Would this be a good time to stay away from the January auctions?
IrishMike
Posts: 7,737 ✭✭✭
I keep hearing that large amounts of money will bidding on the upcoming auctions at FUN, including some dough that may not be too smart. If prices go through the roof as I am hearing, will it have a ripple affect on other nice coins sitting in inventory. Do you think dealers will be raising prices to take advantage of this situation? Or do you think this is just hype? If this happens will it put a damper on the "rare" coin market, at least for awhile? I'd be interested in hearing what you think the dynamics will be.
0
Comments
But .... I don't see dealers raising the prices on coins already in their inventory. After all, if they're already there they didn't sell right away so either the right buyer wasn't there or the price was a bit too high. So now perhaps they'll be properly priced?
to step up to bid on a couple of pop <5 Morgan types, but the bids are already nearing the absurd. While I guess some
are running up the bids to discourage people, I refuse to get into a pi#$ing contest with a bunch of ego driven
collectors that will pay anything. And I suspect a number of dealers will be disappointed as the retail money is
sucked out of the market at the auctions before the bourse really gets going. I sent 3 coins to auction and wish it
was ten. There are better places to play golf anyway than Lauderdale!!
BTW I love your icon
Mark
Just seems to be way too many coins all at once !!
From the size of these sales it would appear that a lot of people are trying to hit the exit doors all at the same time huh?
Would have liked to hear that pitch from the auction salesman.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
I don't think this statement is accurate. Demand is strong and still outpaces supply in many areas. I know of someone who just consigned his sets to auction. He wants to sell because he's done with the challenge and fully intends to put the proceeds back into the coin market in a different area.
As far as dealers raising their prices ... So what .. Again if I see a coin I like "IF" the dealer doesn't like the very fair price I offer I'll walk ...
There might and will be some very obscene prices and coupled with the buyers fee you'll be shaking your head.
A far as ALL the auctions going on at the same time it would seem to that "IF" you thought their was/is way too much material out there that it would make for a very good buying opprotunity ...
It seems certain that Heritage will finally auction it's FIRST $1,000,000 coin, and that might happen several times next week.
How many MS and PR Morgans are up for auction ?? There must be thousands between all the auction companies.
al h.
at the ANA 2 years ago. But it does seem a lot of collections are "hitting the doors at once". Therefore my guess is there will indeed be bargins (in the series I know) but they should occur in the more available dates. If not at FUN then thereafter. The problem is for the really top grade rare material, there is a LOT of money seeking too few coins at these auctions and expect some really silly price records to be set. I just don't want to own a record priced coin--as much as I may want it. And I can by more available coins at my leasure.
<< <i>From the size of these sales it would appear that a lot of people are trying to hit the exit doors all at the same time huh?
I don't think this statement is accurate. Demand is strong and still outpaces supply in many areas. I know of someone who just consigned his sets to auction. He wants to sell because he's done with the challenge and fully intends to put the proceeds back into the coin market in a different area. >>
Really? It doesn't "appear" as I said? What's the total estimates of all the auctions? Hmmm, nothing unusual about the amount of sales going on all at once. nope. Nothing unusual about that at all.
Far as a specific person, that's great. And I can cite 3 to one ( getting out and watching for a while, to selling and buying into other areas). So it all depends on the individual customer obviously.
Business after the sale is going to be very interesting. You stated that you backed off a few coins because of where the bids were at. I have as well. So in other words you don't feel so confident about paying moon money for the coins you wanted. Neither do I although it's getting tough to think "what the heck is moon money anyway" and what do you do with the $$ otherwise?
Buy real estate? Hahaha, not I.
I'm just saying that it "appears" that a lot of people are hitting the doors all at once. The sheer size of these sales back up what is the obvious. Lots of people want to or have been convinced to sell. Now what happens at the sale and more importantly "after" the sale(s) is what's going to be real interesting. I'm not in a position to tell me customers that these sales represent any surge in demand.
Not yet I'm not.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
I for one do think it would have an effect.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
No matter what, they stand to make record breaking millions from this colossal auction.
I will say that all the coins that I am bidding on, are not "out of sight". Everything is normal so far, but I do see some higher prices on certain coins that I have owned and therefor have a good idea of their value. Certain coins are bid thousands over what I would pay and the auction is nowhere near over !
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Just watch, I think we will all gasp at the prices.....I think it may take a while for all of this to be absorbed but less time than many of you think. Lots of new collectors, even in Saints, $10 Indians and $5 Indians which is all I do.
My 20th Century Gold Registry Set
$20 Saint Gaudens Registry Set
When the coin market is flying high and you’ve got money, it’s easy to get caught up in it. But when the worm turns, your exist strategy, with out losing a lot of money, is non-existent. NOBODY will buy you coins in bear market at the prices you paid if you bought in at the peak.
Moral: Buy you enjoy to collect, and don’t get sucked into the “I’m to going to make a killing” mentality. Don’t spend more than you can afford to lose. When you get the “no end in site” mind set, that’s when you can make so bad mistakes.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
You have obviously been at this much longer than I but I have been in the financial markets my entire career and can tell you....yes we need pullbacks and "bear" periods in order to sustain any upward movement. But the coin market is very small by comparison and thus the market capitalization of certain coins is very small. It doesn't take a lot of new money to create major movements. The fundamentals are in place for a sustained decline in the dollar, rising bullion prices and rising interest rates. Thus, coins will attract new money by those looking for alternatives. Those that are smart and do their due diligence will be rewarded as are those that buy fine art. Buy rarity and quality and you will not be disappointed. You may be correct in your comment about having difficulty selling into weakness as the liquidity in coins is lacking, but rarity will always have a buyer at some price. The conditions which may preclude a dry up of buyers is not present at this time.
My 20th Century Gold Registry Set
$20 Saint Gaudens Registry Set
Besides - before most markets turn, prices no longer have any resemblance to reality - they're unsustainable. Quite frankly, there are still relative [to past peaks and grades] bargains in the coin market. It's just that they're getting harder to find is all.
The collecting of great coins should beentered into as a combination of "love of the art" as well as a good long-term investment. TIME is always on the side of the true collector. My opinion...!!
And no, I won't stay away from January auctions. I may put my hand down if bidding gets too high on coins I want, but I won't know that unless I show up.
They pay satisfaction to collectors who enjoy them. Collectors ARE the FINAL CUSTOMERS. There is no such thing as a collector market and an investor market. When the investor market prices get ahead of collector market interest, it has become pure speculation and will eventually fall. We saw this in the early in the early 1960s when the market for rolls of coins collapsed. We saw it again in the early 1980s and again in the late 1980s. If you see collectors getting pushed and priced out of the market, a correction is not far down the road.
Yes the coin market is a lot smaller than the stock market and the infusion of a relatively small amount of money can drive prices up. By the same token the removal of a small amount of money can drive prices down was well, sometimes by amazing proportions
Regarding market peaks and valleys - that's what dollar-cost averaging is all about. It's not timing of the market but rather time in the market that really counts.
<< <i>Wouldn't miss these auctions. Half the fun is viewing coins you couldn't possibly afford. There will be a few deals that will fall through the cracks and woldn't want to miss the bourse.
Regarding market peaks and valleys - that's what dollar-cost averaging is all about. It's not timing of the market but rather time in the market that really counts. >>
In the coin market you can get buried for years. Just ask those bought the "old" commemorative coins back in the late 1980s. Most of those prices have never recovered, and the market averaging is not a great way to recoup. You need to use your brain, no throw money at "things."
I'm NOT saying that all of the current deals stink. I am saying that those who think like informed collectors have historically made out best in the long run.
Great advice, Bill.
<< <i>The fundamentals are in place for a sustained decline in the dollar, rising bullion prices and rising interest rates. Thus, coins will attract new money by those looking for alternatives. >>
Sorry, but that doesn't make a lot of sense. A weak dollar is good for exports, which is good for industry, which equals a rising stock market. If the stock market is rising, it siphons off money from other investment categories; one of those being rare coins. Rising interest rates would do the same thing.
Now, IF, (and that's a big if), this market is actually collector driven, it may not matter. My hunch, though, is that there are a lot of speculators and "investors" in the market and if other opportunities present themselves, they will move on. It would not take much of that for the slide to begin.
Russ, NCNE
Agree with you - I was looking at it from a collector perspective, not a investor or dealers.
I have said this a million times. Like real estate, "they ain't making any more" (rare coins). The supply is what it is.
BUT THE DEMAND CONTINUES TO GROW, and something is happening AGAIN that increases the demand through the roof:
Rare Coin Funds.
They are starting to sprout up again. It is my understanding that a couple of rare coin funds have multiple millions of dollars to spend for purchases for the funds portfolio. You not only have to compete with other collectors and the mega rich that will be at F.U.N. to buy the ultra rarities, but these funds have gobs of dollars to SPEND. They HAVE to purchase coins based on prospectus for their investors.
I always believed once these funds come about again, (like early 90's with Merrill Lynch and Bruce McNale) is a time when the bull market may be at its peak. It is happening.
Are a lot of coins for sale at F.U.N.? Take away the Hugon and Large Cent collection, and you really do not have THAT much compared to other F.U.N. shows. I see a lot of coins showing up at Platinum Night that were sold within the past year and are for sale again.
There will be big players at Hugon. BIG. I was going to bid moon money for the 1913-S MS68 Quarter at Hugon. I may still do it, but I was told.... I will not come close to being high bidder. (Maybe the dealer was trying to scare me!). It will be an entertaining auction experience I think, but the fact that Rare Coin funds are now in the picture, winning a rare coin at a "decent" price might be a long time coming...
Coins are supposed to be a collection, not an investment. At least that's how I see it. The "small to mid-size" rare coin purchaser will be buying the rare coin fund shares. Termed an investment in a fund. I see funds as a negative, but...
There have been 10 year periods when the rare coin market had the best 10-year return out of any investment. (oops, I said investment). I think it was 1985 through 1995. (I am close to being right). So, the rare coin market has had the great returns over a LONG period of time.
I simply look at my stuff as a collection.
Rising interest rates USUALLY occurs if there is an inflationary risk. Rising rates also hurts the stock market. If higher rates, higher inflation, and lower stocks, the money still goes to tangible assets like....
....and how much longer before rates finally rise from their lows????
Just watch the Hugon prices and the Bermuda Collection of Morgans.....A lot of people chasing too few coins, especially the tough dates.....
Its funny but I heard this same discussion right before last years FUN show. This year should be better than last year in my opinion.
My 20th Century Gold Registry Set
$20 Saint Gaudens Registry Set
<< <i>Well, I have put serious money into coins >>
Which explains your bullish stance. I hope you're right, but I've been through enough stock market cycles to know what a frenzy born bubble looks like. This coin market is sure displaying the signs.
Russ, NCNE
then either I win it or I dont. Getting cought up in a bidding war, is best left for deeper
pockets then are found in my pants.
Camelot
Bill - Please, I've had enough of your dealer bashing.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Yeah, I remember an acquisition I made in the mid 90s which at that time was the most I spent on a single coin ($6500). I was buried into it for almost TEN years.
But last year, I was able to "dump" it to a dealer for $16M