I was ignoring this thread thinking it was just a discussion of what signs indicate a Dayi tea was real/fake. Reading through the comments today, you all have made a much more interesting conversation!
I wanted to introduce some background about collectibles markets in general. I think Shah82 alluded to most of these points, but I thought the Wiki article on "Collecting" recaps them concisely:
Wikipedia wrote:While some individuals purchased contemporary collectibles to enjoy and use, many purchased them as investments. Speculative secondary markets developed for many of these pieces. Because so many people bought for investment purposes, duplicates are common. And although many collectibles were labeled as "limited editions," the actual number of items produced was very large. The result of this is that there is very little demand for many (but not all) items produced during this time period, which means their secondary market values are often low.
There is no secondary market for an item unless someone is willing to buy it, and an object's value is whatever the buyer is willing to pay for it.
Some further analysis from me based on the above, that to be collectible and hold value in a collectibles market, items must me scarce and
in demand in the secondary market. That is, high prices in the primary market (retail stores) in Malaysia and Taiwan are not, by themselves, good indicators that Dayi tea is appreciating in value.
To say this is a healthy secondary market, we would have to know at what prices the
collectors are selling Dayi teas to those stores, assuming the stores aren't selling primarily from their own stock. Considering most viable businesses put 50% to 400% markup on items, if that 2009 Dayi 7542 is selling for 70 ringgit, the store paid as little as the original price (18) and as much as 46 ringgit per cake, probably more like 35. That's 95% appreciation before subtracting other costs like rent on the storage space, utilities, climate control capital costs, shipping, and tax. My guess is that, for now, all those costs are low enough in Malaysia that perhaps some large collectors could turn a good profit. In the US, a profit of approximately $240 per jian isn't enough to merit two years' worth of those costs.
The College Investor wrote:Also, collectible markets are very dependent on short-term trends and individual tastes...As a result, the collectible market should be viewed as extremely high risk...it is usually only proven works that hold their value. By this, I mean collectibles that have a market, a pedigree, and a link to someone famous.
Given the above, a case could be made either for or against collecting Dayi, if you're going to collect pu'er hoping to turn a profit. On the one hand, Dayi is the standard famous brand, the Wedgwood of pu'er. On the other hand, they produce millions of cakes annually, making it more like the Fiestaware of teas: pretty, well made, but so abundant the cost in the secondary market is driven by supply rather than demand.
This is why the super limited edition Dayi stuff gets the speculator treatment: these cakes (dragon pole, bok choy banzhang, golden yada yada yada) are some of the few that actually are limited in quantity and availability and might be hard to find in the future. Unfortunately for profit-minded collectors, Dayi sometimes makes the mistake of reissuing these cakes in subsequent years: the original productions of 0622 and V93 would be worth a lot more if they had never been produced again. This also means it's a dangerous guessing game regarding which Dayi recipes will actually remain one-off collectibles and which will be another product line for years to come.
The result of this has been amusing. I received a sample from an Asian collector of a 7542 with a specific batch number that is being promoted as much better than the others, and thus collectible. Even with new cakes, the X01 batch is now collectible for the sake of collecting, commanding more demand because of the assumption that the first released batch contained the best leaves (spring leaves or a better blend of raw material from the previous year).
At the end of a tea cake life cycle, someone has to purchase the cake and drink it. Tea drinkers can take one month to several years to fully consume a cake, and there are without exaggeration millions upon millions of pu'er cakes sitting around aging with hundreds of thousands produced each season of each year--probably millions of Dayi cakes in existance, with a relatively small number of people interested in drinking pu'er tea cakes.
Teas like Hong Yin will always hold some value, as the supply actually is very, very limited, but I don't hold the same hopes for 2009 7542.
Hence, why collectors and retailers drip the 80s, 90s, and early 00s cakes onto the market. They know the supply of these teas still outpaces demand, despite cries of "mai yige, shao yige" (sell one, lose one). This is also why Dayi has moved outside tea media and now advertises in mainstream media; demand has to increase to keep the big collectors buying, which is the bulk of their profit. But, someday, these collectors will flood the market, either with large collections cashing out or simply via the truth that too many collections releasing tea in "little drips" is the equivalent of a rainstorm.
The College Investor wrote:The bottom line is that you shouldn’t consider your collection an investment. If you do collect, do so because you love the stuff you are collecting, not because you hope it will make you rich. Collectibles as an investment are very risky. Collectibles as enjoyment are fun.
I love my collection, and while I take pleasure in seeing current prices for cakes I own, I don't plan on it making me rich. Auhckw clearly enjoys his hobby, and I doubt he will regret it if it turns out he's not rich from Dayi resale, as I don't think he buys on that scale--yet!
I would like to say I wish luck upon those who are hoping so, but my self-interest hopes the big collectors lose their shirts in the coming years so I can pick up good aged tea on the cheap.
