP would be more like 25% land (woodlot, farmland, and livestock), 25% fortified house, 25% guns and ammo, and 25% gold and silver.

My SHTF PP would be:

25% gold and silver coins.

25% firearms of various calibers with plenty of ammo.

25% food and water, with plenty of MREs and freeze dried food.

25% strong relationships with people in my home and community, starting with a spouse who can shoot, clean game, build a fire, field dress a wound and who finds zombie shredding to be an aphrodisiac.

MediumTex wrote:
My SHTF PP would be:

25% gold and silver coins.

25% firearms of various calibers with plenty of ammo.

25% food and water, with plenty of MREs and freeze dried food.

25% strong relationships with people in my home and community, starting with a spouse who can shoot, clean game, build a fire, field dress a wound and who finds zombie shredding to be an aphrodisiac.

How do you quantify 25% strong relationships? Does that mean 75% go into weak relationships or is that part of your variable portfolio?

1NV35T0R (Greg) wrote:

MediumTex wrote:
My SHTF PP would be:

25% gold and silver coins.

25% firearms of various calibers with plenty of ammo.

25% food and water, with plenty of MREs and freeze dried food.

25% strong relationships with people in my home and community, starting with a spouse who can shoot, clean game, build a fire, field dress a wound and who finds zombie shredding to be an aphrodisiac.

How do you quantify 25% strong relationships? Does that mean 75% go into weak relationships or is that part of your variable portfolio?

It's difficult.

Rebalancing is also a challenge.

MediumTex wrote:a spouse who can shoot, clean game, build a fire, field dress a wound and who finds zombie shredding to be an aphrodisiac.

And looks good wearing leather chaps.

Funny, my list is almost similar. Good relationships with people in the community and various parts of the country in case you had to leave are invaluable. No man is an island and a good network of friends in a good community can weather a lot.

I was in Christchurch, NZ recently and they had a major earthquake in 2011 that basically destroyed most of their downtown area. Buildings fell and ones left standing were structurally unsound. Hundreds died. This is the third largest city in New Zealand, but still small by American standards. However it was a major disaster and is estimated it will take 20 years to rebuild everything damaged.

Yet after the incident there was no rioting and only limited isolated incidents of looting. In fact, the stores in the "red zone" (no go area due to dangerous collapse potentials) are still there with all their inventory on the shelves. Even dishes, etc. still on restaurant tables. There's something to be said to living in a place where you can trust your neighbors enough to not go immediately predatory if things go bad regardless of what other preparations you may have made.

craigr, I'd be interested in hearing why you think that happened, or rather, didn't happen. Small city size? Strong family ties due to people not leaving the community? High income? Culture or racial homogeneity?

MangoMan wrote:

1NV35T0R (Greg) wrote: And for the SHTF, I'm thinking I want a PP of SHTF. Perhaps 25% in gold and silver, 25% in guns and ammo, 25% in corned beef hash, and 25% in chaps. Makes a good VP play.

In all seriousness, I used to be a proponent of gun control. But the more time I spend on this forum, the more I want to own firearms for protection in case of SHTF.

That's the spirit! Once you've got one, you might discover that shooting it is a lot of fun. .22s are cheap as heck and very easy to learn with, and .223/5.56 rifles can be incredibly fun to shoot. Where are you located? I'm sure anyone on this forum who's nearby would be happy to take you shooting sometime.

Pointedstick wrote:craigr, I'd be interested in hearing why you think that happened, or rather, didn't happen. Small city size? Strong family ties due to people not leaving the community? High income? Culture or racial homogeneity?

NZ culture and probably the homogeneity as well. Everyone knows each other it seems down there. They do not have higher average income than the US and most things you buy there are more expensive than in the US. But they also don't have the screwed up culture we have that glorifies a lot of non-sense like gang bangers, acting like a whore can make you famous, and throwing chairs at people on daytime talk shows is normal behavior. Honestly, I was a bit embarrassed by the American TV they see there and what they think goes on here.

I know some people from Christchurch very well and they had some small time looting but nothing serious. Police/military were sent out quickly as well. But mainly I just don't think the NZ culture in general is into that kind of behavior of looting, random violence, etc. You're also talking about a small enough population that when you travel in the South Island you're almost certainly going to run into someone you know if you go long enough. It's kind of strange, but it's like a really big small town down there. If you are a jerk the reputation gets around...

There was a good documentary about the earthquake you can watch. It was pretty bad, but they are cleaning up quickly. Most of the major damaged buildings have already been pulled down and construction is well underway:

http://www.youtube.com/watch?v=mIlxoV6uG3Q

I think the lesson I take away is that a major disaster doesn't need to become a zombie apocalypse. But it depends a lot on the culture of the place where you are living. There are definitely places/cities in the US that I wouldn't want to live in during a major crisis and other places that I'd feel pretty good about. I guess it's something each person needs to decide, but if you don't trust your neighbors and have problems with crime when things are fine, just imagine what will happen when there's no electricity/water/food for a while. If that troubles you, then it's probably not where you should be if that is a concern.

I've been to the South Island (where Christchurch is) and I have to say it is the friendliest island of white people I've ever been. That's not to disparage Australia (never been) or England (mixed experience), but NZ is special. If I didn't think my wife would be bored out of her skull, I'd retire there.