Fractional Purchasing - how would you split up an ounce?

[JulieW]

I think 200 coins are the best deal since they have a $200 support being legal tender (though if the coin goes to $200 it won't be sold!). They are also unlikely to be counterfeit. On a bullion buy you can usually find 200's for less than 3 percent premium and (correct me if I'm wrong) but Sovs hover on the 6-9% premium.

Interestingly in Bangkok I found that the gold dealers would only offer about 3% under spot for 200 coins, and spot for sovereigns. Their preferred coin was Krugerrand but I presume any 0.9999 coin would make them happy.

 

[Elemental]

When you look on the perth mint bullion site there's a big premium jump between 1/4 oz and 1/2 oz. I'd go 2 x half oz.

 

[mmm....shiney!]

When you look on the perth mint bullion site there's a big premium jump between 1/4 oz and 1/2 oz. I'd go 2 x half oz.

Don't go regular bullion coins or bars, you need to buy something that increases in value over time, therefore needs to have a limited mintage and worldwide appeal.

Krugerrand = worldwide appeal
(Pre 2011) Pandas = worldwide appeal and limited mintage
Krugerrand = bullion value
(Pre 2011) Pandas = investment potential

 

[JulieW]

Funny, I've always stayed clear of Kruggerands because of the counterfeiting issue (no doubt superstition) and as above, Pandas are problematic for counterfeiting as well. Though I am on the paranoid side.

 

[mmm....shiney!]

Funny, I've always stayed clear of Kruggerands because of the counterfeiting issue (no doubt superstition) and as above, Pandas are problematic for counterfeiting as well. Though I am on the paranoid side.

A certain degree of paranoia is of course healthy. I have it in spades.

But I remember a post from you some time back about your overseas travels and basically you said Australian coins in Asia were relatively unknown and unrecognised. But I think you said krugers or maples or eagles, it doesn't matter, were very sought after. Now a Kruggerand to me is just a small round bullion bar, there are just so many of them and furthermore, who grows a beard without a moustache? My father-in-law had one but he was a kraut - no need to say anymore. The point is, Krugerrands are well known and therefore easily liquidated.

And i agree, pandas are easily counterfeited, but we have the opportunity to purchase legit ones through members of this forum for very little over spot price, and earlier ones command a premium over spot that is difficult to match with any other BU coin. And we have access to members who know where to buy pandas from legit overseas markets.

It's time we threw off the shackles of of our antipodean upbringing and accept the fact that the rest of the world has something to offer that at this stage can't be matched by our own mints.

There are opportunities to purchase gold coins that have a worldwide appeal with a limited mintage as long as people get past the fear of counterfeits. If you're worried (not you Julie), then just do some hard work and research yourself.

The gold/silver/numismatic market reaches billions of people overseas - our little market is a side issue, if you want liquidity, you gotta swim where the big fish cruise.

Yennus! Will you wake up and post your opinion? You've been quiet for a while. I am going to PM you!!!!! PandaCollector - time for some serious input mate.

 

[JulieW]

It's time we threw off the shackles of of our antipodean upbringing and accept the fact that the rest of the world has something to offer that at this stage can't be matched by our own mints.

I giggled at this line Shiney.

It was because I just watched the new BBC Torchwood episode and during it, there is a series of news excerpts about 'life day' and one of the tickers reads: "Australian Prime Minister calls for summit on Life Day".

It made me wonder if an Australian working on the series was having an inside joke. Australia, land of the Summit, land of the Inquiry and Royal Commission (whatever did happen to Royal Commissions, have they been replaced by Summits).

Agree though that it's probably just my eccentric paranoia keeping me away from Krugerrands. I'm all for Maples and Eagles tho.

 

[mmm....shiney!]

It made me wonder if an Australian working on the series was having an inside joke. Australia, land of the Summit, land of the Inquiry and Royal Commission (whatever did happen to Royal Commissions, have they been replaced by Summits).

Summit was a brand of cheap cigarettes when I was younger. Brown and white packet as I remember.

Likewise, a Summit is all smoke and filters. Get a bunch of disaffected citizens together, whether they be young people, blacks or women and pretend to give a shit about what they say. There is the odd Royal Commission, but our poor old lady probably can't afford to commission any more so now they have Inquiries, which manages to satisfy the media and ease public angst. The funniest one is the Brisbane Flood Inquiry. i think it's been going since February, they're trying to work out why Brisbane got a flood. Might have something to do with the weather at the time.

I want one of those good old fashioned "probes" that 'Roy and HG' were always calling for a few years back. That'd be good. Actually i don't want one - but it would be good if someone else got one.

 

[Naphthalene Man]

I want one of those good old fashioned "probes" that 'Roy and HG' were always calling for a few years back. That'd be good. Actually i don't want one - but it would be good if someone else got one.

:lol:

 

[yennus]

Hey folks,

Just wondering - if you had the budget of around an ounce (call it 1600 max) - how would you split it with fractional coins?

I was thinking of buying 8 half sovereigns, or 2 full sovs and 4 halves.

I've just noticed a 1/10 gold philly which just sold for $175 - I LOVE phillies but couldn't shell out that money to get an ounce of them.

So, as a guide: You have $1600 max budget, and you need to acquire an ounce of gold in fractionals.

How would you do it? Give me some food for thought...

RD

In my opinion, which is often not shared by many people here, I would put your cash almost exclusively into gold or silver pandas. I'm merely voicing my experiences, and not intending to belittle anyone.

Here are the reasons why I am converting almost my entire stock of silver and gold into pandas.
1. Panda Pricing: Pandas are just as cheap as Roos/Sovereigns/etc, but rarer, and in more demand.

2. Panda Numismatic Advantage: A few years down the track, a Panda is worth more than its mere bullion price partly because of its rarity. Almost all old Pandas are also worth more than similarly dated Roos/Kooks/etc, even though they were priced about the same when released. E.g. A 2009 1oz Silver Panda was the about the same price as a 2009 Kook/Maples/ASE, but today that 2009 Panda is worth more than double the price of the equivalent Kook/Maples/ASE.

3. Liquidity: In a rush, I KNOW that Pandas can be sold faster in China than any other type of bullion. In Singapore or Malaysia, Pandas also sell for a premium. In the USA, slabbed/graded (PCGS/NGC) Pandas sell very well. In these silverstacker forums Pandas have almost always sold out for me - but I am still trying to sell my ASEs/Maples/Kooks/Koalas/etc. I even took some Pandas to Israel, and there was huge interest in them, but almost zero interest in other types of bullion compared to them.

In Australia I can sell the Pandas fast. (Almost any coin dealer will offer a price)
In China I can sell the Pandas fast. (Almost any bank or coin dealer will offer a price)

In Australia the Kooks/ASEs/Maples sell at a normal pace. (Almost any coin dealer will offer a price)
In China the Kooks/ASEs/Maples do NOT sell well at all! (No banks are interested; only a few coin dealers will offer very low prices for these)

You can review my previous sales from the last few days, and you will see that almost in every case, the Pandas have sold very well, whereas my Maples/Kooks/ASEs/etc have not (compared against the Pandas).

4. Panda Price Stability: Pandas usually do not fall quickly in price, maintaining their historical highs. This is fantastic! While other bullion coins are purely dependent on spot (e.g. Kooks/Maples/PAMPS/ASEs) Pandas maintain their prices. This is why it is important to get into Pandas asap, because their prices generally only move in an upwards direction. When silver was at $32/oz, people were still buying and selling 2010 1oz Silver Pandas at between $45-$55each. No ASEs/Maples/etc would sell at those prices.

5. Pandas are 999 Gold: In Asia, 999 gold/silver is always preferred over non-999 gold/silver (e.g. Sovereigns, etc). In Australia I have also had an easier time selling my excess Panda collection than I have had selling my previous sovereign collections. Perhaps in Europe they prefer their non-999 coinage, but for me I have found more demand for 999 coins. I have read that Greeks like sovereigns, but I can hardly see a scenario where I would be flying to Greece to sell my sovereigns. But I can envisage more scenarios where I might want to sell my Pandas in the nearby neighborhood E.g. Singapore/Malaysia/China/etc.

6. Panda Demand: There is growing demand for Pandas worldwide. People throughout the world are interested in Pandas. But demand for Pandas is especially strong in China. This alone can drive the price of Pandas upwards, not even accounting for worldwide demand. Simply put, Pandas are the easiest form of bullion for the Chinese to buy. They do not buy into ASEs/Maples/Kooks/etc. They go to their banks and/or dealers and buy Pandas. The demand for bullion in China is growing, and has a greater market potential than any other economy in the world. 1.4 billion people wanting silver/gold Pandas is likely to drive Pandas sky high, and past spot rates... but this demand will only mildly effect the price of ASEs/Maples/etc.

7. Rarity: Each month, the US Mint can make around 6million 1oz silver ASEs. In about 2months, the US Mint can exceed the number of 1oz Silver Pandas ever created. ASEs are pure speculative buys on spot (if spot goes up you win, if spot does down you lose). BUT Pandas are an investment that isn't purely dependent on spot. If spot goes up, the Panda price goes up, and you win. If spot goes down, the Panda price often remains the same, and you can still win.

*Bonus Reason: Jim Rogers buys Pandas. He's like the most amazing down to earth investor that I have heard, and he's been on record for buying over $270,000USD worth of Pandas in one hit.

This is my homework: Based on real silver data.

If I had purchased $10,000AUD worth of silver Maples/Kooks/etc in 2009, I would have made a modest gain of about double (spot $16/oz to $32/oz). [ASE then about $20, now $40] (200% Gain)
If I had purchased $10,000AUD worth of silver Pandas in 2009, I would have made an awesome gain of 4-5 times!!! [Panda then about $22, now $95] (431% Gain)

If I had purchased $10,000AUD worth of Maples/Kooks/etc in 2010, I would have made a modest gain of about (spot $20/oz to $32/oz). [ASE then about $24, now $40] (167% Gain)
If I had purchased $10,000AUD worth of silver Pandas in 2010, I would have made a modest gain of 4-5 times!!! [Panda then about $28, now $50] (179% Gain)

If I had purchased $10,000AUD worth of Maples/Kooks/etc in 2011, I would have about 250oz of ASEs.
If I had purchased $10,000AUD worth of Pandas in 2011, I would have about 222oz of Pandas.

If I expect Pandas to continue to perform the same way over their 1st year, then I only have to wait 1 year to recuperate the lost number of ounces due to the value of Pandas rising 12%. My Pandas are now worth 249x ASEs. But the ASE value remains locked at spot, and worth the same amount of ASEs (250oz).

If I expect Pandas to perform at half their performance in their 2nd year (216%), then I am already ahead, and my 222oz of Pandas are worth almost 480x ASEs.
But the ASE value remains locked at spot, and worth the same amount of ASEs (250oz).

So, in just 2 years, from 2009 to 2011, I could have made more than double the return of ASEs through Pandas, than if I had gone only with ASEs only.
Will the next 2 years be similar? I see very few reasons for Panda prices to decrease, but many reasons for their prices to increase.

 

[yennus]

A perfect real life example of why Pandas are the best investment bullion in my opinion:

http://forums.silverstackers.com/message-160790.html#p160790

A 1993 Carded Kangaroo sells for $47.
A 1993 Panda would sell for about $120-$200 (depending on condition).

Even a 2010 Panda sells for $50.
A 2009 Panda sells for over $90.

Why? It simply comes down to demand... There are more people in total (globally) that want Pandas than want Roos. The ability to move a Panda back to China to sell for a profit, is just as easy as moving a Panda from China to Australia, thus the Chinese demand for Pandas has a fast and direct influence on the Panda prices in Australia too.

Kangaroos are only recognized in the Australian market, and even their recognition in the Australian market is very small. Their supply is very small, but so is their current demand, and so is their potential demand. Low current demand + Low future potential demand = Low price.

Pandas are recognized all over the world, and even if their recognition in the Australian market is very small, their global demand is very big. Their supply is very small, and their current demand is high, and their potential demand is even higher. High current demand + High future potential demand = High price.

Which would have been a better investment in 1993, a 1993 Carded Kangaroo or a 1993 Panda? The good money is on the Panda.

Is it any different now? The fundamentals underpinning the Pandas are even stronger today than they were in 1993.

 

[Sargeant Argent]

I'd go 4 x 1/4 oz. AGE's and Maples I like how the maples are thicker and the AGE's are bigger around. I'll stay away from Pandas can't touch one for under 42 dollars, I'd rather have a 1 oz. Maple and a pre 67 canadian quarter. I see the demand for Pandas and numismatic bullion dropping in the future if gold is 5 - 10 k an oz. People won't care about what face is on the coin. You see it already with gold whatever the coin the premiums are fairly similar because the price is high. People are willing to pay double spot for older silver Pandas now but if the spot goes to $100 + I don't think people will pay that premium.
In a real SHTF scenario it won't matter if its a Panda, your gran daddies pocket watch or gold fillings you'll be buying and selling based on spot!

 

[yennus]

<apology in advance... I'm super tired and getting ready for a long day... too tired at the moment to be very gentle... but hopefully the following points are all sound. My response is not intended to be offensive>

I see the demand for Pandas and numismatic bullion dropping in the future if gold is 5 - 10 k an oz. People won't care about what face is on the coin.

So not accurate. The elites in China and elsewhere will still be buying Pandas because they have limited access to gold Maples/ASEs. Plus Maples/ASEs are not liquid in China, but Pandas are. The elites in China and elsewhere will always be in a market for a rare and desirable coin.

You see it already with gold whatever the coin the premiums are fairly similar because the price is high.

So not true... Get the Panda Pricepedia from Peter Anthony... even pre-2008 1oz Panda coins are selling above premiums... it's all publicly available knowledge... look up APMEX.

People are willing to pay double spot for older silver Pandas now but if the spot goes to $100 + I don't think people will pay that premium.

Some people can probably work out the maths pretty easily:

Buy a $40 ASE/Maple now... get zero return above spot in the future.
Buy a $43 Panda now... get possible returns of 400% within 2 years... even 10% returns in 2 years still outweigh the benefits of getting ASEs/Maples.

Alas... if a person does some homework they will see...the 1997 silver Pandas have gone from $2,250 to $41,700 in just three years. If people are willing to pay $41,700 it's likely there is a strong demand for Pandas at even $100/oz. BUT EVEN IF YOU ARE RIGHT... Pandas only need to appreciate in value by just a 10% premium to be a better investment than ASEs/Maples.

If you look at the historical data of gold pandas (which are currently over $1000/oz), you can see real life examples of Pandas fetching more than 10% over ASEs/Maples, making Pandas a better investment.

In a real SHTF scenario it won't matter if its a Panda, your gran daddies pocket watch or gold fillings you'll be buying and selling based on spot!

In a real SHTF scenario the smart people have already left the sh*t, and flown to a country that recognizes their Pandas at a premium. There are 100s of millions of more people in Asia that will recognize a panda over a Maple/ASE, and especially a pre67 Canadian quarter.

The less smart people will be trying to use their pre67 Canadian quarters, wishing they had invested in bullets, canned foods and Pandas instead.

 

[Sargeant Argent]

So you're saying in a global melt down situation you're gonna fly to Asia with your stack meet with wealthy elite buyers, and not only make it through customs but make a sale without getting killed for your stack? Good luck with that.

If you got money to burn and want to invest more money for less oz.s go ahead for the average buyer I think its best to get the most exposure to the pm market with the smallest investment. Not only that but I suspect they will mint more and more pandas every year due to high demand, and greed making them less rare. Coupled with the fact they're chinese who are the counterfeiting kings in the world for just about everything. I'll stay away. Go make your millions on your pandas.

They're a beautiful coin don't get me wrong but banking on premiums to increase can be a dangerous game. No one can tell u what spot will be in 5 years so who knows what the premium on a 2011 panda will be. Stamps used to be worth a lot more than they are now. Remember when comic books had high premium, or hockey cards (if you're canadian) now they're barely worth the paper their written on same goes for coins excerpt they're written on gold. just because people are crazy about pandas now doesn't mean it will be that way forever.

But that's my opinion you have yours and I couldn't give as flying piece of crap which of us is right.

 

[Sargeant Argent]

Don't worry I'm investing in bullets and canned food to. Actually cross bow, rain catcher, crab traps, food smoker and dehydrator mostly. Need a good tinny with a 15 horse on the back!

 

[ozbullion]

go for pure gold fractional bar/coin with .999 as its has more demand and dealer like ozbullion offer spot price for 'even' item.

 

[mmm....shiney!]

Pikey, I think you've got enough information to make a decision now, I'd be interested to hear what you purchased and why in a PM.

I can summarise the opinion in the form of a Venn diagram!!!!! I could've put more in but ran out of labels. The terms "bullion" and "numismatics" are used loosely.

http://www.readwritethink.org/files/resources/interactives/venn/

 

[yennus]

So you're saying in a global melt down situation you're gonna fly to Asia with your stack meet with wealthy elite buyers, and not only make it through customs but make a sale without getting killed for your stack? Good luck with that.

Yep. If you look at history in South-East Asia that's exactly how others have done it. During the Vietnam War, the rich Vietnamese made it out of Vietnam and into Malaysia, Singapore, and Australia using gold. During the civil war in China, the rich Chinese made it out to Singapore, Malaysia, Hong Kong and Taiwan using gold. During the Japanese occupation of China, the rich Chinese made it out of China and into the USA, Australia, Singapore, Malaysia and Thailand using gold coins and gold leaves. During the Communist uprisings in Malaya, the rich made it out to England. The smart investors get out and into safe nations ... the sheeple get enslaved.

If you got money to burn and want to invest more money for less oz.s go ahead for the average buyer I think its best to get the most exposure to the pm market with the smallest investment.

As i used in the examples above. You can spend pretty much the same amount of cash on ASE/Maples/Roos for the same amount of Pandas.
A 1993 Carded Kangaroo sells for $47.
A 1993 Panda would sell for about $120-$200 (depending on condition).
Both were about the same price when released.

Not only that but I suspect they will mint more and more pandas every year due to high demand, and greed making them less rare.

Wow... using high demand as an argument against Pandas? Higher demand leads to higher Panda worth.
Even at their expected high mintages, i.e. 6Million Pandas in 2011 - that is equivalent to 1month's production of ASE/Maples... They will always be more rare that ASEs and Maples at these rates.

Coupled with the fact they're chinese who are the counterfeiting kings in the world for just about everything.

Yeah, and Pandas are WORTH counterfeiting! You don't see people faking the Sudanese Pound, because it's not worth much. They fake Pandas because there is obvious value in Pandas. You see fake US dollar notes... has that destroyed the US dollar?

They're a beautiful coin don't get me wrong but banking on premiums to increase can be a dangerous game. No one can tell u what spot will be in 5 years so who knows what the premium on a 2011 panda will be.

Banking on spot ALONE is more dangerous! As illustrated with historical data above, ASEs/Maples trade only at spot, but Pandas since their release have traded above their spot (some more than others).

Stamps used to be worth a lot more than they are now. Remember when comic books had high premium, or hockey cards (if you're canadian) now they're barely worth the paper their written on same goes for coins excerpt they're written on gold. just because people are crazy about pandas now doesn't mean it will be that way forever.

It is different when there is a native market of 1.4billion people! It is MORE likely that people will loose all interest in Australia's 1930 Penny next week, and I'll be able to buy it for the penny it really is.

But that's my opinion you have yours and I couldn't give as flying piece of crap which of us is right.

And that's probably the difference between someone who does their homework and someone who doesn't.

Those who don't want to do their due diligence really should stick to their Canadian quarters.

 

[goldpelican]

You've conveniently left Perth Mint Lunars off the diagram

 

[mmm....shiney!]

But that's my opinion you have yours and I couldn't give as flying piece of crap which of us is right.

Actually, I hope yennus, myself and a host of others who have bought pandas in preference to other forms of bullion are right. Particularly as we're giving advice to a fellow stacker who wants to spend a large amount of money.

 

[mmm....shiney!]

You've conveniently left Perth Mint Lunars off the diagram

That obviuos huh?