Author Topic: CMC Market Question  (Read 7895 times)

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Year of the Dog

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Re: CMC Market Question
« Reply #15 on: December 07, 2012, 12:57:34 PM »
This thread turned in to exactly what I hoped it would.   

Thanks for all the great info Arif.

Offline poconopenn

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Re: CMC Market Question
« Reply #16 on: December 07, 2012, 10:56:15 PM »
Since early 2012 the speculators, brokers, promoters and flippers are essentially gone from the US market both on the national show circuit and on ebay.  There simply isn't any easy money to be made buying and selling coins for several reasons:

1) NGC and PCGS price guides have educated many sellers to avoid underselling their coins.
2) The market for coins and metals has been uncertain throughout the year, some going down, some up, some flat, an environment that speculators don't really get excited about.
3) Many speculators got crushed on cultural and unicorn coins in late 2011 and early 2012, by January of 2012 many gave up on the market. 

In late 2007 was the first time speculators entered the market in masses, myself included.  We jumped in for different reasons; I was trying buy an asset that was priced in RMB without actually owing RMB currency.  In addition in early 2007 when they released the 25th anniversary sets they included a book that had all the true mintages of each of the gold panda coins from 1982-2000, these mintage were well below the published mintages found in Krause and other books, so an opportunity to buy rare 1998 coins at small premiums to melt became available for short window of time from early 2007 through early 2008, yes it took almost 12 months for US dealers to realize new information was available to the market. Finally, in the summer of 2008 Beijing was going to host the summer games, an event that would surely put Chinese collectibles in the spotlight.  For all these bullish reasons, I sold every US coin I owned that I had slowly stockpiled over 20 years and went all in on gold pandas by late 2007. 

During summer of 2008, just prior to the Olympics the market cooled down and speculators started to bail out, prices dropped about 10-25% during the summer and continued to slide through October of 2008.  All the speculators and even some hardened collectors were out by September-October of 2008, but by then I was a true believer and investor in these coins with goal of buying more rather than getting out and finding another market to invest in. Then in November of 2008 a gift appeared from Microsoft and paypal, Microsoft started to offer 15%-30% Bing cash back on ebay purchases ($200 max per purchase, $2500/year per account) and paypal offered me 3% cash back on echeck purchases, these incentive forced a few investors and dealer types to start buying everything rare that was offered on ebay from November 2008-August 2009, but no speculators came in because there wasn't a market to sell the coin back into once you acquired them regardless of how cheap, because I or anyone else would rather buy on ebay with a 20% bing rebate than buy from a speculator or dealer without a rebate in place. In September of 2009, the market for rare cultural pieces started to turn and by early spring 2010 prices were up 100% in just 6 months and speculators piled back into the market.

The speculators bought and sold for the next 18 months until late 2011 when prices for some coins were down 20-30% and that was enough for many to get out with what profit they had left. By early 2012 it was obvious the speculators were gone, the US dealers that decided to dabble in Chinese coins were also gone and all that was left was collectors, world coin dealers and investors for the balance of 2012. 

The final insight I want to leave you with is the following, how do you know if speculators are in the market or not?  It is difficult for a collector to know. It possible for an investor to figure it out.  But it is bluntly obvious for a dealer to know, why?

1) Collectors and investors buy in rising, flat and falling markets and typically pay with a check or wire to TRUSTED sellers.
2) Speculators only enter markets that are rising and typically pay with paypal or a credit card or want 10 days to pay or 20 days to pay.  When I see this I know markets are topping out and it is time to sell more than buy.  If you find yourself buying with a credit card even though the TRUSTED seller is offering you 2%-3% discount (more than your credit card rewards) to pay with check or wire, then chances are you are a speculator at that moment in time, not a collector or investor, because you don't have the money to make the purchase today.  There are exceptions like for MS70 buyers, they must buy when a coin becomes available rather than when they can afford to buy it, so buying on credit for them is acceptable, while maintaining a non-speculator status. 
3) Once the market turns the speculators jump out almost at the same time (over a few months) and huge amount of coins get offered to dealers and on ebay, in which seller accept the price the dealer is willing to pay rather than asking for current market price.  Remember this important concept, in a bull markets sellers are scared to sell too cheap so they set the ASK price above the current price and prices continue to rise because no one wants to sell, in a bear market buyers are scared to buy at current levels so they set the BID price below the current price and wait for someone to hit it and prices continue to fall.  When speculators are getting out, dealer BID prices can be 20-35% below current market, while when the speculators want to get in dealer BID prices can be just 3%-10% below market, because dealer has the item sold before it even arrives at current market price or slightly higher.   
4) Once the market turns down, all those people buying with paypal and credit cards are no longer buying and those that are buying are paying with checks and wires, the collectors and investors are back and speculators are out. 
 
The fact that only a tiny portion of my sales this year and now are with paypal, is clear sign the speculators are not involved in the market. When they come back I will gladly sell to them everything via paypal at 50%-200% higher prices than today.

Arif


Arif,

This is an excellent overview for MCC market during later 2007 to now. I always the second highest bidder against you during later 2008 to mid-2009 for coins both of us wanted.

Offline Hippanda

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Re: CMC Market Question
« Reply #17 on: December 07, 2012, 11:32:10 PM »
Arif,
...I always the second highest bidder against you during later 2008 to mid-2009 for coins both of us wanted.

What?    The "Original Underbidder" ?  LOL !  :laugh: Is this true?

And Arif,  has confided to me he was the underbidder to me a time or two.

Between Poconopenn and Arif, there is much knowledge in the MCC market.
Thank you both for sharing your insights with all of us!  N31
« Last Edit: December 07, 2012, 11:34:56 PM by Hipanda »
"He who speaks without modesty will find it difficult to make his words good."

Confucius

Offline r3globe

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Re: CMC Market Question
« Reply #18 on: December 08, 2012, 09:48:17 AM »
Arif, THank you for taking the time. Your posts about the past performance of the market are very insightful. However, can you please provide some future outlook? Other than timing the market (which is hard), do you see any of the fundamentals that drive the CMC market change?  We all know you are a dealer, and we can put your outlook in the proper perspective. Thanks.

Offline Straitssettlementshop

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Re: CMC Market Question
« Reply #19 on: December 08, 2012, 10:20:19 AM »
Arif,

Can i have the link to your ebay shop please.

Thanks.

Offline Birdman

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Re: CMC Market Question
« Reply #20 on: December 08, 2012, 10:50:00 AM »
Arif,

Can i have the link to your ebay shop please.

Thanks.

Straitssettlementshop,

Arif's ebay store is http://www.ebay.com/sch/coins888_com/m.html but it doesn't seem that he's been listing much there recently.

You'll probably have better luck looking at the inventory list from his website (updated weekly?) and contacting him from there: http://www.coins888.com/Inventory.html

I just received a coin shipment from him today  :thumbup1:

Offline Straitssettlementshop

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Re: CMC Market Question
« Reply #21 on: December 08, 2012, 11:24:54 AM »
Hi BM,

Many thanks for the link, I wonder whether Arif ship internationally ?

Offline BChung

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Re: CMC Market Question
« Reply #22 on: December 08, 2012, 11:59:24 AM »
How do I purchase from Arif when I can only use Paypal? His ebay store is empty.

Offline Dr650rob

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Re: CMC Market Question
« Reply #23 on: December 08, 2012, 12:04:52 PM »
You don't have to use PayPal I just bought a coin off of him and he is one of the best dealers out there
How do I purchase from Arif when I can only use Paypal? His ebay store is empty.

Offline dynamike51

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Re: CMC Market Question
« Reply #24 on: December 08, 2012, 04:02:37 PM »
Hi BM,

Many thanks for the link, I wonder whether Arif ship internationally ?

There an email link on his website. Communicate with him by email.

Offline Lightsview

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Re: CMC Market Question
« Reply #25 on: December 29, 2012, 05:23:33 AM »
Thanks Arif for the excellent insight into the MCC market!

Offline radderlee

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Re: CMC Market Question
« Reply #26 on: December 31, 2012, 02:05:10 AM »

Offline NBM

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Re: CMC Market Question
« Reply #27 on: December 31, 2012, 01:46:18 PM »
 A most excellent overview, thank you Arif!  N48

Offline Mirkkanen

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Re: CMC Market Question
« Reply #28 on: July 22, 2017, 01:44:15 AM »
I just re-read this thread from start to finish. A fun review!