Numismatic silver vs Silver bullion

I disagree with the author of that link (but have no ill intention against him/her).

Bullion primarily preserves wealth.
Numismatics generally grows wealth.

The author's comment "what r the chances that the premiums will OUTPERFORM the underlying bullion.[?] And in my opinion the odds are low. " can be tested to be wrong.

I'll talk from the angles of Pandas (since that is what i am most familiar with, but this would also apply to numismatic Australian Pre-Decimals; especially the famous penny, as well as other premium coins).

If a person who bought an American Silver Eagle in 2000 went to sell it today, he would only realistically get back enough cash to buy a single 2011 American Silver Eagle. Thus nothing is gained, but wealth is preserved.

If a person who bought a 1oz 2000 Silver Panda in 2000 went to sell it today, he would realistically get back enough cash to buy TEN to SEVENTY 2011 Pandas (or even more American Silver Eagles). Thus the person has grown his wealth.

What are the chances that the premiums will outperform the underlying bullion? If we're talking about Pandas (and similar numismatic coins), then in my opinion the odds are very high.

The maths on the Australian 1930s penny is pretty astounding too :)

But as Jim Roger's often advises and cautions "do your homework."
 
I have collected and still do Numismatic coins.

I feel that it would be an unnecessary foolishness to be exposing more than 30% of one's portfolio to Numismatic silver.


Regards the 1930 Penny ( which is a few grams of copper ) and whose extraordinary value derives 99.99999999 % from its ultra low mintage. So basing one's Stacking Strategies on the 1930 Penny is crazy.
 
A pretty penny :)

1930detr.gif

Source: http://www.australianstamp.com/coin-web/aust/penny/1930penn.htm

A pretty panda :)

2000%2BSilver%2BPanda%2BRev%2B2.JPG

2000%2BSilver%2BPanda%2BMirror.JPG

Source: http://chinesepandacoin.blogspot.com/2010/02/2000-chinese-silver-panda.html
 
I find it interesting that a ton of people are stacking for SHTF, where it gets to the point you have to beat people with a stick for your food, but numismatics by that point would be worthless? If you went to buy a bag of rice, the dealer would only care that your 1oz of silver is 1oz, regardless if its got a cute panda on it or not (let alone them knowing what it is?)

I don't think we would ever descend that far in Aus, and I think numi's are a good way to put another angle to the bet on PM's, however, I got no time to figure out whats good and whats not so I don't.
 
If things really descend into the case where you will be trading silver for bags of rice/flour/toilet paper/etc, I think most people would have preferred stacking bullets.

In some parts of Africa, bullets have played the role as the primary cash mechanism (just like in the book Metro 2033)... I don't think Australia will descend that far down the hole... and if it does... I'm probably going to go hide on a farm somewhere with a stack of bullets and chickens, or fly to some tropical island near Malaysia that will pay a premium for Pandas (and where they fine people for spitting) :)

Until that day comes, I am happy getting the Pandas to do the work of growing my net silver and gold worth. :)
 
yennus said:
If things really descend into the case where you will be trading silver for bags of rice/flour/toilet paper/etc, I think most people would have preferred stacking bullets.

In some parts of Africa, bullets have played the role as the primary cash mechanism (just like in the book Metro 2033)... I don't think Australia will descend that far down the hole... and if it does... I'm probably going to go hide on a farm somewhere with a stack of bullets and chickens, or fly to some tropical island near Malaysia that will pay a premium for Pandas (and where they fine people for spitting) :)

Until that day comes, I am happy getting the Pandas to do the work of growing my net silver and gold worth. :)
Click to expand...

Stack chickens, now there's a good guaranteed rate of return!
 
Stacking chickens is not as easy as stacking Pandas unfortunately :(

hehehe... I use to keep chickens in Africa to feed myself... but it is not easy to make it a profitable venture.

So I tried stacking rabbits in China (for meat and fur), but it's a dirty business.
 
yennus said:
If things really descend into the case where you will be trading silver for bags of rice/flour/toilet paper/etc, I think most people would have preferred stacking bullets.

In some parts of Africa, bullets have played the role as the primary cash mechanism (just like in the book Metro 2033)... I don't think Australia will descend that far down the hole... and if it does... I'm probably going to go hide on a farm somewhere with a stack of bullets and chickens, or fly to some tropical island near Malaysia that will pay a premium for Pandas (and where they fine people for spitting) :)

Until that day comes, I am happy getting the Pandas to do the work of growing my net silver and gold worth. :)
Click to expand...
AS long as you dont loose the whole stack cause you were spitting
 
A place where the SHTF...

Produce seeds are very important over there... as are bullets.

wanting_a_meal.jpg
 
For me, numismatic coins are purchased for enjoyment. To purchase numismatic coins for investment is something only the very experienced should attempt. Some of us are buying bullion that has numismatic potential. Pandas, pre 2010, had that potential, but the latest years are being minted in the millions. ASEs, Maples, Philharmonics, etc. have too many coins minted to ever gain numismatic potential.

Lunars, kooks and Canadian Wildlife coins appear to have the greatest potential due to design changes and limited mintage. However, the 2012 dragons are starting out with numismatic pricing and that defeats the purpose of buying bullion.

This month is the anniversary of my first large purchase of non ASEs. The coins were the 2010 lunar tiger, the 2011 kook, the 2011 Canadian Timberwolf and the 2010 Panda. Premiums on the 2010 tiger and the 2011 Timberwolf coins have gone up to about 50% or more over the silver spot price. Premiums on the 2010 Pandas and the 2011 kooks have increased, but not by near as much. So far so good.

For me, the buying of the bullion coins with numismatic potential is only phase 1. As silver increases in price, there will likely come a price point where the numismatic premium of the bullion coins begins to decline due to the high silver price. Where will that price point be, I am not sure but the silver price will likely be higher than $100USD. when I see the lunar coins begin to lose their numismatic premium, it is time to switch to bullion bars. Hopefully, the premiums on the lunar, Canadian Wildlife, and other bullion coins will allow me to purchase an average of 50% more silver than I could have if I had started with bars.

I was going to begin buying only lunar or Canadian Wildlife coins, but the latest issue of each coin has made me temporarily stop. I haven't purchased the dragons because of the high price and I haven't purchased the cougars because the design is hideous. Since, I believe that I have sufficient silver, any new large purchases will be swaps out for the ASEs that I purchased in 2008-2010.

I have been concentrating on buying gold, so waiting on the next bullion coin that I believe has numismatic premium potential is not a problem for me. If I was wanting to add silver ounces right now, I am not sure what silver coin I would consider buying.
 
if I believe silver is going beyond $400 / oz, the it does not matter right now,
but if proof coins are selling the same as bullion coins in price right now, proof will be preferred.

getting basic, like junk, then bars first,

then higher up. like OZ coins, some Pandas etc, mid premium due to quality finished, but not too much - but if they are easy to trade/swap/exchange/sell etc then they are the best secondary form of silver.

numismatics in a small portion for hobby, they are ok, but do not expect high return since in most cases you will have paid 100% over the silver/metal value.

then rare items - you do not know about it nor anybody else :) ops, the next similar coin is selling for spot. then there gone your investments.

in my opinion, try to get what other people may want, rather than you want, you can swap them.
its like i am holding it for the next guy.
 
I think silver going to 200 in a couple of years. But silver is very volatile. Can go to 30 to 50. To 70 other 50. 100.
The numismtic silver coins the Premium up with silver price. But i think when silver lost valu the Premium is still here or lose less than comn bullion (ases)
 
Yeah, I spent some time there after that pic was taken. It really is a messed up place.

This is a place where the SHTF, and continues to do so in many areas.

Gold and silver don't buy much over there; but bullets certainly do.

Especially outside of the towns and cities, the 7.62 is worth its weight in gold (maybe more).

When the SHTF, the person with the bullets got the gold, while the person holding the gold got the bullets (in an unfriendly way).
 
I was at the brisbane coin fair today and was chatting with one of the coin dealers. I asked him if he had any perth mint bars and he said "oh no we dont touch them!" Why I pondered, he said "too many fakes around :O" apparently he was contacted by the mint and told this?

Anyone heard this before?, BTW I weighed my bars and they all are on the money, maybe something to be careful of?
 
Bullion Baron said:
Someone buying a 2000 panda was not buying a numismatic coin, they were buying a bullion coin which ended up achieving numismatic status.

I think you are really mixing the numismatic/bullion lines with your posts.

The year 2000 panda is now a numismatic coin.
Click to expand...

You are quite correct in that Pandas are primarily bullion coins that very quickly achieve numismatic value. When they make the switch is anyone's guess. I've started treating my 2010s as numismatic items :)

Bullion Baron said:
A fair example would be to use the buyer of the numismatic coin today vs a bullion buyer (present looking forward, not taking an obscure example from history).

So someone could buy a bullion 2011 ASE today for $42 or they could buy a numismatic 2000 panda for $500.

If Silver then soared to $150 per ounce, the bullion ASE has moved a multiple of 3.5x higher, to match it the numismatic Panda must achieve a price of $1750. Do you think that is likely yennus?
Click to expand...

Looking back at the historical performance of the Pandas, yes, they have managed to out pace the price of spot. So, it is likely that when spot moves to $150 per ounce, that the 2000 Panda will continue to do. Because the Pandas appreciate in REAL value, not just in fiat value.

When silver is $100, $150, $200, etc... The 1oz 2000 Panda is likely to command an even greater selling point (or swap rate) than it does currently. My guess (and this is just a guess based on past performance), that when silver hits $100/oz, the 1oz 2000 Panda will likely swap for even more than what it currently does. More than $1750 is likely to be achieved. Especially if it grades well, well then the moon is the limit. Already some 2000 Pandas are fetching more than $3000, so imaging a 2000 1oz Panda fetching $1750 is not a far stretch at all.

It's not just the 2000 Panda either. In just two years, I've seen the 2009 go from about $18 all the way past $100. I do also imagine that when spot hits $100, that these will be worth more than $200each, and will trade for not just 2x 1oz Standard bullion coins, but even more. These are just the normal BU range of 2009s... already the graded and slabbed 2009s are fetching more than this (about $400USD).

Earlier this year, a NGC MS70 1990 1oz Panda Silver Coin sold for $5200USD. So we know that money is available for good quality numismatic coins.

There is a great amount of info about collecting numismatic Pandas at the ChinaMintForums and at LiveBusinessChat. Very interesting stuff that is deserving of a read for anyone serious in growing their wealth not just preserving it.

Peter Anthony's Pricepedia is also very useful: "In fact, the annual rate of return on coins recommended by Panda Pricepedia (as of September 7, 2011) is 157% per year. " Based on recommendations in the November 2010 through June 2011 issues of Panda Pricepedia. (http://www.pandacollector.com/pricepedia.html)

Badon from LiveBusinessChat is also very insightful: "..I estimate that the entire Chinese coin market is only valued at around $100 million right now. China is a much larger country than the USA, and it will soon have much more money than the USA too, but I'll be conservative. Let's guess that China's coin market will almost match America's within the next 10 to 30 years, and become valued at $10 billion. For that to happen, coin values would have to increase an average of 100 times, or 10,000%..."
Badon, LiveBusinessChat Forums

But going back to the original statement proposed "what r the chances that the premiums will OUTPERFORM the underlying bullion.[?]" I believe the chances are very high - especially for Pandas.

I like the way that Badon has put it "In a mature numismatic market like in the USA, coins with mintages under 500,000 are considered rare, so you can easily see how early we are in this [Panda] market. By that measure, we're perhaps 1/100 of the journey towards a mature market. Given China's massive size, it could be that coins with mintages in the millions are considered rare, especially with a worldwide collector base. Or, it could go the other way, and coins with mintages of only 100,000 will be considered rare. Either way though, we're still very early in the game.

You will look back in hindsight and say to yourself "Wow, I was buying coins with mintages of only 5000 for just $300 or so. Now I have to pay $50,000 or more to get one!""
http://www.livebusinesschat.com/smf/index.php?topic=3188.0
 
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