1oz silver Panda vs 1oz silver Lunar Dragon

Discussion in 'Modern Chinese Coins & Medallions' started by Trichter, Sep 8, 2011.

  1. Chillidog

    Chillidog New Member Silver Stacker

    Joined:
    Feb 19, 2011
    Messages:
    1,236
    Likes Received:
    1
    Trophy Points:
    0
    Location:
    In the dog house SEQ
    I love both the pandas and lunars. Collect both
    I have bought both from members here and on eBay both in Australia and the USA. To the best of my knowledge I dont have a fake. When I get them graded I will know for sure. I have just received 40 odd pandas this week all bought from eBay overseas was expecting a fake or two,even hoped for one to show you guys. But no
    All the pandas I bought were mostly in capsules and plastic but not all. As Fishball said if you know what to look for it's easy, bit like girls boobs, not all are real, but if you know what to look for or look hard enough. Going to get bashed for that comment
    One good thing is the fake hype is so far keeping the masses out and allowing us Panda lovers to enjoy getting in for some what cheaper prices. Supply and demand.
    So watch out for the fakes. They are every where. Trade your worthless pandas to me. I'll give you real silver.
    10 pandas for 1 real silver 12 dragon.
     
  2. yennus

    yennus Well-Known Member Silver Stacker

    Joined:
    Oct 24, 2010
    Messages:
    4,762
    Likes Received:
    91
    Trophy Points:
    48
    Location:
    Shanghai:Sydney
    And these are the type of questions that get me in trouble :)

    In summary, yes, I believe that the 1oz silver 2012 Pandas may outperform the 1oz silver 2012 Lunars.

    I am deliberately trying not to be inflammatory, so please be gentle in your responses. I AM NOT SAYING THAT DRAGONS ARE BAD COINS TO STACK. I AM NOT SAYING THAT DRAGONS ARE BAD COINS TO COLLECT.

    Some quick reasons why I don't see 2012 Dragons outperforming 2012 Pandas (before I go on today's Panda Hunt).
    1. Is it a bullion coin or a numismatic coin?
    a) If a Dragon is a bullion coin, it really is selling for far too much at its release - hardcore bullion stackers are unlikely to stack these for "bullion" reasons.
    b) If a Dragon is a numismatic coin, then there are too many of them available for their price to be astronomically high in the near term (less than 3years). But in the long term (more than 3years), who knows? Maybe... I personally don't think so, but I could be very very wrong.

    2. Starting price of Dragons: It's too high. If we value the today's median Dragon purchase price to be around $80 or above, that places its issue price at double spot. If we measure the Dragon's future price appreciation in REAL* terms, the dragon is going to need a rather large following to get it to double in the next 1-3years.

    *Here is how I define appreciation in REAL terms.
    If you purchased a 2000 ASE when it was issued ($5-$6), and then sold it 11 years later ($40-$45), it would still only purchase ONE 2011 ASE. So there has been no REAL appreciation even though your FIAT appreciation was about 8x.
    If you purchased a 2000 Panda when it was issued ($10-$12), and then sold it 11 years later ($400-$3000), it would purchase EIGHT to SIXTY 2011 Pandas. So there has been a REAL appreciation (1oz of silver now gets you 8-60oz of silver) and also in FIAT terms (at least 40x).

    Why is that? Well, it takes time for something to double in REAL value, and the starting bar (issue price) is very high. E.g. It is easier for spot silver to double in price ($40 to $80) than for spot gold to double in price ($1700 to $3400).

    E.g. Pretend for a moment that dragons were released in 2009 instead of 2011, and the issue price ($30) was double the price of spot ($15/oz), like it is today. Now fast forward to the present day, and imagine it needs to appreciate to double it's issue price worth in REAL* terms - just like the standard 2009 Panda has (issue price was less than $18 when spot was at $15/oz).

    The dragon thus needs to perform at least 4x better than spot today. It must actualize a fiat price of $160. Up to now, no Lunar that I know has done that, achieve double it's REAL value in 2 years.

    a) Do bullion coins generally appreciate so fast in just 2-3 years? Not many. Most people that are buying for bullion reasons would automatically reel away in horror at buying a 1oz of silver coin for double the material value. They would stick to the standard bullion coins (ASE,Maples,etc).
    b) Do numismatic coins generally appreciate so fast in just 2-3 years? Possibly, but because there are still relatively large numbers of these dragons floating around, I don't imagine seeing their value going super high in the short term. (Long term perhaps, but I don't think so...)

    3. Birth place of the Dragons:
    Yeah, I've gone into this before, so I won't dwell too much on this point. The primary source of numismatic and bullion demand for most coins is from it's local population.
    E.g. Chinese (i.e. Real Chinese people that live in China...as apart from Chinese people that live outside of China) people generally don't stack ASEs/Maples, because they can stack Pandas.
    E.g. Canadians tend to purchase more Maples than any other group.
    E.g. Americans tend to purchase more ASEs than any other group.
    E.g. Australians tend to purchase more Koalas/Kooks than any other group.
    E.g. As much as I want the Chinese to value a 1930 Penny, they don't value it as much as I do.

    a) If the dragon is a bullion coin, it's too expensive for bullion buyers both domestic and international, to buy it for bullion reasons.
    b) If the dragon is a numismatic coin, then it needs to compete with the Chinese dragons that are coming out of China. (I don't collect those either, but if I were to choose one, I would go with the Chinese dragon because of its wider support base, current undervalued coin sector, and future growth potential)

    ======
    Why I think the 2012 Panda will outperform the Dragon (in REAL appreciation).
    1. Is it a bullion coin or a numismatic coin?
    The Panda is first and foremost a bullion coin. It is released usually at less than 20% above the prevailing spot price of the day. Yet it does go on to have numismatic value quickly after release; at its release, it is a bullion coin (and often gets treated that way). That means that Pandas are often fingered, turned into jewelry, etc because they are bullion coins. Just like ASEs and Maples.

    2. Starting price of Pandas is so low it's easy to double.
    Because Pandas are issued as bullion this is an advantage (high demand). Because it doesn't have a high issue price, it can easily climb up the charts, and because of their high attrition (e.g. fingering, jewelry, etc), good quality Pandas quickly decline in population (lower supply), boosting the REAL value (of good quality Pandas) very quickly (price appreciation).

    High Demand + Low Supply = Price Appreciation

    Let's return to the 2009 Panda, which had a high mintage for its time of 600,000.

    When released, they were only about 20% above spot. $18 per coin (it was actually less than this on release, but it's a good figure to start with), when spot was $15/oz. By early 2011, just two years on, its market rate was $90 (now is about $100). That's 5x increase in FIAT terms ($18 turns into $90), or a double increase in REAL terms (A 2009 Panda today is worth at least TWO 2011 Pandas).

    This was fairly easy for the 2009 Panda coin to do. Its release price was low, and historically almost all Pandas have done better than spot since their release.

    3. Birth place of the Pandas
    There is so much local demand for Pandas, and with Pandas being in such small supply (mintages usually less than 6million per year, which is equivalent to just 1-2months production of ASEs), local Chinese demand is enough to drive the prices up, without even having to factor in international demand which is also very high.

    Local demand, in my opinion, is the leading indicator for whether a coin will appreciate. If the Chinese don't want them, it's unlikely that the world will want them. At present, there is HUGE demand for them, so much so, that supply is tight, even for 2011s.

    I see the doubling of the mintages from 2010 to 2011 (1.5million to 3million), and from 2011 to 2011 (3million to 6million) as a good indicator that demand is strong, and supply is tight.

    We've been through the stats before, but lets quickly run through them again.

    1,400,000,000 Chinese; 6,000,000 Pandas = 1 Panda per 233 people.
    22,000,000 Australians; 300,000 Dragons = 1 Dragon per 73 people.

    The supply of 2011 Pandas is THREE times tighter than the Dragons (not including worldwide demand for either coins). Or since this discussion is really about Dragons, there are simply too many Dragons. If Dragon mintage were cut to 100,000, then it is very likely we would see a greater appreciation of the Dragons in the coming years.

    Of course, someone will say: "BUT the average Chinese person cannot afford Pandas like the average Australian can."

    AND I would say "You are wrong." The average Chinese person doesn't go into debt, and tends to be a net saver - and could easily afford a Panda.

    EVEN IF I agreed with you "Ok, the average Chinese person can't afford the Pandas." There are enough elite and middle class Chinese to adequately cover the Panda positions.



    ====

    There are a few more reasons why I think 2012 Pandas will outperform Dragons on REAL terms, but I think that's enough for the moment, I want to get to my hunt while spot is lower.

    ====

    In regards to the comment: "Pandas still have the problem of being pandas. Stupidly large number of knockoffs kicking around. I wont touch them with a 10 ft pole."

    This is a typical response of a Pandaphobe exhibiting his Pandahysteria.

    1. The counterfeit Panda issue is a NON-ISSUE in China. If you sell fake Pandas in China and get caught, you are likely to DIE. (If you sell them overseas, well that's different).
    2. The local Chinese can recognize fake Pandas as well as we can recognize fake ASEs. (YES there are fake ASEs... at least 2 other Stackers have seen them now... I showed a fellow stacker the fake ASE being sold at the recent ANDA meeting in Sydney). If you are unfamiliar with ASEs you probably won't recognize it as a fake... same with Pandas, if you are unfamiliar with Pandas you probably won't recognize a fake. If you are familiar with ASEs, you'll probably notice it is a fake. If you are familiar with Pandas, you'll probably notice a fake Panda.
    3. There is a reason why counterfeiters target Pandas - BECAUSE Pandas are profitable.
    4. The more familiar people are with Pandas, the less of an issue counterfeiting becomes. E.g. People still accept $100USD even though this has been counterfeited many times.
    5. The 2000 Panda is probably the most counterfeited Panda coin, and yet it still commands the highest price on average ($400-$3000). Why? Because informed people can distinguish between genuine and fake.
    6. Do your homework. There are whole communities outside of Silverstackers dedicated to Pandas, and also identifying the latest bad bears (counterfeits). Peter Anthony's website has good writeups on bad bears, as does the China Coin Forum.
    7. In my opinion the real source of Pandaphobia has nothing to do with Pandas, but is more of a heart issue, which is clearly recognized by this statement "Its hardly suprising. 90% of things coming out of china are fakes." This is a really very sad comment to make. Sinophobia cloaked with Pandaphobia.
     
  3. fishball

    fishball New Member Silver Stacker

    Joined:
    Apr 11, 2011
    Messages:
    6,509
    Likes Received:
    1
    Trophy Points:
    0
    Location:
    Shin Sekai Yori
    Great post yennus. Sinophobia, learnt a new word today!
     
  4. goldpelican

    goldpelican Administrator Staff Member

    Joined:
    Jun 29, 2009
    Messages:
    17,648
    Likes Received:
    580
    Trophy Points:
    113
    I recall many people buying them as pre-orders (and many are still yet to receive them! hurry up and mint and ship, mint!) in the $44 range in June, and they were $49 at the mint on day of release. $80+ prices aren't "issue" prices.

    Most of the Lunar demand is actually Europe and USA. Seeing as something in the order of 80-90% went straight overseas, if we took a guess at 15% of the mintage being available locally, it's more like:

    22,000,000 Australians; 45,000 Dragons = 1 Dragon per 488 Australians.

    If we just assumed Germany was the only other destination where coins went, it would be:

    22,000,000 Australians; 81,800,000 Germans; 300,000 Dragons = 1 Dragon per 346 people.

    You could do a similar comparison with Pandas if there were any stats on how many left the country. Either way, I don't think mintage to population comparisons are valid when both coins are collected globally.
     
  5. fishball

    fishball New Member Silver Stacker

    Joined:
    Apr 11, 2011
    Messages:
    6,509
    Likes Received:
    1
    Trophy Points:
    0
    Location:
    Shin Sekai Yori
    Germany has an even more amazing demand for Pandas GP.

    There are 12oz Silver pandas which go for $7000 US+ on Germany eBay.

    So you could pretty much add the German population to the China population for Panda demand if you want lol
     
  6. goldpelican

    goldpelican Administrator Staff Member

    Joined:
    Jun 29, 2009
    Messages:
    17,648
    Likes Received:
    580
    Trophy Points:
    113
    Yep, hence the last line - you would need to know the population of COLLECTORS, not the population of countries.
     
  7. yennus

    yennus Well-Known Member Silver Stacker

    Joined:
    Oct 24, 2010
    Messages:
    4,762
    Likes Received:
    91
    Trophy Points:
    48
    Location:
    Shanghai:Sydney
    Thanks GP, your wisdom is always welcome.

    Indeed, if Dragons can be had for $44-$49, I can imagine some people seeing some spectacular returns very quickly. Unfortunately from what I've heard, many people have been unable to get their Dragons at $44-$49.

    Your comments regarding international movements of coins is also valid. Though my opinion does differ.

    If we include the potential population stats of the Dragons and Pandas, Pandas will usually always have a higher potential sale base. Why? Because Pandas are sold everywhere that Dragons can be, whereas, Dragons are not as available in China. [It's an unfair advantage of 1.4billion that is both a blessing and curse]
     
  8. yennus

    yennus Well-Known Member Silver Stacker

    Joined:
    Oct 24, 2010
    Messages:
    4,762
    Likes Received:
    91
    Trophy Points:
    48
    Location:
    Shanghai:Sydney
    It also goes back to the potential size of customers.

    Pandas appeal to both numismatic collectors and bullion stackers (locally and internationally).

    Whereas, of late, (partly because of their unavailability and price) the Dragons are more geared numismatic collectors than bullion stackers.

    <I'm not a Dragon hater. I'm not saying that Dragons are a bad investment. If you can get a Dragon for $40-$50 that's a PHWOOAR! BARGAIN!>

    While I don't agree with GP totally, his reasoning is sound. I could be totally wrong, and 2012 Pandas could stay at bullion basement prices forever. I don't see it that way. But I haven't heard from a Higher Power that this will/won't be the case.

    Thanks again for your thoughts and comments GP. Truly much appreciated and valued.

    You should definitely come up the SydneyStacker's Meet and give a presentation on Dragons and Lunars and such. :)
     
  9. lionfishcoin

    lionfishcoin Member

    Joined:
    Jan 7, 2010
    Messages:
    186
    Likes Received:
    1
    Trophy Points:
    18
    Location:
    Sydney
    I do like pandas but recently I find out the truth is that the price of panda is even more crazy than dragon on this site.

    So anyway I did some research by myself and I found out the best price I could source the panda set 2001-2011 is very similar to the lunars series1 set. They all around $1200.

    So to me they are all good investment coin.
     
  10. fishball

    fishball New Member Silver Stacker

    Joined:
    Apr 11, 2011
    Messages:
    6,509
    Likes Received:
    1
    Trophy Points:
    0
    Location:
    Shin Sekai Yori
    Er you can get em at $1200 from yennus?

    http://forums.silverstackers.com/topic-14196-phoar-bargains-panda-hunt-special-panda-hunt-day-5.html

    Using the prices from Day 3.1 (http://forums.silverstackers.com/message-197225.html#p197225)

    2001 $111
    2002 $125
    2003 $188
    2004 $159
    2005 $104
    2006 $144
    2007 $88
    2008 $88

    Then assuming $90 for 2009, $60 for 2010, $50 for 2011.

    How is that 'crazier than dragons'?
     
  11. lionfishcoin

    lionfishcoin Member

    Joined:
    Jan 7, 2010
    Messages:
    186
    Likes Received:
    1
    Trophy Points:
    18
    Location:
    Sydney
    a typo there, should be 2000-2011
     
  12. fishball

    fishball New Member Silver Stacker

    Joined:
    Apr 11, 2011
    Messages:
    6,509
    Likes Received:
    1
    Trophy Points:
    0
    Location:
    Shin Sekai Yori
    Got a link? At that price I'd buy a set myself! :lol:

    Just the 2000 panda is worth $375-500 :|
     
  13. Slam

    Slam Well-Known Member Silver Stacker

    Joined:
    Sep 27, 2010
    Messages:
    1,294
    Likes Received:
    49
    Trophy Points:
    48
    Location:
    Au
    I have noticed that the desire to create a full set is what is driving the panda prices. You have insane people paying $400+ for a year 2000 panda.

    For me, if a single coin is overprice. I give up on the entire set. Personally, I have given up collecting any Pandas pre-2007.

    I am expecting the 2012 Panda to have a mintage of at least 10 million.

    The difference is that for lunars, we know there will be 12 and that every 1oz coin in the series contains a maximum mintage of 300,000.

    If you bought enough in the front of the series, ie Mouse, Ox, Tiger, Rabbit, Dragon.

    You can easily trade in the future to complete your set. So technically your set is guaranteed.

    Panda's like kookaburras are left unopened, there is no set to be completed. Once people realise that they cannot complete a set of pandas.

    They wouldn't bother with the earlier coins. Simply because the prices are unrealistic.

    I don't think the 2012 Panda will do better then the 2012 Dragon. A mintage of at least 6million (most likely 10 million), versus as mintage of 300,000 and is part of a defined set.

    Likewise, if the chinese demand is that strong for Pandas. What if they suddenly decide to buy lunars as well?

    Anyway, each to their own. My money is still on the dragons, provided you can get them at Perth Mint release price. Everyone had their chance to get a roll on release day.

    Slam
     
  14. unfunkable

    unfunkable Active Member

    Joined:
    Feb 7, 2011
    Messages:
    1,017
    Likes Received:
    0
    Trophy Points:
    36
    Location:
    Canberra
    apparently the dragon hits the panda with hits fireball and the tiger gets roast panda meat for dinner
     
  15. Dirtbikepilot

    Dirtbikepilot Active Member

    Joined:
    Aug 23, 2011
    Messages:
    1,225
    Likes Received:
    3
    Trophy Points:
    38
    Location:
    Ubiquitous
    Poor Pandas :( how can they hope to compete against a Dragon?

    Great 3 min effort. Would have taken me 3 hours.
     
  16. fishball

    fishball New Member Silver Stacker

    Joined:
    Apr 11, 2011
    Messages:
    6,509
    Likes Received:
    1
    Trophy Points:
    0
    Location:
    Shin Sekai Yori
    I share the exact same view about collecting a 'set'. I don't have any pre 2007 Silver pandas either because of the exact reasons you stated.

    However, I don't think $400 is insane for a year 2000 panda.

    You want insane? Take a look at the Chinese lunar coins and other coins in China...

    Year 2000 1oz Silver BU Dragon (Round) - $838
    Year 2000 1oz Silver BU Dragon (Fan/Blossom) - $550
    Year 1980 Copper Proof Winter & Summer Olympic games - $12,000
    Year 1989 12oz Silver Proof Snake - $18,490

    Plenty more examples etc, can see the madness in pricepedia if you subscribe to it.

    Now of course I think these people are batshit crazy but a $400 panda looks very tame in comparison. But no, I won't spend $400 for an oz of Silver unless silver spot price is > $100.

    I believe there is definitely a massive upside potential in the Chinese market in the future, just seeing some of these crazy prices in auctions in China and Hong Kong gives me confidence that the returns on these coins will be high due to the strong collector base.

    To be honest, pandas and other chinese coins are a small part of my PM portfolio (< 10%) but I believe this is a good area to be in, a little risky but potential gains are huge.

    Will the panda out perform the dragon? Maybe. Maybe not.

    My 2 cents? Buy both! As close to spot as possible. You will definitely gain regardless of which one you buy. However given how difficult it has been to obtain a sizable amount of dragons I would think that any gains would be offset by the sheer bulk of pandas I can buy even if the gain % per coin is lower.
     
  17. lucky luke

    lucky luke Well-Known Member Silver Stacker

    Joined:
    May 15, 2011
    Messages:
    1,909
    Likes Received:
    178
    Trophy Points:
    63
    Location:
    Qld
    Fake Chinese tourists?
     
  18. lucky luke

    lucky luke Well-Known Member Silver Stacker

    Joined:
    May 15, 2011
    Messages:
    1,909
    Likes Received:
    178
    Trophy Points:
    63
    Location:
    Qld
    Are you a fully paid up American Republican voter by any chance???? ( :) Yeah, I know your id says you are from Perth, but that could be a fake Chinese ID your using).
     
  19. goldilox

    goldilox Member Silver Stacker

    Joined:
    Mar 17, 2011
    Messages:
    448
    Likes Received:
    0
    Trophy Points:
    16
    Location:
    AgSpot
    i do think the PM dragon is still a numi coin but you have a very good point yennus
     
  20. jpanggy

    jpanggy Active Member

    Joined:
    Jun 23, 2011
    Messages:
    1,668
    Likes Received:
    1
    Trophy Points:
    38
    Location:
    Melbourne
    Dragons are now considered numi, GP has clarified it and therefore it can/will attract gst.
     

Share This Page