SIDEBAR
Introduction
The idea for investing in copper on a personal scale came to me within the last year. Before that, for about 5 or 6 years I was buying world coins for two reasons: arbitrage and foreign exchange (ForEx).
For the coins which had a superior rate of exchange-- GBP, EUR, CHF-- I would acquire them for a fraction of their face value to exchange them for full face value at a ForEx booth. I would also do likewise for coins with a good rate of exchange-- PAB, CAD, AUD, BBD, BSD, KYD, BMD, even XCD and MXN. I picked those because those were commonly available at the coin shop I would visit.
Normally I would avoid coins with bad exchange rates (100 units per 1 USD or worse). However, I made an exception for Japanese Yen (JPY) because JPY/USD is one of the top traded exchange pairs in ForEx.
My Plan
Each time I bought those world coins and others, I would have maybe 10 or 20 JPY 10.00 coins. After several years, I must have had 2000 JPY 10.00 coins for total face value of 20 thousand yen. I thought I would be able to take advantage of a good exchange rate, so I was looking to sell the Japanese Yen coins I had (of all six denomiations). There was one detail I hadn't considered until the moment I was ready to cash out.
One Overlooked Detail
Places which exchange currency don't like taking back coins.
They'll gladly exchange paper for paper, or even give you coins for paper-- but they don't normally give paper for coins. or they take it for a steep fee.
This is just as true of banks as it is for foreign exchange establishments. They say they don't have the space to store the coins. While that could be true, it's not something anyone with coins to exchange wants to hear.
Change in Plans
By the end of 2019 I hadn't figued out how to get more or less full exchange value for the world coins, and I had a different set of priorities. I deceided to sell the JPY 10.00 coins (and he rest of the world coins I had) to an online store for discounted rates. Although I was hoping for a better exchange, I still came out winning in terms of arbitrage.
Some Math....
Given the (80 to 120)JPY/USD rate I quoted earlier, I had anywhere from $16.67 to $25.00; to make things convenient, I'll say the JPY/USD rate was 100/1, which would put me at $20.00. That may sound small, but given the payment I received it was like found money.
Now that we're dealing with copper for investment, let's do some math....
GIVEN
- 2000 JPY 10.00 coins
- 4.5 grams = 1 JPY 10.00 coin
- 1 pound = 454 grams
- USD 4.4722 (as of 9 June 2021) = 1 pound Cu
- 0.95 (95%) Cu content
CALCULATED
- 2000 JPY 10.00 coins
x 4.5 grams / (1 JPY 10.00 coin)
= 9000 grams - 9000 grams
x 0.95 Cu content
= 8550 grams Cu - 8550 grams Cu
/ 454 grams per pound
= 18.8325991189427 pounds Cu - 18.8325991189427 pounds Cu
x USD 4.4722/pound Cu
= USD 84.2231497797357
≈ USD 84.22
Results
2000 JPY 10.00 coins exchanged for USD 20.00 is OK for something needing high volume (which I didn't have or couldn't sustain if I had it). However, 2000 JPY 10.00 coins weighing 9000 grams-- 8550 grams of which was copper-- worth about USD 84.22 is better. Even if I used the price per pound of copper on 31 December 2019-- USD 2.7902-- that still ends up being close to USD 52.55.
I still believe I can succeed with my personal ForEx plan (micro-ForEx?), but I should limit it to the coins which have superior exchange rates. I will leave currencies like JPY and those in that neighborhood to the professionals who have the volume.
Epilogue
Before joining Hive, I hadn't heard the term HODL, nor had I considered investing in copper for its value as a metal. After writing this post on JPY 10.00 copper coins, I feel like the people who thought Bitcoin had reached the moon in 2016 and cashed out. You all know what happened later.
| DISCLAIMER |
|---|
| As I am not a financial expert, this post is not meant to give financial advice. This post was written for informational purposes only in the hopes that it may be useful to anyone who is in a position to take advantage of it. |
The "How Anyone Can Invest in Copper" Series:
Part 1: USD Lincoln Cents |
Part 2: CAD Maple Leaf Cents |
Part 3: GBP Pence Coins (Decimalized) |
Part 4: AUD Cents Coins |
Part 5: JPY 10.00 Coins |
Part 6: SIDEBAR-- My Experiences with JPY 10.00 Coins |