Coronavirus Effect on Coin Pricing
cameron12x
Posts: 1,384 ✭✭✭
What effect, if any, has the Coronavirus had on OVERALL coin pricing?
With many people staying inside more (away from other people) will that push online sales more?
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cameron12x
Posts: 1,384 ✭✭✭
Comments
I'm thinking online sales will rocket.
Finances will dictate the market.
Silver took a big drop!
The majority of the people in the U.S. cannot do OK without a source of noninvestment income. People are starting to be laid off because the pandemic is hammering the tourism/travel industry (cruise lines, airlines, hotels, etc.). Other sectors of the economy will follow; especially hit hard will be small businesses (they typically aren't sitting on lots of cash or even have large credit lines). People may buy bullion-related items, but I would not expect lots of sales of 'collector coins' priced below $1K.
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I'm back from a coin shop that was not selling any bullion related items except slabbed SE. They were only buying bullion from customers.
Imagine how many people are in front of a computer and buying all day.
Internet speeds have been getting slower as more people stay at home.
I'm more curious about coin pricing than bullion pricing.
I agree with @Sonorandesertrat many people have seen their 401K's and other retirement savings reduced in the last two weeks, that is bound to have at least a short term effect on discretionary spending for some. The very tip top where the millionaires and billionaires buy will not see much affect, same with those buying $10 AG hole album fillers. But I could certainly see buyers that have been buying the 1K type coins taking a break.
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A lot of this has nothing to do eith demand. You don't want to keep bullion in stock. With a 1% margin and 3 to 5% daily swings, any smart coin guy locks in immediately any bullion buy and it is sold 2 minutes after it is bought.
I'm usually a bullion buyer at melt. Now, I'm looking for a slight discount to motivate me.
With that said, I have somewhat reduced my bullion holdings this week and put on positions in gold mining stocks.
My guess is that coins, and their prices, while important to most of us, will drift lower as demand wanes.
When this panic passes and service related people get back to work and get caught up, demand should resume.
It may not though.
The money spent on "bread and butter" coins that support the market ($10-$250) is now and perhaps will be for some time spent on, well, bread and butter.
Small time dealers living on the edge will out of necessity lower prices to liquidate inventory for the needed cash flow. Eventually it will effect the entire market. Call it the "Trickle-Up Theory."
Double post. Sorry.
This virus is going to get worse before it gets better in the USA, hope it is not as bad as what we are seeing in Italy and Spain. We are living through a historic period. Stay safe and take care of your family and friends.
Obviously a higher percentage of the trade moves online. The interesting thing will be to see if it stays there when shows start operating again.
Here's hoping the 85 degrees here kicks that virus's arse!
I hope, but it may not be like flu.
The smart shop maintains an inventory level constantly.
Then they sell anything above that position.
Or buy when the position drops.
It means that there is ALWAYS inventory in stock to sell.
Coins are hardly an actual necessity, even for the most addicted coin junkie. That said, we know practically nothing about what the virus will actually do to individuals and to society. On that little or no information, lots of nominal wealth has already been stripped from Western nations. That can't be good for nonessential spending.
Buy buy buy!
Paper money eventually returns to its intrinsic value. Zero. Voltaire. Ebay coinbowlllc
I hope you're wrong.
Here's my take on local action. Gold for some time has been too high for my local buyers, anything greater than a 1/4 oz would not sell period. Had to be shipped/refined etc. Silver was a little easier to sell than gold, but not great and not big silver bars like kilo's or 100 oz bars etc, those had no buyers either prior to the drop, Now that the price drop has occurred, I have had renewed intrest in silver. Had many calls on fri and this am, for silver. What little silver we had sold out in the first 5 min of opening the shop, but we sell at spot, so that's the reason. Buyers Might have paid me 50c to $1 over spot, but Not sure, as we didn't ask that, spot was the price. Before this drop, I had very little buyers of 90% at even spot minus 10%. But this morning, because of selling out of .999 so fast, I was able to sell 90% at spot plus 5% this am, and they bought it all out today. Problem will be, being able to replace it at this low level, may not be many sellers or liquidators of silver at this level for the short forseable future.
as far as collector coins, last week ,buying was slow in this area, junk box heavily discounted stuff sold , but nicer collector coins really did not. In the past few days, I have read folks commenting that because of all the show closures and venues where hand to hand sales take place closed, that people would flock to the internet /ebay too buy. I am really not seeing it. In fact, a few days ago ebay sales seem to hit a brick wall. (In my opinion, foks are holding cash and taking a wait and see approach in case they need funds to get through this crisis for necessities. A lot of my ebay coin sales actually go to other dealers who do the large shows like balt, CSNS, etc, and with many of them closed now, they probably are reluctant to pile up even more inventory that they cant sell. I got two newsletters today from two dealers I do business with informing their customers about the closures and commenting that Baltimore is one of the bigger venues for the year, and with out the show taking place, they need to move some inventory direct , and would be willing to negotiate a good price. So, I cant see them wanting to add anything more at this time unless they got a steal or tremendous buying opportunity!!
Jim
I would say @bigmarty58 is right. You need watch Italy and France.
Better add Spain to the mix now.
Better
I have been collecting for about 55 years, and have a pretty decent collection, both raw and a lot of slabbed, including a nice large chunk of gold. Earlier in the year, I totalled it all up, so I would have an idea, and was kinda amazed at the number, when it was all put together.
When the Dow tanked the other day, the entire value of my collection "disappeared" from my 401K in 7 minutes. But between SWMBO and myself, there is nothing, coins, stocks, land, etc. that has to be sold for 5+ years to pay bills, so no day to day impact.
What I am doing is buying stuff to build some inventory in my classic car business. My guess is people selling stuff to go buy toilet paper.
I didn't think you could lose money on stock unless you "sold"???
I sneezed and silver dropped a buck. I blinked and it dropped two more.
You thought wrong, even though the loss is a paper loss/unrecognized loss until you actually sell. If you bought a stock for $10 and it’s at $7, try selling it at $10 and let me know how you do.😉 While you might later regain that loss, you could also lose more, before you sell.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
So I am right. If you don't sell....you don't lose. The market will go back up to where it was and more,
Unrealized losses are a very dicey topic. If your unrealized losses represent a small percentage of your net worth and you have other liquid assets, then those potential losses won't cause much loss of sleep. If your unrealized losses are a large percentage of your net worth and your liquidity position is poor, then you might be sweating. Younger people likely have the potential time to sit on their unrealized losses in hopes of recovery, but some younger people will take those losses by selling and returning to better markets with the proceeds to speculate in something else that may have more potential. Older people may not have time and are faced with whether or not they will leave their heirs with a pile of dung, or possibly they might do better for the people that they care about by handling the sale of those assets with their own expertise while they are still alive. Unrealized losses are not something to cavalierly avoid thinking about.
I hope that those sentences do not seem silly. Probably others have more to say. I feel that unrealized losses should not be allowed to build up to a significant amount, especially through inattention.
Indeed. A lot of folks feel less flush today then they did last week or the week before. That effects the psyche of most
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I Have several customers who are still sitting on the unrecognized loss in their silver they bought at 47-48 oz right before the crash in 2011-12.
You have lost the money, whether you sell or not. The question is whether you will regain it and it’s not a given that you will.
Under your way of thinking - and I realize many others think the same - If you buy stock in a company that goes bankrupt, the stock goes to $0, and you never sell it, so you haven’t lost the money. Does that really make sense to you?
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I have had some strong online retail sales here and there. With many shows shutdown perhaps some of that money hitting online.
However, overall economy should slow sales and bidding. Many entering uncharted waters, insecurity. Scary, my outlook very bearish. Have a couple of CAC coins (started low to generate bids) closing this weekend hope get at least cost.
Coin demand may be weak as survival needs kick in. As many sellers price on cost plus not many prices moving down soon unless seller under pressure for cash flow for survival needs.
Keep tabs on bullion prices and MV for your top coins - PCGS MV, CPG, etc.
Corona virus pricing litmus test would be say if lower bids winning items. Have tested the waters but nothing decisive.
Nobody’s going to be buying coins if they worried about cost of living needs. Like an aircraft in a stall numismatic values(except bullion) could go into a tailspin.
Were they not selling because of no demand OR because they were amassing/hoarding?
Well, that's a smart AND well-funded shop. I know both kinds: well-funded and under-funded. A shop with no bullion in inventory is probably smart but not well-funded. One of my local guys always has $50k or so in bullion inventory and does as you suggest. The other shop does not have that kind of working capital and so has almost no bullion in inventory at all.
My only point is that you can't really assess demand based on what the bullion inventory is. For a poorly funded shop, low inventory is not indicative of demand - either high or low. For a well-funded shop, the inventory is almost always the same and tells you little or nothing about demand unless you KNOW they are well-funded and their low inventory represents high throughput.
Ezackly. The "market" may recover but there's no assurance that one's particular holdings will return to pre-crash levels. Things like Amazon, Apple, Microsoft, etc. are likely to.
This.
The value of any asset is what you can get for it at that moment in time, not what you presume it might be worth if you just hold it long enough.
You don't realize a TAX LOSS until you sell. But you do have a loss in the value of the asset. The $50,000 in stock that is now worth $25,000 represents $25,000 less liquidity.
I agree with Dimeman. He hasn't "lost" money until he no longer owns the stock which sells for a "loss."
If he keeps the stock and it goes up in the future, did he really lose anything?
You two yahoos are talking about "value." And that is different
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"yahoos"?
It is "lost money" even if it is only temporarily lost. Your net worth is whatever the current "value" (your term) is of your assets. Yes, we are talking about "value", but that is the monetary (money) worth of whatever you own, not what you paid for it.
You are talking about taxable events not actual monetary value. Using your accounting system, if I spend $50 on a stock in 1960 and still own it today, it is only worth $50 even if its "value" is $50,000 today because you also don't "gain money" until the sale either. That is ludicrous. Similarly, if I bought $50 in a bankrupt company in 1960, it is still worth $50 today because I haven't sold it?
By your accounting system, Bill Gates is only worth a few million dollars because all of the appreciation in his Microsoft stock isn't "gained money" until he sells it all.
I dare Dimeman to spend the money he hasn't lost.
Mark that is completely different and you know it! My example is say you had money in the DOW in 2008 when it was at 13K and it dropped to 6K.....you kept it and it went to almost 30K......went to 21K then up to 23K. Total gain at this time would be 10K from the high in 2009. And it will go back up to 30K and beyond...…...if you didn't sell at any point!
Now is actually the time to buy.
If he keeps it long enough and it doubles in value, but he dies before selling it, did he lose everything, never being able to spend the money that could have been received by selling it?
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If what you wish to call “value”, has declined, there’s been a loss, even if the asset hasn’t been sold. The fact that the price might go back up, doesn’t mean there hasn’t been a loss. And there’s no need for name calling.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
That is the whole point......about selling and not selling!
Because of the past actions of the Federal Reserve Bank in the several financial crisis since 1987, people have now been trained that "things always come back". That's an attitude that is very dangerous to one's wealth.
@jmlanzaf Your comment "The value of any asset is what you can get for it at that moment in time, not what you presume it might be worth if you just hold it long enough." is the best comment in this thread so far, although Mark Feld's comments are highly accurate too.
The point people are intentionally glossing over or ignoring is that what if you have to sell stock? Some folks have no choice. A lot of folks sell stocks from time to time to buy coins. I know I do.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
It’s not different, because you don’t consider a loss to have taken place, unless there’s been a sale. And if your stock becomes and remains worthless, there’s no sale. But an unrecognized/paper loss doesn’t always come back to a smaller loss, a break even or a gain.
And in your example in your above post, how can you say a “total gain at this time would be 10K..” when there’s been no sale? You can’t have it both ways. If there’s no loss until there’s a sale, there’s also no gain until there’s a sale.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.