This is not a hypothetical what-if nor a cherry-picked date. This is a real life "I-was-there, what-it-cost" example illustrating Silver's value in an emerging European country in the last 20 years. Here's the first part: actual coin/Ag value & cost-basis given. (I will work on a stock loss calc next, based on the 1992 pyramid-ponzi event that friends suffered. See below.) 1) Consider Silver priced in 100 Korun 1951 K. Gottwald (7 gr Fine Ag; avg intrinsic value in 1992 = 27.03 Kčs) 2) Purchased for 115 Kčs in January 1992, that "investment" entails 325% premium/'loss' upfront (numismatic, retail silver value &spec coinflation) 3) Since 1992, Paper currency Kčs has fallen -64.43%; today's 115 Kčs is equivalent/down to ~41 Kčs in 1992 value. 4) Recent POS, the intrinsic value of the fine Ag in the coin is now "worth" ~134 Kčs in today's currency, a nearly 5-fold rise (4.95x higher) from the 1992 intrinsic value. 5) But the coin actually sells ~379 Kčs (2-8-2013 ebay auction plus s/h: no net, taxes, etc. factored) say ~2.74x over current intrinsic value. 6) Evidently, the coin's value appreciated ~3.30x or 2.3x gain over the 1992 cost-basis.
How about buying up old French 50FF coins from the mid 1970s for 40FF(then about $8 or so) because they had been demonetized? Now they would be worth about $28 or so.
Interesting aside, scottishmoney. The ČSFR event is this: http://www.nytimes.com/1991/11/10/world/future-investors-line-up-in-prague.html http://www.nytimes.com/1992/05/19/w...ull-market-as-state-grip-yields-to-stock.html I'm looking for actual returns for the 1,000-Korun coupon and aggregate losses on 'managed accts' that investors piled into (signing over their coupons) not performance of the Czechoslovakian stock mkt itself. From a 2011 study "Of the 1,700+ companies originally listed on the Prague Stock Exchange, many have been privatized by shrewd investors. Some firms have been acquired or merged, while many were not viable businesses to begin with and have gone out of business. The number of listed companies dropped into the teens by the late 1990s, but has risen to 27 presently." What was the average investor loss was in for particular privatization scheme? It's not just coupon-loss but also any 'mutual funds' ponzis they ostensibility joined. Many funds/investment ops went bankrupt soon thereafter. If an investor suffer -50% loss on capital YEAR 1, s/he'll need 100% return just to break-even Year 2 (or whenever.) Where investor values reported plunged ~-90% (see Fortune Magazine: http://money.cnn.com/magazines/fortune/fortune_archive/1996/12/23/219833/index.htm ) an investor would need to gain +961% thereafter just to break-even. This discussion is fundamentally correct: http://www.financialwebring.org/forum/viewtopic.php?f=14&t=108357 "Modern-day trading on the Prague Stock Exchange began in 1993, but if you search on the Internet, you'll find almost no details about the first 10 years of its history. {...}The architects of the Prague Stock Exchange made one deadly mistake. Specifically, they set the starting share price for each company at 1000 Czech crowns. Thus, for most companies, from Day 1, the share price had no place to go but DOWN. Czech citizens, who had zero experience with equities after 40+ years of Communism, panicked. They lined up outside fly-by-night offices to dump their shares at below market prices. {....}What happened to the 1700+ companies that were originally listed on the Prague Stock Exchange? 1697+ of those companies have been DELISTED. Most of the 1697+ companies still exist. Many of the 1697+ companies are very profitable."
Not certain how to calc initial stock index valuations: my 1993 starting value is 861 Kčs, not 1,000 Kčs. It appears the April 6, 1993 - 12/31/1994 return should be -35.28% and following years' returns (from the Prague Stock Market Index website) are not declared TR (w/div reinvested.) Delisting may also entail TOTAL LOSS (an omission known as 'survivorship bias') so I would only suggest these returns for the Prague Index as partial indication of Czech investor losses. (9mo)1993: -5.89% 1994: -31.24% 1995: -23.56% 1996: +26.70% 1997: -8.21% 1998: -20.41% 1999: +24.23% 2000: -2.29% 2001: -17.53% 2002: +16.75% 2003: +43.06% 2004: +56.58% 2005: +42.73% 2006: +7.87% 2007: +14.24% 2008: -52.72% 2009: +30.19% 2010: +9.62% 2011: -25.61% 2012: +14.01% 2013: +3.16% As an alternative to Cz stocks, compare possible purchasable 8 coins (50% Ag '100 Korun 1951 K. Gottwald') for 108.27 Kčs/ea. on 4/6/1993 = ~861 Kčs 1) 4/6/1993 Equity Investment = 861 Kčs, in stocks >>> = 2/8/2013 994.1 Kčs ~ +15.46% nominal gain (over nearly 20 years.) 2) 4/6/1993 Equity Investment = 861 Kčs, in stocks >>> = 2/8/2013 994.1 Kčs ~ - 55.89% actual LOSS to currency depreciation/inflation 3) By comparison: a 1993 Coin Investment ('100 Korun 1951 K. Gottwald' same premium/cost-basis, above) and recent auction would have realized 3,035 Kčs. 4) Net feeBay -13% the Coinvestment alternative would return "worth" of ~2,640 Kčs, or 2.66x the Cz. stock index return. 5) Caveat: no idea what taxes or other costs might factor in either investment alternative, over time. This is 'best estimation' only. I don't believe there's anything special about the numismatic example I've used - that is too say, Communist Dictator Klement Gottwald's 1951 coin does not command great popularity in free-mkt Czechia nor any 'extraordinary premium' at auction. So it's a fairly representative Ag coin, what Czechoslovaks actually hoarded and could have purchased/sold in the period both before & after 1993. Some did, in fact! The Big Picture? The persistent and tirelessly repetitive Paper Bug notion that "stocks are always better than coins/PMs" is shown here to be FALSE. Whether or not most emerging economies & stock markets so favored Ag (in this period) I cannot say. But the US stock market's best 60 years 1946-2006 should probably NOT be assumed 'the global norm', either. Factoring Paper Depreciation, numismatic value and PMs offer even better opportunities for non USD investors to hedge and diversify their portfolios. It would be useful to see other non-US stock returns & currency calculations for LOCAL Ag in different periods, too.
