[QA] Why would you be posting graphs/charts of super-rare coins...

Discussion in 'Modern Chinese Coins & Medallions' started by yennus, Oct 7, 2011.

  1. yennus

    yennus Well-Known Member Silver Stacker

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    Hi THUCYDIDES79, welcome to the Panda Forum. I think the chart you are referring to is this one, yes?
    [​IMG]
    Source: http://www.pandacollector.com/pricepedia-index.html

    If so, I might hazard a few answers. Hopefully PandaCollector will give his official response:

    Q> Reasons that the PPI (Panda Price Index) is used as a selling/marketing point on ALL coins?

    A few things that should be understood prior to answering the question:
    1. The PPI isn't meant to directly infer performance on all coins. Just like the DOW Jones Index and S&P 500 doesn't cover ALL the stocks performance. The PPI is only an index of 20 Pandas with mintages less than 2000.
    2. What the PPI does provide indirectly, is a snapshot of the demand for the Panda market. If these 20 Pandas aren't not performing well, "generally" the other more common Pandas should suffer also. If these 20 Pandas are performing well, then "generally" the other more common Pandas should be doing well also. Of course there are performance differences with each individual coin.

    A> Generally speaking, if the PPI is going up, this trend should be seen throughout the Panda Market, and thus far it has been fairly accurate. Thus the PPI can be used as a marketing point on the Panda market, in much the same way, when the S&P 500 and DOW Jones Index is up, those are used as a marketing point for the stock market.

    I hope this helps.

    Side note: Since my involvement into Pandas, I have been trying to keep track of the most common 22 Pandas (1989-2011). Mainly because the top 20 are generally out of my reach. You could call this the Yennus Panda Price Index, or the Index For Poor Pandas. Those that have been to the Panda/SydneyStacker Meets have seen this chart, and what is clearly evidenced is the Panda's performance in relation to silver; and as you would expect, it's a curve very similar to PandaCollectors.
     
  2. yennus

    yennus Well-Known Member Silver Stacker

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  3. yennus

    yennus Well-Known Member Silver Stacker

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    a) It is ok to disagree.
    b) Panda premium over spot doesn't matter, because the 1oz silver Panda was still one of the most easiest sources of silver in the past, and even today.
    c) Scrap silver in China was rarer than most other nations, especially during the 1980s.
    d) History lesson, during the Civil War 1940s-1950s, the riches of China left with the Nationalists and those who fled. China quickly returned/stayed in the agrarian age. During the Great Leap forwards, almost all metal, especially precious metal, was turned into government hands.
    e) Most of the silver found in China then and now is a result of mining and importation.
    f) Pandas back in the 80s and 90s were probably one of the easiest and most reliable sources of bullion.
    g) Even today, 1oz Pandas are the easiest source of bullion to find. Aurora Et Luna will testify to this (hopefully), the local banks hold stock of 1oz Silver Pandas, but not bullion silver bars.

    a) This is fairly easily to check as true.
    [​IMG] A 1/10oz 2006 Panda <43,100 Minted
    [​IMG] A 1/20oz 1991 Panda coin ring. BU est. <11,500; Pair 1990 Panda coin cufflinks. BU pop est<24,000
    [​IMG] A 1/10oz 1987 ring BU est. <52,000; and 1/20oz 1988 BU est. <27,000 jewelry set. (I can't read the size, but I'm guessing these are the sizes)

    a) I don't think any other bullion series coin has performed as well. I'd be interested to know of another set of bullion coins that have performed as well as the Pandas over the last 30years.
    b) I think you are forgetting that Pandas are sold as bullion coins that take on numismatic premiums. They are not sold as numismatic coins in the years they are released. When purchased in monster boxes, they are only a few percent more than ASEs. E.g. 2011s can be had for as little as 8% more than ASEs in some places.
    c) This is a chart that tracks the most common (not the rarest) Pandas of the last few years in comparison to ASEs. It's a good reflection that it is not only the rarest Pandas that perform, but that in general, all Pandas perform better than spot, and standard bullion coins (ASE/Maples/Philharmonic/etc).
    [​IMG]
     
  4. Argentum

    Argentum Active Member

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  5. 940palmtx

    940palmtx New Member

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  6. comeaux

    comeaux New Member Silver Stacker

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    I'm working now but I will put up all of the "Panda Jewelry" my wife owns later tonight ! ;)

    Oh and the question about "what happens when SHTF" ... thats a great one. I don't have much time now but will add more later.

    Ok the same thing will happen with numismatics (any type) as will other collectables such as famous paintings of "Van Gogh" & "Da Vinci" or any other valuable collectibles.

    People will hold on to "high value" items until the very end, look at history.

    If the SHTF to a level where you are using $1,000 numismatics to buy a loaf of bread, then all the money you have in the bank or anything you own will also be worthless.

    We need to look at things rationally.

    I'm going to put together a list of "what ifs" later to bring this into perspectives ... :D

    Oh and the guy who I saw purchase a $30,000 Morgan Dollar last week on Heritage Auction ... I hope he brings that 1 oz coin to me to buy a tomato and cucumber when the SHTF !!! :lol:
     
  7. hiho

    hiho Active Member Silver Stacker

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  8. comeaux

    comeaux New Member Silver Stacker

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  9. hiho

    hiho Active Member Silver Stacker

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  10. fishball

    fishball New Member Silver Stacker

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  11. fishball

    fishball New Member Silver Stacker

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    The PPI is not an index for performance on the broader panda market.

    I always thought it was merely an index used to observe whether or not panda coin rarity had any correlations with prices.

    If you want a panda market index, then it'd make more sense to take the 1986- current year pandas and exclude the outliers such ad the 27g 1984 $3000 worth silver pandas.

    That would make much more sense imo. Might consider doing it myself this weekend.
     
  12. comeaux

    comeaux New Member Silver Stacker

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  13. yennus

    yennus Well-Known Member Silver Stacker

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    Hi BullionBaron, welcome to the Panda Forum.

    Your statement of "The PPI is not like the DOW/S&P, it's more like selecting the best performing stocks on the market..." is not accurate.

    This was Peter Anthony's response to the following question regarding his PPI.
    Question: What is the range of performance of the individual coins?
    Answer: The lowest gain was 73% and the highest was 2,748%. The average gain as of January 1, 2011 was 503%

    IF the PPI were selecting only the best performing Pandas, the gains would be far far higher than what his PPI has achieved.
     
  14. Pandacollector

    Pandacollector Active Member

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    The PPI was constructed with the thought that the low mintage coins would reveal the long term trend in Panda prices sooner than coins with larger mintages. They are harbingers for the rest of the series, imo, because they demonstrate what happens when demand exceeds supply. The PPI isn't designed or intended in any way to exaggerate the series' price performance. There were several spectacular performing coins that I left out because I didn't have at least one price point per year for them. Had I included those the Index would have been several hundred points higher. I hope that clarifies things but feel free to ask questions.

    Best wishes,
    Peter Anthony
    http://www.pandacollector.com
     
  15. yennus

    yennus Well-Known Member Silver Stacker

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    Thank you Peter, your presence here is most welcome.

    I hope that answers the questions that were asked.
     
  16. ReturnToZero

    ReturnToZero New Member

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    Absolutely ridiculous. How is picking 20x2000 mintage (40,000 coins) an index of millions and millions of coins? The price of them going up is purely only because there is only a couple of thousand out there amongst billions of cashed up Chinese and Western buyers.

    The Stocks on the Dow is backed by the productivity of the companies that make up the index and as such, given rationality, are valued mostly on intrinsic value. The numismatic value of a panda is extrinsic and is only based on whatever the hell the next cashed up guy thinks it's worth, the only intrinsic value is the bullion.

    You argue that the 20 with 2000 mintages are not necessarily the best performers but that doesn't matter - what matters is that they are incredibly advantaged from the start by been ultra rare, regardless of what the last person decided to pay for it.

    A better analogy would be if all the companies in the whole world (lets say 100) just produced the same type of toilet paper, and the Dow, made up of 20 companies who issued 2000 shares whilst the rest issued millions. Of course the price would be through the roof on the top 20.

    The whole point of an index is to take a basket and represent the market as a whole - the PPI represents squat.

    This is purely an exercise to give people the perception that panda's will make you rich and you should pay more.
     
  17. fishball

    fishball New Member Silver Stacker

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    There's more detail as to what the index actually measures here: http://www.pandacollector.com/pricepedia-index.html

    I think this is the most important part

    It doesn't actually say it's indicative of the entire panda market trend.
     
  18. hem9

    hem9 Active Member Silver Stacker

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    That is exactly what I was saying in the other forums but I broadened it out to any type of bullion that goes for multiple times of intrinsic value (melt value) and purchased in the hopes of selling for a higher price. I feel it is like other types of investment which is looking to profit from the analogy of "the greater fool"
     
  19. fishball

    fishball New Member Silver Stacker

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    But isn't that exactly the same thing people are doing with 1oz Silver proof dragons now hem9?

    Pay $112.50 for 1oz Silver proof dragons (multiple times over spot melt value) and hope to sell higher price.

    I realize you speak of bullion, not proofs but Panda bullion (excluding 2011) silver coins are as much a numismatic item as proof dragons from the mint.

    (In fact, upon deeper thought I realize my entire stack is based on the premise someone else down the road will pay more for it than what I paid for :lol:)
     
  20. ReturnToZero

    ReturnToZero New Member

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    I don't question that in detail, the index was created for the right reasons, but taken out of context (i.e. compared to as the Dow, which is representative of an entire market) is misleading.
     

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