Reverse Poll: If the market crashed tomorrow...
rhedden
Posts: 6,626 ✭✭✭✭✭
Last week, I did a poll to get your opinion on which coins would be least likely to hold their value if the market crached tomorrow. High grade modern coins and high grade Morgans took a beating, igniting an interesting discussion that was both informative and entertaining to read. Thanks to all who contributed.
Now this is a complementary reverse poll. The question is:
If the market crashed tomorrow, what category of coins (among those listed above) would retain the highest percentage of their current market value?
In other words, which coins would be the least affected by the market crash, and therefore represent the safest investment?
Now this is a complementary reverse poll. The question is:
If the market crashed tomorrow, what category of coins (among those listed above) would retain the highest percentage of their current market value?
In other words, which coins would be the least affected by the market crash, and therefore represent the safest investment?
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Comments
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Its a fact that the high prices -high grade stuff always moves up the highest and falls the farthest. This is investor material and when the game ends these guys move on to bonds, stocks, antiques, whatever.
The supply of these coins is limited, and hard core collector demand is pretty steady.
Key date coins used to be pretty good, but I'd say that those coins have been driven to speculative levels in the current market IMO. This goes double for lower grade examples.
A lot of other items on this list like Morgan and Peace dollars, even in MS-65, have gone up and down like yo-yos over time. They will do it again because the supply is really quite large, especially for the common dates.
This is the area that most investors won't get in
coins with high demand are spared.
<< <i>Any coin that has appreciated significantly will dive proportionally. While this applies mostly to high grade coins, especially moderns, lower grade key dates could be hit too. For example, 1916 SLQs of all grades have gone up quite a bit in the last year. They can go down just as easily. >>
I've never followed this logic and would appreciate an elaboration since
it seems to be common wisdom.
A 1916 quarter has been sought after by collectors since the 1920's and
has had a large premium since the 1940's. This coin is needed by collectors
of the series and variety type collectors since it is distinguishable from the '17
issue.
The modern high grade coins are in most cases far more rare than the SLQ
and sold for near face value a few years ago. They weren't really even collect-
ible until recent years because of the logistics required to find them before the
advent of ebay and the grading companies.
While it's logical to assume that any coin that goes up a great deal can also fall
a great deal, the connection between an item that wasn't previously valued hav-
ing a new price which recognizes some demand and its old "price" seems much more
tenuous. Even in a market crash doesn't a price decrease require that fewer col-
lectors are going to seek the item in comparison to supply? Why would this af-
fect the only segment of the market with almost no hype and skyrocketing demand?
While there is perhaps some reason to predict a coin which has been popular for
seventy five years with a broad collector base and a recent history of sharp price
jumps might suffer in a down turn why would a coin that's been collected only brief-
ly suddenly revert to face value in a market collapse.
I still maintain that these arguments are moot if there is no such collapse and that
such a collapse is highly improbable. I also disagree that the '16 quarter is especially
susceptable to a crash; this coin is very popular with returning collectors and it is
this driving up the price more so than speculation or hype.
Their rarity transcends most speculative machinations as there are just not ENOUGH of them to promote. Or....ACQUIRE. Several million dollars would go begging looking for nice ...early....coins.
Several million dollars is spent on Morgans probably every couple weeks.
DMPL Morgans at a grand+? Not for this kid.
The greatest RISE has been in common Morgans and ...... modern stuff. (I did NOT say "junk"...heh)
I have yet to see the rationale behind moderns. Course, I'm a geezer too.
Regarding the 1916 SLQ, the price seems to have climbed faster than the overall market. That makes me think it will fall faster, too. Are more people collecting SLQs in general or 1916 SLQs specifically? I don't know. The following is a price history from Heritage's archives of PCGS MS64 SLQs. Prices are in $1000s, and I've truncated the less significant digits:
6/04 24
3/04 21
9/03 18
9/02 13
4/02 13 and 14
1/02 14
10/01 8
10/00 9
8/99 13 and 11
6/98 11
Interesting little downturn in 2000 and 2001, isn't it? I'm not sure what that means. However, the overall trend is clear. In 3 years the price has tripled, and in the last 2 years has almost doubled.
Regarding moderns, I know how defensive you get, and I'm not bashing moderns. I'm just stating my opinion - condition rarities are not the same thing as population rarities. A rare coin will always be a rare coin, unless a hoard is found. Condition rarities are like the 4 minute mile. After the first one, many followed. Many haven't been "discovered" because the only way they exist is inside plastic. They become less rare over time, as more are slabbed.
You said: why would a coin that's been collected only briefly suddenly revert to face value in a market collapse
The key phrase is a coin that's been collected only briefly. To me, that means fad. Fad means bubble. Bubbles burst.
Its the Tulip affect. As prices rise, investor interest peaks, they start to buy that which is rising fastest even though they have no intention of keeping it. The coins with the most appreciation and available in largest quantity start to snowball higher. Then the time comes when they peak, such is usually when the appreciation starts to slow and the cost of the money increases(interest rates). Then these investors start to sell, the price starts to fall. As soon as the investors see the fall they decide to sell fast so as not to be left holding and the fall, just like the rise, starts to feed on itself.
Collector coins in lower grades do not interest investors and would be the ones that would still hold value in a falling market.
This may sound like theory but anyone around in 1989 will tell you the fact. You couldn't buy a MS66 morgan for $1200, 2 years later they were available by the box for less than half that. A lot of the high end stuff has gone into investor hands and will be quickly dumped when they stop rising.
As far as the 1916 quarter, I agree, it should not fall much unless it too has become the object of investor hoarding.
wanes and I can afford a pq they are nowhere to be found. I would think your commons and ultra rares would
lose the least. Bob
<< <i>
Regarding moderns, I know how defensive you get, and I'm not bashing moderns. I'm just stating my opinion - condition rarities are not the same thing as population rarities. A rare coin will always be a rare coin, unless a hoard is found. Condition rarities are like the 4 minute mile. After the first one, many followed. Many haven't been "discovered" because the only way they exist is inside plastic. They become less rare over time, as more are slabbed.
You said: why would a coin that's been collected only briefly suddenly revert to face value in a market collapse
The key phrase is a coin that's been collected only briefly. To me, that means fad. Fad means bubble. Bubbles burst. >>
Every year there is a brand new crop of eighteen and nineteen year old sprinters and runners.
This will be true until the race dies out. There will never again be a 1971 clad dime made. This
is the simple fact of the matter. One can say that moderns suck because they were made in huge
quantity or they suck because they're just clad crap, but it makes no more sense to say that they'll
crash because there will be more found than to say Morgans shouldn't have been collected or early
gold shouldn't have been collected in the early days because there would be more found.
Certainly there are more raw gems to be found but incredibly this is one of their greatest charms
rather than a fatal flaw. While a raw classic will usually bring 50% of its value, raw moderns are
bought and sold every day by non collectors for tiny fractions of their current values and their cur-
rent values are tiny fractions of what the same coin would sell for if it were an old coin! Think about
that a second. Here is a place where it's possible to buy a rare coin by grade or mintage for a dol-
lar or two. A more common coin like an 1804 dollar goes for millions while the modern sells for pea-
nuts because of a startling lack of demand. OK fine. Perhaps there will never be much demand for
the newer coin but in the mean time the demand continues to ratchet up and the coin is available
for less than its current price!!! People who are collecting these coins learn very early on what the
situation is. They are not going to bail out of their collections or the market just because prices are
crashing for some coins. They also have some feel for how many of these coins will be found in the
future. They know because they know how hard the coins are to find in the present. Every time a-
nother is found it's one more which isn't "lost" and it usually means thousands of more rejects which
won't yield another gem.
Despite the perception that these coins were made in huge quantity and that there are billions more
just waiting to be checked, this is simply not the case. Would you imagine that if these were so easy
the prices would continue to increase? They certainly would not. In many cases the number of raw
coins is a tiny percentage of the size most people consider it to be. Most of the moderns ('65-'98) sim-
ply were not saved in any quantity. You could check 1971 dime rolls all day and never find a gem ex-
cept for one little problem, there probably aren't enough 1971 dime rolls in the entire world to keep you busy
checking them all day. They simply do not exist and never really did because these coins are in circulat-
ion. They are worn badly and are sufficiently scarce in circulation that at least a couple members here
haven't been able to come up with a worn coin in a couple days. It is not my contention that circulated
examples are undervalued or that the uncs are rare. It is my contention that while the hobby looked
the other way that these coins were allowed to wear out in circulation and get lost to time and tide. It
is my contention that this coin is scarce in nice collectible condition because the mint set coins were gen-
erally poorly made and even the mint set has been lost and abused by time. It is my contention that if
only a few collectors became serious about moderns that a coin like a gem '71 dime would be seen as
a desirable coin. It is my contention that without a new generation of collectors that there will eventually
be a market crash from which the overall market will never recover and that it will devastate the values
of all coins except a few of the great rarities.
How the future shapes up is anyone's guess but unless you have some inside information or some sort
of insight that I've not yet heard, it might not be wise to wish ill of moderns.
CG
not many collectors think a 1971 dime is "neat" in the same way that a 1931 or 1901 or 1851 or 1821 or 1805 or 1795 dime is "neat"
(neat as in obsolete, as in old, as in different from my pocket change)
Liberty: Parent of Science & Industry
CG
<< <i>I thiink I agree with Cladking on this. If the bottom fell out of the coin market tommorow the change in my pocket would still be worth pretty much the same as it is today. So message to the wise would be to put all of those 1971 dimes aside as a hedge agains the crash that is sure to come some day.
CG >>
Now you're getting it. But even better would be to buy twenty rolls of dimes each time you go
to the bank for the next few months. In each lot of rolls you'll find one ratty old '71 dime. When
you save up ten or fifteen of these spend them for a nice gem that an unknowledgeable collector
is selling. This way you'll feel you've really earned your gem and you might not try to get your
$1.50 back the first time the market hiccups.
You'll thank me later.
to the bank for the next few months. In each lot of rolls you'll find one ratty old '71 dime. When
you save up ten or fifteen of these spend them for a nice gem that an unknowledgeable collector
is selling. This way you'll feel you've really earned your gem and you might not try to get your
$1.50 back the first time the market hiccups.
you have a lot more free time than I do, and choose to spend it much differently.
Liberty: Parent of Science & Industry
<< <i>I agree, the mid range coins of $100-500 would probably not change too much. >>
Hmmm... these coins took a big hit in the late eighties and early nineties. Common 40's Mercs in 65FB were selling for $250 or there abouts in 87 and 88. Heck they are only worth 25 to 30 bucks now. I'd say that was a pretty big hit for a $250 buck coin.
My belief is that nothing is safe if the market happens to gone into the dumpster like it did in the time period mentioned. Prices are getting very high and caution needs to be taken. JMHO.
Ken
<< <i>Now you're getting it. But even better would be to buy twenty rolls of dimes each time you go
to the bank for the next few months. In each lot of rolls you'll find one ratty old '71 dime. When
you save up ten or fifteen of these spend them for a nice gem that an unknowledgeable collector
is selling. This way you'll feel you've really earned your gem and you might not try to get your
$1.50 back the first time the market hiccups.
You'll thank me later. >>
Not so -- I've gone through about a dozen rolls of dimes from the bank and haven't found a 1971 dime. I found one 1971-D dime in the lot, but it's the Philadelphia issue I still need for my Whitman album. As far as I can tell, that dime is hard to come by...
Then I got to reading and thinking along these line, "Coins picked up at face value from Banks as they come out....that seller would be least affected as he can still spend the coins at face value!"
<< <i>
<< <i>Now you're getting it. But even better would be to buy twenty rolls of dimes each time you go
to the bank for the next few months. In each lot of rolls you'll find one ratty old '71 dime. When
you save up ten or fifteen of these spend them for a nice gem that an unknowledgeable collector
is selling. This way you'll feel you've really earned your gem and you might not try to get your
$1.50 back the first time the market hiccups.
You'll thank me later. >>
Not so -- I've gone through about a dozen rolls of dimes from the bank and haven't found a 1971 dime. I found one 1971-D dime in the lot, but it's the Philadelphia issue I still need for my Whitman album. As far as I can tell, that dime is hard to come by... >>
On average you'll have to go through about twenty rolls of dimes to find a '71-P. About
90% of the '71-P's you find will be VG or F and a third of those will have significant damage.
The remaining 10% will be higher or lower grades.
Curiously, while the general public is only now starting to remove the tougher clad from cir-
culation this coin was already tough to find in decent shape. It is not the toughest clad dime
in circulation but it's the coin which came under attack the other day simply because it was
new (three decades ago).
Saints for me. I don't think if the markets crashed people will be interested in buying anything without intrinsic value of the metal.
""I have 4 2003 $25 Gold Amer Eagle PCGS MS69 coins. 9967.69/72030076
I
wish to sell these. I have contacted the United States Rare Coin &
Bullion Reserve where I purchased these from but can't seem to elicit
much response.....even a bid of some kind. Do you have any
recommendation for what I shoud do? I really do not want these.
Thanks so any help.
Anne """
She bought them from austin "rare" coins. Couldn't get a bid from them to sell them back, and that's in a pretty good gold market huh?
Imagine if the market takes a nosedive and further imagine if these were "clad" coins.
P.S. Yeh I bought them ( the eagles) and sold them on the BST board here and kept 1 of em. But paid bullion money and sold them for bullion money with a very teenie tiny premium.
Careful out there!
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>
Imagine if the market takes a nosedive and further imagine if these were "clad" coins.
>>
So, it would be better to have your 1804 dollars revert to metallic value than your high grade clads?
Which would have the greater percentage loss, the $1000 Ike that tumbles to face or the million
dollar classic which becomes worth its silver value?
<< <i>
<< <i>
Imagine if the market takes a nosedive and further imagine if these were "clad" coins.
>>
So, it would be better to have your 1804 dollars revert to metallic value than your high grade clads?
Which would have the greater percentage loss, the $1000 Ike that tumbles to face or the million
dollar classic which becomes worth its silver value? >>
This is getting old. And quite funny
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>
This is getting old. And quite funny
>>
The ironic thing is that there actually are a few ways in which moderns are inferior to classics
but in the more than two years I've been here not one of them has ever been posted. Instead
there are many posts about the weaknesses of the classics which have been twisted to make
it appear to be a weakness of the moderns.
And no, I have absolutely no intention of stating any real weakness in moderns, but just remember
there are a lot fewer of them than there are weaknesses in classics.
It is preferrable to look at the strenghts of both areas.
The only thing that matters ultimately is that people enjoy collecting coins, and they are "worth"
whatever someone is willing to pay.