Premiums and Expectations

Hey Guys,

Just trying to figure this out for myself and any help would be appreciated.

Trying to figure out the correlation between the premiums of the given coin based on their design / series / year , etc.

From what I gather, a lot of the premiums are based on the mintage of the coin. Supply vs demand. That's easy, so lower mintage dictates higher premiums.

I also understand that sometimes the snake will sell for less than a dragon / horse as it's a less popular year. Moreover, the first coin in the series will also sell for more than the rest of the other series as the series becomes popular and tries to track down the remaining pieces to complete their set.

What I don't get is that how come a spider will have higher premiums than the scorpion , how the eagle will sell more than the stock horse, etc. How a turtle will be more popular than a zombie or a map of australia
(Not sure if i got these correct but you get my point).

Essentially, how do you know if a coin is going to do well or not? Is it based on the design? Is it based on the subject matter of the coin (insects vs. maps of australia vs. world war stuff vs ships vs zombies)

With the Zeus as a prime example , the premiums are huge. Now the question is are the premiums huge now only because of the hype and the recent release. Will it still have the same premiums 5 years down the track or will it just be as normal as anything else after people forget about this coin ? Is it better to sell it now (not that i have one) and realise the profits or hold on to it thinking that the premiums will be even higher down the track?

Have older releases previously whose premiums were quite high kept their values til this day? Talking about coins probably more than 5 years old now.

I don't know if my blabbering makes sense but will appreciate any input.

cheers

 

I would advise you to buy a Macdonald book...and go through it...see what their RRP on release...mintages etc.

RAM Bird of Australia Series or Endangered ANimal has a high RRP when released in 1990, but now you can get it at bullion value.

Not all low mintage does well...it is only one of the few factor in.

Red Back Spider was a one off...as certain supplier rumoured to take most of the mintages and quite a lot goes out to Europe.

Carded Stockhorse is bound to get their premium quickly, because of the fact they are a carded bullion (that Perth Mint hasn't release for awhile...well except coloured koala) and the fact that Australian has the first dib in getting carded in the primary market (since the boxed bullion goes to Europe/US).

Dragon was a kick off for the Lunar Series...combination of being a popular design and precious metals hitting a record high.

As you can see...there is not only 1 factor that will lead a coin/series become popular. Looking at the recent release of SBSS/Silver Shield, the Death and Debt coin at one point was selling for $95-$100. Not so much now.

One advice that was given to me by a coin/stamp shop...if you pay retail for everything...you are in the losing game. That advice was specifically for stamp...but I can see how boxed coin can fall in the same fate.

Hit and miss...

 

This is a terrific and very important topic question for all those who buy coins.

I am relatively new into this notion that precious metals products may be a good investment of some of my fiat money. 18 months is not a long time compared to many who have been stacking for years, but that's how long I've been stacking.

From what I have learned, the premium at the original point of sale (before the after market) doesn't necessarily have much to do with the short term value that the coin will eventually be perceived as by buyers/collectors over the next few years. I am guessing that a mint that produces a coin generally has a formula in place which determines the mint's selling cost. It has mostly to do with design/production costs plus a percentage for premium on top of this figure. As for the aftermarket perceived short term value (and therefore premium) I believe that a minimum of 90% of that premium will be derived at by hype that has been perpetrated prior to, during, and after the release of the coin.

In my view, the Zeus and Poseidon coins are good examples of crap that is being hyped to no end creating what seems to be a strong demand. In a short time, these coins will no longer be hyped and people who were tricked into thinking these are somehow worthy-of-the-hype coins will come to their senses and realize that they paid a lot for crap. Then the prices will shrink back down before you know it. So, if you were someone who bought one, I would suggest to sell it while the hype is on and make your money and with that money buy good coin products (which in large part will depend on why you are buying precious metal products in the first place and also will depend on where you live or where you may be living in the next several years).

As for intermediate and long term value, I believe coins that have a very good design and that are part of a successful series of well designed coins tend to maintain a good premium. Lower mintage, first in a series, type of finish, quality of production (whether many of the coins produced have nicks, dings, and scratches or milk spots or other such production blemishes), and the thing depicted on the coin certainly can have a positive or negative affect on the intermediate and long term value.

The first series of coins I started to buy are from the Perth Mint Lunar 2 series. While I believe the series will maintain very strong popularity, initially in 2012 when I made my first coin purchases as a stacker I got sucked into the duplicitous hype of the Lunar Dragon and like many, way over payed for bullion Dragon coins. In hindsight, I should have been buying 2008-2011 Lunar 2 coins at the time I was buying some Dragons.

To wrap it up here, I feel your topic question, silver91, is always important for me and I would think to most people who buy coins.


.

 

It's all about desirability.

 

guys, appreciate your input and different perspective on the topic.

does shed some light on the matter and all good things to note while purchasing these coins

always good to learn from the more experienced people in this forum

cheers

 

supply (mintages) mean zero without demand. Demand dictates prices as an independent variable.

If no-one wants a coin with 1000 mintage its worth less than the panda with 1000 million mintage if people are demanding it.

The key is a collectable where demand outstripes supply and there is a supply side shortage.. this is what causes prices to rise in the secondary market.

your welcome

1for1

 

I think everyone and their 4th grade daughter already knows that it's demand (vs supply) but that is not the answer. It's what drives the demand is what the answer is and what silver91 is really asking about I think.

Reminds me of people claiming that the market price of silver is based on sentiment....like duh! Everyone already knows that. The answer really is what drives sentiment.

.

 

nail on the head - curious as to what drives the demand and what factors weigh more than others

 

^ Yes, I can't tell you how many times I have seen people spit out the non-answer answers....tons. It's no different than if I were to ask, "What makes blue, blue" and some person thinking they are telling you the answer responding, "Because it's a color." Yeah, like no shit Sherlock....that's not the answer. Now if they told me that it has to do with a light wavelength of around 450495 nm and a spectral frequency of around ~670610 THz then you'd be giving me a real answer.

As I've already stated, the answer to the question of what drives demand is mostly hype....in my opinion.

I have seen crap coins (Zeus and Poseidon) see high demand based on hype and I've seen much less demand on lots of silver coins and medals based on lack of hype (an example would be many US Mint commemorative silver coins which are often well designed, are high quality, are never repeating in design, comparatively (to equal size and year silver Eagles for example) low mintage, etc ).

Then there are coins that are hyped that deserve the hype. The US Mint curved baseball coin is an example in my opinion. And I say that as someone who missed the boat on these because frankly, I didn't have the money available. I also think that finally the hype is starting to match what is deserved for the America The Beautiful series coins. When I bought my first one in like December 2012, there was little interest in these from what I saw on different forums. Now the sentiment is starting to be where it should be in my opinion.

As for high relief coins or medals, almost any high relief coin or medal out there has a better design than the Zeus and Poseidon. Want to see some equisite designs and for recently released items then see here: http://forums.silverstackers.com/topic-52136-chinese-buddha-silver-medallion.html

 

Lots of words in this topic. I've not read the last few replies so apologize if the topic had moved on.

I'm new to stacking (first coin purchased 1 week ago).

Spot Value of Silver 1oz = 11.50.

I purchased all 1oz Silver coins (Britannia, Maple, Koala, Kookaburra and a Bullion) for between 17 - 20. Purchasing from the main dealers each coin was coming to near 30.

I thought my purchase price was pretty good.

 

so can anyone give us an example of a hyped up coin within the last couple of years that have held or even better that their premiums have gone up?

 

Mongolian Hedgehog?

 

A good generalization in the world of collecting is that hype is for non performers, and the big earners are sleepers, until they take off.
A good example is the Zombucks Walker - coins for the apocalypse - but rounds by most standards.
Issued for 90 days (about 40,000), at about $3 over spot they quickly doubled in market price, even for tubes of 20.
With 10 in the series, 2, 3, and 4 received some market hype (great expectations based on the Walker), nothing special from the mint that I heard about.
The result of this hype was non-existent. Same 90 day minting period, but no more purchased, sales have been flat, at the 40k.
Value on #2 (Morgue Anne) did pop up a bit after minting ended, not so for #3 (Zombuff). #4 is still in production.

In the world of rounds, many have increased in premium value, little or no hype. Staying power is yet to be demonstrated.

The Doctor Who coin (legal tender) 50th anniversary - from Perth mint has done very well.
Market price nearly doubled when minting stopped, although some dealer still have some at an increased price, but less than market (eBay).
For the record, this is a colorized coin.
As far as I know, no hype.
More in the series, still available from the mint at issue price.

Certainly others know more about coin resale value than I do.
You can't go wrong thinking 'Lots of hype, is the premium worth it?'
Likewise - 'The big earners will be sleepers, bought by true collectors, and 'accidently' increase in value.'
Getting ahead of the curve and spotting trends is a talent that can be cultivated. Most buyers do not have the patience.
I have sold many collectables (not silver) that had good worth because when manufactured, they were shortly discarded with the trash.
No charge for ownership when issued, now $50 to hundreds. Even at auction I bought them for just a few dollars, no collectors in the crowd that day.

Something marketed as 'collectable', will be for novices, not serious collectors, and duds. Not always, but often.

I opted out of the U.S. mint Baseball Hall of Fame curved coin, but others may know how it has been doing, one to watch.

 

I think that hype needs to be better defined. I would agree that hype from the manufacturer (adds, commercials, mailings, etc.) should always be carefully evaluated as it does look like they are trying too hard to sell a product. Hype from fellow collectors and stackers some see as excitement and a desire to own by others in the hobby. Some folks see that kind of hype in a more negative way - uneducated drones jumping on the bandwagon. Guess you have to decide for yourself how you want to view your fellow stackers. Either way, this is one of those subjects that will continue to be debated long after we are gone!

 

Such things as 'hype from fellow....' are often fabricated, on the net in general, and often by the time this is realized it is too late.
Being a long standing member of relevant forums, getting a feel for the personality and dependability of posters providing hype, is a safeguard.
Know your source, it's not rocket science.
On the internet, this requires skill.
A lot of sheeple read internet postings like the newspaper - 'It must be true.'

 

I would add to BeHereNow's comment that "hype" is very broad and very inclusive. Lot's of ways people (whether they work for the mint, a large dealer, a small shop, a forum member, or anyone for that matter) can hype a product.

Widespread hype is what pushed the ugly Perth 2012 Lunar Dragon bullion coins to ridiculous levels.

It's part of the game though...hyping products will never stop.



.

 

I would agree with that. You do have to know something of the other posters, who you tend to agree with and who seems to be simply a shill. I always respect a good discussion and well thought out talking points even if I don't agree, still respect "Hey I like it, I'm getting one!" and tune out "You like this coin so you are an idiot". We have a little of everything here and that is what makes it fun.

 

In my view, hype generally has to have a component of personal gain for the one hyping.

There are some sellers and dealers that are members of various stacker and coin forums who no one would necessarily suspect they are a seller/dealer and who come on to hype the coins that they want to move out of their inventory or if they are an eBay seller, want to sell immediately or in the not too distant future. That happens routinely and it's something that moderators look out for I suspect.

Certain marketing and advertisements are generally a form of hype.

That's what I see hyping a coin to be and I do believe that lots of coins on the market have gained much of their premiums by this mechanism. But this is just the way the game is played much of the time. I remember a time about 20 years or more ago when I saw a barrage of marketing in magazines and tv touting the exclusive opportunity to own rare investment coins. What was being sold were dozens and dozens of different year and mint mark Morgan dollars....many I would bet were coins that are quite common years/mint marks. I'm sure the hype got plenty of people to pay a lot of money for coins that are nothing special at all in comparison to many other numismatic coins and this hype-driven demand likely pushed prices higher and higher. The point being...this is just the way the game is played.

I have personally given props to plenty of coins posted by other members that I don't own...that's not hype because I gain nothing from lauding such coins. It's just appreciation.



.

 

It is human nature to want to belong to groups, have common interests with others.
If someone buys one coin, they think is special, it makes them feel good about themselves, and their purchase, if others agree, and buy the same coin.

So Joe Blow gets on all the chat boards to tell anyone who will listen about this great - Political statement - coin, that is sure to increase in value.
Lots of Joe Blows do this, and the hype is on.

Humans want many forms of personal gain that is not financial, like ego boosting, like belonging to a group.
They may not start the hype, but they add to it.