Author Topic: Jay's new article 2/3/14  (Read 12153 times)

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Offline PandaQuest

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Jay's new article 2/3/14
« on: February 04, 2014, 07:47:44 PM »

Offline fractalfate

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Re: Jay's new article 2/3/14
« Reply #1 on: February 04, 2014, 10:59:34 PM »
Thanks for the link, PQ, but that 'article' sounds a lot like B.S. to me. At a minimum mintage of 8 million coins, the contemporary silver Chinese Panda is a bullion play. No more. No less. Paying more than is necessary for a pure bullion play is a poor use of resources. Given that logic, I suspect an alterior motive for posting such financial advice. I rhetorically wonder what that motive might be?

Offline cloudtoground

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Re: Jay's new article 2/3/14
« Reply #2 on: February 05, 2014, 12:58:05 AM »
with a mintage of 8 million coins the only people who will make money off those panda coins is the greedy Chinese government.  I think there's about a million eagle proofs so I'd buy the eagle if I had to pick.  And to tell you the truth I won't buy either.

Offline PandaQuest

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Re: Jay's new article 2/3/14
« Reply #3 on: February 05, 2014, 03:05:30 AM »
Wow tough crowd, I guess I'll play the devil advocate on this one, let's look at the gold panda market for a second. Based solely on eBay Supply, it is extremely tight and limited meaning hardly anything is coming up for auction, and whatever is up for sale as BIN is IMHO speculative and unrealistic pricing for the most part (in today's value). So the Gold panda market has basically come to a holt, which is weeding out many people that are looking to buy/invest/collect pandas.

Now here we have the silver panda, which is made with as far as I know the most affordable precious metal besides copper. Which has many uses, industrial and medical and much much more. Now you include reasons why people purchase these coin, (investments, collections, and one of the least talked about reasons gifts!.) Me personally I give away at least 5 silver pandas every year, examples: graduation, birthdays, and Christmas. And for all those that don't know there's an actual gift market of Precious metal coins/medals in China mainly around the time of Chinese New Years, and my understanding is those coins do not come back to the market.
 Now let's look at the global demographic of the silver panda buyers, the continents I would consider the most influential are Asia, North America, Europe, and Australia.
The rough combined population is  5.5 billion. You'ld be surprised how a market with strong demand can absorb even a large mintage number like the 2014 silver panda. So you see 8 million really isn't that large of a number when you put it in perspective. I remember in 2011 when the mintage number jumped from 800,000 to 3million, people were crying and complaining, why such high mintage numbers, the markets ruined and flooded! I just ran a search for the 2011 silver panda and only 54 listings came up, compared to hundred back then. Who's to say next year they won't make 15 or 20 million. 
So in the end I have to disagree with you guys, they can be a good investment as Jay shows in his charts, and the fact that silver is at a four year low makes you really think about the long term potential. Silver has broke the $45 dollar mark twice in the past who's to say it won't happen again.(someone wise once said history tends to repeat itself)

Full disclosure: I have know relations to Jay or the China mint or anyone even selling silver pandas. In fact I have only a hand full of older date silver pandas. I'm just a collector out of Phoenix Az who enjoys reading and learning about the different MCC sectors.

Offline PandaQuest

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Re: Jay's new article 2/3/14
« Reply #4 on: February 05, 2014, 03:32:26 AM »
with a mintage of 8 million coins the only people who will make money off those panda coins is the greedy Chinese government.  I think there's about a million eagle proofs so I'd buy the eagle if I had to pick.  And to tell you the truth I won't buy either.

Here's some food for thought

2011 silver panda mintage 3 million- current ebay listings 54

2011 American eagle proof mintage 950,000- current ebay listings 178

Offline PandaCollector

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Re: Jay's new article 2/3/14
« Reply #5 on: February 05, 2014, 09:52:50 AM »
One of the basics of understanding modern Chinese coins is that "mintage" means how many coins were authorized, not how many were struck and distributed.

Best wishes,
Peter Anthony
China Pricepedia
www.pandacollector.com

Offline AllSong

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Re: Jay's new article 2/3/14
« Reply #6 on: February 05, 2014, 11:45:37 AM »
One of the basics of understanding modern Chinese coins is that "mintage" means how many coins were authorized, not how many were struck and distributed.

Best wishes,
Peter Anthony
China Pricepedia
www.pandacollector.com

In the case of the 2013&2014 Pandas,the max mintages are too high for me to believe,
that the actual mintage will come near the mintages of the previous years´. Is that a reasonable way to analyse the numbers or is there no connection?

Talking of mintages: any words on the street, rumors etc. on the actual mintage on any of the commemorative Pandas?
"Boards don´t hit back!"

Offline SANDAC

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Re: Jay's new article 2/3/14
« Reply #7 on: February 05, 2014, 11:46:28 AM »

...Me personally I give away at least 5 silver pandas every year, examples: graduation, birthdays, and Christmas. And for all those that don't know there's an actual gift market of Precious metal coins/medals in China mainly around the time of Chinese New Years, and my understanding is those coins do not come back to the market.

 ...
I think gift giving is an important aspect in Chinese coin buying.  There is a tradition of giving money or close equivalent during the Chinese New Year.  Relatives and friends can be quite lavish with birthday and wedding gifts especially with the current one-child society.  Most of my gold panda coins of the 1980's and 1990's were received as birthday/wedding gifts or extra leftover when purchasing gifts for relatives.  I bought 3 sheets of yr2000 silver panda expressively as gift and gave away two sheets of them until they were too valuable to give away.

Yes, it is very bad form to sell gifts.  They should be displayed prominently when the gift givers come visiting.

Offline cloudtoground

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Re: Jay's new article 2/3/14
« Reply #8 on: February 05, 2014, 06:51:33 PM »
In the case of the 2013&2014 Pandas,the max mintages are too high for me to believe,
that the actual mintage will come near the mintages of the previous years´. Is that a reasonable way to analyse the numbers or is there no connection?

Talking of mintages: any words on the street, rumors etc. on the actual mintage on any of the commemorative Pandas?

Common sense tell you to stay away from common Panda mintage numbers of 3-8 million.  The American eagle with unlimited mintage is the same way.  At least the eagle has had some reverse proof sets over the past couple years with a one month timeline to purchase so those mintages were in the 230K area. Some of the less common coins that have 60k or less mintage seem to have less because you just don't see them as much as you should.  Some Chinese dealers have told me that it's possible that 'rare' coins are being hoarded by banks or the government so they seem rarer than they really are.   Who knows for sure, but mintages is the number you have to go with.

Offline Mirkkanen

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Re: Jay's new article 2/3/14
« Reply #9 on: February 05, 2014, 07:19:22 PM »
At a minimum mintage of 8 million coins, the contemporary silver Chinese Panda is a bullion play. No more. No less. Paying more than is necessary for a pure bullion play is a poor use of resources.

All you have to do is take a look at the prices that 2010, 2011, 2012, 2013, and 2014 pandas are being sold for on the bay in order to decide whether they are a better bullion play than eagles.  Yes, newer pandas are a bullion play, but whether they outperform other bullion plays is the question. Here is the answer:

2010: avg. $42 for the last 5 non-slabbed coins sold (>2x melt)
2011: avg. $41.75 for the last 5 non-slabbed coins sold (>2x melt)
2012: avg. $40 for the last 6 non-slabbed coins sold (2x melt)
2013: avg. $31.6 for the last 6 non-slabbed coins sold (1.5x melt)


Yes, silver pandas, even with their recent higher mintages, clearly outperform eagles as a bullion play. I can sell eagles all day long now for $23 shipped, but good luck trying to find a silver panda for less than $30.
 

Offline Birdman

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Re: Jay's new article 2/3/14
« Reply #10 on: February 05, 2014, 08:03:48 PM »
With the caveat that I don't follow silver pandas or American Eagles that much, my sense is that the current premium of silver pandas is influenced by history and psychology.  For close to 20 years, American Eagles have been produced in the millions each year.  People have long thought of them as a bullion play.  It has only been the last several years, however, since the silver China pandas have been produced in large numbers.  People still have in their heads that silver pandas are uncommon (and they see the high prices of many older silver pandas to reinforce that thought).  I think the same applies to MS70s.  People are used to seeing few MS70s of older silver pandas, and when they do see them, they sell for a significant premium.  it is with those biases, I believe, that people are willing to bid up 2014 MS70 silver pandas to a premium. 

It is interesting to note that as of today at NGC, 18658 out of 32826 = 57% of 2014 silver pandas have earned an MS70.  And at PCGS 28,398 out of 41576 = 68 % of 2014 silver pandas have earned an MS70 (I guess PCGS was sent the higher quality coins).  I think people still have in their heads that there are only a handful of MS70s for a given year, not tens of thousands of MS70s.  And many more 2014 coins are sitting at the grading companies waiting to be graded as MS70 and add to those population numbers.

I'm not against silver, as I just bought a few 10 ounce bars last week for a small premium over spot price, but the premium over spot price and the large number of 2014 silver pandas rolling out of the mint keep me from making a purchase.  Scroll through the number of "China Silver Panda 2014" that have sold on ebay over the past few months. 

http://www.ebay.com/sch/Coins-Paper-Money-/11116/i.html?_from=R40&_nkw=china+silver+panda+2014&_in_kw=1&_ex_kw=&_sacat=11116&LH_Sold=1&_udlo=&_udhi=&_samilow=&_samihi=&_sadis=200&_fpos=&_fsct=&LH_SALE_CURRENCY=0&_sop=12&_dmd=1&_ipg=200&LH_Complete=1

There were 6668 sold listings and many of those were for 5 coin lots.

Perhaps the truth of the matter is that I don't have any money left in my bank account to buy the 2014 Silver pandas since I've been actively scraping together money to buy low population older gold pandas during the slowdown. We all have our addictions. :001_tongue:

Offline cloudtoground

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Re: Jay's new article 2/3/14
« Reply #11 on: February 05, 2014, 08:04:17 PM »
I think it's sort of ridiculous to talk price appreciation because I don't think you can tell a thing about a four year "investment" unless your intent is to flip it.  People usually pay more the first year or two for something as those who want to buy buy and then the price comes down.  I always see this on ebay and Pandas are no exception.  I see a real jump in price of modern coins only when it's discovered that the amount produced was lower than expected.  The 2011 Eagle proof comes to mind.  Bullion coins with large mintages are going nowhere.  

Offline cloudtoground

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Re: Jay's new article 2/3/14
« Reply #12 on: February 05, 2014, 08:07:49 PM »
"I've been actively scraping together money to buy low population older gold pandas during the slowdown. We all have our addiction"

I wish I had the money to buy older gold Pandas but I like that strategy. Sounds like a winning one.

Offline pandamonium

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Re: Jay's new article 2/3/14
« Reply #13 on: February 05, 2014, 09:07:07 PM »
Correct me on this one but I think Gresham's law says the best of money is not circulated.   (It was posted earlier.)  Most everyone will readily sell the Silver Eagles but not the Silver Pandas.   Do you see many Silver Pandas for sale at coin shops?   Keep in mind the general public or sheeple herd in the US have realized that the US dollar is headed down while the Chinese Yuan will go up so Silver Pandas are the first choice to own and hold......

Offline fractalfate

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Re: Jay's new article 2/3/14
« Reply #14 on: February 05, 2014, 09:39:11 PM »
Interesting points everyone. The impetus of my post was to point out that the average person has merely average intelligence and (on average) makes merely mediocre investment decisions. The investor who plans on outperforming the masses should not and cannot let the behavior of 'sheeple' drive their investment decisions. Paying too much for a bullion investment just because that is the fashion right now, as exemplefied by current prices on contemporary silver Chinese Pandas, makes it impossible to outperform over time those who purchase bullion at a lower price point. That's the easy part to swallow. The more unpalatable undercurrent is the publishing of irrational financial ideas (or implied strategies) under the thinly-veiled guise of wholly benevolent and unbiased advice. This behavior is disingenuous at best and outright deceptive and/or malevolent at worst. The bottom line is that misinformation is a contagion that will poison rationality, logic, and enlightenment. It is simply unacceptable and should be squashed at every available opportunity.

Offline poconopenn

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Re: Jay's new article 2/3/14
« Reply #15 on: February 06, 2014, 02:00:02 AM »
Jay's article was scientifically incorrect. The current price has nothing to do with the actual appreciation of the investment. The cost of silver panda had a higher premium when they were issued, therfore, a higher base line. I am sure if you bought 2010-2012 silver pandas during the years they issued, you lost more money than if you bought Eagles in this down market. Timing is everything for any investment, especially in commodities, such as silver and gold.

Offline Mirkkanen

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Re: Jay's new article 2/3/14
« Reply #16 on: February 06, 2014, 02:09:43 AM »
I bought (20) 2010 silver pandas from a private seller at $21 per coin when silver was just above $19. They were retailing for $6 over if I remember correctly, but this guy wanted to turn them into gold so he sold them to me cheaply.

If I had bought eagles from him, I would have paid the same price . . . $21 per coin. I chose the pandas. Today, if I sold 20 eagles, I'd make $40 profit - shipping. Selling the pandas at $36 each, I'd make $300 profit -shipping.

Am I missing something, or were pandas the better choice?

(Even if I'd bought them for spot plus $10 back in 2010 ($29 per coin), I'd be looking at $140 profit -shipping)

Offline PandaQuest

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Re: Jay's new article 2/3/14
« Reply #17 on: February 06, 2014, 09:37:28 AM »
Jay's article was scientifically incorrect. The current price has nothing to do with the actual appreciation of the investment. The cost of silver panda had a higher premium when they were issued, therfore, a higher base line. I am sure if you bought 2010-2012 silver pandas during the years they issued, you lost more money than if you bought Eagles in this down market. Timing is everything for any investment, especially in commodities, such as silver and gold.

If you could Poconopenn show us a correct analysis of the newer issued silver pandas.

Offline Wafdawg

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Re: Jay's new article 2/3/14
« Reply #18 on: February 06, 2014, 10:22:01 AM »
You really have to view this from a long term prospective.  China is getting precious metals into the hands of their citizens.  The East is hoarding gold.  Silver is the poor man's gold.  I think we all expect China to grow and be the world's economic engine in the future.  So in 10 years I think we will look back and see that 8 million will be a small mintage size comparatively to what lies ahead in the future.  I can easily see China authorizing mintage numbers equalling today's ASE numbers.  And to Peter's point, these are authorized mintage numbers, not actual. Now 8 million is still high compared to the mintage numbers of the 90's and early 2000's but you have to realize that those days are over.  Those coins will just be worth that much more.

Offline Pandora

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Re: Jay's new article 2/3/14
« Reply #19 on: February 06, 2014, 12:45:00 PM »
From the supply side, when the market is down, there will always be more eagle sellers than panda. It is even more true in good market. Most of the eagle buyers are bullion collectors, while panda buyers are coin collectors. Long term, Panda will win in general, unless a particular eagle gets rare.

Offline comeaux

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Re: Jay's new article 2/3/14
« Reply #20 on: February 06, 2014, 01:10:49 PM »
Most of the eagle buyers are bullion collectors, while panda buyers are coin collectors

I agree as well ...

Also why does it always have to be about investment? Can't we just buy Pandas and other coins simply for the love of collecting coins? 

Offline poconopenn

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Re: Jay's new article 2/3/14
« Reply #21 on: February 07, 2014, 12:35:51 AM »
I bought (20) 2010 silver pandas from a private seller at $21 per coin when silver was just above $19. They were retailing for $6 over if I remember correctly, but this guy wanted to turn them into gold so he sold them to me cheaply.

If I had bought eagles from him, I would have paid the same price . . . $21 per coin. I chose the pandas. Today, if I sold 20 eagles, I'd make $40 profit - shipping. Selling the pandas at $36 each, I'd make $300 profit -shipping.

Am I missing something, or were pandas the better choice?

(Even if I'd bought them for spot plus $10 back in 2010 ($29 per coin), I'd be looking at $140 profit -shipping)

My comment was referred to a “down market”, not an “up market”. My recollection of 2010 silver panda price was at least $15 premium over the spot and 2014 silver panda still has a premium of $11 over the spot. The cost base line of silver panda and silver eagle has at least $11 difference. If you count the premium difference, the advantage of investment in post-2010 silver panda over Eagle is very limited if there is any. In fact, Chinese is buying Eagles as investment, since the premium is very low over spot.

Offline Jay

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Re: Jay's new article 2/3/14
« Reply #22 on: September 20, 2014, 12:51:24 AM »
7 months later, here is a follow-up:

Despite a weak precious metals market, silver pandas have held-up quite well.  Silver panda premiums are holding or increasing has China demand rebounds.  

Silver is now ~$18 vs $20 when I wrote the blog post.

2014 premium is still $8-9
2013 premium is now $12-13  vs $10 in February (the dollar value has held)

2012 price is now $40+ and 2010 $50+, which is $5-10 higher than Feb despite silver being $2 lower.

One can sometimes snipe single coins off ebay for slightly less if you are willing to take the risk, but there is a trend here....
 
My view is that over the course 3-5 of years from issue, they have out-performed bullion.


Offline pandamonium

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Re: Jay's new article 2/3/14
« Reply #23 on: September 21, 2014, 12:01:13 PM »
I agree as the world wants the Yuan.   When the MCC market finally breaks out the premium for Chinese silver pandas should increase greatly.   It is the best of bullion.   What happens when Saudia Arabia announces oil will be sold in Yuan and not US dollars?   I want to own silver pandas not silver eagles or other bullion.......


http://news.goldseek.com/GoldenJackass/1411156860.php

Offline geoxxx

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Re: Jay's new article 2/3/14
« Reply #24 on: September 21, 2014, 12:38:16 PM »
I read somewhere that Iran is already selling in Yuan due to the US sanctions...

Offline pandamonium

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Re: Jay's new article 2/3/14
« Reply #25 on: September 21, 2014, 03:29:32 PM »
Many oil producers are selling w/ the Yuan.   I still think we have another year or two but who knows.   It is the trend and the Yuan is the future........