Here’s How to Reduce Risk When You Invest in Precious Metals

Platinum ScrapRecycle Precious MetalsRecycling and Refining
Written By Barry Lenson

Investing in precious gold scrap, silver scrap and platinum scrap is not gambling, for a very simple reason:

When you invest in precious metals, you are relying on experience and knowledge to reduce or even eliminate risk. When you are gambling, you can’t eliminate risk completely.

When one investor was examining a batch of thermocouple wire, for example, he was able to know what it was because he had seen the same kind of wire before. He knew how much silver was contained in the thermocouples he was looking at, and he knew what it would sell for. So he applied his experience and knowledge and made a profitable buy of silver scrap.

If you compare that process to gambling, you see there are important differences. A gambler also tries to use knowledge and skill to reduce risk. A knowledgeable bettor who is betting on horses at a track, for example, is armed with lots of data about how the horses in a race have run before, which of them run well on a wet track, and other information. A gambler who is playing roulette understands the odds of winning on different bets, such as odd vs. even, black vs. white, and so on.

So why do we say that gambling and investing in precious metal scrap are not the same thing? One very fundamental reason is that when you are gambling, you can never completely eliminate the risk of losing, no matter how smart you are or how much you know. The horse you bet on can simply stop running or lose. The two-to-one bets you are running sequentially in roulette can simply never pay you back and you can lose everything, faster than you thought possible.

Granted, when you are investing in precious metal scrap, you can sometimes make an unwise choice that will pay you very little return. But unlike gambling in a casino, you rarely run the risk of losing everything. You make wise investments, you make ill-advised investments, and you learn and become a smarter investor.

Where Can You Get the Knowledge and Experience to Earn Big Returns?

One of the problems is that it takes time to learn the knowledge you need to become a highly successful investor in precious metals. Some investors have simply seen so much scrap of different kinds – those thermocouples we mentioned above, or silver-plated silverware, or batches of silver scrap from a factory floor – that they can make a pretty good estimate of value. Other investors, especially those who are just starting out, lack the experience to reduce risk and boost profits.

One of the most effective ways to reduce that risk is to send a sample of the scrap you are thinking of buying to our precious metals consultants. We can test it for you, and issue you a report that tells you what it is worth. Are there times when that process doesn’t work? In truth, there are. There are times when you are looking at a pile of scrap and you have to decide immediately whether or not to buy it.

That’s when investing in precious metals starts to look like gambling, because you could lose the money you invest. But in our experience, that doesn’t happen often. Why? Because we are here to help our customers know what they are looking at before they invest.

The idea is to test your scrap before you buy, not afterward, if at all possible. Want to know more? Give our consultants a call today at 800-426-2344 and let’s have a zero-risk conversation about the scrap you want to buy.

Barry Lenson
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