[QA] Pandas and Grizzlies, 2011s and/or 2010s and Shopping in Shanghai

Hi xxxx,

many thanks for your question.

I hope you make big profits from this advice, but as my favorite celebrity Panda collector, Jim Roger's, often says "Do your homework." Please bear in mind (pun intended), I could be totally wrong, and Pandas could crash below the price of spot. However, this is my honest opinion:

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Q> I would appreciate your advice on [buying Pandas or Grizzlies].

A> That is a good question, whether the 1oz 2011 Panda has as high a profit potential as the Canadian Wildlife set. I'll narrow my scope to the Grizzly.
At the time of this writing, one of the foreign sources I buy from has the 1oz Grizzly at $37.17, the 2011 1oz Panda at $39.43, and the 1oz Maple at $34.37 (all measured in USD). [You will need to check with your domestic sources as to whether my calculations are still applicable to your situation as prices may be more or less expensive depending on where you buy from... E.g. Downies or silverstacker members]

For the purposes of disclosure, I do own both Pandas and Grizzlies, but my main bullion specialty is obviously Pandas.

Past performance:
For me, when assessing the future profitability of a coin, I often look at past performance. This is easy to do with Pandas as they have extensive history, and thanks to the work of people like PandaCollector and Tamo42, finding historical prices is much easier. The Panda series undeniably has an upward trend.

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As a general rule we know that all Pandas appreciate, especially with the release of a new year series. Whether it is a lot or a little is unique to each coin, obviously not all Pandas have performed as well as the 2000 Mirror Panda (though some have). But I would imagine that upon the 2012 Panda release, the 2011s should automatically have a 1-5% premium (over the 2012s) within the first 6months, then grow to a 5-10% premium (over the 2012s) before the end of the year 2012. By the end of 2013, perhaps they will have a 20% premium over the 2012 series.

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These are very conservative growth rates. If you look at the 2010 series, these are doing spectacularly well. When first issued, they were approximately $20-24USD each (depending on where and how many you purchased). Today they are worth over $70USD each. The fiat price is not so important, what is important, is that they are now worth approximately 2 ounces of silver (E.g. 2x 1oz Maples/ASEs/2011 Pandas, etc) within less than 2 years!

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But with regards to historical pricing on Grizzlies, since they have only recently come out, there isn't much data to work with. I'm sure they will do better than Maples and ASEs, but how much better is a big unknown.



2011 1oz Panda: likely to appreciate based on past performance.
2011 1oz Grizzly: no past data available, but likely to do better than spot and standard bullion rounds.

Domestic demand:
We know that domestic demand for 2011 Pandas has been setting records in China. The demand for the 1oz 2011 Panda year has been unprecedented, which is likely one of the reasons why the PBOC felt obliged to mint more. From 1.5million, to 3million, and yes, now to 6million. As big as 6million sounds to us in the West, this move is unlikely to cause an oversupply of Pandas within China. I'll cover this in the mintage section. What is important to note, is that 1oz Silver Pandas are predominantly the main silver instrument available to the general public, and is preferred over other types of bullion and bars.

[imgz=http://forums.silverstackers.com/uploads/675_2010annualmintages.jpg][/imgz]
Since 2011 minting hasn't finished yet (for the Maples and ASEs), I can't compile the charts for this year, but even if you compare the 2011 Pandas with the mintage numbers of last years ASEs and Maples, you can see the huge disparity between Panda populations and the Eagles and Maples.

I also don't think there is an oversupply of 2011 Pandas, because the prices they are achieving in China are very high, even when you factor in the tax on silver. If there were an oversupply of Pandas I imagine their prices would fall much lower than what they are currently selling at at banks in China (about 300RMB-360RMB = $46AUD-$56AUD depending on volume, etc).

As far as I know, the year is almost over and grizzlies are relatively still widely available, without having a massive short fall. Which does not prove that domestic demand is low, but I suspect it is likely that either there is an oversupply or low local demand.

2011 1oz Panda: High domestic demand
2011 1oz Grizzly: unknown level of domestic demand

Mintage:
The mintage of 6million Pandas sounds huge to our Western ears, but to the Chinese, it still means that only a few people can ever hope to own one.

<humor: In China people rarely compliment each other saying "You are one in a million" ... because that naturally leads towards there being at least another 1400 people just like you>


1,400,000,000 Chinese; 6,000,000 Pandas = 1 Panda per 233 people.
34,000,000 Canadians; 1,000,000 Grizzlies = 1 Grizzly per 34 people.

I'm not a big believer in low mintages automatically turning into high profits... mainly because there are plenty of low mintage series that don't generate profits (e.g. Australian Masterpieces in Silver, some fewer than 20,000 sets, and yet they sell below spot often).

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I obviously haven't factored in everything, but this is my quick assessment. If I had only a few thousand dollars and were given a choice, either all Pandas or all Grizzlies. I would go all Pandas. I think the less riskier choice is to go with the Pandas because of past performance, constantly high domestic demand and a low Panda population per capita in China.

Grizzlies, because they do have a low mintage per capita if you factor in the potential of international buyers, may do exceedingly well. I don't think so, because I place the most confidence on domestic Canadian demand which doesn't seem spectacularly high for the grizzlies, and the mintage is too high for it to be a numismatic coin for a population of just 34 million people. Kind of like our Australian Kookaburras which often don't sell for much more than spot. 300,000 sounds like very few, but with a population of only 22,000,000 there is one for every 73rd person. Like I said though, I could be completely wrong, and the Canadian Grizzly could be the start of an amazing collection (like the 1989 Panda), and the Aussie Kooks could be vastly undervalued, about to sprout wings like eagles and soar to new heights.

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Now you probably don't need to go exclusively one or the other, you could quite reasonably go both. Depending on budget, I would probably collect a few Grizzlies, just in case they did go to the moon.

Please note, I'm not saying that Grizzlies are a bad bullion to have. I stack them too. I think they will do better than bullion bars too.
Please note, I like bullion bars too... I really do (they is sooo shiny).
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Q> I missed the boat with the 2010 coins and a mintage I would be much more comfortable with, but have no problem with being swayed!
A> I think we all wish we saw earlier where the 2010 Pandas have recently gone (i.e. double the price of spot). I thought the 2009s had peaked when they hit double the price of spot, but now they have risen over three times the price of spot! In time the 2010s will probably follow suit too, but knowing when is the tricky bit.

[imgz=http://forums.silverstackers.com/uploads/675_1ozbullioncomparison.jpg][/imgz]
The 1oz Bullion Comparison chart was made earlier in the year, almost all the Pandas, including the 2010s have increased significantly over spot at this point in time.

Without question, while spot is low, the safer bet is on the 2011s... but by the same token, in my view, the 2010s are going to be far more valuable than the 2011s in the coming years. It really depends on when you want to cash in your gains (I'm short term on the 2011s, long term on the 2010s). Many different ways of playing with Pandas. But if you want to buy and forget, get a mix of 2010s and 2011s, and when it comes to selling them in 10years, I imagine both will be worth significantly more than what they are now (in REAL terms and in Fiat terms).

Q> Further, I have a friend who lives in Shanghai and wondered if you could tell me where the best place to buy pandas there would be?
A> Certainly, email me, and we can go Panda Hunting together. I think I should start a tour group called Panda Tours, taking people to the three big areas in China where Pandas can be found at BARGAIN prices.

Q> She bought me my 2011 but the price was more than I would get in the UK or Mainland EU which shocked me.
A> Shocks a lot of people the first time around... I remember when Aurora Et Luna was out here in Shanghai, he too was surprised how expensive Pandas were... supply and demand, supply and demand, supply and demand... and taxes ... we are blessed to have them available in Australia for much cheaper than what the locals in China pay... hence the fundamentals are strong with these bears.

I call this the: All bears go where the love is at. If the Panda prices overseas drop, Pandas will make their way home to China (since the demand is constantly strong). If Panda prices in China rise, the price of Pandas overseas rises too (or else the bears come home to where the love is at).



Q> Is there any chance I could get a number of 2010 coins at sensible money that would be worth paying the extra premium on now or do you still feel that the 2011's are the best bullion/semi-numismatic play out there anyway!
A> Yes, let me know how many/how much you want to invest, and i'm sure we could come to an arrangement. I'm just a lowly Panda collector, not a dealer, but I do have a couple of trays of 2010s.
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2011s are good if you are new to Pandas. 2010s are good if you are a bit more experienced and want to take a few more risks. I'm investing in 2000 Mirror Pandas (these are about $1500USD each), but that's another story. Definitely consider getting the Pricepedia from Peter Anthony before investing in Pandas, his suggestions usually do pay off very well. He has done a lot of the homework on our behalf.


Source: http://www.pandacollector.com/pricepedia.html

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Q> The dealer I have bought from most and trust with real time pricing has 2011 pandas listed at AUS $ 46 as we pay 20% VAT which is included in that. They will no doubt fall a little if we have this low to mid 20's correction that is being talked about and it's this I have in mind as a buy point unless as I say some 2010's were available even in China?
A> Wow! That's really cheap! That's only about $38.33each (without tax)! Yes, if spot drops, then the 2011s will likely follow. BUY BUY BUY!

But if spot drops, it is unlikely the 2010 and older Pandas will fall in price. [A simple way to remember this effect: Eagles fly among the clouds, Pandas play above the clouds... it just means, standard bullion is tied directly to spot, and rises and falls in accordance to spot... whereas Pandas generally rise many times above the price of spot... Pandas are a good hedge for when spot drops because they are unlikely to fall below their metal value, and are quite likely to rise far above their metal value].

If you trust your friend in Shanghai, I can probably get you cheaper 2010s than most other places. My son was born in that year, so I usually keep a few more of these. Stack is also located in Shanghai.


I hope this helps,
Yennus.

 

Which pandas would you purchase inside of China, is it anything prior to the current year or are 2010 panda prices still higher than Australia too?

Is the main reason for purchasing in China the greater population of pandas coins that they have, so finding rarer items is easier and often with better pricing?

 

One of your best ever posts yennus, make it a sticky!

I don't think that we in the west really have a handle on China's potential markets. You are very humble, lowly Panda collector, ha! that made me giggle

There is NOTHING in recent times that has outperformed modern Chinese coins. Very good point you make about how 1oz became 2oz's after 2 years (conservative). This fellow should get the book then get the pricepeadia... like symbols, the numbers don't lie.

No offence to Canadians, I'm half , IMO the Wildlife series just won't have the same broad based demand required to elevate it anywhere near the level of Pandas. If 1% of China go into Pandas, public of medium means, that's 10,000,000 people buying silver... thats 1%... 10,000,000!! If 1% of Canadians get into silver, again public of medium means that's 230,000. The fire will be warmer under the Pandas, it just will be. The Chinese understand and love its' silver and it's gold, don't quote me on that just what Ive heard, Canadians like most westerners are blinded by the banks and stock markets (rigged) and are ambivalent to precious metals at best.

Here in Australia we have the Kookaburra series and proof lunar series 1 and 2 which are great coins, they've tried to protect them by keeping mintages down. I have series 1 2oz Lunar proof coins, great coins well made shiny... 90's coins, packaging, COA, mintage only 1,000 for each, tried to sell them twice at $200.00, and... no buyers. That's a low to mid range BU Panda of infinitely more mintage price.

Anyways I could go on and on and on

 

Yes I agree 25grizzlies that is a very informative post by yennus that took some time to compile.

Very well done yennus, thanks for taking your time to write this.

I too have been collecting many other coins as well besides pandas and really haven't seen them appreciating.

I have "mint direct" (sealed tubes from apmex) of the Canadian wolfs, grizzlies, maples & ASE's and the only coin that is doing moderately well is the wolf that I have recently seen selling for $52 to $55 and I paid $34.65 for them or $866 per each 25 coin tube. The Somalia Elephants have not done much either.

The Australian coins I stashed away are fairly cool and I like them but the koala & kangaroos have not performed as I expected they would have.

My favorite Australian coins are the Discover Australia "The Dreaming Series" 2009, 2010 & 2011 5 coin sets. These proofs are absolutely gorgeous !!! In my opinion they are really beautiful coins and have very limited mintage but I am extremely surprised that with only 10,000 mintage that they have not appreciated at all. In fact I would have thought the 2009 set would have sold out by now but it hasn't so
I just do not see the demand here. I mean we are talking about a coin with a 10,000 MINTAGE and has not sold out. Regardless, I still like them and they may be worth something in 20 years so I will keep them but just disappointed in the demand for them.

Compare these 10,000 minted "Dreaming" series coins with the 2010 Pandas that sold out 800,000 in only a few months, increased the mintage and then sold out immediately again and there is no comparison.

So yea yennus makes some excellent analogies in this post again, very well done and appreciated !

 

Buying "Mint Direct" tubes is a total scam to command a slightly higher premium in my opinion. Any time you order the amount of ounces equivalent to what would be in a tube, that's how you'll receive them. The wolf and grizzly were performing very well before silver tanked recently. I think by the time the 6th coin is out, the set will do well on its own. Over the years I have found that some items with very limited mintage figures don't do as well as expected, while others with 100,000 - 500,000 mintage figures will increase much more.... I think this has to do with the visibility of the item creating demand for it. If something is very limited and hardly seen, not many people will know to look for it unless it was very well marketed, whereas a higher mintage item will be seen more often and build its own demand through visibility as long as it is a desirable item.

As for the Pandas, past performance has been stellar without a doubt, but going forward as the mintage figures increase significantly it's almost certain that price appreciation will slow. It's still too early to say, but if Yennus is correct and the demand for them continues to grow, if the mint continues to produce enough to meet the demand then in a few years its possible that the new Panda releases may turn into the equivalent of an ASE.

Just my opinion.

 

This was one of the most insightful posts I've read. I think everyone will benefit from reading and learning yen us thoughts.

I too believe that pandas will continue to rise. I don't think people in north America really have a grasp of how big the potential market here is in Asia. Not to mention money is just oozing out of people's pockets in Asia. Aka rise in middle class.

This panda forum of has of been great help to me. It has made me seriously reconsider rather than investing in regular bullion instead try buying numismatics.

Also note I was shocked that in GZ 2011 pandas were found for 280 at many dealers. I was first quoted around 320-350 RMB a few days prior.I guess it was maybe an over supply of them. Many dealers had sheets of the
.

 

Do not know where you purchased your mint direct tubes from but I purchased mine (apmex) for the same price as the individual coins.

Yes I agree the coins I did purchase have not been performing well although all are above my purchase price.

 

I haven't/don't buy mint direct tubes. I don't even buy ASEs, Maples, etc. anymore because I'd rather get more ounces for the same money by buying bars, or spend an extra couple bucks for a limited Lunar, Kook or maybe Pandas (if the mintage doesn't get astronomical), or the Wildlife Series releases as they're available.

Current cash price on APMEX for 2011 ASE if you buy 20 (Orders in quantity of 20 or more come in mint tubes 500 or more come in monster boxes.) - $740
Current cash price on APMEX for 2011 ASE in Mint Direct tube - $750

It may be a moot point now since the premiums have come down some, and at the time I guess you got a deal, but when buying the Grizzly and Wolf the Mint Direct tube had a higher mark up at the time, and when the 2011 ASE was released the mint direct tube had a much larger margin than $10.

Sorry for diverting the thread a bit.

Back to Pandas folks...

 

But, 1 thing is missing.
Pandas are 99.9% pure
but, Grizzly are 99.99% pure.
So, ideally grizzly should perform well. As there mintage is low + 99.99% Pure + Highest Denominated coin.

On the other hand
If you think Asia. We are having more millionaires each year. So, more money to spend on Panda.

Still Confused

I think i will get both in equal amount

miner

 

I purchase most of my Pandas inside of China. Mostly anything older than 2011.

Main reason for purchasing in China is for all the reasons you have listed. Greater population of Pandas, so it is normally easier to find what you are specifically looking for, especially the rarer items (e.g. BIG THREE), and people in China if you have a good relationship with them are willing to negotiate on price.

I also find it safer than Ebay... cos like I have mentioned before, if you get caught distributing fake Pandas in China, you are likely to end up grieving those who love you the most, especially when the price of the execution is billed to your living relatives.

 

Thanks 25Grizzlies! Much appreciated! I am looking forward to hearing you speak at the next SydneyStackers Meet only a few weeks away!

Hahaha... I am only a lowly Panda collector I am only up to collecting silver Pandas.. you should check out Comeaux's collection heeheh...

Thanks for sharing your experience on the lunars. It mirrors my experiences with them too.

You are absolutely right! It only takes 1% of Chinese to enter the silver game, and that's 14,000,000 Pandas needed straight up!

 

Thanks Comeaux, truly high praise coming from an esteemed Collector like yourself. Many thanks!

Thanks for also sharing your experiences with Australian coins too. Much appreciated!

 

Thanks HustliN! Your comments are much appreciated!

Indeed, as the middle class grows in China and throughout Asia, I imagine we will see the Pandas reaching new record highs.

I like GZ, got some good friends there. Good place for Panda Hunting too.

 

Hi Silverminer, welcome to the Panda Forum.

You might be right, it Grizzly might perform well in the coming years.

I'm not a big believer that the 99.99% makes a big difference, but it may.

Also, I don't think a low mintage automatically translates into a high return... in some cases it might, but there are a lot of low mintage series that perform poorly, as talked about by 25Grizzlies and Comeaux.

I think you are right on the money in regards to Asia growing more millionaires each year, which probably will translate into more Panda sales. I hope so