How are coin "market forces" affecting your coin collecting interests ?
barberlover
Posts: 2,228 ✭✭
If i was rich, i would simply buy what i like at the best price i could get, but i wouldn't let special coins get away because of price.
But even when my circumstances were better, i never seperated what i thought was a fair price for a coin from the decision to purchase it or let it go.
Bill Jones made a statement on a previous thread that i completly agree with that said something to this affect; that he would pay maybe 50% above bid for an exceptional coin, but that he wouldn't pay multiples of bid for them. I completly agree with that.
Currently there are some very hot coins and some that are stone cold with many series or dates within series that fall into these two camps.
I would be very interested in hearing your take on how current "market" conditions are affecting your collecting decisions especially if a series you collect has been directly impacted by current market forces. An example would be if you collect barber dimes and quarters are you sad that the pieces you collect [in mint state] have continued to go down in value over the last few years, or are you happy because this series is undervalued so you can buy more. Or if you collect bag toned morgan dollars are you selling them so you can retire or buying more even though they are costing you alot more then the ones you baught a few years ago.
Are you looking into new areas of collecting if the coins you already collect have gotton to expensive?
How are your collecting decisions and goals being affected by the current interest in coins of a "hot market" Les
But even when my circumstances were better, i never seperated what i thought was a fair price for a coin from the decision to purchase it or let it go.
Bill Jones made a statement on a previous thread that i completly agree with that said something to this affect; that he would pay maybe 50% above bid for an exceptional coin, but that he wouldn't pay multiples of bid for them. I completly agree with that.
Currently there are some very hot coins and some that are stone cold with many series or dates within series that fall into these two camps.
I would be very interested in hearing your take on how current "market" conditions are affecting your collecting decisions especially if a series you collect has been directly impacted by current market forces. An example would be if you collect barber dimes and quarters are you sad that the pieces you collect [in mint state] have continued to go down in value over the last few years, or are you happy because this series is undervalued so you can buy more. Or if you collect bag toned morgan dollars are you selling them so you can retire or buying more even though they are costing you alot more then the ones you baught a few years ago.
Are you looking into new areas of collecting if the coins you already collect have gotton to expensive?
How are your collecting decisions and goals being affected by the current interest in coins of a "hot market" Les
The President claims he didn't lie about taxes for those earning less then $250,000 a year with public mandated health insurance yet his own justice department has said they will use the right of the government to tax when the states appeals go to court.
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Lincolns are doing good, Buffaloes have been (are they near there short term top?)
Some other series/groups will probably surge in the near term future - but I am not sure what -
2-cent pieces? Barber series? Franklins?
I have kinda gone with what I think is cool and I can afford - getting some cool colored Jefferson and Roosevelts. Of course I realize it may be some time untill these series get """WHITE HOT""" - whatever that is.
So, the money I would pay to upgrade is being spent on Certification/Grading of some coins I purchased over the last 2 years.
While I was building my set, a few dealers told me that I was crazy to spend that kind of money on those pieces because “Those old coins never go up in price.” Well if “never” was defined as the next 15 years, they were right, but since than there have been several rounds of price increases that now make my purchases look like wise investments.
There are several things that collectors should know about the coin market.
First, prices tend to rise in spurts. A series will get hot, and the prices were rise quickly. Then it cools off and prices may decline a little unless they were raised to unreasonable heights earlier. In those cases, the prices can drop like a stone. After a price spurt a coin series can lay dormant for a long time. That can be a good time to buy, but beware that a dormant series can be hard to sell at good prices if you need cash. So plan on owning the coins for a long time.
Second, large dealers play promotional games with common coins. They do this by raising buy prices on the Gray and Blue Sheets and by pushing these coins either as “investments” or “hot collectables” to their clients. Such promotions can only work with coins that are common enough so that the dealers have lots of product to sell. What good would it do to promote something if you can’t get enough of them sell and make money? That why those dealers years ago told me that my early coins were “a bad investment.” Most early coins are scarce and promoting them makes little sense.
Third, new modern coins often have their best days in the sun when they are first issued. After the novelty wears off, they often settle into obscurity at modest prices.
Fourth, the coin market is not like the stock market. There are no control mechanisms that maintain formal markets for buying and selling. There are no trading rules that can slow down a “run” on a given issue. No one has to buy your coins, and the prices in the coin trade publications are less precise that the stock prices in your daily newspaper.
Currently several parts of the coin market are hot and prices are moving up. Some other areas, including your Barber coins, barberlover, are pretty quiet except for the rare dates. Generally I try to avoid hot coins because I don’t want to own them when the merry-go-run stops. As a collector, I am a “contrary buyer.” As I dealer I try to fill my customers wants, but I will advise them at times that it might be well to take it easy on some items, because the market is running too high. They may take my advice or ignore it. It’s just my opinion.
At any rate I would never pay double bid for anything. Although the bid sheet prices might be too low, as they are now for some items, I’ve never seen a time when they were THAT FAR OFF.
Coin collecting is something one gets into for the long haul if you are going to do it right. Believing that you can be a “day trader” in the hobby will land you in the same spot as most of those who play the stock market that way. Unless you are a plugged in pro, you are setting yourself up for some financial misery.
My advice is to collect what you enjoy with an eye toward paying reasonable prices. For your private investments and retirement funds, stick to stocks and bonds. You’ll be happier in the long run. If you make money on your coins, that’s just a bonus.
"Bill Jones made a statement on a previous thread that i completly agree with that said something to this affect; that he would pay
maybe 50% above bid for an exceptional coin, but that he wouldn't pay multiples of bid for them. I completly agree with that."
I think that you should not draw a line in the sand at a percentage point above sheet but i do believe that you should not pay above
"market rate" for any coin. Surprised to hear me say that?
What is market rate? It isn't necessarily Greysheet bid. Think about it. The greysheet doesn't determine market prices. It seeks to
tell you what they have been recently. It is reactionary. When the market value of something changes it changes before any sheet
reflects the change. Call up the greysheet people. Ask them how many people they have who help determine what values go into the
Weekly, the monthly and Quarterlies one, two and three.....and the weekly bluesheet....and the one that gives market and ask prices.
Then sit down and determine how many values are a part of the sheets. Thousands. In just the Bluesheet Morgan PCGS page there
are 105 rows and 10 columns of information. That's 1050 values for one half of one page of one sheet. Add in the NGC values....you're
now at 2100 Add in the Peace Dollars and you're at 2580 FOR ONE PAGE. The sheets are guides. Just guides.
Anyone who is fixated on sheets will likely have a collection that shows it. However, if you're spending the rent money on coins or think you will have to liquidate your collection at any moment, you
might want to focus on crap at bluesheet.
The collectors that we remember are the guys that have "good eyes"....they are also the guys who paid way above "sheet" for coins
with fabulous eye appeal. Not guys whose mantra was "well, it's 51% over sheet....that's just too much!"
The question shouldn't be how much should i pay but rather "How steep is my learning curve"?
And by the way, before we go any further, suffice it to say, if i wanted to, i could buy and sell generics, or soybeans or average coins
or monsters. I'm not defending my inventory, i'm defending my stance. My stance is reflected in my inventory.
Why do I choose to buy beautiful coins? Because i like them more than the coins that are not beautiful.
What do i pay for them? Generally, market rate as i percieve it to be.
How do we know what something is worth?
When we are offered a coin, we get information (sheets, auction records, info about coins offered at shows, and the memory of same,
etc.) and we process it in our microprocessor and spit out a subjective evaluation of "fit".
Coins are art and they vary a great deal with regard to appearance. You have to let your thoughts and then your emotions tell you
whether something is a good deal or not. Your gut is likened to intuition. It's a soft voice but one that is very valuable.
Being a greysheet or bluesheet thumper is the best way to identify yourself as a newbie. Some newbies have been in the hobby for
decades. They are permanent newbies. Some people "get it" shortly after arriving at the hobby.
These are just my opinions. Average coins are worth something. What are they worth? Generally.....sheet. How much are coins that aren't average? More than sheet. How much more than sheet?
IT DEPENDS ON THE COIN!!!!!!!
adrian
Camelot
Like all things...this too will pass.
Isn't that what they said when Chain Cents started being sold for a premium?
I will say that its guys like me who pay a premium for better than average coins that help keep this "Bull" market in coins going.
Everyone has a right to there opionion, and my main reason for this thread was to share my thoughts and more importantly hear yours.
I value others opionions on things like this because i consider the mindset of other collectors a valuable teaching experience for me. I always like to learn, i guess in that sense i am a newbee.
My collection is not large and has shrunk since i lost my job, but anyone who's seen my collection could probably tell you if i was a 30 year newbee or if i had a very good eye for the coins i've purchased.
Is it possible that greysheet is not always up to the minute in a hot market? No doubt about it.
Is it possible to obtain nice eye appealing coins without paying over 50% above of greysheet? Anaconda, for the most part i would say there's no doubt about that either. There maybe exceptions to this in a hot market with monster bag toned morgans and the like, but it is certainly possible to buy top 5% coins without paying multiples of bid. Just the opionion of a 30 year newbee. Les
<< <i>Isn't that what they said when Chain Cents started being sold for a premium? >>
50-D BU Jeff nickels and 1903-O Morgans, not to mention the BU roll craze, come to mind.....
I think toners will come down...although the real MONSTERS will still have a premium of some type.
Well, great comments so far everyone, lots of wisdom in here.
I think that if a collection, or accumulation (hoard
As with stocks, the best coins always seem too expensive, whether it be a high P/E ratio in the case of stocks or "% above bid" in the case of coins. One must either pay up what it takes to own it or one passes, and if you own it, you're on board and then the price you get when and how you go to sell the item will be determined by the market at that place/time, as well as how effectively you can convince the "market" or your buyers, that the premium over sheet is justified. Of course, if a collector wants to own the coin at virtually any price, for the intangible joy of owning something beautiful or unique or historic or famous or whatever, like with the ultra rarities, well then you can't put a price on that, if the collector can afford anything, no price is too high.
Whatever the budget, though, it does make sense to seek value, and I know that I personally feel comfortable owning coins that are a little more liquid , and for that means buying closer to sheet than multiples of the current price guides. If that means i won't ever own some spectacular rarity, I guess it's just because I would rather have several different pieces, both diversified and with a more reproducible value if/when the time comes to liquidate.
Liberty: Parent of Science & Industry
I feel by sticking to just one series the market has more influence over the collector.
My philosophy is I spend what I can afford.It doesn't matter if the series is hot or slow.