adrian77
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Post by adrian77 on May 14, 2018 17:38:02 GMT
I am not sure if silver coins sell for spot value or slightly above as there is a premium for the or below as scrap value
Assuming they sell for spot then this one interests me
I have assumed troy ozs and that these coins sell at spot value
On 12th Nov 17 4088 ozs had a spot value of £12.80 per oz = £52,300 i.e. close to FS valuation of £53,000
Today there is a spot value of 12.25 at 1800hrs = £50,078 = LTV of 80%
Low spot for 2018 was 12.22 = £47,339
= LTV of 85%
Looks to me as if this borrower is using FS to invest our money on the international silver market- in fact investing in this loan is similar but probably safer than spread betting!
At least these coins can be quickly sold at a known price if need be - only snag is that if the price falls to the 5 year low of Dec 15 of £9.33 then the LTV will be over 100%.
If the price falls below 9.33 then any sensible borrower would default, keep the loan money and let FS lenders take the loss !
On the other hand if silver goes to the 2016 high of £15.26 then the LTV will fall to 64%
and the value will go to £63,400 . If this happens then any sensible borrower would default , let FS sell his loan and then receive the profit after interest!
This one looks pretty safe to me unless silver falls below about £11.25/oz (to cover interest at 30% over 6 months) ... any comments
I thank you
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lobster
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Post by lobster on May 14, 2018 19:30:21 GMT
Silver Britannias retail for at least a couple of quid above the spot Silver price - in fact right now with the spot price around £12.20 the best price I can see for Britannias is about £16.00 , which of course makes investing in this loan a lot safer.
Regarding your point about the borrower " ... using FS to invest our money on the international silver market ...." , well to my mind he/she simply wants to borrow some dosh for who-knows-what , and is using the coins as security. Presumably the borrower is also very bullish on silver, otherwise he/she would simply sell the coins to raise the cash rather than pay high rates of interest to FS. Given that FS must be charging upwards of 15% , Silver is going to have to really perform well for this loan to make financial sense to the borrower.
Not too sure about any analogies to spread betting . With a spread bet the more right you are the more you win , and the more wrong you are the more you lose. Both your potential profit and potential loss is virtually unlimited , which is why you have to treat spread betting with great caution. With this loan however, your profit is very much capped at 10% for 6 months or so, although it's fair to say that the greatest possible downside would result in the loss of your entire investment.
However, the above doesn't detract from the fact that this looks like a safe loan to me. IMO the "real LTV" is more like 60% , but much more importantly , the security is an absolute piece of cake to sell compared to property etc, and there's no way the wool can be pulled over our eyes because the price of the coins is so readily available.
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adrian77
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Post by adrian77 on May 14, 2018 19:56:30 GMT
interesting reply - thanks a lot - looks a better bet than many property loans , speedboat loans etc!
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drgonzo
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Post by drgonzo on May 14, 2018 20:06:50 GMT
Britannia's trade for a small premium as they benefit from CGT exemption.
The £16 price you are seeing will include VAT (gold is VAT exempt, silver is not), so not as big a premium as it may seem!
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lobster
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Post by lobster on May 14, 2018 20:19:09 GMT
Britannia's trade for a small premium as they benefit from CGT exemption. The £16 price you are seeing will include VAT (gold is VAT exempt, silver is not), so not as big a premium as it may seem! Actually nowadays you can buy silver without paying VAT , eg here
I should add that I have never done this myself and just assume that it's legitimate, so please do your own DD etc . A simple Google search will bring up plenty of similar sites. So, if this is indeed the case, the £16 price quoted above would not attract VAT
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michaelc
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Post by michaelc on May 14, 2018 20:36:38 GMT
For me the most relevant statistic is that the investment size is capped at £50 with the expected return over 6 months to be around half a pint of beer.
Nevertheless, I'm grateful to my fellow forumites and lobster in particular (and Adrian for starting the thread) for educating me a little about these silver coins.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on May 14, 2018 20:52:42 GMT
Yeah, like Linda Evangalista, it's not worth getting out of bed for.  |
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drgonzo
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Post by drgonzo on May 14, 2018 20:57:28 GMT
Britannia's trade for a small premium as they benefit from CGT exemption. The £16 price you are seeing will include VAT (gold is VAT exempt, silver is not), so not as big a premium as it may seem! Actually nowadays you can buy silver without paying VAT , eg here
I should add that I have never done this myself and just assume that it's legitimate, so please do your own DD etc . A simple Google search will bring up plenty of similar sites. So, if this is indeed the case, the £16 price quoted above would not attract VAT Yes, I have bought from the sister site of the one in your link (silver-to-go.com) in the past, although they are not as competitive as they used to be. thesilverforum.com is a good place to go for info if anyone is interested in purchasing physical precious metal coins / bars. "VAT Free" is a bit misleading as there is still an element of tax, but when buying from some European countries you can benefit from their lower tax rate which if I remember right is about 7% in the likes of Germany. You can also sometimes find second-hand silver from some UK sellers on the margin scheme which is another way to pay less tax on the purchase... but prices tend to get bumped up so that they are pretty close to the European prices regardless of how much of it is actually tax. Apologies for going a bit off-topic!
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