Buying Coins In Bulk Quantity

[aarkay]

Hi...

Not the least wanting to sound a pessimist or a moralist the craze of buying coins in sack full when a few (say  in single digit) will suffice for a collection reminds me of an incident which happened in Mumbai (then Bombay) a few years ago....one evening there was rumor that salt will  be in short supply in the coming months due to some problems in Gujarat or somewhere...there was a heavy rush and a long line at the grocery stores at the place where I was staying....people went crazy and started buying salt in large quantities  some even up to 50 kilos at the inflated rate of 10 rupees per kilo(incidentally the normal rate at that time was  less than a rupee) ......more over the normal monthly consumption for a family  would have been around a kilo at the most ...incidentally I too was carried away by this crowd behavior psychology and purchased a couple of kilos at 10 rupees a kilo ..... this insane rush subsided in a couple of days and salt was available in plenty at normal rates......thus people who hoarded salt were the ultimate sufferers locking their money for longer time(say 50 months) and using salt  bought at an inflated price....I see such a situation in the buying coins in packet of 100 coins...a collector at the most will be wanting say up to 5 coins for his collection...even if these are bought at 10 to 20 rupees per coin his blocked capital will be around 100 rupees as against 2000 or 3000 rupees  at the least spent when buying in bulk... the money thus available  by buying small quantity could be used to buy other coins...further if left with 100 coins he may not have to think about how and what price he will have to dispose the extra coins....a real headache....let me conclude that this is my way of thinking to make use of the  limited resources   available to the fullest extent.....there could me difference of opinion..... would welcome comments please...

Aarkay

[paisepagal]

It is a very I interesting thought, and I have my specific reasons for buying a packet of 100 coins at a time.
For me, I make sure that I don't buy a Rs10 packet for say more than Rs1500 and Rs5 packet for more than Rs1000. These go specifically for exchanges with people across the globe. It's an easy way to make sure my swap list consists of as many unc coins as possible. 50 coins automatically go to several long term trading partners in Europe, the other 50 I hope to exchange over the next few years. Storing place is not a problem for me.

So I don't get caught up in these frenzys, the latest being basaveshwara. But I do wonder what other collectors do with such quantity.

[Mackie]

Very interesting thought, Aarkay. Sometime back I was seriously contemplating the idea of buying and storing Indian coins in bulk (10-15 coins each lol yeah thats my definition of bulk) but later dropped the plan. I would rather buy one or 2 coins of each type and use the saved money to buy something more interesting.

It would be very interesting to read the views of the other members.

[Abhay]

My reason for buying coins in Bulk is quite different.
Firstly, I buy Bulk Coins only from Princely States, and that too, mostly from Gwalior state.
The reason for buying in bulk is just to search for some new varieties, new dates, new mintmarks etc.
Many a times, I have been successful in finding a new variety, or a new date, or a new mintmark, die variations.
Secondly, I buy the coins near the Silver value. So, even if I may not be able to sell the extra coins, the value of Silver is rising. I remember buying my coins at the average rate of about Rs. 250 (for 10.5 grams of Silver). I know that I can always sell my extra coins @ Rs. 650 today, even at the silver rate.

Abhay

[Figleaf]

If you buy anything in quantities higher than you need for your personal and swapping use, you are a dealer, a speculator or my wife, buying rice.

If you aspire to be a dealer, your objectives are a) to sell as much as possible and b) to minimise your inventory, because this will maximise your profit when price is beyond your control. This means you buy as much as you think you can sell, but not more.

If you wish to speculate, you must be realistic about your profit. Suppose you buy a silver coin @ Rs. 250 in 2000 and you can sell that coin today @ Rs. 650 net of cost. Average annual compound interest on that period is 8.29%. Deduct inflation in that period (say 6%) and your speculative profit today is 2.9%.

Compare 8.29% with what you could have had on a risk-free (guaranteed by the government) bank savings account - say 8%. If the difference is positive, this is the reward for the risk you have taken, comparable to an insurance premium the market paid you for running the risk the value of the object of your speculation goes down. If the difference is negative, you may have won on price, but your risk-taking cost you money. The speculation went badly.

By the above standards, you are in the great majority of cases better off not being a speculator.

If you are having trouble with compound interest calculations, download the attached Excel file (click on the paperclip.) Change the blue cells and find the answer in cell C5.

Peter

[Abhay]

If you buy anything in quantities higher than you need for your personal and swapping use, you are a dealer, a speculator or my wife buying rice.

If you aspire to be a dealer, your objectives are a) to sell as much as possible and b) to minimise your inventory, because this will maximise your profit when price is beyond your control. This means you buy as much as you think you can sell, but not more.

If you wish to speculate, you must be realistic about your profit. Suppose you buy a silver coin @ Rs. 250 in 2000 and you can sell that coin today @ Rs. 650 net of cost. Average annual compound interest on that period is 8.29%. Deduct inflation in that period (say 6%) and your speculative profit today is 2.9%.

Compare 8.29% with what you could have had on a risk-free (guaranteed by the government) bank savings account - say 8%. If the difference is positive, this is the reward for the risk you have taken, comparable to an insurance premium the market paid you for running the risk the value of the object of your speculation goes down. If the difference is negative, you may have won on price, but your risk-taking cost you money. The speculation went badly.

By the above standards, you are in the great majority of cases better off not being a speculator.

If you are having trouble with compound interest calculations, download the attached Excel file (click on the paperclip.) Change the blue cells and find the answer in cell C5.

Peter

Peter, my greatest rewards for these bulk buying coins are some of the coins that I have found - some of them are unique.
I remember buying a lot of 50 coins of 1 Rupee William IIII @ 250 each, some time in 2006. Out of the 50 coins I bought, I was able to make 4 sets of 5 coins of all the William III Varieties (F Incuse, F raised, RS Incuse, Bud Leaf, Twin Leaf). Today, each coin sells for almost Rs. 3500.
So, it all depends on the coins you bought.

Abhay

[Coinsforever]

If you buy anything in quantities higher than you need for your personal and swapping use, you are a dealer, a speculator or my wife, buying rice.

I'm astonished and enjoying , I would say instead of buying a bulk lot why not mohur or ashrafi or Nazarana rupee.


I think waste of time to screen bulk lot to find scarce specimens rather to go directly for what you can afford .

Cheers

[Bimat]

I have bought world coins in bulk couple of times, however those were mostly different coins, may be 2-3 of same type but not more than that. 100 or more pieces of same coins? Nah. I don't collect Indian coins at-all so I don't even bother about bags of 100 pieces (I can mostly get them for face)..I just buy X number of Indian coins for trader friends..

I do intend to collect rolls of coins (small denominations only) but that's for fun only. I have no plans to buy rolls anytime soon, though.

Aditya

[Coinsforever]

I would like to share the bulk lot I bought were B.I  Edward & G. V complete series (Copper /Brass - Excluding Silver)

IMO  no need to scratch head for spares & swapping .

Again it is upto what extent and how much risk you take.


Cheers