Do you ever get the sense that there's a lot of money in the hobby?
Zoins
Posts: 34,186 ✭✭✭✭✭
With strong prices for top condition rarities and even for the 2019-S Enhanced Reverse Proof on the secondary market...
do you ever get the sense that there's a lot of money in the hobby, it's just not going to all the traditional places?
Tagged:
0
Comments
Think1% of the top end pieces are represented at a big auction like FUN? If so, the number would be pretty easy to calculate.
It wouldn’t be that hard to write some software to multiply the price guide by the pop reports. That would give you some idea, but of course wouldn’t account for crack outs, raw coins, or coins in the holders of other TPGs.
Probably a few Billion.
OK, Uber-geek me did a little math for Peace dollars (the best US coin, obviously). I only did the math for 6 issues. These numbers are the book value (pop report for each grade x price guide for each grade) for coins in PCGS holders graded MS60-MS68. Of course, this doesn't include raw coins, coins in other holders, or crackouts/duplicate submissions:
1921 - $11.7 million in extant book value
1922 - $8.5 million
1922-D - $2.5 million
1922-S - $2.4 million
1928 - $6.7 million
1934-S - $17.9 million
These six coins total $49.7 million in book value. If you did the math for all 24 issues in the series (minus a handful of proofs) you'd end up with somewhere around $150-200 million, (probably on the lower side since I included some of the keys).
That's just Peace dollars. Add Morgans and I think you'd be over a billion dollars.
These numbers account for 187,000 grading events. Our hosts have graded 43 million coins. Extrapolating (ignoring many, many sources of error)...... equals $11.4 billion.... so @DIMEMAN is pretty much correct.
The top 5 art collectors alone hold assets of about $11 billion. The art market was $64 billion in 2017.
I think $11 billion is very low. First of all, you are only looking at U.S. coins. Second of all, estimates of the annual U.S, coin market run close to $4 billion. Unless 30% of the market changes hands every year...
https://numismaticnews.net/article/coin-market-got-smaller
If you consider the U.S. Mint alone has $250 million or so in annual sales, you have several billion in U.S. Mint products alone from the last 20 years floating around out there.
I would estimate the total is closer to $100 billion for U.S. only. [Assume 5% of the market turns over every year, $4 billion per year, that gets you to $80 billion. ] Probably more like $200 billion for the world market.
Most of what you described was outlined in my caveats. My numbers are only for US coins from MS60-70 in PCGS plastic. They are not good numbers..... AT ALL, but they give some idea of the order of magnitude. They were extrapolated from a small handful of data garnered only for Peace dollars. This series doesn't contain anything even remotely approaching the $1M level. At the top a very small number of coins account for a large part of the value. The US market might very well be close to $80 billion, but I bet it's a little smaller. I'm guessing more than 5% of the "money part" of the market turns over every year.
Edited to add:
From the article, I'm surprised that the two big auction houses account for only $342 million of the $3.8 billion market. I would have thought their share would be much, much higher.
In any case, it's clear that I'm a rather small guppy in a sea of whales.
It's all money , and that's more than a lot of money.
Costs a lot of money to collect.
Instead of buying video games and others stuff boys between 16-18 I spent most if not all of my money on coins. Thousands of dollars. It dose not come cheep.
There are definitely more coins to be sold than there is money to buy coins. I'm always curious what fraction of all coins are in dealer inventory at any given time.
IG: DeCourcyCoinsEbay: neilrobertson
"Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me
If I wanted to be nit picky I could point out that the population numbers are clearly inflated by multiple resubmissions, and I would STRONGLY suspect the higher the grade/value of the coin, the higher the percentage of those population numbers are actually resubmissions.
Having said that, I think that Bryce gave a reasonable account of the MAGNITUDE of the coin market compared to the art market.
U.S. Type Set
72% of statistics are made up 90% of the time.
Defining a "collectibles" market size is difficult because much of what is in it is dormant for long periods. Some of this material (the "nice" stuff) that lies dormant would bring very good money if actually brought to market but much of it is actually dead product that would be difficult to move without big price reductions.
That said, I have calculated the coin market as being worth $14,583,441,005.21 as of this moment. The .21 includes some rare corroded Lincoln Memorial Cent "errors".;)
I'm not sure what population numbers have to do with the numbers I presented. Bryce's number is AN ORDER OF MAGNITUDE too small in all likelihood given the numbers in the PNG report. The market is only $11 billion if 30% of the entire coin market trades every year since the annual coin sales (U.S rare coins) is approximately $4 billion.
There's little doubt that the art market is somewhat bigger.
I would also point out that the GRADED population of $20 double eagles is near 2 million coins with probably at least that many raw. That makes the value of just the graded $20 gold at somewhere approaching $4 billion and possible $6 to $8 billion if you include raw. So, the $11 billion figure is definitely far too low.
I'd point out that there is around $4 billion worth of $20 gold in slabs, so $11 billion is decidedly too low.
A few years go i brought up the subject of the most valuable year for numismatic coins. Years of large gold production quickly trumped the years with significant rarities.
Yes ... every time I open my red book.
Yea, I learned that in the mid 1970s when I took my first table at a coin show. I had an item that was priced at over $1,000, which was a lot of money in those days. A job that paid $12 to $14 thousand a year was considered to be quite good. I bought a new car for $3,000 in trade. I sold the piece to a dealer almost immediately. As it turned out, I was asking too little.
The thing that amazed was that everybody had cash and lots of it. Hundred dollar bills were kind of like $10 bills in the “every day world.”
I totally agree their is a mega boat load of $$ in the hobby, and $1 million coins get a lot of buzz. I will not quibble over pop numbers, resubmissions, etc.
The only concern I would have, alluded to by a couple other posters is how thick is the demand. Large amount in dealer stocks = not good, and if 5% 15% 35% whatever of the "good" stuff came to market in a year, what would happen to prices?
What would happen if, say, a bag of 1000 Mint State 1893-S Morgans was found, or the top 10 collectors (the Whales) of Morgan dollars decided to move on, and dump their entire collections? The hobby would survive, but the "value" of the Morgan series would probably take a SERIOUS step down.
A good friend who collected a WIDGET was very proud of one of his widgets, only 2 known. He turned down $10,000 for the widget, as no one else could complete the set without his widget. Until a case of 24? was found in West Virginia, and the price dropped to less than $50, as the collector base was thin.
Was this a coin or a token / medal? Can you say what it is specifically? I'm guessing it really wasn't a widget when there were just 2 known.
If there is it’s concentrated in a small pop of wealthy individual dealers and collectors.
The average person coming into the bourse room at a show is doing good to have $300 in their pocket.
A dealer selling 6 world coins for a dollar seemed to be having the most success at a recent show I attended.
I bought some $20 PCGS MS63 Libs for $1440 each
from a bullion dealer. That’s probably more money each than the average workers week check. Hope gold goes up.
Sure does seem to be a lot of money in the coin hobby...and, indeed, a lot of product lies dormant for extended periods...Not sure how much cash actually moves each year...that would be an entirely different set of figures. No, I have neither the time nor sufficient curiosity to compute such information
I am amazed daily on the obscure topics that develop here on the forum.... 
Cheers, RickO
Well duh,....It's ALL money.
@jmlanzaf
I imagine you're correct and the number I casually tossed out there from 15 minutes of simple math certainly wasn't likely to be all that accurate. In any case, whatever the size of the market, it's a number so big that it's virtually incomprehensible. For most of us, the actual number probably isn't as important as the trend-line.
There are a few things that don't "seem" right to me in my little brain. The Numismatic News article that you referenced claims that Heritage and Stacks combined don't account for even 10% of the annual market. When I run the cert numbers, most of my coins have made an auction appearance with the two bigs at some point. There are probably even more that once did, but now have a different number. This seems slightly irreconcilable, as the majority of my coins did not come to me from HA or Stacks auction wins.
Second, who on earth purchases all of the MS63 Morgans, Mercs, Peace dollars and Buff nicks? Sure there are loads in dealers' inventory, but hundreds of thousands of these went somewhere...... In my normal day-to-day life I've NEVER seen a slabbed coin outside of a dealer's shop and only rarely at club meetings. I'd be surprised if anyone in my extended family has any. Where did they all go?
I think there is plenty of people with money to buy coins. I know many folks lament that the coin market is weak but I don’t see it. I’m sure some things are down but other things are up.
LIBERTY SEATED DIMES WITH MAJOR VARIETIES CIRCULATION STRIKES (1837-1891) digital album
I agree. I continue to be surprised and impressed by how much coins sell for.
Just attending a major show, seeing what's offered and knowing the table fees and travel costs the Dealers paid tells me there's a lot of money in the hobby. The key is not paying too much to get a participation ribbon.
Wealth held in numismatic items is not visible to government agencies like the IRS. Coins can be held "off balance sheet" for many reasons that have nothing to do with collecting. While subject to risk of loss due to market reasons, they are way less visible than assets held in bank and stock accounts.
OINK
only when I look at the PCGS price guide.
Natural forces of supply and demand are the best regulators on earth.
I think everyone's guestimates are way low. If you consider the gambit as a whole there has to be without a doubt trillions of dollars worth of coins out there.
US Coins
World Coins
Ancient Coins
And don't forget modern circulating coinage. Anyone feel like figuring out how much dollar wise the yearly production of coins is worldwide? That might begin to put things in perspective!
Edit to add:
NCLT's
Bullion Coins
Exomumis(tokens and Medals)
In the case of the RP enhanced eagle absolutely, more dollars than sense.
See 80s/90s sports cards, beanie babies, Dutch tulip bulbs, bitcoins etc. Just greed and speculation.
The whole worlds off its rocker, buy Gold™.
I would not put too much focus on slabs alone. As I frequently mention on this forum, the majority of collections are still raw.
We have two local B&M stores - not counting the half dozen pawn shops. Each of those stores does close to $2 million in sales per year. My county has a population of 1 million. So, add in the pawn shops and multiply by 300 and you start to get close to the PNG number.
A lot of widgets get mass marketed. There might well be thousands of those coins in "non-collectors" hands.
"Do you ever get the sense that there's a lot of money in the hobby?"
No. If there was, I suspect some of Brent Pogue's selections would have gone for more. The Child's specimen of the 1804 dollar would also have sold.
As another data point, the declared value for coins submitted to PCGS in 2018 alone was $2 billion.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
In my very thin market, I know of large collections that are off the radar.
I am sure it's the same for the rest of the market.
Looking at the CU3000 it appears Coins are lagging way behind Stocks and Real estate except for a few exceptions ( CC Mint coinage). The next decade will be better. IMHO. Bring it!
100% Positive BST transactions
i have bought more coins this year than ever before.......stock market is giving me that false sense of being wealthier. Oh my!
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I have bought more coins this year than ever before.......coin market is giving me that false sense of being wealthier. Oh my!
good for you !
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Your $100B has been my prior guesstimate. However, not sure it is particularly meaningful in the context of the OP because a disproportionate percentage is held by low to mid-budget collectors in lower to mid priced coins.
I think $200B is too much, unless it includes every single non-US coin worth around FV which is most. For the more expensive world coins (maybe $1000+), the US market seems to be worth at least 5X to 10X all others combined going by the Heritage archives.
My assumption also, with some of the "investment" type coins (such as the most common Morgan dollars) maybe being owned by the same person in the hundreds if not more. Any other outcome would require a noticeable percentage of the hobbyist collector base owning the same coins.
Your sentiments are similar to mine.
My guess is that over half of all hobbyist collectors spend less than $500 a year. Maybe noticeably less since I doubt most long time collectors have collections worth over $10K.
Maybe in the vicinity of 80% spend at most $300 on a single coin, excluding metal substitutes such as ASE, generic US classic gold and Morgan dollars. That's why the shows I have attended have a "budget" section where to my recollection $300 is the cut-off.
Coins are not a viable substitute for alternative asset classes at any scale. Coins do not have the capacity to accommodate any meaningful flow of funds relative to other asset classes without sending the prices of practically everything most collectors prefer to buy into the stratosphere. This outcome will result in "widget trading" not real collecting, which is why Wall Street's attempt in 1989 to commoditize coins shortly after the introduction of TPG failed.
Many good points being made here.
Of course, to know how big the market it, you have to define what is meant by "the hobby" in the OP's title. We all collect different things at different levels. Are we including paper, exonumia, bullion, foreign, ancient, and private mint issues? Are we including all of the pocket change ever minted, or just stuff above a certain threshold? Many "collector coins" can be had for a small premium above face value (US state quarters & clad Kennedys in gem BU grades, for instance). In the aggregate, these potentially account for significant value but are of little numismatic interest to the "advanced" collector. I wonder what numismatic News used for their estimate.
I don't think there is anyway to accurately come up with a number + or - a bunch of Billions!
Let's just say it is a HUGE Hobby.
You know a hobby has lots of money involved when there are tightly controlled price lists, when spreads and bid/ask are razor thin, and when someone offering 10% less on something might be considered a ripoff artist.
Yes BUT obviously NOT mine
.... and the hype fueled it to some point