What can we expect to see during the next bear market in coins? (My top ten predictions added)

RYK

An auction company folding?
A TPG folding?
A Liberty nickel selling for less than $1 M?
Wannabes selling pencils and apples on street corners?

What do you expect to see in the next bear market? (You might not know it is a bear market until one or more of these types of events occurs.)

VAMs4U2BuyHere

<--------- Getting ready for the pencil & apple bullmarket

Longacre

I think definitely you would see an auction company folding. I have my idea as to which one, but I will not give my prediction right now. At the risk of agreeing with Laura, I think there will be a large decrease in the number of "semi-professional" dealers who try to transact business with the public. I am sure they will still collect, but there will be less emphasis on dealing. On the collector front, I think there will also be a decrease in the number of active collectors (do you know anyone who actively collect baseball cards or stamps right now with a passion?). I think the major dealers, in general, will still be around, but business to the public will not be nearly as good or as active as it is right now where coins literally fly out the door.

Russ

There won't be a bear market. It's different this time.

Russ, NCNE

klorineforbrains

291fifth

The next bear market in coins, which I suspect is already in its intial stages, will be characterized by a subtle decline in liquidity at first. Full time dealers will notice this immediately but, because pricing guides (or, perhaps, the dealers who contribute information to them) are reluctant to report price declines, the collecting public will be kept in the dark UNTIL they actually try and sell some of their coins for CASH. The sellers will find that their low-end-of-grade coins, even if in major TPG holders, are next to impossible to unload without heavy discounting.

As the bear market builds up steam other factors in the economy will begin to affect the market. I suspect the wild speculation in housing/mortgages we are now seeing in markets such as Florida will be the trigger for a more widespread downturn. Coin collectors/investors who find themselves "upside down" in their housing speculation will be forced to unload their coins in order to make mortgage payments. At this point the decline in the coin market will become obvious to all, just as was the case in 1965-6, 1982 and 1989.

Watch for more expensive coins turning up on eBay as sellers, who have been shocked by the lack of serious offers from dealers they have dealt with during the run-up, try selling their own merchandise. It will sell, but the decline will now be out in the open for all who follow coins on eBay to see.

I expect the bear market to last just as long (or longer) this time as was the case following the 1989 collapse.

I know many don't like politics interjected into these discussions so I will throw out just two more words:

South America

solid

One scenario is that it could happen quickly, but be relatively short-lived (a couple of years).

While some people will be scared out or forced to get out and sell into a declining market,
I believe there is a much broader base this time around that will be willing and able to pick
up the pieces and lend support to pricing at some level.

I hope to be among the latter group.

Ken

Coinhusker1

<< <i>There won't be a bear market. It's different this time.

Russ, NCNE >>

Coinhusker1

<< <i>An auction company folding?
A TPG folding?
A Liberty nickel selling for less than $1 M?
Wannabes selling pencils and apples on street corners?

What do you expect to see in the next bear market? (You might not know it is a bear market until one or more of these types of events occurs.) >>



Two auction companies will fold (probably the ones located in Beverly Hills)
Two "third world" TPGs will fold or get sold
Most Liberty Nickels sell for less than $1M already!!!

RYK

Here are my ten predictions for the next coin bear market:

1. A major auction company will fold.
2. One or two of the TPGs will fold.
3. Either the President of CU or the head of NGC will retire, possibly both.
4. PCGS will (finally) allow NGC coins in its registry.
5. The PNG will shrink by one-third.
6. ANACS will no longer offer grading opinions at coin shows, but they will offer a registry.
7. The FUN Show will no longer be one of the top two coin shows of the year. The Palm Beach coin show will fold. So will the Santa Clara show. Long Beach and Baltimore will return to twice per year.
8. A Liberty nickel will sell for less than $1M. So will an 1894-S Barber dime.
9. The portion of the Harry Bass collection on loan to the ANA in Colorado Springs will be sold.
10. A major east coast coin firm will merge with a major west coast coin firm, a union that one would have never believed could happen.
11. (Bonus) Activity on this message board will slow to the point that it will make Sleepy Hollow™ in 2005 seem busy.
12. (Double bonus) Dorkkarl will buy a slabbed coin and leave it in the slab!

topstuf

291fifth

<< <i>Here are my ten predictions for the next coin bear market:

1. A major auction company will fold.
2. One or two of the TPGs will fold.
3. Either the President of CU or the head of NGC will retire, possibly both.
4. PCGS will (finally) allow NGC coins in its registry.
5. The PNG will shrink by one-third.
6. ANACS will no longer offer grading opinions at coin shows, but they will offer a registry.
7. The FUN Show will no longer be one of the top two coin shows of the year. The Palm Beach coin show will fold. So will the Santa Clara show. Long Beach and Baltimore will return to twice per year.
8. A Liberty nickel will sell for less than $1M. So will an 1894-S Barber dime.
9. The portion of the Harry Bass collection on loan to the ANA in Colorado Springs will be sold.
10. A major east coast coin firm will merge with a major west coast coin firm, a union that one would have never believed could happen.

In reply:
1. More than one major auction house will fold. There are already too many of them.
2. Submissions to the MAJOR TPG's (3) will shrink sharply. One will go out of business and one more will be bought out by the remaining major.
3. I have no idea but read #2 again.
4. Won't happen.
5. Probably not...but non-PNG dealers will disappear by the hundreds. Most of the PNG dealer have been around long enough to know how to survive even sharp downturns.
6. ANACS will continue to offer grading opinions...any other surviving TPG's will be forced to do the same.
7. If the Florida real estate market collapses FUN could decline in importance but I doubt it will fold. Dealers like to go to Florida in January. Many secondary shows will fold and even major shows will cut back on frequency and days open. Shows like the ANA Winter and the CSNS Summer could disappear.
8. Agree. Many high flyers will be sold privately to avoid negative publicity. You won't even know they have changed hands.
9. ???
10. There will be many mergers but not all will be successful. Some well known names will disappear though some of this will be the result of aging and not the market directly.


tc

Prethen

You're obviously referring to a very serious bear market. The last time this happened was after that whole investor crap in the late 80's. I doubt we'll be in for that. I do see that the market will soften and some of the hyped-up prices will ebb, but I don't see any massive bubble about to burst. It would take something very serious, in the near future, to do the type of harm to the coin market that you're inferring. I think some of your top 10 items make sense if that were the case, though.

tradedollarnut

Low end, shiny and washed out coins will plummet in value as buyers become very picky.

You will never again see a 1913 Liberty nickel sell for less than $2M, let alone $1M.

291fifth

<< <i>Low end, shiny and washed out coins will plummet in value as buyers become very picky.

You will never again see a 1913 Liberty nickel sell for less than $2M, let alone $1M. >>



That's right...you won't see it...because it will happen in a private sale. The coin won't appear again until the market booms.

tc

librtyhead

I have allways believed that when you buy a coin(as a collector)that you buy the coin,not the slab or grade.When the market goes down it is great for the true collector.But it may not be so good for a dealer,who has invested alot of time and effort into the next grade higher slab.Spending the better part of the day trying to make as much money you can off a hobby that should really be about what a person thinks is a great looking piece of art, is not my personnel cup of tea.I know what I like. and I work it into my budget ,it matters not to me so much what a coin cost, or what other people think. If it looks good I will buy. My prediction for the future is it may be a failed enterprize but many people will enjoy this hobby not for the money but for the enjoyment they get with the hobby as it will and allways should be. WOW thats the most I have ever said on this forum!!!!!!!!!!

RYK

You will never again see a 1913 Liberty nickel sell for less than $2M, let alone $1M.

Oh, yeah, well how about an 1885 Trade dollar selling for less than $250,000?

(Making predictions like this is for amusement and to provoke discussion, not necessarily to be 100% accurate.)

Low end, shiny and washed out coins will plummet in value as buyers become very picky.

I think that this is already happenning (the picky part, not the plummet in value yet)

tradedollarnut

That's right...you won't see it...because it will happen in a private sale. The coin won't appear again until the market booms.

There are plenty of high flyers where this prediction will indeed be true. However, with regard to the 1913, show me ONE example that has sold for less than the previous record price for the coin in the last 50 years. While that record will be difficult to uphold, it is a coin that will never trade below $1M again ... and most likely not below $2M.

morgannut2

I certainly think washed out, white common date coins have already begun their price fall. However this is (in my opinion) because of two factors: 1) People aren't stupid, they learn quality. As a coin price and popularity cycle progresses as it has they learn to buy better coins; and 2) Many collectors get their "feet wet" with the common stuff first--the end will not begin until the rare/uncommon/key dates in the popular series level out in price--why? everyone collects them last. This isn't happening yet

It is absurd to think a 3 million dollar nickel will sell for less than one million. The owners are too well off to dump such a coin--they'll sit on it, UNLESS-- there is a major stock market crash or some other disaster. Basically all you will see is small or trivial declines in high end original coins, ranging from the great rarities to common Morgan 1882CC's in MS 67 still in their original GSA bowes and unmolested.

I would be astonished if there are more than 3 grading and 3 auction firms in a major downturn, but by aquistion not bankruptcy.

Most important of course is Dorkkarl's new fear of cracking out his coin's--that means we're in big trouble!!

Russ

I agree with TDN. The type of person that can afford to plunk down $3 mil for a coin is the type of person that can afford to hang on through a bear market.

Russ, NCNE

librtyhead

When e-bay starts to have cust become accountable for thier transactions many people will shy away from promoting thier items on this type of forum, and will not show any of thier coins.This in itself will turn the clock backwards on alot of nuministic interest!!!!!!!!!!!!!! the taxman cometh!!!!!!!!!!!!!!!!!!

librtyhead

Everbody and his brother says e-bay sucks but if you really think about it what will happen when its not such a free ride and AMERICAN people are taxed on thier yard sale items that they thought they could sell at a cheap rate.E-bay may have been the best thing that happened to coins.now I think it may go to sh%t!!!!!!!!!!!!!! give it time anything good can and while be wrapped up in RED tape........... my hot seat just got some gas...............................

Nic

"Top Ten Predictions" . No offense intended. The more I see these type of threads the more I believe the market has a long ways to go. I've participated in 4 bear markets and another will occur. Not quite yet nor as extreme. K

roadrunner

The 1990-1996 downturn was quite severe. Many dealers left the business. Lots of others joined forces to stay above water. Those that got sunk by credit over with heavy inventories sold off and joined the staffs of other major firms. No auction houses went out of business....at least none that I can recall. The weaker ones will likely just revert back to their retail businesses and hold one or two auctions per year to keep their hands in it. Would not be surprised to see a Stacks or ANR for example to merge with a west coast entity to combat the market share the Heritage continues to seize.

The collectors and investors (as usual) took the brunt of the last downturn. It will be much the same once again.

roadrunner

fountainheadgold

I do not want to see a downturn BUT when it roars BUY BUY BUY

scher

I am not sure what will happen..but I'm still buying high end rare coins in the series I collect, and am also buying for investment in selective areas for the long haul..
I just love collecting high grade coins but again am not sure about future price levels..
Bruce Scher

stimmy

My prediction is that I will start purchasing coins at very reduced prices..

lloydmincy

You guys commenting on the "crash" of the Florida RE market apparently do not understand it fully. 1) QUITE a few of those homes are purchased with cash. 2) EUROPEANS are a HUGE buyer of Florida RE. The demand for it, from baby boomers in the U.S., and since late 1990's, Europe, (especially Germany), and the lack of it, is what will keep it going. I have a good friend developer in northern Ft Meyers, that had just finished a complex, Condos and homes on or within a 1/4 mile from ocean. 35 homes, about 70 condos, attached. He told me.... about 75% was foreign buyers, MOST WITH NO MORTGAGE. The Europeans like the: availability of parking near ocean, LOW taxes, CHEAP gas (In Germany, it is about $6 a gallon with taxes). They call Florida "absolutely beautiful, and the closest CHEAP AND FREE AND SAFE Tropics in the world. Went waterskiing with a German today on my lake.. Asked him about it. His family of 3 brothers own 4 houses in southern Florida. Keeping them for the whole family to retire.

Coins? This bear market, when it comes, will not be disasterous for collectors that can hold on to them for life. I am one of them. If a big crash, I'll buy 'til my wallet bleeds. Top Auction houses, not including heritage, will merge ANYWAY to stay competitive.

Bear

Please stop blaiming me for

every down coin market. It aint

my fault I tells ya.

relayer

Does it mean Bear will buy all our coins

RegistryCoin

How 'bout this: The current bear market is over, and I have now no idea what the next one will bring. Ask me then...

Bear

For most collectors, the down turn will be well underway before

you know it is happening. When you do realize, your finances will

always be under stress from other economic developements.You are starting

to see auctioning of lesser quality coins. The bloom is off the roses for the really

high class stuff. Dealers are getting pickey as to what they will buy. Posted prices

in the various sheets are always 3-6 months behind the times, especially when they drop.

The curve seems to have topped out in general and is now just on the other side of the high point.

Coin shows are at best fair to sluggish. The hype is still there, but remember, hype sells the sizzle

and not the steak. There is always the possibility of a slight bump up just before the end but no one ever knows

for sure that it is the end, untill well after it is in process. Dont expect dealers to tell you that the sky is falling. If they

do that , who will they sell their high priced coins to. When the market is supposedly going up, its easy to be deluded,

screwed, blued and tatooed. You generally wont realize how bad , untill you try to sell.

Tarmac

14 months later, are we closer?

oreville

Of course we are closer.

But first we are entering an "investment" phase in which investors have started buying coins. We can easily see prices rise up to 5-10% a month for up to two years.
Then, within 2, possibly 3 years, we could begin to see a bear market. The severity of the bear market will increase based on the severity of the price rise that preceeded it.

RYK

Low end, shiny and washed out coins will plummet in value as buyers become very picky.

Check

ANACS will no longer offer grading opinions at coin shows

Check

The Palm Beach coin show will fold.

Check

Barry

I'm impressed! How about some stock picks?

mrearlygold

<< <i>There won't be a bear market. It's different this time.

Russ, NCNE >>

saintguru

I just saw that this was started last year!

I agree with Russ. Serious or not. IT IS different this time.

I agree with Bruce. Big money buyers don't panic. They wait.

I agree with Mincey. If coins go down there will fantastic bargains that will be available for about 10 minutes.

I agree with RYK that inferior, neuveau-treated coins will lose their unexplicable appeal. AND, true natural coins will carry much bigger premiums. You could even see a designation on some types of "natural".

There is no bear market, and I see the better end of the coin market continuing for the majority of this decade.


A good thread, Rob...even though you called the doom 5 or 6 years early.

RYK

A good thread, Rob...even though you called the doom 5 or 6 years early.

The thread was a quasi-spoof thread. At the time, there was a lot of gloom and doom on the forum. I do not want to take credit (or blame) for fearless predictions. Most of mine were made in jest.

Edit: SG, your new avatar is scaring me. Engage adblock!

Pushkin

The next bear market will occur in four phases.


Phase 1: The government will confiscate all pattern coins.

Phase 2: The government will confiscate all gold coins.

Phase 3: The government will confiscate all pre-1965 coins.

Phase 4: Chinese Trade Dollars and modern crap will be the only coins that are legal tender.


Have a nice day.

jpkinla

I started buying coins in late 2003 and early 2004. That is when I got serious and at that time there were plenty of coins in my area of interest to go around. Now, at least in dated gold, it is hard to find special pieces. I know I couldn't duplicate my $10 Indian set today and would have great difficulty building a top Saint set. The better coins are just not out there and when they do show up there are several willing buyers out there.

The coin market will fizzle when the Wall Street guys decide to pour tens of millions into coins again and when gold peaks out. Since I believe we are just rounding second base, I believe there is a lot more time to go.

I would rather own my coins than shares of stock or bonds.

MrBreeze

My prediction is that the State of Ohio will not buy any coins for its funds, even though the prices will be way down.

RedTiger

It depends on what kind of bear market it is. If it is a typical cyclical bear market with a modest 25% to 35% decline in values, not much is going to change except a few marginal dealers will seek other work, a few collectors will sell to pay the rent.

If it is a "big Kahuna" tidal wave bear market with a 50% or more decline, odds favor at least an equivalent run up before that so that all the dumb money buys at the top. If a big grizzly bear does show up, 80% of collectors and 70% of dealers will be strong buyers after a short steep decline only to see the bottom drop out. Liquidity dries up, meaning the typically bid/ask spread of 5% on widgets may widen to 15%. No one has cash, so trades are much preferred to buying. Those that do have ready cash will demand a steep discount on already low prices. Those that have to get out no matter the price to meet other expenses will have to sell well below the depressed sheet prices.

One sign of a bear has already appeared in the form of new investment funds of coins. It will be serious when newbies start showing up to the board touting how much money they have made in coins without knowing anything about them. Another sign is in the slowing of submissions at the grading services. As for price action, a lot of coins have not gone up much in the last five or ten years. Irrational exuberance is only in thinly defined segments. Coin shows are hit or miss as far as attendance--not even a doubling of silver prices has brought out the crowds. Threads like this never appear at a real market top, so keep partying, the cops have not even been called yet.

Coxe

(1) The number of fresh collectors entering the hobby will naturally attenuate with the maturity of the state quarters program. Heavy promotion and eductation will drive a fraction of existing newer collectors away or into classic series colelcting. The Mint will be forced to cut back on offerings, reduce mintages and perhaps scrap more ambitious programs (like Presidents and First Ladies despite Bush's poll numbers or Hillary's campaigning). Though others will debate me on it, I can see 70 graded slabs discounting dramtically and the 69 level being virtually unsaleable. I know I wouldn't want to be stuck in that quagmire of risk with an inventory full of that material. Recovering the grading fees would be a struggle.

(2) I agree that one or both Beverley Hills auction companies will fold or be absorbed by someone else. Depending on how long CA AB1178's legs grow, we may see a lot of wannabes checking out in California and perhaps an exodus of the Escala Group (Teletrade and Bowers & Merena) from the state.

(3) Inflation and gold will govern the gradients of this market. There will be no one event butterfly effect that tips it. The path taken will follow the lead of precious metals and the investor component of the rare coin market. It will be interesting if the metals storm ahead and common (and problem) coin valuations advance but decelerating to converge at a very small premium over melt in time.

(4) While I like all 4 of the top TPGs, the survival of all is unlikely. My guess is ICG will find its brand not sufficiently marketable and look to merge with ANACS (going in a bit of a circle). ANACS will survive because of its name, the introduction of a more inclusive registry (paid by banner ads), and hopefully new value added services that come to fruition in a mature state faster than PCGS and NGC. PCGS and NGC are not going away nor merging. I could see PCGS offering a "conservation" service. It is a guess and something I believe they should have done yesterday.

(5) The 2007 FUN will be a serious barometer, not just rhetoric this time, for the coming year's market. I agree with the thought that Long Beach will collapse to two shows per year by 2008, though the bourse hours should be extended, more attendant events associated with it presented and the public will have no less access than the dealers. Heritage and Teletrade will not have as many auctions each week.

But it always comes down to supply and demand. The real thing to look at is the count of bidders on seriously important pieces on the auction floor and their prices realized. Even if the best coins grow, competitive interest will be a bad omen for the general market.

Good things I (and many others) have noted is the drying up of great material. The recent Platinum sale had some spectacular pieces. However, there was some stuff there that one wouldn't have seen north of the Signature sale a year ago. Look at the weekly Internet auctions at Teletrade and Heritage. There are a LOT more problem coins and the fraction of ANACS is growing. I think the auctions have overextended themselves and getting quality consignments is a huge problem today. That is great for this market. Dealers and collectors are like pirrhanas when a great piece hits the market. With less of that around, some may divert their interests while others lower their standards or (best of all) start buying coins rather than holders and recognizing rarity and quality even in raw.

This time is different in some respects. That won't avoid a declining market at some point (buying opportunity for some of us). Instead of the investor saturation of common MS65 this time, it is going to kill the ultramodern 69/70 market and it will be bloody.

cladking

<< <i>

This time is different in some respects. That won't avoid a declining market at some point (buying opportunity for some of us). Instead of the investor saturation of common MS65 this time, it is going to kill the ultramodern 69/70 market and it will be bloody. >>



I would agree that the modern and ultramodern markets are riskier especially in
the very highest grades Except that there is no obvious speculation in these markets.
Any newbies buying very high priced coins of any moderns might be somewhat "weak-
er" hands simply because they've never seen a market correction before. They don't
know that by the time they're aware of a bear market it's already too late to sell. This
could cause a collapse to be magnified a little in this area. The modern market itself
should be relatively stable because of the relatively few number of newbies in it and the
fact that the amount of "investment" is small and likely to stay small so long as conven-
tional wisdom says that all this crap is overpriced.

Any crash would necessarily start in the highly touted coins which means classics rather
than moderns or ultramoderns. Meanwhile key date coins of the 20th century are likely
to escape nearly unscathed by any garden style decline.

Obviously this can change if speculative money were to start flowing into moderns or lat-
er coins but if it does the prices of these would move sharply higher first.

This is hardly to say that all ultramoderns are underpriced or fairly priced today and that
at some point in the future they will be higher priced. Anyone buying any coins is well
advised to learn about the coins and their market to protect themselves from price swings.

Bear

The US Mint will have trouble finding materials that are cheap

enough, to continue minting our worthless coinage. Might have to go to

paper, plastic or aluminum.

cladking

<< <i>The US Mint will have trouble finding materials that are cheap

enough, to continue minting our worthless coinage. Might have to go to

paper, plastic or aluminum. >>



Now, now. A quarter still has a nickel's worth of buying power. If you want better coins you'll need to vote for better politicians.

Longacre

So which auction firm will fold?

BlindedByEgo

<< <i>(2) I agree that one or both Beverley Hills auction companies will fold or be absorbed by someone else. Depending on how long CA AB1178's legs grow, we may see a lot of wannabes checking out in California and perhaps an exodus of the Escala Group (Teletrade and Bowers & Merena) from the state.
>>



As amended, AB1178 specifically excludes coin dealers from the requirements of the bill.

lsica

I wouldn't be surprised to see major price adjustments in toned coins and in super-high-grade ultra moderns. And although this might exert SOME downward pressure on other parts of the market, I'm going to guess that those price reductions will be slight, small, and quickly recovered.

Coxe

I agree on toners. There are too many far from spectacular ones that don't deserve any premium that have been bringing just short of moon money i some places. Even the best of them are commanding buoyed up prices that probably cannot be maintained. Regardless of the general market direction, these have got to correct sooner than later.