Author Topic: This is what I learned from my worst trade or purchase.  (Read 9692 times)

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Offline Birdman

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This is what I learned from my worst trade or purchase.
« on: April 10, 2016, 12:10:33 PM »
I just looked at my old files, and I saw a trade that I did many years ago.  Fortunately, I didn't do many deals like THAT.  But, I was inexperienced.  I'm sure we all have some hard-earned knowledge that could benefit each other.  Perhaps we could share some advice in this thread, so it could be a resource that is useful for new collectors to read.

Who has something to share?

Offline r3globe

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Re: This is what I learned from my worst trade or purchase.
« Reply #1 on: April 10, 2016, 12:23:09 PM »
Worst purchases I made were the ones I did following HYPE: The 2011 Medal and Historical Series SUPER DOPER HYPE! Most of you know what I am talking about. Do your own research and learn as much as possible before buying.

Offline KeepOnTrying!

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Re: This is what I learned from my worst trade or purchase.
« Reply #2 on: April 10, 2016, 12:49:23 PM »
Worst purchases I made were the ones I did following HYPE: The 2011 Medal and Historical Series SUPER DOPER HYPE! Most of you know what I am talking about. Do your own research and learn as much as possible before buying.

Same tailwind hit me as I came on board MCC collecting years later. Bought relatively too many medals based on what I read (and non PMs too). Luckily I am more perceptive now (I hope). Silver is still good and I am not knocking it as I still collect it, but not at the rate I did then. I wish I collected more gold coins than I did then. Trying to redress it now but I regret it now!  N24

Newbies really need to immerse themselves in study before they start buying but the drive that brings them into MCC collection is not likely to allow them pause before they start gobbling up the stuff!
KeepOnTrying and Never Give Up!
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Offline pandaccumulator

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Re: This is what I learned from my worst trade or purchase.
« Reply #3 on: April 10, 2016, 01:40:13 PM »
Most of my bad purchases were made in 2011, 2012 period, when market had peaked, and I had very limited knowledge on MCC and overpaid on some coins, and saw my investment became worth less and less in the following years. Luckily, I started on silver, the less expensive staffs. For example, I paid $2k on a 2000 1 oz silver mirror panda ms 69 on ebay. In today's market, it is probably worth less than half of that.

Later on, I learnt to be "smart", got some good deals, even in a declining market.

Offline BubbaJones

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Re: This is what I learned from my worst trade or purchase.
« Reply #4 on: April 10, 2016, 02:03:22 PM »
This is a great thread. 

I agree with KOT.  I started out 'chomping on' as much silver as I could get my hands on. 

I didn't have much of a focus on gold, sadly!!  After all, it is sooooo expensive compared to silver.  But the lessons I've learned lately is stop the focus on 'all' silver, and start buying gold. 

I've been hearing about James Rickards book on the 'New Case for Gold.'  I think I need to pick that one up. 

Everything I've been hearing is that gold is the place to be, so I'm limiting my silver purchases, and going in the direction of gold. 

Even if it is fractional 1/10 or 1/20 that I can afford. 


Offline Grip

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Re: This is what I learned from my worst trade or purchase.
« Reply #5 on: April 10, 2016, 04:42:16 PM »
Aside from doing a lot of research, the toughest thing to do is focus on what direction you want go (like Panda Halves did), patiently stick with it, and don't get suckered into chasing a hot trend. I got the MCC bug in 2009 and started with silver Pandas. Unfortunately I tried to go cheap and got burnt on some fakes out of china-about 250.00 worth. I also made the error of using a "shotgun" approach and started buying 5-12 oz silver coins without understanding these appeal to a narrow field of collectors.The same is true of medals, and thankfully I avoided that trap- except 875.00 for a 1 oz 87 PF68 God of Longevity that reminded me of Yoda-too cool. I also top ticked the Unicorn craze buying a 95 1 oz PF 69 for 1010.00 (with a lot of fanfare from some former forum members). I also recommend sticking with the 1oz and fractional gold, silver, and Platinum Panda coins before venturing into other MCC coins.

Offline KeepOnTrying!

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Re: This is what I learned from my worst trade or purchase.
« Reply #6 on: April 10, 2016, 05:04:49 PM »
Aside from doing a lot of research, the toughest thing to do is focus on what direction you want go (like Panda Halves did), patiently stick with it, and don't get suckered into chasing a hot trend. I got the MCC bug in 2009 and started with silver Pandas. Unfortunately I tried to go cheap and got burnt on some fakes out of china-about 250.00 worth. I also made the error of using a "shotgun" approach and started buying 5-12 oz silver coins without understanding these appeal to a narrow field of collectors.The same is true of medals, and thankfully I avoided that trap- except 875.00 for a 1 oz 87 PF68 God of Longevity that reminded me of Yoda-too cool. I also top ticked the Unicorn craze buying a 95 1 oz PF 69 for 1010.00 (with a lot of fanfare from some former forum members).

Just like everything else in life some have the gift (of clear thought and wisdom) while others have to learn by experience.  :001_unsure:

Fool me once:  :cursing:

Fool me twice:  :blush:

Tomorrow is always a fresh day and presents opportunities for correction, rectification and learning of new ways.  N48

That's why we just have to keep on trying!  :thumbup1:
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Offline NBM

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Re: This is what I learned from my worst trade or purchase.
« Reply #7 on: April 10, 2016, 05:10:58 PM »
Just like everything else in life some have the gift (of clear thought and wisdom) while others have to learn by experience.  :001_unsure:

Fool me once:  :cursing:

Fool me twice:  :blush:

Tomorrow is always a fresh day and presents opportunities for correction, rectification and learning of new ways.  N48

That's why we have to keep on trying!  :thumbup1:

This, so much this...  N23 N24 N26 :thumbup:

Offline Grip

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Re: This is what I learned from my worst trade or purchase.
« Reply #8 on: April 10, 2016, 05:35:56 PM »
Aside from doing a lot of research, the toughest thing to do is focus on what direction you want go (like Panda Halves did), patiently stick with it, and don't get suckered into chasing a hot trend. I got the MCC bug in 2009 and started with silver Pandas. Unfortunately I tried to go cheap and got burnt on some fakes out of china-about 250.00 worth. I also made the error of using a "shotgun" approach and started buying 5-12 oz silver coins without understanding these appeal to a narrow field of collectors.The same is true of medals, and thankfully I avoided that trap- except 875.00 for a 1 oz 87 PF68 God of Longevity that reminded me of Yoda-too cool. I also top ticked the Unicorn craze buying a 95 1 oz PF 69 for 1010.00 (with a lot of fanfare from some former forum members). I also recommend sticking with the 1oz and fractional gold, silver, and Platinum Panda coins before venturing into other MCC coins.
I would also add that if you own a coin that gets "hot" like the current 95 1/2 oz gold Pandas, don't be too quick to sell unless you need the money for something else. I sold one for 16,000 only to see prices go more parabolic...

Offline pandaccumulator

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Re: This is what I learned from my worst trade or purchase.
« Reply #9 on: April 10, 2016, 06:19:53 PM »
I would also add that if you own a coin that gets "hot" like the current 95 1/2 oz gold Pandas, don't be too quick to sell unless you need the money for something else. I sold one for 16,000 only to see prices go more parabolic...

It is hard to call a market peak or a bottom. Looking back, some of the old "hot" 1/2 oz gold panda have dropped 40-60% from their peak price. 98 LD was selling for $20k,  serif was selling for over $6k, 96 was selling for over $5k? If you owned multiple of these "hot" coins back then and didn't sell, you must be scratching your head now. Just like a stock, nothing will go up or in one direction forever. Almost all collectibles, including coins, go through cycles.

Offline Birdman

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Re: This is what I learned from my worst trade or purchase.
« Reply #10 on: April 10, 2016, 09:54:50 PM »
I first got into Chinese coins in early 2011 when the market was getting extremely hot.  I got lucky early on and found a 2000 Lunar Dragon set (5 oz silver rectangle and 1/2oz scallop) in a local coin shop for a small percentage above spot price.  I got them graded and they earned PF69.  Those coins were so hot then.  Dealers were tripping over themselves and paying strong prices to buy them for the Chinese market.  I sold the gold scallop to a dealer for many times more than my initial investment.  That's good.  My gut told me to sell the silver rectangle too, since the market seemed crazy, and it wasn't a series I was collecting.  I was about to sell, but a relative of mine who doesn't know much about coins, convinced me to hold it, saying it was "rare".  Mistake.  That coin has come down several thousand dollars since then.  I missed out on a very big return.  My lesson learned is, "listen to your gut."  If you are the one who spends countless hours studying the market, don't take the advice of someone else who hasn't done his research.  When there are supply squeezes and spikes in popularity, there can be very big increases in price.  Overshoots.  Don't get greedy.  Take some money off the table.

It is hard to call a market peak or a bottom. Looking back, some of the old "hot" 1/2 oz gold panda have dropped 40-60% from their peak price. 98 LD was selling for $20k,  serif was selling for over $6k, 96 was selling for over $5k? If you owned multiple of these "hot" coins back then and didn't sell, you must be scratching your head now. Just like a stock, nothing will go up or in one direction forever. Almost all collectibles, including coins, go through cycles.

Having said the above, I haven't taken my own advice with my 1995 G1/2.  Part of me says cash it out, as the price has run up so much that the probability of additional dramatic rise might be limited.  I have a nearly complete collection of G1/2, however, and I've just finalized a trade for the last major piece of the puzzle, so I'm having trouble giving up my single 1995 G1/2.  The collector in me is overruling the investor.  There is certainly a risk of it dropping many thousands of dollars in price if there is a mini-hoard found somewhere.  I'm torn.  I rationalize that since gold pandas are such a flagship, popular series, it has a better chance of holding its value.

Most of my bad purchases were made in 2011, 2012 period, when market had peaked, and I had very limited knowledge on MCC and overpaid on some coins, and saw my investment became worth less and less in the following years. Luckily, I started on silver, the less expensive staffs. For example, I paid $2k on a 2000 1 oz silver mirror panda ms 69 on ebay. In today's market, it is probably worth less than half of that.
Worst purchases I made were the ones I did following HYPE: The 2011 Medal and Historical Series SUPER DOPER HYPE! Most of you know what I am talking about. Do your own research and learn as much as possible before buying.

When I was fairly new to the forum, someone who is no longer a member here offered to do a trade.  Perhaps my antennae should have gone up when he pointed out in his first PM that he has "high character and integrity".   I ended up doing a trade with him and making a separate purchase that was influenced by his hype.  I traded some MS70 pandas to him that I had bought as OMP near spot price and graded myself, so my cost wasn't too high, but I still gave up some good coins for a coin that now sells for more than 30% below what it did back then.  That person is no longer welcome on this forum, owing to his unethical practices (no not THAT person), but you definitely need to look out for the hype.  There are some people who are skilled at using slick arguments to prey on inexperienced people.

I'll echo what others have said.  Do your own research to determine what is currently undervalued and/or has fundamentals that make it likely to increase in price in the future.  The bulk of my purchases over the past 5 years were to buy semi-key gold 1/2 oz (I largely avoided the sexy key and popular G1/2).  I tried to get the overlooked semi-keys for a reasonable percentage above spot price.  I watch with interest now as some of those coins have recently started to increase in price.  I just used some of these to trade for a 1998LD G1/2 NGC MS69.

Try to buy the overlooked coin with lots of potential, not the coin that everyone is saying is so wonderful.  It is out there.  Is it now a semi-key G1/4? a condition rarity gold panda? a gold proof panda?  or something else?  I don't know, but someone who does his own research and thinks independently will have a prize in future years.

Offline KeyDate1/2ozPandas

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Re: This is what I learned from my worst trade or purchase.
« Reply #11 on: April 11, 2016, 12:36:49 AM »
My gut told me to sell the silver rectangle too, since the market seemed crazy, and it wasn't a series I was collecting.  I was about to sell, but a relative of mine who doesn't know much about coins, convinced me to hold it, saying it was "rare".  Mistake.  That coin has come down several thousand dollars since then.  I missed out on a very big return.  

I too still have 2000 5oz rectangle dragon NGC PF69, I had it when the pop was only 2 for PF69, now it is 19.  I got offered $8000 for that coin as a pop 2 and refused to sell because every 2000 rectangle I saw had filed edges, literally a mint employee took a nail file and smoothed out the edges, which is why it was so difficult to get PF69.  Today the coin is $2000, which is still a couple hundred over what I paid so I will continue to hold it for another 5-20 years.  At one time I had over 70x 5oz silver lunars, today I have just 4x 5oz silver lunars, 1995 pig (pristine omp), 1995 dragon boat PF69, 1996 rat PF69 and 2000 dragon PF69 - don't plan to sell them for a long time.

The 1995 1/2 price spike is due to dealer demand, not speculator demand so I wouldn't worry as much about prices falling very much, because dealers holding a large position can't afford the price to drop (I believe I told Grip not to sell his 1995s).  By the same token, coins dealers are not holding large positions in (everything except 1995s, 1998s, 2002 1/10, 2006) should easily out perform when dealers realize there are other coins they need to hoard to complete sets.  As Birdman points out, that is where he likes to position himself.

I don't worry much about selling too cheap or paying too much, it is part of the game when you are investing in anything.  I have sold over 10x 1995 sets for under $13K, doesn't bother me because they were purchase for under $4K, if hadn't sold those, then I probably wouldn't have sold 1998 LD sets for $42K or bunch of cultural coins near the market peak. 

Offline Grip

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Re: This is what I learned from my worst trade or purchase.
« Reply #12 on: April 11, 2016, 08:04:01 AM »
The 1995 1/2 price spike is due to dealer demand, not speculator demand so I wouldn't worry as much about prices falling very much, because dealers holding a large position can't afford the price to drop (I believe I told Grip not to sell his 1995s).

  

Used the 16,000 to pay off my mortgage. Now debt free so it was a good trade...

Offline Birdman

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Re: This is what I learned from my worst trade or purchase.
« Reply #13 on: April 11, 2016, 09:00:47 AM »
I Used the 16,000 to pay off my mortgage. Now debt free so it was a good trade...

Nice!  N47

Offline sasushi

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Re: This is what I learned from my worst trade or purchase.
« Reply #14 on: April 11, 2016, 02:18:15 PM »
I started in early 2012, mostly in rare mcc silver coins (mostly 69 UC)all non panda, somehow I never got attracted by them - except the 1982. I managed to complete the first lunar silver series in 69, before I realized that even NCS and putting them into sealed bags with a vacum, didn't prevent them from getting spots or toned. So I quickly changed them all into rare mcc goldcoins (non panda) with some losses. This was my mistake.

I am somehow a collector - I only like coins where I like the design - and somehow I am an investor since I only get UC 69.

And then I started buying old chinese silver - there I started to like the old craftsmanship&design. Somehow I am having the idea if the silver was ok the last hundred years and if the grades are somewhere between 45 and 63 - the risk of loosing money due to toning or spots is much lower - my second mistake ?- or did I turn into a collector - what are your thoughts?

KR,
sasushi