Re: Whats a better investment?Charter, Specimen...

News: Welcome to the Canadian Paper Money Forum.

Troy, I agree with you, Dominion of Canada notes are undervalued. But my philosophy is to collect notes that I favor, instead of going with market trends. Some day I may change, who knows.

Dcollector111

P.S. I am very interested in your numismatic private pooled mutual fund concept; I hope to hear from you about it.

Sounds like you have a good approach to the hobby aspect of Canadian Paper Money.

My analysis was to address the issue you tabled of what is the best investment (your original question) and commentary on key areas within Canadian Paper. To answer this question correctly requires a large amount of analysis and awareness of market trends which cannot be ignored, I have only touched on it in this thread.

Had the original question been what it appears to be now, what should I collect?  I could have saved us both some time and effort and said collect what you "like", which is what you have said you are going to do anyway  

I will keep you posted on the Numismatic Private Pooled Fund, if I believe I can get through the legislative hurdles in a cost effective manner it is likely to become a reality in the next 24 months.

Have a good one.

Troy.

Very well, all that now remains is for Dcollector111 to tell us which notes he likes, so that we can tell him which of those are the best investments.

MonetaryMan, your Numismatic mutual fund idea has me intrigued...would it be a closed-end fund where a certain number of private investors ante up and then no further sales, or a true open-ended mutual fund, where the fund itself continuously sells and buys units of the fund to and from the public, like (for example) a CIBC mutual fund?

What types of investments would comprise your fund?  Would it just be an ever-changing portfolio of banknotes that are bought and sold daily, or would some other types of assets be included also?

The fund would be comprised primarily of paper money from different British Commonwealth Countries and USA paper. Canada would have a strong component because the lead manager is strongest in Canadian Paper and Canada is a true Bull Market.  Other managers and advisors would be involved to assist in the International component. I also have not ruled out a potential Gold Coin component.

The neutral weighting would be something like 30% CDN Paper (with a up to an additional 10% swing either way depending on the managers view of the market) and the remainder would be International Paper and a cash component so the fund would have liquidity for large acquisitions. The fund will also require additional financial instruments for optimal overall performance.

The fund would close once a certain amount of cash was raised as having too much cash will be too difficult to invest wisely in high performing numismatic investments and overall rates of return would dimish as quality investments become more difficult to obtain.

Fund managers would have flexibility to buy and sell as outlined in the prospectus which would be tabled.  The managers will look for investments with long term potential but will be quick and extremely active to capitalize on short term plays as well to grow the funds asset base internally.

Managers would be paid for performance above and beyond a comparitively modest Management fee of 1% and a 20% (tenative) of the share on returns on eveything over a 10% (tenative) annual return.

I would essentially like to turn myself over to the service of the market and have everyone benefit from my ability to generate large profits in the marketplace. Investors would be up over 100% during the last 12 months if my results belonged to to them.

I will bring in a highly skilled & experienced team to augment my skills and experience to create a world class fund.

It should be a win-win for everyone involved if I can get it off the ground legislatively.

I would prefer to not introduce further details on how this is going to happen as new business models and innovative ideas with real commercial value need to be protected against people who may be looking for "how to guides".

Thanks.
Troy.

my, my. so this is the bunch of collectors/ speculators/investors who drive up the market building their portfolios, and drive out the amateur for-fun collectors. It almost reminds me of earlier plans/funds for rare coins, baseball cards.  I am not very smart but when cabbies, Tom and Harry think it is almost a sure thing, i think it is time to leave the market. Good luck with your investment plans. Just remember, speculation could be very expensive. You think you can still enjoy those notes, if things don't work out ?
BTW, i have a few good notes i am ready to sell. My favourite dealer was wondering out loud about the market just yesterday.
Don

If you are ready to sell this infant Canadian market eagerly awaits the arrival of your material.

A consequence of prosperity is that not everyone can afford to grow with the market on quality rare notes so they will often adjust their appetite to less expensive material. As for me I am doing what I can to bring Canadian Pricing in line with the rest of world currency where USA and Australian notes (and other existing and former commonwealth countries for example) trade for six figures in cases where only a few are known of a particular sample. Our market will have to appreciate exponentially just to keep up (5-10+ fold). I am sure there are some people who would love to see the international markets and the CDN suffer through deflation, I am not one of those people.

Price sensitivity and an appetitie for collecting the rarest, most collectable & desirable notes Canada has ever issued do not and will not coorelate well together. If this is not your appetite then you have very little to worry about.

We are quite backwards here in Canada, it's almost a dirty thing to say that I am collecting for investment reasons. The slogan of Australia's dealer with the best inventory (likely its most successful) is "Specialist's in superb quality investment portfolios for advanced collectors and superannuation funds".  It is routine and very much out of the closest that the rest of the developed world is investing for financial return in paper money, and it is time we give our collective heads a shake, its ok, it doesn't make you a bad person. Without the pursuit of profit we would be 3rd world at best.

I suppose if free material is the desired outcome then there are plenty of beach rocks and beautiful tree leafs that can be collected at no cost. But if you are a collector and gasp, an in the closet "investor" too, it is unlikely that the rocks and leafs you acquired for free are going to have significant commercial value even if you hold them for a long time. However there is the possibility that if you got people excited about your new line of collectables new collectors might join in, but alas with a migration of new collectors the foundation for commerce would once again exist; and with commerce comes supply and demand, and with supply and demand comes the notion of price elasticity.  After all it is Condition, Scarcity (Supply) & Demand which are the valuation drivers in essentially any collectable; numismatics is no exception. It has always been this way since, the 1st Roman Emperor Augustus 63 B.C. - 14 A.D, (1st known collector of numismatics) gave birth to the seed of our hobby approx 2045 years ago commencing with Gold Coins. Our niche in numismatics (Paper Money) wasn't born until 650 A.D (China produced the 1st known note some 450 years after paper was invented in the same country in 200 A.D.). A small piece of trivia for you: the oldest note you could ever actually hope to get your hands on would be a 1368 Ming Dynasty (9"x13"!). Handle with care as its paper is made from the inner bark of a mulberry tree!

On the matter of "things not working out"...I don't know about the others but the fear of the possibility and the reality of actually incurring a capital loss is not a foreign concept to me and a fact of life as ones pushes forward in a capitalist system.

I have grown up with many collectors who are closet investors who once in a while let it slip they too are hoping to reap a return on their portfolio one day, be it for themselves, or for their loved ones via their estate when the times comes. Then again I know someone who loves their collection so much he has said "If I can't take it with me, I ain't goin!"

Collectors, Dealers and Investors all have one common bond and that is we all owe thanks to the Chinese and Augustus before them for giving birth to what we all enjoy so much.

Troy.

Hello dc,
I think it best that you familiarize yourself with the market in general as I assume you would prior to "investing" in any other commodity. I'm talking about the real market, not only the Charlton Catalogue or CCN. Major Auctions, shows and cautiously, ebay. Then you can get a better feel for what price range you're looking at for the notes you decide to collect or "invest" in.
Also, it might be an idea to become proficient in the grading of bank notes prior to stepping out too big. Over-grading is rampant.
Keep in mind that if you're simply looking to throw money at something, someone is always willing to catch and run with it.
Good luck.

Hi All,

I just came back a vacation, and I am happy to see that there is still discussion in this thread.

I have already mentioned what notes I prefer, in my ideal portfolio, in reply #13. Anyways here it is again:

-65 % Chartered Banks & its Specimen notes (no proofs and broken banks)
-15% BOC Specimen notes (complete from 1935 to recent)
-5% error notes
-5% solid # notes
-10% replacement & Chartered Bank notes for trading purposes.

From my point of view specimens (1935 and prior) are undervalue, especially the 1935 French $500 (specimen)

As for common items, they follow similar trends in the stock market, up and down. However, in the long run, their value appreciates.

It seems in a hot market, a lot of rare items will appear, and that’s the opportunity for “rare item collectors”. They also need luck.

Dcollector111