Author Topic: Market capitalization: A new way for investors to compare, analyze, and predict coin prices  (Read 2652 times)

0 Members and 1 Guest are viewing this topic.

Offline badon

This is hyping. You will realize if you are referring to the sold transaction of 2015 Fun fair panda peak and current pricing. so many unsold BUT they keep claiming it sold and fast gone. 

You are probably right, trouble. The best time to sell something is when the professional marketing for it is at its peak, and that peak usually occurs at the introduction. Although I agree the marketing "hype" is certainly a big factor, I'm not convinced prices will drop or even remain flat. Your comparison to the 2015 FUN expo/show pandas is really wonky. The 2015 5 oz silver panda FUN expo has a mintage of 1500 and sells for around $500 to nearly $700+ in 69 and 70 grades: 162136894326, 252438619169.

Consider this:

At a sale price of $565.95 each for the 2015 5 oz silver FUN show pandas, multiplied by a mintage of 1500, you get a market capitalization of $848'925 - nearly a million dollars.

At a sale price of $8000 each for the 2016 12 oz silver panda ANA Anaheim expo pandas, multiplied by a mintage of 125, you get a market capitalization of $1'000'000 - exactly a million dollars.

Since rarity tends to have non-linear effects on prices, arguably the ANA Anaheim pandas are too cheap. There could easily be a much larger spread in those prices, and no one would be surprised. It will be interesting to see what happens to this comparison in the future. Will market capitalization become a meaningful way to analyze price versus rarity (supply) for coins with similar popularity (demand)? This is an open question in the science of numismatics, or numismatic economics, if you want to call it that. 

We're in a field that's ready for new researchers, and our only competition are charlatan alchemist bozos who are still trying to turn lead into gold - and by that I mean turn "fiat" into "coin". It's never going to work. No matter how many fools believe it, it makes no difference. It's still not true, and it never will be true. See: Lies: A coin coined by coining is not a coin if it’s not a fiat coin.
« Last Edit: 2016 Sep 04, 11:16:36 PM by badon »
 

Offline badon

 

Offline badon

This is hyping. You will realize if you are referring to the sold transaction of 2015 Fun fair panda peak and current pricing. so many unsold BUT they keep claiming it sold and fast gone. 

You are probably right, trouble. The best time to sell something is when the professional marketing for it is at its peak, and that peak usually occurs at the introduction. Although I agree the marketing "hype" is certainly a big factor, I'm not convinced prices will drop or even remain flat. Your comparison to the 2015 FUN expo/show pandas is really wonky. The 2015 5 oz silver panda FUN expo has a mintage of 1500 and sells for around $500 to nearly $700+ in 69 and 70 grades: 162136894326, 252438619169.

Consider this:

At a sale price of $565.95 each for the 2015 5 oz silver FUN show pandas, multiplied by a mintage of 1500, you get a market capitalization of $848'925 - nearly a million dollars.

At a sale price of $8000 each for the 2016 12 oz silver panda ANA Anaheim expo pandas, multiplied by a mintage of 125, you get a market capitalization of $1'000'000 - exactly a million dollars.

Since rarity tends to have non-linear effects on prices, arguably the ANA Anaheim pandas are too cheap. There could easily be a much larger spread in those prices, and no one would be surprised. It will be interesting to see what happens to this comparison in the future. Will market capitalization become a meaningful way to analyze price versus rarity (supply) for coins with similar popularity (demand)? This is an open question in the science of numismatics, or numismatic economics, if you want to call it that. 

We're in a field that's ready for new researchers, and our only competition are charlatan alchemist bozos who are still trying to turn lead into gold - and by that I mean turn "fiat" into "coin". It's never going to work. No matter how many fools believe it, it makes no difference. It's still not true, and it never will be true. See: Lies: A coin coined by coining is not a coin if it’s not a fiat coin.

Mentioned:

badon_ comments on Google Trends and ebay analysis hints that silver coins and bullion may be poised to surpass gold - again

I just decided to take a conservative $120 price for the USA 2016 1 oz silver American liberty coins, ungraded, and calculate their market capitalization for the purpose of deciding whether the PRC 2016 ANA Anaheim pandas are overpriced or not. I'm using this data here:

Re: Priced too low - Non-fiat 2016 1 oz silver American liberty instantly gains 330%

At a sale price of $125 each for the 2016 1 oz silver American liberty, multiplied by a mintage of 12'500, you get a market capitalization of 1'500'000 - it's still in the ballpark of around a million dollars! WOW! At exactly $1.5 million USD! I did not expect this to be so close. I think we may have discovered something here. I'm running out of time, but maybe someone else wants to toss out some market-cap calculations for similar coins to see if they're somewhere close to the same? Gosh, I'm not sure I'll be able to STOP now that I've started researching this. We always discover something cool around here than nobody else has seen before.

OK, so wait a minute...

If we assume $800'000 to $1.5 million USD is a typical market capitalization for a somewhat obscure, newly-issued non-fiat coin in the USA coin market, then that means the 2016 12 oz silver panda ANA Anaheim expo pandas, at exactly $1M market cap for a price of $8000, could drop to as low as:

$6400 = $800'000 / 125 mintage

Or it could rise as high as:

$12'000 = $1'500'000 / 125 mintage

Oh wow. Guess what the high and low asking prices are on ebay right now?

I put links to find the 2016 ANA Anaheim pandas in my badon's ebay spam filter links (BESFL) list:

[...]

Search ebay for 2016 12 oz silver and 1 oz gold ANA Anaheim expo pandas newly listed

They are all very close to perfectly fitting within that range! WOW AGAIN! I don't believe it. This is amazing. We have just put numbers on 3 different coins and our mathematical analysis of mintages, rarity, and prices are consistent across all 3 of them. That means this market ISN'T unpredictable. It's following some rules, and respecting some boundaries...

...and everyone participating in the market is following those rules and respecting those boundaries too, even if they don't realize it.

Step 2: Profit! How do we make money with this knowledge? We have something right now that no one else in the world has, which gives us an advantage. It appears to me there is much more upside than there is downside for the pandas, but we have to keep in mind we're analyzing them in the context of a foreign market, so the upside implied by the native coin we compared them with (2016 American liberty) might be spurious. Maybe we need to do more analyzing. What can we analyze next? Maybe my top 4 pandas described here?:

My chat with Hybridsole about 4 RELATED(!) pandas for investment purposes

I would love to see how this math works out for those coins, all compared with each other. If we can find one that is an outlier, either too high or too low, and the reasons for it aren't sustainable, we can place our bets on the possibility of an adjustment in the direction that aligns it more closely with the others. Time for me to take a break. I need to ponder this for a bit. If anyone else wants to do some calculations and share their results, please post them!
« Last Edit: 2016 Sep 05, 12:02:51 AM by badon »
 

Offline badon

 

Offline UTAHN


Just wanted to mention that the 2016 Nanjing Pandas original pricing follows the capitalization theme well
Antique Silver 30X300=$9000
Silver             199X135=$26,865
Antique Brass  30X250=7500      already $345
Antique Copper 30X250=7500     already $345
Copper            199X50=9500       already $80-100
Brass               100X100=10,000  already $150

The only one way outside the group is the silver, but how many silver pandas have a 199 mintage.
Also for $64 an oz silver you can buy silver panda with a mintage of 199.
Lucky says sales going very well.
This silver group has some very strong dynamics of its own.

It is interesting to note that Lucky sold some Antique brass and copper sets for $690 after original sale.
That would push their capitalizations  up over $10,000.

These 2016 Nanjing Pandas certainly have some desirable aspects for the collector and investor.

Excited to see how the size and mintage  proposals of  gold 2016 Nanjing Panda turn out.

We can still get on this train, where it appears the 2016 ANA pandas have left the station.


I hope these show up on Pricepedia's  radar soon, wouldn't that add fun.

UTAHN
 
The following users thanked this post: badon

Offline badon

 

Offline badon

 

Offline badon

 

Offline badon

 

Offline badon

Mentioned:

Re: 2016 1/4 oz gold standing liberty centennial mintage 100'000:
What's most interesting to me about this coin is the fact it's almost 14 times more expensive at $485, but the mintage is also 8 times higher too at 100'000, compared to the $35 price on the 2016 1 oz silver American liberty that has a mintage of only 12'500. Even at the recent peak prices of $150 per coin, you probably still get a better deal with the rarer coin. I'm not sure how to put numbers on this. Maybe with market capitalization, as described here:

Market capitalization: A new way for investors to compare, analyze, and predict coin prices

2016 1 oz silver American Liberty non-fiat:

$437'500 = $35 x 12'500
$1'500'000 = $120 x 12'500
$1'562'500 = $125 x 12'500
$1'625'000 = $130 x 12'500
$1'750'000 = $140 x 12'500
$1'875'000 = $150 x 12'500
$2'000'000 = $160 x 12'500

2016 1/4 oz gold Standing Liberty fiat:

$48'500'000 = $485 x 100'000

With market capitalization, I think the smaller number would represent the best deal because it has a better combination of price versus rarity. If the price is too high versus the mintage, or the mintage is too high versus the price, the market capitalization will show it every time. I think I have a new way to choose, compare, and prioritize my investments now.

In the above comparisons, it's clear the fiat coin is not so good of a deal, due to have a much higher market capitalization. Non-fiat wins again! There's less upside potential if the market cap is already high. If the market cap is low, there is more upside potential, assuming similar coins (apples-to-apples) have consistently achieved higher market caps.

It's interesting to note this is the exact opposite of stocks. As hard assets, coins cannot grow like a business can. Interesting. I'm going to have to ponder this some more.
« Last Edit: 2016 Sep 09, 12:10:39 PM by badon »
 

Offline badon

 

Offline Y7ASyxC

I posted my vision regarding this important topic here:

Re: Glass coin capsules, QR codes on NGC/PCGS slabs, crypto slabs?

Edit by badon: Linkify.
« Last Edit: 2016 Oct 18, 10:57:12 AM by badon »
  • never argue with idiots
 

Offline badon