Climb the wall of worry...Are rare coins too high??
saintguru
Posts: 7,724 ✭✭✭
Every time there is a successful show, I read that coins went too high, that the public is going to be holding the bag...blah, blah, blah. The funny thing is that it is consistently a number of DEALERS who are the ones paying the big bucks for great coins!(and most of the time they have buyers on the phone, or with orders to BUY!) So why all the negativism?? Because a lot of dealers are scared to pay up...that's what fuels BULL markets...the negative sentiment, the frustration of not being to buy on the cheap, the reluctance by many dealers to take on inventory at up money, and the battle cry of "It's at the TOP'!.
CLIMB THE WALL OF WORRY.
As a Saint collector, I used to get anywhere from 6-12 calls every show with very high end coins to but. I got ONE call this week, and the coin was so expensive it was clear that the "seller" was not really interested in selling. I am absolutely convinced that this market is collector driven, coins are disappearing for years as long-term investments, and the lack of turnover of recent purchases has many dealers seeing red because they can't get a solid toe-hold in the action without putting their money on the line. Nobody want inventory...no wonder prices are goin up.
BULL markets top out when speculation accelerates. The collectors are not "speculating". They are collecting and for god reason. They sense an asset class that is "real", that has limited supply, has "aesthetic" appeal as well as investment appeal, and they see coins as an undervalued collectible.
Clearly, my point is that as I read the threads that say this is a market in the throes of excess, I disagree! Many dealers look back on the dealer-to-dealer fueled market of 1989 and recall being burned bad...many haven't even seen a collector driven market. This is not an attempt to bash dealers, but I hear them more that any other group, commenting that it's all too high. It isn't. It's the "WALL OF WORRY"! It's like gasoline on a fire.
What's amazing is how similar the mechanics and dynamics of the rare coin market are to the stock market. The fundamentals DO drive the direction. And right now there seems to be no break in the action. Many of you that are looking for "great" coins have to be seeing the lack of supply that I am....
FOOTNOTE: I should qualify that I am discussing the more RARE coins...not Ultra-Rare, but not commons...I apologize to those who collect commons, but this is my area of interest. I'm certainly not saying that even commons will not go up....but that is not the true topic of my post. As for "moderns", I am absolutely clueless...so I can't even attempt to discuss them.
CLIMB THE WALL OF WORRY.
As a Saint collector, I used to get anywhere from 6-12 calls every show with very high end coins to but. I got ONE call this week, and the coin was so expensive it was clear that the "seller" was not really interested in selling. I am absolutely convinced that this market is collector driven, coins are disappearing for years as long-term investments, and the lack of turnover of recent purchases has many dealers seeing red because they can't get a solid toe-hold in the action without putting their money on the line. Nobody want inventory...no wonder prices are goin up.
BULL markets top out when speculation accelerates. The collectors are not "speculating". They are collecting and for god reason. They sense an asset class that is "real", that has limited supply, has "aesthetic" appeal as well as investment appeal, and they see coins as an undervalued collectible.
Clearly, my point is that as I read the threads that say this is a market in the throes of excess, I disagree! Many dealers look back on the dealer-to-dealer fueled market of 1989 and recall being burned bad...many haven't even seen a collector driven market. This is not an attempt to bash dealers, but I hear them more that any other group, commenting that it's all too high. It isn't. It's the "WALL OF WORRY"! It's like gasoline on a fire.
What's amazing is how similar the mechanics and dynamics of the rare coin market are to the stock market. The fundamentals DO drive the direction. And right now there seems to be no break in the action. Many of you that are looking for "great" coins have to be seeing the lack of supply that I am....
FOOTNOTE: I should qualify that I am discussing the more RARE coins...not Ultra-Rare, but not commons...I apologize to those who collect commons, but this is my area of interest. I'm certainly not saying that even commons will not go up....but that is not the true topic of my post. As for "moderns", I am absolutely clueless...so I can't even attempt to discuss them.
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Comments
(How do I transfer funds from my Fidelity account directly to ANR for the Jewell $3's?)
<< <i>Keep the negative sentiment going!! That will keep prices down for us collectors!! >>
I think you are reading my post backwards!! Prices are going UP because the negative sentiment keeps the pipeline empty!! Buy now because you will pay more tomorrow.
I have probably had to pay UP on 70% of the coins in my set, (at the time I bought them)...many have DOUBLED since then. However, I'm in for a long time so I have no interest in selling, nor will I if we see some natural correction...but everytime I paid up...if another showed up in the following months or yaers it seemed like they opening bid was at the price I paid or higher!
Remember one thing...it works so much better if you really have a PASSION for the coins you collect. It removes you from being myopic regarding their value as a collectable...call it the intangible appeal.
Saintguru -- I think you are right on target. (And, btw, congrats on the registry set. I had a look for the first time, just now. Awesome.)
In your opinion, how do world coins figure into your logic? It seems to me that the phenomena you have analyzed are largely a U.S. trend.
I chose to be in the mainstream with US coins...as an personal portfolio manager I'm often asked about foreign stocks...and my response is typically that we have so many great companies in the US, why get involved with something that I have less access to information on, and is harder to follow?
BTW, Thanks for the comments on the Saints!
<< <i>
<< <i>Keep the negative sentiment going!! That will keep prices down for us collectors!! >>
I think you are reading my post backwards!! Prices are going UP because the negative sentiment keeps the pipeline empty!! Buy now because you will pay more tomorrow.
I have probably had to pay UP on 70% of the coins in my set, (at the time I bought them)...many have DOUBLED since then. However, I'm in for a long time so I have no interest in selling, nor will I if we see some natural correction...but everytime I paid up...if another showed up in the following months or yaers it seemed like they opening bid was at the price I paid or higher!
Remember one thing...it works so much better if you really have a PASSION for the coins you collect. It removes you from being myopic regarding their value as a collectable...call it the intangible appeal. >>
My thought was to the extent buyers think prices are high, they will stay out of the market and reduce demand.
But I concur with what you are saying . . . the "negative sentiment" may reflect frustration from lack of availability. The Legend market report appears to confirm this. Therefore, prices will need to rise to shake out more supply for the market!
Thanks for the further analyses. I think you are right, that there are probably certain coin series in world collecting that would behave similarly to the trends you outline. I also think there are particular world coins that would behave that way, for example the 1839 five-pound gold piece, something I long for..
I've been expanding my collecting into world coins in the last year or year-and-a-half, and as is often said on this board and on that, your money goes a lot farther.
p.s. I'll tell you one coin I bought at issue that has skyrocketed, backed down, and seemed to stablize: the U.S. commemorative buffalo dollar. I bought two two-coin sets at issue. Up-up-up, down, back up a bit, stable. Seems like. Anyway, I'm
(Remember: the new buff nickel goes on sale at the mint site, today...)
I would agree that as prices increase it will shake some supply, but that's how every market in the world works...stocks, commodities, etc. Let them come...I for one would love to see some unknown sets that have been stored for decades come to market! Fresh original coins...That's where the fun is!!
<<Let them come...I for one would love to see some unknown sets that have been stored for decades come to market!>>
Stacks has been advertising in Numismatic News and Coin World about an upcoming auction of the 'Gardner' collection from, I think, Buffalo NY. The ads say that this collection has items that have been in storage at a museum for like sixty or seventy years, and I recall that it says some are very toned due to long-time storage in an old Wayte Raymond album. Unfortunately, I cannot find more information at the Stack's website on this. And I don't have CW or NN in front of me to post more info. I seem to recall that the add says there is gold in the auction.
You are right on. I could list 20 or more coins, in grades that would sell above the current market, in one of your New York minutes. Probably several times over at the same show, til they found a collector who would put it away for years.
So, what do we do? Stay alert for the special ones, in the series we like, and be patient. Then step right up, and pay the price.
Series and dates where the prices will continue upward, without any balancing or adjustment (IMO):
Bust dollars in AU 58 and higher-even the common 1799 is getting attention, if nice.
Early quarters in MS 63 and higher, Esp. the nice 64's.
Early and Bust halves, esp. the 1794,1795, 96/97, 01,02. And the rare dates before 1822.
Early gold in MS, and pq for grade.
It seems I am influenced by the early classics, as they are rarer by pop and availability. I'm sure the later series have the special coins that will retain all the increases we have seen in the last 2 years, and continue higher. But make sure they are special.
So, dealers, find an 1804 quarter in MS 62, or an 1801 half in AU 58, or a 1797 dollar in MS 62, and I and 20 other collectors will be knocking down your door.
Thanks, and kudos on the show. Steve said it was a lot of fun.
OH...I don't have a NY minute!! I'm in Chicago if you don't mind!!
This is a contrarian market indicator that usually works very well. When everyone is screaming "buy," and there are few people saying the end is near, *that* is when the end is probably near.
Still, I'm on the sidelines for a while. I'm tired of watching everything I want going for moon money.
Chicago/New York. No difference. They are both at a pace that takes my breath away. Come to the mountains and relax for a week. It takes 2 hours to watch 60 Minutes on the tele.
Saints do not sound like Moderns. They even sound older and more revered than classics or busts. But at least I do know and hang with Busts(ties). Do you know any Saints?
<< <i>Ziggy...that's my point...but if there are coins that you (really) NEED and rarely see, I'd be paying up. The next one STARTS where the current one stopped! >>
Yeah, but there's little that I NEED and rarely see. Hence the sidelines.
Come on...are there really any Saints, Dale?
Now I HAVE known MANY BUSTS!!! Oh the good old days....
Weren't you the guy who lasted for 78 episodes of Jeopardy?
How's that for an even more lame radiologist's post?
<< <i>There is no wall of worry regarding the coin markets, it trades on a completely perspective than equity markets. >>
Can you translate this into English?
Ok, oh guru of economics, you say that all these rarites are being bought up as fast as they can be sold. And you say that they are going on to strong hands. What happens when the supply of rarites dries up? Where does the money go?
Next???
<< <i>I am absolutely convinced that this market is collector driven, coins are disappearing for years as long-term investments,... >>
I think that 1) the market is only partly collector driven (there is quite a bit of hype and speculation in certain areas) and 2) Many coins are NOT "disappearing for years". Rather, a good number of them are being recycled fairly quickly as registry set collectors complete and then sell their sets and as dealers play the auction merry-go-round game.
<< <i>Mark...even though some registry sets are hitting the market they are a tiny percentage of the coins in strong hands. >>
I might have to agree with that Jay.