The bath tub analogy of coin collecting - or - has the market peaked.
Bear
Posts: 18,953 ✭✭✭
Due to the constant rumblings of whether or not the Coin market
is peaking causes me to reserect the famous Bathtub analogy.
The coin market is like water filling a bath tub. The quality coins
are the first water to enter the tub and as such will be the first
to rise in value. As the water level continues to rise, the less
desireable coins will begine to rise in value. When the tub is full and the
bath is concluded, the plug is pulled. The water in the bottom of the
or the less desireable coins will be the first to go down the drain.
Eventually the water at the top or the quality coins will be the last to
go down the drain with falling prices. So we generally see quality up first
and quality down last. To be sure, outside economic circumstances will have an effect
on the coin market, however let us look at the current state of affaires. For some time now,
we have had a two tier market. The high flying coins have generally been the
premo expensive rarities,the super high grades and the ever dangerous top pop moderns.
The low tier going no where coins have been the scrubbed up, over dipped, marginal and
fugly coins to gether with some of the more essoteric series such as the classical Commems.
The numerous coin auctions have brought many top notch collections and quality coins to
the market place at ever increasing prices. Perhaps it was the increasing home values that made
collectors feel rich, or the rising stock market or even compressed demand being released.
As all things in life have cycles, we may be entering such a cycle swing now. Of course, much
of the time we do not know for sure untill well after the peake, it seems to me that we are
approaching that peake now.Marginal and lower quality coin prices are flat to soft, their is a
growing hesitency to get overly involved in many top pop coins whose numbers may be soon diluted
by the steady wave of coins being graded and upgraded. The last coins to suffer will the the truly
outstanding specimens. While these quality coins may suffer a seeming resistence at the current price
levels, they will always be in demand and are certainly the coins to gather in on any weakness. It might
not be a bad idea to take the current opportunity to sell ones mistakes and more risky coins and
maintain a cash position ,or purchase any top quality coins still within ones pocket book.
Are we at the top of the current market, perhaps. Is their a guarantee that it wont go higher,
no there isnt. Should one be somewhat cautious, you bet your life. Finally, am I certain that I am correct,
no, I am not certain. If I was infallible, I would have made millions in the stock market, which I certainly
have not. To all I say, good collecting, be careful, be prudent, be selective of quality and enjoy the
hobby. Most of us collect for the love of coins and we can and have ridden out previous ups and downs
with equal equinimity. Just dont spend the rent money looking to make a quick profit in the coin market.
is peaking causes me to reserect the famous Bathtub analogy.
The coin market is like water filling a bath tub. The quality coins
are the first water to enter the tub and as such will be the first
to rise in value. As the water level continues to rise, the less
desireable coins will begine to rise in value. When the tub is full and the
bath is concluded, the plug is pulled. The water in the bottom of the
or the less desireable coins will be the first to go down the drain.
Eventually the water at the top or the quality coins will be the last to
go down the drain with falling prices. So we generally see quality up first
and quality down last. To be sure, outside economic circumstances will have an effect
on the coin market, however let us look at the current state of affaires. For some time now,
we have had a two tier market. The high flying coins have generally been the
premo expensive rarities,the super high grades and the ever dangerous top pop moderns.
The low tier going no where coins have been the scrubbed up, over dipped, marginal and
fugly coins to gether with some of the more essoteric series such as the classical Commems.
The numerous coin auctions have brought many top notch collections and quality coins to
the market place at ever increasing prices. Perhaps it was the increasing home values that made
collectors feel rich, or the rising stock market or even compressed demand being released.
As all things in life have cycles, we may be entering such a cycle swing now. Of course, much
of the time we do not know for sure untill well after the peake, it seems to me that we are
approaching that peake now.Marginal and lower quality coin prices are flat to soft, their is a
growing hesitency to get overly involved in many top pop coins whose numbers may be soon diluted
by the steady wave of coins being graded and upgraded. The last coins to suffer will the the truly
outstanding specimens. While these quality coins may suffer a seeming resistence at the current price
levels, they will always be in demand and are certainly the coins to gather in on any weakness. It might
not be a bad idea to take the current opportunity to sell ones mistakes and more risky coins and
maintain a cash position ,or purchase any top quality coins still within ones pocket book.
Are we at the top of the current market, perhaps. Is their a guarantee that it wont go higher,
no there isnt. Should one be somewhat cautious, you bet your life. Finally, am I certain that I am correct,
no, I am not certain. If I was infallible, I would have made millions in the stock market, which I certainly
have not. To all I say, good collecting, be careful, be prudent, be selective of quality and enjoy the
hobby. Most of us collect for the love of coins and we can and have ridden out previous ups and downs
with equal equinimity. Just dont spend the rent money looking to make a quick profit in the coin market.
There once was a place called
Camelot
Camelot
0
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...much of this upward cycle may still be in its infancy.
coins with a determined frenzy.
Camelot
I was taking a bath
long about a saturday night
Rub dub
Just relaxin in the tub
Thinkin everything was alright
Well I stepped out the tub
Put my feet on the floor
I wrapped my towel around me
And I opened up the door
and then
Splish Splash
I jumped back in the bath
well how was I to know there
was a party goin on?
There was a splishin and splashin
splishin' and a splashin
Rollin and a strollin
Rollin and a strollin
Movin and a grovin
Movin and a grovin
Reelin' with the feeling
Reelin' with the feeling
Splishin an' a splashin
Rollin' and a strollin'
On a saturday night
Bing bang
I saw the whole gang
Dancin on my livin' room rug
Flip Flop
They were doin' the bop
And they all had their dancin' shoes on
There was lollipop, and peggy sue,
Good golly miss molly was even there too
Well a' Splish splash
I forgot about the bath
I went and put my dancin' shoes on
There was a splishin' and a splashin'
Splishin' and a splashin'
Rollin' and a strollin'
Rollin' and a strollin'
Movin' and a groovin'
Movin' and a groovin'
Reelin' with the feeling
Reelin' with the feeling
Splishin an' a splashin
Rollin' and a strollin'
On a saturday night
I was splishin and a splashin
rollin and a strollin
movin and a groovin
reelin' with the feelin
Splishin' and a splashin'
on a saturday night
Go BIG or GO HOME. ©Bill
and increases the short term interest rates how will it impact coins. The current inflation rate is around 5%.
Home building values are intentially under represented in the government calculations, so the true rate is probably higher.
Inflation causes cheap money which then seeks hard assats such as coins, gold ect. If the fed moves gradually to increase rate
and falls behind the inflation rate this will mean that bond yields will rise and those individuals and governments holding US bonds
and corporate bonds will see their bond values drop. Long term rate shoot up causing mortgage rates on fixed and variable
mortgages to increase cutting off the cash flow of refinancing. This will slow the economy and could slow the coin market.
Should the Fed start raising interests rates dramatically to choke off inflation , that will make it more inviting for indeviduals
to put money back into interest bearing saving and CD acounts reducing cash flow to the coin industry.
With the uncertainty caused by the Fed actions, the national elections, the economy, the flood of money that has been injected
into the national economy the past few years and the booming national debt, one must begin to wonder what exactly the future
holds for all of us. One thing is certain, nothing moves in a straight and predictable direction indefinitly. The economy will always
catch all of the experts by suprise and act in unexpected ways. I have found that usually when bargains of unusuall value occur,
I am usually short of money. When there are no bargans to be had, then I have some money. I can never seem to synchronize
my assets to match up with opportunity. Its my expectation that the administration, as all administrations, will try to hold thing
stable untill the elections. After that occures, no matter which party may win, it will be a economic storm of some tremendous
proportion. As any ship heading into a major storm, dont be over extended on debt, have some loose cash and be emotionally ready
for the rough seas ahead.
Camelot
summer is
all Bear
Camelot
in an economy which is entirely interdependent and most necessities, including food, comes
from factories rather than the land or the effort of individuals. This isn't to say that it's imp-
ossible since there can always be a panic, just that it's no longer possible to engineer a slow
down to rid the economy of imbalances or speculative excesses. Instead they must manage
away problems through money supply. It appears to many observers that we have likely
reached a point at which a recovering economy will have to be maintained by bailing out bor-
rowers with inflation. Greenspan is not among them. He still believes that it's possible to have
growth without inflation. So long as he believes this it would seem there could be the same
sort of smooth sailing that we've "enjoyed" for the last 40 years. I have to believe he's wrong
and that we will have some inflation though.
Camelot
“We are only their care-takers,” he posed, “if we take good care of them, then centuries from now they may still be here … ”
Todd - BHNC #242