The article is broken up into separate posts - The coin investments list is at the end of the articleThe market is coming back to life. Some sellers are pulling their good coins from the market, in anticipation of higher prices. Many sellers with unsold inventory consistently resist the temptation to lower their prices to score sales of the best coins, which apparently they'd rather keep.
Batman's posts are often front-page material here at LBC, but lately they have been disappearing into the noise since he started posting them over at the Chinese Coin Forum. Still, I managed to find this one that provocatively reminds us that even the most common of pandas may still be very undervalued, due to the near constant discovery and improving recognition of varieties:
http://china-mint.info/forum/index.php?topic=4266.0
With so much attention focused on the lunars, it's tempting to cash out panda profits to jump into the lunar market as the sectors rotate. However, it might be wise to refrain from selling your pandas just for that purpose, and instead fund your lunar purchase other ways that don't involve selling your good investments.
My investing motto is "starve failure, feed success". If some of my investments are doing better than others, I preferentially allocate additional funding for the best investments, at the expense of the worse ones. When it comes time to sell, I sell the losers before I sell the winners. In general, I don't take profits on good investments, I just let them keep running.
The end result of that is that my investment portfolio has become heavily concentrated in very rare key coins. The not so rare coins tend to get bought and then sold more frequently. At the moment, I can't think of any coin with a mintage under 1000 that I have ever sold. In fact, I'm having trouble thinking of any coins with mintages under 5000 that I have ever sold. Keep those rare coins - it will cost you more to replace them than you'll be able to get by selling them.
In another bit of news, ghostrider80811 reports that China has been selling U.S. Treasuries in response to some unkind words the American Congress has said about China:
http://china-mint.info/forum/index.php?topic=4271.0
The effect of that is 100% pure inflation. That's just one more factor that's coming together to cause an avalanche of buying activity. A confluence of various factors is what characterizes a predictably strong market, and a safe investment. Most of the investors in the modern Chinese coin market have wisely ignored recent price weakness. Instead, most of us have treated it as a buying opportunity, and I think it won't be long before we get to experience the rewards of our consistent confidence in the modern Chinese coin market.
We called the slow season the "upgrade season", which officially ended in August with the start of the auction season, even while price weakness continued to persist. Now, nearing the end of October, we're finally seeing many different signals that seem to indicate increasing market strength as we continue into the economically-boosted holiday buying season.
Here's some more
interesting chatter from the last list #97:
With only $24,000 in coins sold this week form this list, this is a weak market, with volumes below many weeks this past summer, and many items selling below what they could have sold for in the summer. Items are selling at stronger discounts to Pricepedia prices, unlike the previous trend which was to add a percentage onto the most recent Pricepedia prices. Gold has not finished correcting yet but as it is in a long term bull, it is stronger than silver which seems just plain weak. The considerable number of auctions for investment grade coins indicates some seller still think prices could weaken further, so why not get market price now and go back on the stink bid later.
I actually think $24k sold is pretty healthy. My older articles back from earlier in the year sometimes had only a few hundred dollars in sales. I remember thinking how great it was if the sold coins list topped $5000. Buying activity is vigorous, but not aggressive.
I think we're at the bottom. That doesn't mean we're going to go up from here, necessarily, because we could bounce around near the bottom for a while before we clearly see the market lifting. I predicted that this busy season would be "muted", and indeed, that's what we're seeing. But, it seems like we haven't actually reached the busy season yet...
...
Just a few months ago you could buy as many 1999 1 oz silver Beijing expo pandas as you wanted at around $100 each, and they were only about double that in a 69 grade. Then, they boomed to $400 to $700 in 69 grade. Occasionally one will go cheap on auction, but asking prices for the investment grade coins has remained high, while ungraded and lower grade coins have dropped back again.
My interpretation of that is that there is strength in the investment grade coins because people know they're rare and hard to find, so sellers aren't letting them go cheap. There is still weakness that is holding back sales, but prices generally have not dropped. Sellers seem to be willing to hold on to them as long as they have to, which means the consensus is that the current market situation is temporary.
Another interesting thing to look at is the page views at the Chinese Coin Forum:
http://china-mint.info/forum/index.php?action=stats
At the bottom, you'll see that September 2011 was the second busiest month EVER, for the CCF. June was #1 at almost 300,000 page views. So, I think your observation is correct that summer was quite busy, and things got slower after the summer - but there are a few independent indicators that show increasing interest in investing in modern Chinese coins that is approaching the levels we had back in June.
It really does appear that market activity is increasing.
I would like to end with a note that, while our busy season has so far been "muted" just like I predicted. I think we'll stay "muted" for all of the remainder of 2011, in comparison to previous years, but everything will change in 2012. It's too soon to say for sure, but the early 2012 portion of the busy season may take the market to new, unprecedented gains - or, we may have to wait until the late 2012 busy season.
The wildcard that I'm not sure about is how the market will respond to the introduction of the 2012 Chinese lunar dragons. If the market gets enthusiastic about it, we could see some more perkiness in the market a little sooner than the end of 2011. Pay close attention to how the market reacts to the 2012 lunar dragon, and you'll get a better idea of what the early part of 2012 will be like.
My choicesFocus your purchases on rarity together with popularity during this weak market. Sprinkle in some underpriced coins to ensure you don't miss out on big percentage gains in the cheaper coins. Stick with the best coins available, in the most popular types (prefer 1 oz over 5 oz, for example). Be sure to continually upgrade your coins so you can keep up with the market as better coins accelerate ahead of lesser coins.
* Coins in a 70 grade.
* Lunars, starting with dragons, and expanding to the whole sets. 2012 year of the dragon will be lunar-mania.
* 1983 15 g silver pig (key)
* 1981 15 g silver rooster
* 1982 15 g silver dog
* 1984 15 g silver rat
* Dragon and phoenix (marriage theme symbolism).
* Peacocks (marriage theme symbolism).
* Pandas, especially silver, the rarer the better.
* Expo pandas, especially gold accented silver ones, and silver Munich expo medals.
* 1979 year of the child, and possibly other child-themed coins like the 1989 children's fund panda .
* Other 1979 dated early coins and medals.
* Almost all medals are underpriced - buy the rarest, most popular ones first.
* 1990 goldfish medals.
* Gods medals (longevity, war & wealth, mazu, buddhas, etc).
* Underpriced invention & discovery, especially silver.
Remember, there are several kinds of rarity, in order of importance:
* Mintage rarity
* Grade rarity
* Relative rarity within a series ("key" coins)
* Variety rarity/popularity (you have to have popularity too)
