Topic: 2016 Personal Market Reflection: Panda Halves

[jc888888888]

I see things from a completely different perspective.   I'm a firm believer in free markets - let them go where they want to go, let the money go where it wants to go.  There's nothing to address, there's nothing to rein in.  Affluent money is going to buy what it wants to buy, whether it be West Vancouver real estate or Chinese gold pandas.   I wouldn't address the runaway valuation in Chinese pandas any sooner than I'd hope the people on the McLaren forums would take up cause to help me afford a shiny new 570S.  And I understand your perspective, KOT - I myself can't afford the rare key dates anymore.  But like most other markets, the Chinese panda market is stratified - there are people with money, and then there are people with MONEY.   

Forget about billionaires...there are currently 1.3 million millionaires in China.    If even 1 out of every 300 decides they want a panda set, I can forget ever again affording even the semi-key dates I'm missing in my collection.    Not only is the panda market not shrinking, or at risk of shrinking, it has the potential to explode exponentially.   Sure, exploding prices may curb the enthusiasm of the fringe collectors, or the guys on the silverstackers forums, or the collectors of US coins who buy the occasional 1/10 panda gold just for kicks.   But the market isn't about them, in my opinion.  It doesn't matter if they walk away - most of them can't compete with the immense quantities of Chinese capital looking for places to go anyway.  I've always believed, since the very beginning of my foray into Panda collecting 6 years ago, that the gold pandas would eventually migrate back home.  So while I understand where you're coming from, and I know I'll likely never own a 1995 1/2oz, I also believe that the market was never going to be about me anyway, or anyone even remotely close to my level of wealth.   

This is just my personal perspective, all just opinion, which along with 89 cents may get you a cup of coffee at the QuickieMart.

KOT ,YOUR HOPE  is that the master set craze dries up essentially .......pull backs are inevitable..the trick to those are when they happen you cant stand there like a deer in the headlights :)  no one can pick tops or bottoms..... what I do see though folks complain when MCC is priced low :) and they complain when it is high ....... I am not pointing fingers ( i have done a little bit of it myself)    I have trained myself not to do that   buy the next mover   1/10 and 1/20 and 1/4 still cheap in my opinion   

[KeepOnTrying!]

I see things from a completely different perspective.   I'm a firm believer in free markets - let them go where they want to go, let the money go where it wants to go.  There's nothing to address, there's nothing to rein in.  Affluent money is going to buy what it wants to buy, whether it be West Vancouver real estate or Chinese gold pandas.   I wouldn't address the runaway valuation in Chinese pandas any sooner than I'd hope the people on the McLaren forums would take up cause to help me afford a shiny new 570S.  And I understand your perspective, KOT - I myself can't afford the rare key dates anymore.  But like most other markets, the Chinese panda market is stratified - there are people with money, and then there are people with MONEY.    

Forget about billionaires...there are currently 1.3 million millionaires in China.    If even 1 out of every 300 decides they want a panda set, I can forget ever again affording even the semi-key dates I'm missing in my collection.    Not only is the panda market not shrinking, or at risk of shrinking, it has the potential to explode exponentially.   Sure, exploding prices may curb the enthusiasm of the fringe collectors, or the guys on the silverstackers forums, or the collectors of US coins who buy the occasional 1/10 panda gold just for kicks.   But the market isn't about them, in my opinion.  It doesn't matter if they walk away - most of them can't compete with the immense quantities of Chinese capital looking for places to go anyway.  I've always believed, since the very beginning of my foray into Panda collecting 6 years ago, that the gold pandas would eventually migrate back home.  So while I understand where you're coming from, and I know I'll likely never own a 1995 1/2oz, I also believe that the market was never going to be about me anyway, or anyone even remotely close to my level of wealth.  

This is just my personal perspective, all just opinion, which along with 89 cents may get you a cup of coffee at the QuickieMart.

Perhaps I need to clarify one issue. My views on matters such as the ones being discussed here have nothing to do with personal financial status (best kept private), current holdings and ability to pay prices being asked for some of the panda coins (again private). Even the super rich still make value based decisions before their purchases, be it something from Sotheby’s or another private jet, for example. In fact such discussions should rise above personal considerations because long term results only support conclusions reached following robust and exhaustive examination of currently available population derived data.

Especially as there is a lot that is not revealed or easily discernible about MCC in general one cannot accept certain market trends at face value. Mintage survival of specific coins is difficult to determine with any degree of specificity. This should temper justification for any coin availability-associated price trend that is obtainable.

I am absolutely not suggesting price controls. This is laughable at the least. Market forces control prices. However, valuation of commodities (by the market) is based on a consideration of both positive and negative determinants. Coin rarity, for example, is one of the critical determinants operational in the current market price upsurge. So if a specific coin is indeed more common than is evident at present, what will the market do when that information becomes categorical, in 1, 2, 10 or any number of years’ time?

I have no doubt that panda coin numismatic premiums will continue to increase but only the passage of time will validate current pricing trends. Meanwhile opinions and queries cannot/should not be verboten!

[Wafdawg]

I see things from a completely different perspective.   I'm a firm believer in free markets - let them go where they want to go, let the money go where it wants to go.  There's nothing to address, there's nothing to rein in.  Affluent money is going to buy what it wants to buy, whether it be West Vancouver real estate or Chinese gold pandas.   I wouldn't address the runaway valuation in Chinese pandas any sooner than I'd hope the people on the McLaren forums would take up cause to help me afford a shiny new 570S.  And I understand your perspective, KOT - I myself can't afford the rare key dates anymore.  But like most other markets, the Chinese panda market is stratified - there are people with money, and then there are people with MONEY.   

Forget about billionaires...there are currently 1.3 million millionaires in China.    If even 1 out of every 300 decides they want a panda set, I can forget ever again affording even the semi-key dates I'm missing in my collection.    Not only is the panda market not shrinking, or at risk of shrinking, it has the potential to explode exponentially.   Sure, exploding prices may curb the enthusiasm of the fringe collectors, or the guys on the silverstackers forums, or the collectors of US coins who buy the occasional 1/10 panda gold just for kicks.   But the market isn't about them, in my opinion.  It doesn't matter if they walk away - most of them can't compete with the immense quantities of Chinese capital looking for places to go anyway.  I've always believed, since the very beginning of my foray into Panda collecting 6 years ago, that the gold pandas would eventually migrate back home.  So while I understand where you're coming from, and I know I'll likely never own a 1995 1/2oz, I also believe that the market was never going to be about me anyway, or anyone even remotely close to my level of wealth.   

This is just my personal perspective, all just opinion, which along with 89 cents may get you a cup of coffee at the QuickieMart.

Honus, I see the market exactly like you. I do not see collector enthusiasm waning anytime soon. Current year mintages are proof of that.  And it is hard to envision the 'golden era' pandas significantly pulling back because there are way too many people that would pounce on the buying opportunity.  Price is the equilibrium between supply and demand.  Supply is at best static or at worst declining while demand is exponentially rising.  Again just look at the mintage numbers.  This is a bull run in panda enthusiasm. 

[Honus]

KOT, there's more I could add to the discussion - especially in regards to how much the concept of "value" enters into what is happening with the pricing of rare dates (I believe value has absolutely zero to do with it, pricing trends have nothing to do with it, NGC data has nothing to do with it and if you're searching for any justification based on traditional value-based metrics or any rational extrapolation of past pricing trends you won't find it) - but I don't think I can do so without sounding like I'm hyping the market or trying to pump up values and influence sentiment.  I don't want to create that impression because that's not where my thinking originates, so I'm going to stand on my last post and leave it at that.  I'm sure others will have much more to add.  It's a great discussion for sure.

[jc888888888]

I would say  with a long time horizon     ...historical figures, cultural figures, lunars , panda medals  , IN GOLD ... lots of promise ..................

[poconopenn]

I see things from a completely different perspective.   I'm a firm believer in free markets - let them go where they want to go, let the money go where it wants to go.  There's nothing to address, there's nothing to rein in.  Affluent money is going to buy what it wants to buy, whether it be West Vancouver real estate or Chinese gold pandas.   I wouldn't address the runaway valuation in Chinese pandas any sooner than I'd hope the people on the McLaren forums would take up cause to help me afford a shiny new 570S.  And I understand your perspective, KOT - I myself can't afford the rare key dates anymore.  But like most other markets, the Chinese panda market is stratified - there are people with money, and then there are people with MONEY.   

Forget about billionaires...there are currently 1.3 million millionaires in China.    If even 1 out of every 300 decides they want a panda set, I can forget ever again affording even the semi-key dates I'm missing in my collection.    Not only is the panda market not shrinking, or at risk of shrinking, it has the potential to explode exponentially.   Sure, exploding prices may curb the enthusiasm of the fringe collectors, or the guys on the silverstackers forums, or the collectors of US coins who buy the occasional 1/10 panda gold just for kicks.   But the market isn't about them, in my opinion.  It doesn't matter if they walk away - most of them can't compete with the immense quantities of Chinese capital looking for places to go anyway.  I've always believed, since the very beginning of my foray into Panda collecting 6 years ago, that the gold pandas would eventually migrate back home.  So while I understand where you're coming from, and I know I'll likely never own a 1995 1/2oz, I also believe that the market was never going to be about me anyway, or anyone even remotely close to my level of wealth.   

This is just my personal perspective, all just opinion, which along with 89 cents may get you a cup of coffee at the QuickieMart.

+1, excellent comment.
 
There are many Chinese millionaires who do not consider MCC as collectible or investment vehicle yet. They have been buying 6-7 figures painting and porcelain as well as 5-6 figures Imperial and Republic coin and low mintage 5 oz.-1 kg gold MCC.
 
Perhaps, this forum has spent too much time on panda. There are other sections of MCC. In general, they have appreciated much more than panda during last 5 years.

For examples,
 
All 8 gm lunar gold coins have a valuation more than $1,000 (1984 rat is about $12,500) now.

111 circulated proof (cu-zn and cu-ni) coins have been issued by China Mint since 1984. Four of them have a valuation of 5-figures. About 185 BU gold pandas (major varieties included) have been issued since 1982, but only 3 (1995 ½ oz. LD/SD and 1998 ½ oz. LD) have a valuation of 5-figures.

Many gold commemorative coins with size less than 1 oz. have a valuation more than 5-figures.

IMO, the appreciation of gold panda during last 12 months is just a price catch-up to the other sections of MCC.

Just for information

Nanjing Exchange total fund index has reached low of 2016 at 2360 last week. The high of this year was 3960 on March 31.  The all time peak was reached on May 2015 at 5540.

[SANDAC]

IMO, the appreciation of gold panda during last 12 months is just a price catch-up to the other sections of MCC.

[Wafdawg]

I have to reference Panda Halves NGC Population Numbers again:

United States 24,276,343
China: 1,656,016
South Africa: 392,859
Australia: 383,239
Canada: 324,331
Great Britain: 192,231
Russia: 128,641
Mexico: 89,021
Poland: 67,718
Germany: 59,431

Now imagine when the NGC population for Chinese coins is 10 million or 20 million or matches the US current 24 million and you own several gold pandas, particularly the key dates and 1/2 oz that are the most desirable.  So instead of owning the most desirable coins out of 2 million, you own the most desirable coins out of 20 million. What will they be worth then?  I'd have to think multiples over today's prices. 

Can you make more in bullion?  Maybe.  I do expect gold prices to be substantially higher in the future so if one would rather hold more bullion you can potentially see the same profit potential as a whole. A lot of ways to play it.

[pandamonium]

A explosion in MCC prices is inevitable.     Gold first but do not give up on silver.     Silver is way out of whack on the price manipulation scale.    A strong USD meant strong rare US coin prices.    Now it is China's turn for their Yuan and rare coins/medals........There is enough MCC supply for us collectors but not for upcoming demand.........just a matter of time now....

[Wafdawg]

A explosion in MCC prices is inevitable.     Gold first but do not give up on silver.     Silver is way out of whack on the price manipulation scale.    A strong USD meant strong rare US coin prices.    Now it is China's turn for their Yuan and rare coins/medals........There is enough MCC supply for us collectors but not for upcoming demand.........just a matter of time now....

I think silver has great potential but it is overstated when compared to gold.

https://youtu.be/cJMfKocAtbk

[KeepOnTrying!]

KOT ,YOUR HOPE  is that the master set craze dries up essentially .......pull backs are inevitable..the trick to those are when they happen you cant stand there like a deer in the headlights :)  no one can pick tops or bottoms..... what I do see though folks complain when MCC is priced low :) and they complain when it is high ....... I am not pointing fingers ( i have done a little bit of it myself)    I have trained myself not to do that   buy the next mover   1/10 and 1/20 and 1/4 still cheap in my opinion    

If you need to know I am currently and primarily a panda coin COLLECTOR and building a complete set of gold fractionals. As such I am not interested in just the key or semi-key coins; I aim to collect them all. In fact sets of the lower three fractionals you referenced above are virtually complete and include varieties and proof coins in addition to the regular date set. I recently uploaded most of the 1/10oz coins to the NGC registry:

http://coins.www.collectors-society.com/registry/coins/SetListing.aspx?PeopleSetID=193725

http://coins.www.collectors-society.com/registry/coins/SetListing.aspx?PeopleSetID=193724

My acquisition cost for the 1/2oz and 1oz coins that I do not already have in my collection is not necessarily the issue; more important is how stable the price trend is. Comments in this thread are noted. Minor pullbacks are not an issue.

I have to reference Panda Halves NGC Population Numbers again:

United States 24,276,343
China: 1,656,016
South Africa: 392,859
Australia: 383,239
Canada: 324,331
Great Britain: 192,231
Russia: 128,641
Mexico: 89,021
Poland: 67,718
Germany: 59,431

Now imagine when the NGC population for Chinese coins is 10 million or 20 million or matches the US current 24 million and you own several gold pandas, particularly the key dates and 1/2 oz that are the most desirable.  So instead of owning the most desirable coins out of 2 million, you own the most desirable coins out of 20 million. What will they be worth then?  I'd have to think multiples over today's prices.  

Can you make more in bullion?  Maybe.  I do expect gold prices to be substantially higher in the future so if one would rather hold more bullion you can potentially see the same profit potential as a whole. A lot of ways to play it.

Great insight about the possible (future) magnitude of the pyramid base of Chinese panda coin collectors (a la fwang). It is a much easily understood predictive statistic. Thanks.

[jc888888888]

If you need to know I am currently and primarily a panda coin COLLECTOR and building a complete set of gold fractionals. As such I am not interested in just the key or semi-key coins; I aim to collect them all. In fact sets of the lower three fractionals you referenced above are virtually complete and include varieties and proof coins in addition to the regular date set. I recently uploaded most of the 1/10oz coins to the NGC registry:

http://coins.www.collectors-society.com/registry/coins/SetListing.aspx?PeopleSetID=193725

http://coins.www.collectors-society.com/registry/coins/SetListing.aspx?PeopleSetID=193724

My acquisition cost for the 1/2oz and 1oz coins that I do not already have in my collection is not necessarily the issue; more important is how stable the price trend is. Comments in this thread are noted. Minor pullbacks are not an issue.


Great insight about the possible (future) magnitude of the pyramid base of Chinese panda coin collectors (a la fwang). It is a much easily understood predictive statistic. Thanks.

Excellent collection wow !!!  I am a big believer :)

[Honus]

That is a fantastic collection KOT!   I'm sure that took a lot of time and effort, so kudos to you.    I don't know that I have had the focus to do what you've done, to get organized and account for every year, every denomination, every variety, so I have admiration that you took the time and energy to accomplish that.    My own personal strategy was far more haphazard!

Also, I want to emphasize that I wasn't trying to categorize you when I wrote that there was market stratification.    The point I really wanted to make wasn't only about the level of affluence affecting the market, but the mindset that often accompanies those levels of affluence.   Whereas I myself am a value hound - and there may be a few other value hounds on this board with me - I'm quite certain that for the Asian buyers that I suspect have entered the market the notions of relative valuation and linear trending no longer apply.   It's surprising to see 1/2oz gold coins selling for $30K, until you see Vancouver homes selling for 35% above ask via all-cash offers, homes that a year ago may have fetched $1.5 million but today sell for $4.5 million (and in many cases are then subsequently not even occupied and sit unkempt).  There is so much money looking to sidestep Asian capital controls, being plowed into assets simply for the purpose of escaping the Chinese financial system, and one can't help but wonder if and when that money will have some effect on coin markets, if it hasn't already.         

[jc888888888]

That is a fantastic collection KOT!   I'm sure that took a lot of time and effort, so kudos to you.    I don't know that I have had the focus to do what you've done, to get organized and account for every year, every denomination, every variety, so I have admiration that you took the time and energy to accomplish that.    My own personal strategy was far more haphazard!


+++++1111111111
Also, I want to emphasize that I wasn't trying to categorize you when I wrote that there was market stratification.    The point I really wanted to make wasn't only about the level of affluence affecting the market, but the mindset that often accompanies those levels of affluence.   Whereas I myself am a value hound - and there may be a few other value hounds on this board with me - I'm quite certain that for the Asian buyers that I suspect have entered the market the notions of relative valuation and linear trending no longer apply.   It's surprising to see 1/2oz gold coins selling for $30K, until you see Vancouver homes selling for 35% above ask via all-cash offers, homes that a year ago may have fetched $1.5 million but today sell for $4.5 million (and in many cases are then subsequently not even occupied and sit unkempt).  There is so much money looking to sidestep Asian capital controls, being plowed into assets simply for the purpose of escaping the Chinese financial system, and one can't help but wonder if and when that money will have some effect on coin markets, if it hasn't already.