Silver, Part 2

I wrote about investing in silver a few weeks ago. At the time I purchased a few silver coins, not much, but a good sampling of US, Canadian, and Austrian coins. A total of ten coins for a little over $20 each, with the hope that if silver goes up in value I could get all of my money back and then some by selling them. I took pictures of them for the blog, and took measures to keep them from tarnishing that I hope work.

There are other coins as well though. JM Bullion, where I bought my coins, doesn’t have a huge selection, sticking mostly to true bullion coins as well as “rounds” which are made by private mints and generally cost less for the same amount of metal. Another company, APMEX, has a lot more selection, but they are typically a little higher than JMB, plus APMEX charges for shipping on orders less than $5000 . . . Until this week, when they decided to give away free shipping. This seemed like a pretty good opportunity, but a lot of the fancier coins that APMEX sells are priced too far over the market price of silver to make me think they are a decent investment. For instance, Australia makes a silver coin with a kookaburra on one side (Queen of England on the other) and every year since they first started making them, they use a different design for the kookaburra (the queen gets revised every now and then as she ages). They also limit production. The result is you pay more for a kookaburra, but it also goes up in value over time even if silver stays the same price. A lot of silver collectors really like the Kookaburra, nicknaming them “Kooks,” which is probably appropriate for people who horde silver. The Kookaburra coin was so successful that Australia made a Koala coin (kangaroos are on their gold coin while their platinum coin features a platypus). Well, koalas are pretty cute. The United Kingdom mints a coin that features Britannia, a deity that represents Britain, sort of equivalent to lady Liberty appearing on US coins. The Britannia design changes every year as well (sort of, they are saying now that the bullion coin won’t change, but the proof coin will), and the coins tend to be pricey (Chinese coins are the most expensive, featuring panda bears).

Silver Kookaburra

Australia Silver Kookaburra

Maybe I was looking on eBay for Kookaburra or Koala coins and I came across Armenian silver coins. They have Noah’s Ark on them because Mt. Ararat, where the Ark landed, is in Armenia. I thought about trying to buy some Armenian coins on eBay, but the prices generally run a little higher there since the sellers are paying fees to both eBay and PayPal (APMEX and JM Bullion require the use of personal checks or you can pay a surcharge to use a credit card). I thought it would be neat to get an Armenian coin since we have a family connection, and since APMEX had free shipping maybe I could get some Britannia’s and Kookaburras while I was at it. I put together an order, but it was getting too expensive with Kookaburras and Britannias at $4-5 over the market price of silver for each coin. The Armenia coins were a little more reasonable and I found a sale on 2012 Mexican coins called Libertads that some people like. I still wanted some Kooks, so I wound up buying 8 coins of three types: Noah’s Ark, Kookaburra, and Libertad.

Armenian Noah's Ark

Armenian Noah’s Ark

After placing that order, I still kept an eye on eBay and one seller called Modern Coin Mart that has tons of auctions every day. eBay has customers competing against each other, so prices tend to be a little higher, but every now and then someone manages to get a deal. I put in a few bids for Kookaburras and then Koalas, but I was easily beat. Friday was the last day to get free shipping at APMEX and it looked like I could order from them cheaper than I could trying to win an auction. So I went ahead and ordered a couple of Koalas from APMEX, but it turns out you have to order at least $50 to get free shipping so I threw in another Koala and then got a Kook to balance them out. Meanwhile I had a bid in for five Koalas on eBay that I was winning at the moment but would probably get outbid by the closing that night.

Silver Koala

Australia Silver Koala

Australia has another silver coin series that marks the animals of the lunar New Year (the Chinese zodiac). They have been minting these coins long enough that they have made it through all 12 different animals and are now into their second round. And the values on these go up just like the Kookaburras. I found a Year of the Horse coin on eBay from MCM at $24, which seemed cheap, so I put in a bid of $25 and change to see what would happen, thinking it would go immediately to $26, but instead I was winning. Then I realized it was a British coin, not the Australian one. The British are just starting their Lunar Year series this year. Maybe because it was Friday night and most people have better things to do, but I ended up winning that coin. It’s not a horrible price, but I should have stayed away. That price is $6 (31%) over the market price of silver. Then I watched as my other open bid on the 5 Koalas stayed in first place. Another 5 Koalas earlier in the evening was already a few dollars above my maximum bid, so I figured I wouldn’t win and at worst the losers from that auction should be able to outbid me. That earlier auction ended up at $125, but nobody came to my rescue and I “won” five Koalas (at 20% above the market price of silver; less expensive Philharmonics run about 11% over). So now I had bought 8 coins from APMEX earlier in the week, plus 4 more this morning, plus 1 on eBay and then 5 more on eBay. Combined with the 10 I already had, that’s 24 coins so I need to just stop now. Well, except I would still like to get a Britannia (I got 5 a couple of days later). I don’t think I will ever want to spend the money on a platinum platypus for $1,500. And I will have 8 Koalas, which isn’t that great because they are not a limited edition like the Kookaburras, even though the Kooks are limited to 500,000 coins per year and most years fewer than 500,000 Koalas are minted.

United Kingdom Silver Britannia

United Kingdom Silver Britannia

It has been pretty interesting as I research these coins and I have been updating some of the articles on Wikipedia, too. So anything that keeps your mind working is worth something. I feel like the real cost to me is just whatever the premium is on each coin above the market price of silver. The money for the silver itself is just an investment, though it may not be a good one. I should have some nice pictures of coins in the next few weeks.

2 thoughts on “Silver, Part 2

  1. I got my first two batches of eBay coins today. The Koala coins come in their own plastic capsule that is supposed to be airtight to prevent tarnishing, fingerprints, and scratching. The Britannias didn’t come in capsules, but I found out that you can buy them, so I put in an order for a bunch last week. They are called Air-Tites and they have all different sizes to fit different coins. But the overall diameter of the capsules are grouped so you can fit different sized coins in a tube that accommodates the uniform capsule diameter. The diameter of the Koala capsules is about the same as the Air-Tite H size and fit in the red-capped H tubes with most of my other coins (the fit is a little too tight for the clear capped 26-coin tubes).

    The Koalas and Britannias are very shiny with mirror finishes and even with the queen on one side, are very pretty coins. I also got the British year of the horse coin which looks better in person than the cartoon looking horse in the pictures. The obverse (the side with the queen) is nearly the same on the Britannia and horse, but the Britannia has tiny little castle like dentites around the edge of the coin face whereas the edge around the queen on the lunar coin is smooth. For a while they got their dentite and anti-dentite dies mixed up at the mint and produced 38,000 horse coins with dentites and 17,000 Britannias without. Collectors love mint errors because they are less common than other coins, so these are worth a lot more money than the regular version. They were nicknamed the “mule Britannia.”

    The Kookaburras and Libertads shipped today, so I should have those at the end of the week.

  2. Pingback: Silver, Part 4 | Ted's Blog

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