I'm putting up for sale my entire collection---someday.
TahoeDale
Posts: 1,785 ✭✭✭
Some questions have been raised about the effect, if any, of the recent disaster caused by Hurricane Katrina on the coin market.
Add to that the rising interest rates, devaluation of the dollar, and inflation caused by oil, and the increased demand for all materials.
So I pose this question: Will you consider a large sale(most if not all) of your collection based on world events, regardless of your personal needs and continued avid interest?
I will not. And I assume most true collectors will not. But those who have purchased coins as an investment only, and dealers with large inventories of investment grade coins, may lean towards a sale, or lessening of their % in high end coins.
I really do not see key dates, pq original early and bust coinage going to a fire sale. And many other series where the demand for nice examples in all grades remain high.
But I am a realist, and understand there are always cycles in this industry. Just try to continue in the collecting mode through all the cycles, selling only when your interest wanes. By that time, you will be an expert in your chosen series(s), and will likely have all the coins you have been looking for all these years.
Add to that the rising interest rates, devaluation of the dollar, and inflation caused by oil, and the increased demand for all materials.
So I pose this question: Will you consider a large sale(most if not all) of your collection based on world events, regardless of your personal needs and continued avid interest?
I will not. And I assume most true collectors will not. But those who have purchased coins as an investment only, and dealers with large inventories of investment grade coins, may lean towards a sale, or lessening of their % in high end coins.
I really do not see key dates, pq original early and bust coinage going to a fire sale. And many other series where the demand for nice examples in all grades remain high.
But I am a realist, and understand there are always cycles in this industry. Just try to continue in the collecting mode through all the cycles, selling only when your interest wanes. By that time, you will be an expert in your chosen series(s), and will likely have all the coins you have been looking for all these years.
TahoeDale
0
Comments
WS
I think my views closely parallel yours - but let me add some thoughts. As a start, I am a collector - not a dealer.
I consider my collection to be both a hobby and an investment.
On the hobby side, I enjoy finding pieces for my collection, the people I meet, and the fact that coin collecting relaxes me after a tough day at the office.
On the investment side, I treat my collection in a similar fashion to all my other investments. It is just one element of my portfolio. You always want to try to buy low and sell high but it doesn't always work that way. I have chosen to buy coins thru all the ups and downs and hopefully dollar-cost-average everything over the long haul. Overall, I have done very well so far.
As far as when to liquidate, I would follow the same philosophy as with my other investments. Don't rush to sell immediately - sell over time and don't let world events drive short term hysteria. If you don't need the funds, then why hold a fire sale? Most of my collection is high grade (as is yours) so there will always be a demand for high grade pieces. Yes, there are cycles, but if we all knew with precision when the peaks and valleys will occur, we would all be retired in paradise. You take what you get and move on - and hope you have a good batting average.
However, if my holdings were generic, common pieces then there might be a good reason to liquidate. Common pieces don't have the upside of the higher grade pieces, but may have significant downside. In that case, I would strongly consider a reduction in my holdings (especially if I were a dealer).
In any event, even if I did sell all my coins, I would still go to shows and look at coins. The relaxation it provides, the occasional rip of a variety or cameo, and the camaraderie are as valuable to me as the investment aspect of the hobby.
“In matters of style, swim with the current; in matters of principle, stand like a rock." - Thomas Jefferson
My digital cameo album 1950-64 Cameos - take a look!
Dale,
In contrast to your experience with early and bust coinage, I do see a few sell-offs in the Lincoln series. There have been a number of prominent bail outs over the past year and more on the way. Word on the street is that the #2 Basic set will go up for sale again (first Mershon and now the new #2). In addition, a friend of mine without a registry set has dumped a few high-end low pop Lincolns on the market recently. He is doing it for financial reasons and wants to move the money to other investments.
As for me, I will continue to slowly and quietly accumulate.
Jack
Kind of damned if you do and damned if you don't ... so I guess it's damn the torpedoes, full speed ahead!
Bullspit! I don't care how great the coins are. Try selling at a market low and you will find that prices really did drop. And believe me, I speak from experience.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Of course ... if you have to sell. The problem is on the buying side - supply dries up because no one wants to sell at the lower levels.
It's like those silly greysheet prices on coins that haven't changed hands for a decade. Did the price really rise or fall if no transaction has occurred?
I see the market actually continuing to rise as the dollar starts its freefall. The images of our citizens in New Orleans however poor they are not getting care from the richest country in the world and the gas lines and the shift to tangibles/collectibles/commodities should cause a major move in bullion and coin prices.....
I may actually be more bullish to generic gold than rare gold but I believe both are poised to have major runups....What can Greenspan do now? He can't continue to raise rates in the face of Katrina. So he has to pause and increase the money supply/liquidity in the face of rising gas prices and inflation.....That should cause a major decline in the confidence of our currency causing a major move in gold......and I mean major.....We will be over $500 by Christmas!
$20 Saint Gaudens Registry Set
But John has convinced her that gold is going through $500, so I guess that my plan failed.
But some people will sell some great coins and they will sell cheaply. Don't get me wrong, I'm not saying that you should dump it all if you think the market is heading lower. But let's at least be honest with ourselves.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
$20 Saint Gaudens Registry Set
in this environment. Many great coins get halved, or worse, cut by 2/3. My own best coin fell by 50% in that window. And that already factors in the 1 pt grading boost it received in that time frame. If the market goes down, everything but the most solid or basal of collector coins survive. There were plenty of great coins to go around. I never heard of any collector complaining that they couldn't buy enough good coins in the down market of 1992-1996.
roadrunner
As strange as it sounds, Hurricane Katrina will be bullish for this hobby.
Who wants to buy my collection for $10,000,000 ?????
Its up for sale for the next 24 hours .....sight unseen
The first check I receive wins
Stewart
You are going to get us all in trouble. I will PM you with an offer, but I might need to see the coins. Will you please send the collection on approval? I am in the circle of trust !!!!!
You never did answer the question in the post, but I guess you sort of did. Neither world events nor your loss of interest will be the deciding event for you. It's SEND ME THE MONEY !!!!!!
and re read what mr eureka and roadrunner said over and over again
I have always STRONGLY disagreed with your viewpoint that great coins can only rise in value, and never drop. Over decades, that may be true. But there have been very steep drops in the coin market, even at the high end. In every market for every kind of asset, there can be bubbles, and there can be corrections; and there can be bear markets just as surely as bulls.
TahoeDale, you say that you would not sell your collections due to these exogenous factors. But if these factors start eroding the coin market, and if the current conditions of a housing bubble, a flat yield curve, a rapidly devaluing dollar et al. finally burst, and if you saw coins like yours starting to drop in value ... I bet you'd reconsider. The coins you've bought that have appreciated over the last five years - what makes you so sure they can't fall right back to the levels you bought them at and below??
Sunnywood
Sunnywood's Rainbow-Toned Morgans (Retired)
Sunnywood's Barber Quarters (Retired)
I don't claim that they can only go up ... it's obvious that sometimes [very rarely] they are sold for a loss [see the Dexter 1804 dollar in 1994 for example]. However, most usually, they are in strong hands and not even offered for sale during a downturn. Almost always a great coin is sold for a profit the next time it sells.
Normally I would agree with you, and be very uncertain of the next cycle that could wipe out many gains of the last 4 to 5 years.
But the internet and great imaging has brought out so many new collectors, and the poor return on equities has brought into the mix very wealthy smart investors who can give substantial support to the rarities they think will help their portfolios and egos.
Common and generic coins of every series, that are just condition rarities, will not be sustainable. A few examples will follow, as well as true rarities that will remain in demand for all time. While prices may peak, for awhile, for the latter group, over time they will reach new highs.
MS and proof 68, 69 and 70 coins:
Over the moon prices cannot be paid forever. And these condition rarities will come down, some substantially. The Barber halves in proof 69 cameo/deep or ultra are not today $75,000 coins(value). And they appear to not be selling in that advertised range. The same can be said for MS 68 Barber halves. When they first appeared, dealers and perhaps the public thought they might fetch over $60,000. All have either remained for sale, or were deeply discounted if sold.
Every series has the same problem with the ultra condition grades. A few may sell for big bucks, but will be adversely affected by a down turn.
But the rare early dollars, halves, quarters, dimes, half dimes and copper in proper slabs and grades should hold their recent gains.
And the 1901-S quarters, 1904-S halves, no drapery quarters and halves, early proof(before 1840), and other "rare" key dates may find a top during a boom, but the increased demand will help sustain their prices.
And it won't hurt if the coin that is rare is also originally toned and pq for grade.
At least, that's my opinion. I could be wrong.