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The Panda Pricepedia 20 Index
Latest Value: 596
The Panda Pricepedia 20 Index measures price changes over the last 5 years for a basket of 20 scarce or rare Panda coins. All the coins included in the Index were chosen because 1) their melt value is under $2,000* and 2) their populations are less than 2000 as estimated in The Gold and Silver Panda Coin Buyers Guide.
The reason that the melt value is kept under $2,000 is to exclude coins whose price is tied to their intrinsic metal content rather than collector demand. The population limit is meant to find out whether scarcity really relates to price appreciation. A strong correlation suggests that a strategy of buying scarce Panda coins will yield better investment results than buying coins with large populations and a high amount of bullion value.
The chart shows the performance of the Pricepedia 20 Index vs. gold and silver bullion. Both gold and silver have been in bull markets for the last five years. The price of both metals has more than doubled. Even so the Index shows a major benefit in holding scarce Pandas rather than bullion.
Question: Is this Index valid? Has it been "juiced" in some way to exaggerate the price gains in Pandas?
Answer: The coins in Index were chosen according to several criteria: they are spread out across the range of dates and metals that have populations under 2000, they include both coins and medals, and there were enough sales to construct a 5 year price chart.
This last point caused many of the coins or medals with the greatest price rises to be excluded because there are entire years for which no sales are recorded. So it's quite possible that the Index actually understates the performance of this class of coins.
Question: What is the range of performance of the individual coins?
Answer: The lowest gain was 73% and the highest was 2,748%. The average gain as of January 1, 2011 was 503%.
Question: Are all the prices used to calculate the index actual sales prices? Were any "estimates" used?
Answer: All prices are of actual sales.
* At the time the coin is included in the Index