Academic Article on coin hoarding/ sorting

[Economist]

Fellows,

I've been eager to post this article here since it was published this Spring:

http://tylerawatts.com/uploads/arbitrage_and_knowledgeRAE.pdf

Most of the research for this was done right here at realcent.org-- I salute you all!

Unfortunately, I had lost my access to the old Realcent site due to inactivity and just now got back on board.
Nice to be back, though, and I hope you enjoy the article!

-Tyler

[AlexTG]

Great read, now when people ask me why I sort pennies. I can just send them to this artical, and when they don't read it, I know I wont have to worry about them asking me any more.

[Thogey]

So...
I'm thinking the paper's conclusion is 'buy low, sell high"?

If copper drops below 1.54/lb it's not worth doing?

Did I pass the test?

[misteroman]

that about sums it up lol. good read

[didou]

If copper drops below 1.54/lb it's not worth doing?

It's only worth doing at 1.54/lb if you don't count your time and expense. According to the paper it don't worth doing right now unless you do it on a very large scale.

But if it's drop at 1.53/lb or below i will still be doing it. I didn't intend to sell it or make profit right now as the paper suggest. For me it's a security a way to put money for the hard time ahead, money that worth a face value (protection against deflation) and a metal value (protection against inflation), it's also a bet on the future value of copper. If it's increasing, then it will worth making a profit out of it, not only to protect my wealth.

The paper is only focusing on turning it on a viable business right now and completely ignore the future and the environment we are in. It does not take into account the future where copper is becoming harder to get from the ground every passing day, and the increasing demand from undeveloped country and the increasing population of the earth. It doesn't take into account the price of oil, which is like copper, harder to get from the ground. And the facts that each pounds of copper made today required a larger amount of oil to extract. Investing in copper and in others metal (which they are a concentrate of oil) is nothing more than a bet on the future price of energy. It also doesn't take into account the current economical situation in USA, Canada and in Europe. We live in a very uncertain time where for the protection alone, in my opinion, worth my time to sort copper.

While i complain a lot I would like to salute all the efforts made to do that paper. It's a very nice (and unique) compilation of idea and data for copper sorter. Very few if any papers are documenting this right now.

[fasTT]

Just a quick note to say nice work on your paper.

[AGCoinHunter]

Yea, I skimmed through it and got to say, nice work. Very clear and well laid out.

[Computer Jones]

So...
I'm thinking the paper's conclusion is 'buy low, sell high"?

If copper drops below 1.54/lb it's not worth doing?

Did I pass the test?

Well, that may be an acceptable synopsis.
But, how long do you view as a time frame for the high selling point is the important question...

If you take the corporate view of what's the bottom line for the next fiscal 3 months your decision possibly might be a bit different from the sell high view of "what's the best timing for your Grandchildren".

I'm in it for the long haul, maybe I won't be the one to pull the sell trigger!

Buy low is now, I don't think you'll get much distention on that point.
Sell high is where the Magic 8 Ball is needed!

If you're betting on 1/1000 of the price of Cu in the next fiscal quarter, take up day trading in penny stocks (no pun intended).
You'll have your coronary bypass a few years later in life.

[TXTim]

Great paper!
I can whip that baby out whenever someone gives that "what a stupid hobby" look.
I can say I am an arbitrageur.

[Insane-O]

Really nice paper, Tyler. Thank you for this.

[johnbrickner]

Most Excellent! Great job on review of literature and putting it all together.

[AFModell]

Tyler,

I very much enjoyed your article. It was a pleasure to read and interesting to see this hobby approached from a more scientific perspective. Thanks for your efforts and posting the article for all to read.

Kyle

[Economist]

Didou,

Thanks for reading the paper and your response here. But I'm afraid your criticism/ complain is off base; I explicitly addressed people hoarding for the long-term:

p. 84:

They are interested in accumulating small hoards of copper cents, either for immediate resale in the penny-bullion market or for long-term speculation,

p. 84-85:

Above the casual sorters in both intensity and volume are transitional hoarders. They aim to either: (a) make a modest profit by sorting and selling coppers, or (b) accumulate a significant hoard, into the range of hundreds or thousands of pounds, of coppers, speculating that the bullion premium will grow or at least hold steady.

p. 85:

Professional hoarders are bona-fide arbitrageurs, aiming at speculatively
accumulating large stocks of coins, and/or immediately profiting on the bullion
premium....Professional hoarders who are focused on long-term copper
accumulation measure their hoards by the ton; those who focus on immediate profit
sell upwards of tens of thousands of copper pennies per week.

Lest anyone be misled, this paper is not a how-to on the copper penny business (that's what Realcent is for!). This is an economic analysis of the entrepreneurial problem, with copper penny hoarding/ selling as a case study.

[tinhorn]

Impressive piece of work, sir.

Professional hoarders who are focused on long-term copper
accumulation measure their hoards by the ton...

Or tenths of tons, I presume. WooHoo! I'm in the Big Leagues!