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Copper Catcher
Administrator
USA
2092 Posts |
 Posted - 11/28/2009 : 18:14:46
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The Review of Austrian Economics
Tyler Watts - Department of Economics, George Mason University, MSN 3G4, Fairfax, VA 22030, USA Published online: 14 May 2009
Abstract: I investigate in depth the contemporary, nation-wide arbitrage phenomenon of copper penny hoarding. While penny hoarding represents a “pure arbitrage” opportunity, it also clearly demonstrates the knowledge problems that face those entrepreneurs who are fully informed about intra-market price differences. This paper contrasts the Neoclassical and Austrian views on the role of information and knowledge in arbitrage, emphasizing the greater depth in understanding to be gained from the knowledge-based Austrian approach, as opposed to the information-based Neoclassical approach.
Source: You must be logged in to see this link.
Translation: Keep on sorting! 
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jadedragon
Administrator
Canada
3788 Posts |
Posted - 11/28/2009 : 20:10:53
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| I'm guessing Tyler Watts is one of us. That is fantastic - love to read the whole paper. |
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
Passive Income blog |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
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Copper Catcher
Administrator
USA
2092 Posts |
Posted - 11/29/2009 : 17:29:57
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| No, I did not download it...the abstract was all I needed to read to be satisfied. :-) |
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psi
Penny Collector Member
Canada
399 Posts |
Posted - 11/29/2009 : 17:59:36
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| Someone with a university account could probably get it for free. |
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Zyll
Penny Pincher Member
USA
214 Posts |
Posted - 11/30/2009 : 18:06:31
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| First time posting here. I work at a University so I was able to view the full PDF, 18 pages. Going to read tonight. Looks very interesting though. Section 3.5 is titled "Examples of knowledge-sharing from the realcent forum", and he cites posts from 2008. |
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Copper Catcher
Administrator
USA
2092 Posts |
Posted - 11/30/2009 : 19:29:51
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| Zyll, great...share what you can later.. thanks for posting! |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
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Zyll
Penny Pincher Member
USA
214 Posts |
Posted - 11/30/2009 : 22:50:37
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No Problem, thanks for the welcomes.
This paper is mainly about the difference between head knowledge and experiential knowledge. Watts uses the arbitrage of copper as an illustration of this difference. There's no meaningful discussion of the knowledge gained here, but he does say that this forum is better than formal education for getting the action-knowledge needed to be an efficient hoarder. It's not enough to know that the melt-value of a copper penny exceeds its face value; you must know how to overcome the four "basic problems in the pursuit of this arbitrage enterprise:
1. Acquiring pennies
2. Sorting for copper
3. Returning zincs
4. Selling coppers
Watts' paper is an economic study, but in my mind it begs the question: is there a FAQ associated with this forum? He outlines the different levels of hoarders and their differing goals based on the volume of pennies sorted per week. If I were to take on the cost of a Ryedale, I would want a business model to make up those overhead costs.
I sort maybe $50/month, so I'm a small player. But I've seen the potential and I want to up my volume if, as Watts says, the income is worth the time I would spend. |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 11/30/2009 : 23:22:01
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Zyll, thanks for your post. In answer to your question, it would be best answered in hindsight. One year from now when copper cents are worth five cents each and there are only 10% to be found in the wild, would it have been worth it to save them a year earlier for a penny a piece? Two years from now, when they're going for ten cents a piece and the percentages are down to 5%, would it have been worth it to save them when they only cost a penny? Three years from now, when they're as scarce as wheaties are now and going for twenty cents each, would it have been worth your efforts? Consider this to be 1965, and look at what happened to silver. Grab your cents before Gresham does.  |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 11/30/2009 : 23:28:32
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| To look at this analytically, you have to remember your time is a valuable asset, and copper coin sorting is labor intensive. At max, you can sort 3,000 pennies an hour with 98 - 99% accuracy. You'll miss one or two percent so your percentages gleaned will not be as high as if you had a machine doing the work. You can check out the Ryedale Ace go to ryedale.coin.com It is the low end model but therefore is affordable (around $100). If you wait to buy one, you'll later ask yourself "why did I wait? this makes sorting so easy!" Best investment you can make. When looting a store, those who get in early get out with the best stuff first. |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 12/01/2009 : 00:41:58
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Welcome to the forum Zyll. Thanks for sharing. Obviously doing significant volume makes it easier to justify the purchase of capital equipment. But that just deals with one of the 4 problems in the equation. By increasing your processing speed you actually multiply the degree of difficulty for the other 3 areas. Depending on your circumstances and banking relationships, finding an optimum balance can be a bit of a challenge. A Ryedale would allow you to process 8-10 times as many pennies in the same amount of time you currently spend sorting. Of course being able to process at that increased clip usually tempts folks to spend more time sorting than they previously did when they were more casual about it. Even with automation, there is still a significant amount of work involved.  |
If your percentages are low.. just sort more. If your percentages are high.. just sort more.
Now selling Copper pennies. 1.6x plus shipping. Limited amounts available. |
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jadedragon
Administrator
Canada
3788 Posts |
Posted - 12/01/2009 : 03:02:43
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| I think that forum member Economist is the writer - just my guess though. |
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
Passive Income blog |
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wolvesdad
1000+ Penny Miser Member
USA
2164 Posts |
Posted - 12/01/2009 : 06:23:00
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;-)
Nice to have you Zyll. Thanks for summarizing the article for us!!
And thanks Copper Catcher for the original nudge about the article.
Hey, people know about us!!! little by little the copper fever is catching. |
"May your percentages ever increase!" |
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Copper Catcher
Administrator
USA
2092 Posts |
Posted - 12/01/2009 : 07:29:25
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| Copper Fever... Is that where my sore throat and cough is coming from today! LOL |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 12/01/2009 : 07:29:40
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| I think Hoard brings up some good points. Sorting the copper is just one of the original posters four problems, and they are by no means equally weighted. I would have to say sorting is the easiest of the four. Producing high volume is problematic because you need a reliable source, and the banks are touchy about this. Returning zincs is getting harder if you don't use Coinstar, which is costly. BOA just told me today they are no longer accepting 50 pound bags, only $50 face. And the market for selling is undeveloped right now. But for all those same reasons, copper represents compelling reasons why you can benefit at the expense of others who don't want to deal with these issues. It will be a moot point in a few years when the copper cents are gone. |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 12/01/2009 : 09:44:22
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| I think you are right about the identity of the writer jade. Surprised I didn't make the connection. The name, occupation, and writing style all fit. Economist is a respected long term member here who I have dealt with on occasion. I would be very interested in reading the entire paper. |
If your percentages are low.. just sort more. If your percentages are high.. just sort more.
Now selling Copper pennies. 1.6x plus shipping. Limited amounts available. |
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Zyll
Penny Pincher Member
USA
214 Posts |
Posted - 12/01/2009 : 10:36:18
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| Okay, I know we're getting off topic here but all I see at You must be logged in to see this link. is an "Apprentice" model for $499. Please point me to the $100 "Ace"? Thanks! |
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 12/01/2009 : 10:53:22
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| The Ace in a non powered manual feed sorter. It may not be on the website lately. But if you go to the Ryedale equipment section on this forum there are pictures and discussion. |
If your percentages are low.. just sort more. If your percentages are high.. just sort more.
Now selling Copper pennies. 1.6x plus shipping. Limited amounts available. |
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AGCoinHunter
Penny Hoarding Member
USA
685 Posts |
Posted - 12/01/2009 : 13:04:21
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| I got an Ace a week ago and love it. While its manual you can really plow through a box of pennies which might take you a few evening to hand sort. I did about $75 this past weekend in a few hours. You have to make sure its on a level surface and make sure to check our your zinc bucket for older wheats and indians, but overall it does the job. The 82's are the pain in the arse, but I did notice that it sorted them differently. I am still experiementing but eventually I am going to find a way to automate the feeding of the machine. A few other things I have noticed is that its easy to drop two pennies at a time which requires you to turn the unit upside down to get the two stuck ones out. For a small end sorter, this is worth the money. Found 1 IH and 15 wheats so far. |
"All tyranny needs to gain a foothold is for people of good conscience to remain silent."
-Thomas Jefferson
"There is no difference between communism and socialism, except in the means of achieving the same ultimate end: communism proposes to enslave men by force, socialism—by vote. It is merely the difference between murder and suicide." - Ayn Rand
________________________________________________
Lenin: Class-based International Socialism
Hitler: Race-based National Socialism
Obama: Class- and Race-based Post-National Socialism
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Zyll
Penny Pincher Member
USA
214 Posts |
Posted - 12/01/2009 : 14:14:07
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| Can I just say how angry I am that our dollar has been debased to the point where even the lowly penny is worth twice its face as scrap metal! Au 1933, Ag 1964, Cu 1982, Zn 2010??? How can we continue? I have turned to copper only because it's still in circulation, but the storage and transportation issues are very problematic and that is why they're undesirable to hoard Cu over Ag/Au. |
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AGCoinHunter
Penny Hoarding Member
USA
685 Posts |
Posted - 12/01/2009 : 15:10:56
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| Its theft Zyll. Poloticians have basically plundered our country for handouts and entitlements. If you look at the Roman Empire we are eerily similar when it comes to currency. Next on the list is aluminum or pvc. |
"All tyranny needs to gain a foothold is for people of good conscience to remain silent."
-Thomas Jefferson
"There is no difference between communism and socialism, except in the means of achieving the same ultimate end: communism proposes to enslave men by force, socialism—by vote. It is merely the difference between murder and suicide." - Ayn Rand
________________________________________________
Lenin: Class-based International Socialism
Hitler: Race-based National Socialism
Obama: Class- and Race-based Post-National Socialism
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jadedragon
Administrator
Canada
3788 Posts |
Posted - 12/01/2009 : 17:27:53
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| Next on the list is steel - used in Canada for coins since 2000. |
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
Passive Income blog |
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Arbitrage and knowledge
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