Rare coin market under threat
derryb
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If you understand what is coming, then you can duck. If not, then you get sucker-punched. - Martin Armstrong
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As we know, in a neighborhood of 100 homes currently valued at $1 million each, when a desperate seller accepts $500,000, the value of the other 99 homes immediately drops to $500,000.
Uhh.....no. Lost interest after that statement by the author. "Desperate sellers" don't define any markets.
Perfect, let's see, my 1972 Redbook has proof Morgan's at $215.00 bucks, I look forward to the new buying opportunities!
Based on current auction prices, it isn't happening yet. Also, I agree, just because One guy has to sell a house at half price to move it for whatever reason doesn't mean the rest have too.
Also, I am not a real estate property owner, but have several customers who are. And one thing I have never understood is , if you have spaces, building, for lease , but nobody is leasing them currently, they will not drop the price to get somebody in (a lesser paying tennant, than nobody) Doesn't seem to work, the ones I know just leave it empty if they cant get the lease price they want. I have asked several of my customers who own property and they never have gave me an answer why this is. (is it some sort of tax break or write off?
as pointed out by the author desperate sellers set the new low price. When three different gas stations near the same intersection witness one of their competitors lower the price, guess what happens next? Desperate sellers don't cause a decline in stock prices when they take the bid that is lower than last price?
The worst thing about desperate sellers is how more desperate they can become when other sellers start matching their prices. Competed with any lowball ebay sellers lately? I've seen it become a race to the bottom, especially when its a new mint product where market timing is everything.
If you understand what is coming, then you can duck. If not, then you get sucker-punched. - Martin Armstrong
We just sold moms house for more than we put it up for
Works both ways: desperate buyer
If you understand what is coming, then you can duck. If not, then you get sucker-punched. - Martin Armstrong
If they are desperate they will feel they have to lower their price. In real estate "comps" are critical to determining market value.
Simple, they are not desperate. Their price will tell you when they are.
If you understand what is coming, then you can duck. If not, then you get sucker-punched. - Martin Armstrong
WHEN was that? and was it priced to sell?
can not compare to a commercial lease issue.
when you lease, there is nor security when leasing. But when you buy you can evaluate your down side.
I just read this and was going to post the exact same thing! People make arguments based on completely false premises.
Closed a week ago
House WAS priced to sell as it needed Tens of thousands of dollars or more in improvements. We are extremely happy with the price we got, timed perfectly
Easy to sell a house in San Diego as it is the best place to live in the USA
Anyone > @Eldorado9 said:
Any collector who DOES understand the economic impact of our current recession on assets, particularly collectibles, should be preparing their wish list and stacking their cash. Dealers of course will tell you this is hogwash and that you should pay current prices now.
Those who do not agree with the author in the OP would be advised to keep an eye on other rare collectible markets such as art and automobiles to fully understand what is coming to the rare coin market.
If you understand what is coming, then you can duck. If not, then you get sucker-punched. - Martin Armstrong
There is no threat yet, at least not where desirable coins are concerned. Those coins are typically in strong hands. During the last recession, what I saw being sold to generate cash was bullion-related items, common mint and proof sets, etc.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
So let me get this straight. You're considering the purchase of a 1903 S Morgan in PCGS MS65 that three months ago sold for $24K. You've been following this coin for a while and you notice it got by you and just sold for $15K.
Are you still willing to pay $24K for it?
If you understand what is coming, then you can duck. If not, then you get sucker-punched. - Martin Armstrong
Lower prices fuel lower prices.
If you understand what is coming, then you can duck. If not, then you get sucker-punched. - Martin Armstrong
During the last market dip, I saw a certain error coin type drop from $1000 down to $500.
I bought every one of them and became a market maker in the error type coin.
I personally brought the price back up.
Some of the comparisons here are misleading. You're comparing gas, an undifferentiated commodity with a limited useful lifespan and high turnover that competes almost exclusively on price, to constant assets like real estate. If a recession hits, unless a property/owner is excessively leveraged, they are not necessarily under substantial pressure to sell. Your argument is predicated on the belief that if the value of an asset goes down as determined by the market, then all owners of similar assets are under pressure to sell, which simply isn't true.
The coin market is not monolithic, it is actually a bunch of niche markets. A wipeout in one niche does not necessarily spill over into others.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
It is still early, and we are just entering the 'middle game'....There is much yet to be seen....Cheers, RickO
Your argument is predicated on the belief that if the value of an asset goes down as determined by the market, then all owners of similar assets are under pressure to sell, which simply isn't true.
My argument is predicated on the belief that if the value of an asset goes down as determined by the market, then all owners of similar assets are under pressure to lower their price if they wish to sell.
As pointed out by the author in the OP, this will result in lower prices.
If you understand what is coming, then you can duck. If not, then you get sucker-punched. - Martin Armstrong
A wipeout? No, we're talking about declining asset prices during a recession. Will affect other "niche" markets such as art and rare automobiles as well.
If you understand what is coming, then you can duck. If not, then you get sucker-punched. - Martin Armstrong
Acting early (postponing purchases, building cash) is the whole point!
If you understand what is coming, then you can duck. If not, then you get sucker-punched. - Martin Armstrong
Desperate sellers also fuel lower prices.
The author makes some ridiculous statements and this one is right there with it. To answer your question, they follow THE LAW. In the state of Florida, it is against the law to sell fuel BELOW cost. If fuel prices (crude oil prices are trending downward) then the busiest gas station in an area will likely be refilled SOONER than the others and they will be able to lower their gas price FIRST. The other gas stations will only be able to lower their price when they purchase more fuel at a lower cost, they won't be able to lower their price just because a competitor does. Also, the supplier of gas to the busiest gas station in the area will likely sell their fuel to the busiest station slightly cheaper than the other gas stations are able to purchase their fuel. It's all about volume. This is why if you have three gas stations within a very close proximity there is almost always one that is cheaper than the others.
The real estate example of someone dropping the price from 1Mil to 1/2Mil just to offload it is about as ridiculous. I do not have time to punch the 500 holes in that analogy but thankfully a few others have.
Looking for Top Pop Mercury Dime Varieties & High Grade Mercury Dime Toners.
I've been seeing some real bargains in coins in ebay hands lately.
If a nation expects to be ignorant and free, it expects what never was and never will be.---Thomas Jefferson, 3rd President of the United States of America, 1801-1809. Jefferson was the primary author of the Declaration of Independence.
Desperate people = buying opportunities for those who aren't.
Yes, that's accurate, but "if they wish to sell" is the operating term. The demand goes down, but so does the volume. Most such owners of high-value assets that maintain little carrying costs (such as coins) will simply refuse to sell at those prices unless they are under fiscal pressure to do so; high-end numismatic items are a luxury good, and most collectors are sufficiently diversified that even a major decline in the market for such items would not threaten their financial security. The transaction requires two consenting parties to be complete, and a single data point (e.g., the $500,000 home sale that you mentioned) is irrelevant as a true market trend unless it can be sustained; if I buy a rare coin for half of its greysheet value, that doesn't mean that I can go and buy all other comparables for the same price, the owners would maintain a price that protects their investment unless the capital is needed elsewhere.
The more generic the coin, the more this phenomenon would be apparent, but not necessarily for truly rare coins. If there is a pre-existing market glut (as in the case of, say, the 1909-S VDB 1c), then yes, such a phenomenon would likely drive down the price. If an example such as the unique 1870-S $3 were to become available, the present owner could negotiate with a buyer like Hansen for an exorbitant sum if they so chose to regardless of the state of the overall market, because the volume is practically nonexistent.
That’s simply not true about real estate. Prices drop when there is too much inventory and the economy stinks and they go up when you can rent an empty unit in 2 minutes.
Rare coin market under threat...
I don't think so.
Some pre 33 gold was doing this a few weeks ago. The price tags generally tumbled significantly lower in that 12-36h than the past (and following) 30 days. And this is during a shortage. Desperate sellers in a strong market like that, hmm.
The once hot real estate market in my area seems to have ground to a halt. Who knows what the prices will be since sellers apparently aren't desperate enough yet to start cutting prices.
Do you really want to take out a Jumbo loan in this economic environment?
Also, look at all the expensive SUVs in those food bank lineups. The repo man may soon be very, very busy.
I have fashioned a rather stylish hat from aluminum foil. Color me prepared for the impending doom.
You are a glass half empty type aren't you. Just a few days ago Ebay was ruining you with tire kickers and today the whole coin market is crashing, your world seems quite bleak.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
I can't wait for the flood of Tesla's out of Portland and Seattle. We have vehicle problems right now that only amount to like an ounce of gold but jesus without a combustion engine we would have no problem at all right now.
I've been following this from Nov/Dec at the first reports of a respiratory illness with human to human airborne transmission. It was nuts in March being prepped for 6 months out, having been isolated for 90 days already, and everyone was telling me I was crazy and masks are stupid too.
Then one day mid March or end of march there was a line of SUVs like a funeral procession down this 4 mile cut of road. I still wanna buy one just because I think the guy would take half, not really because I need it. I mean, I could use it if I had it, I guess.
We are looking into the houses in that area now :-)
If the coin is great....maybe so. Who knows why it had a bad night at auction bringing $15K. Happens a lot. Coins fall through the cracks all the time. And savvy dealers and collectors tend to sift them out and offer them later...closer to the original $24K price. Sometimes several dealers pool up their resources to keep from bidding against themselves....also can lead to lower prices on that particular sale.
Who knows, maybe the coin is lower end. Those are the first to crash in price when things get rough. One needs to consider the very solid for the grade coins with eye appeal....the bread and butter of the investment oriented US coin market. Those could still be $24K. You can have the same graded coin easily bring $10K, $15K, $20K, $24K all within the same week. Obviously they were of different quality. Million dollar homes are million dollar homes for a reason....either quality, location, or both.
You are comparing apples and oranges. The housing market is FAR different than coins. People live in their houses. They can rent them out if they wish. They have a wide demand around the world. Not so for rare US Coins. And the unusual number of tiers and factors in coin grading/pricing make it almost impossible to draw a comparison between what any two coins bring at auction.....unless possibly they are both PCGS CAC....and even then....not necessarily comparable. The author chose a very bad example to make his point about "desperate sellers." And in doing so, he undercut his entire article.
Watch out for the price gold heading to $1900+ and juicing the coin market for some time to come. I would not rule that out. Remember the recessionary 1976-1980 the coin market flourished (and PMs) while most everything else tanked or zig-zagged. Too many one-off events with all sorts of economic and political levers being pulled now to make an argument that X "has" to happen in 1-24 months down the road. Gold price and gold demand tends to have a much bigger impact on coin prices than economic conditions. If money and stocks become suspect, coins and PMs often benefit.
Masks may yet prove to be "stupid," especially when outside in the sun. Makes good sense for health care workers and others in close quarters to other people. I don't believe there are even accurate studies proving their effectiveness for the general population.
Derry, when the housing market tanked in 2008/9, you were buying silver to hedge against a slow bleeding fiat. Now, here we are in the midst of a crisis where trillions and trillions of dollars are being infused into our national debt, further weakening the dollar and your stacking cash???
Says the man with 500 pounds of fresh tuna in his freezer.
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb, Ricko
Bad transactions with : nobody to date
People that collect rare coins are rarely "financially desperate".
Demand seems strong especially on eBay.
Bidding activity for MS63 and 64 Morgan’s was strong with them getting at least bid or above.
Income inequality isn’t new.
Not saying it’s wrong. Just isn’t new,
BHNC #248 … 140 and counting.
In regard to gas prices. In my area we have 4 stations within 2 miles of each other. Prices range from a low of $2.05 to a high of $2.17. The higher priced ones offer car repairs and that is where they make their profit. So no need for them to lower their gas price,slim margin there anyway so whatever they sell at a higher price is gravy. They just let it sit in the tanks. Their existence does not depend on gas sales. The lower discount gas stations are selling gas only and need a greater gas turnover, hence the lower competitive price. This scenario played out when I worked at a service station years ago. Few cents profit in gas, just brought customers in so we could sell them oil etc. Our real profit came from the repair bays being full.
Prices range from a low of $2.05 to a high of $2.17.
My goodness, I'm glad I'm in South Carolina. Most stations around here were $1.33 yesterday.
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It's only just begun....
Paper money eventually returns to its intrinsic value. Zero. Voltaire. Ebay coinbowlllc
I kind of chuckled a little bit when he called a yacht an asset, in my eyes it's a liability.
The two best days in a man's life are the day he gets a boat and the day he finally sells it.
A boat is just a hole in the water that you pour money into.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
It is very nice to have friends who have boats
This is part of the reason grade inflation is so pernicious. A low end or over graded piece sells cheaply. The price guide is updated after a coin or two, and many buyers use that as a cap. Some will still pay up, but it is harder to find such a buyer and a nicer coin will only carry but so much of a premium. This is supposedly why CAC exists. The new economy is only icing on the cake.
So's a residential home. In my book anyhow. It's an expense. I bought to avoid rent.
Resale doesn't quite fit in the place where you LIVE.
In today's silly low interest rate environment, I consider the area rents to be my "return" on the house price.
I think he is using that term in the accounting sense. Anything with equity is an asset.