Why is there NOT potential for a bear market? I mean look at some of the results from the last Heritage sale and coins like the CBH 1817/14 tanking ( not to mention a number of others) - this is definately a "ding" in the rising market. I just don't sense that coins are going up and up and have years to their peak. Adjustments ARE going on right now, so call it bear or whatever...
Love that Milled British (1830-1960) Well, just Love coins, period.
* "Fourth-Rate" grading services.... * "Do-It-Yourself" Slabs.... * Gradeflation at the major TPGs.... * Tom Noe and the Ohio scandal..... * An infinite number and type of offerings from the US Mint.... * A flood of counterfeit and fantasy issues from China and elsewhere.... * High price differentials for one-point grade upgrades.... * The inability of the average collector to tell the difference between AT and NT.... * The inability of the novice collector to tell the difference between "natural" and "lightly cleaned" coins.... * Infighting at the ANA.... * Overpriced and misleading offerings snagging newbies on Cable TV and print media.... * Ebay's failure to control misleading and deceptive advertising on it's "venue"....
When first reading the article again and figuring it was written today for the fist time, I was thinking that hey, all those things in your list are still around. Nothing has changed. And they were around years before 2006 as well.
But in any case, the market for many coins basically peaked along with housing back in 2006. While prices meadered a bit (up or down), the prices in summer of 2008 were not all that different from summer of 2006 or 2007. There are exceptions, but for the general market I believe it is true. If there wasn't a gold or silver bullion market attached to the coin market, our markets would have started cratering in 2007 along with RE. More common coins and problemesque coins have certainly gotten cheaper since 2006. The OP's initial thoughts of a high were probably true, but not for all of the reasons stated. As long as gold and silver continue to offer increasing value to the asset markets, then it will act as a life preserver of sorts for better coins in general. It will not help the coins that have no real demand in the market place other than to fill the need to fill speculator's pockets.
imho, Most common coins are ridiculously overpriced right now. >>
I think this graphic tells it all. Collectors and to an extent investors drive the market. Big investor coin prices have declined this year. The massive layoff began late in the last Quarter of 2008 and through the first quarter of 2009. Collectors and investors who are laid off don't have the discretionary income to afford continuing to spend on their hobby or investment-grade coins.
The big banks and hedge funds have recently begun moving from PMs to commodities/futures such as oil. At a time when U.S. refineries are running at 85% of capacaty and demand for gasoline at a 15-year low, the price of oil has risen 70% in the past two months!
To summarize, the price level in the coin market will continue to decline as fewer collectors and investors can afford to partcipate in the market and if the big instutional investors are moving from PMs to commodities, the prices of PMs will also put downward pressure on the coin market, IMHO.
"Please help us keep these boards professional and informative…. And fun." - DW --------------------------------------------------------------------------------------------------------------------------------------- BONGO HURTLES ALONG THE RAIN SODDEN HIGHWAY OF LIFE ON UNDERINFLATED BALD RETREAD TIRES
imho, Most common coins are ridiculously overpriced right now. >>
I think this graphic tells it all. Collectors and to an extent investors drive the market. Big investor coin prices have declined this year. The massive layoff began late in the last Quarter of 2008 and through the first quarter of 2009. Collectors and investors who are laid off don't have the discretionary income to afford continuing to spend on their hobby or investment-grade coins.
The big banks and hedge funds have recently begun moving from PMs to commodities/futures such as oil. At a time when U.S. refineries are running at 85% of capacaty and demand for gasoline at a 15-year low, the price of oil has risen 70% in the past two months!
To summarize, the price level in the coin market will continue to decline as fewer collectors and investors can afford to partcipate in the market and if the big instutional investors are moving from PMs to commodities, the prices of PMs will also put downward pressure on the coin market, IMHO. >>
I think looking at a short time period beginning in summer of '06 is deceiving you, imo prices were high in '07 & in "06, they may have not been as high as end of '08 but dropping to '06 & '07 levels is not a LARGE decline by any means in my book. Using analogies to prove a point are valid except that this is a hobby not an investment and you are comparing investment with a hobby which imo is comparing apples to oranges. >>
Realone, I believe the collector drives much of the coin market, but one cannot totally ignore the Investor's contributions. I also believe that the chart showing the recent downturn in the coin market coincides inversely with the increase in unemployment. Fewer potential buyers & investors mean reduced demand.
Further, as major investment funds move to non-PM investments the PM prices will decline, which has a direct impact on collector coins containing PM.
That said, I do agree that this is primarily a hobbyist market. And as a percent of hobbyists in this market lose their jobs, there will be less discretionary aggregate income spent on their hobbys. All of these are indicators of a bear market and not a bull market.
Cheers!
Kirk
"Please help us keep these boards professional and informative…. And fun." - DW --------------------------------------------------------------------------------------------------------------------------------------- BONGO HURTLES ALONG THE RAIN SODDEN HIGHWAY OF LIFE ON UNDERINFLATED BALD RETREAD TIRES
<< <i>Realone, I believe the collector drives much of the coin market, but one cannot totally ignore the Investor's contributions. I also believe that the chart showing the recent downturn in the coin market coincides inversely with the increase in unemployment. Fewer potential buyers & investors mean reduced demand. >>
I think there may be *increasing* investor interest in rare coins these days, as few investors today trust stocks and cash gets less than 1% in many cases. I could be wrong but I suspect that that has reduced the impact of less discretionary collector income and unemployment angst.
I also think investors are being MUCH more picky about the right coins this time than in 1989. Back then money was often thrown at anything numismatic and we saw huge runups in generic MS-65 Morgans and MS-63 Saints. Investors are looking less for a "bucket of widgets" this time but more for quality and rarity of individual specimens, making it a little more like the fine art market. That the really nice coins are probably down no more than 10% as a group when so much collector money is out of the picture and most other investments have tanked by 1/4 to 1/3 or more suggests that investor interest is still keen, but unlike 20 years ago, it's very focused on a segment of the rare coin market which has historically never "crashed" in value.
<< <i>Realone, I believe the collector drives much of the coin market, but one cannot totally ignore the Investor's contributions. I also believe that the chart showing the recent downturn in the coin market coincides inversely with the increase in unemployment. Fewer potential buyers & investors mean reduced demand. >>
I think there may be *increasing* investor interest in rare coins these days, as few investors today trust stocks and cash gets less than 1% in many cases. I could be wrong but I suspect that that has reduced the impact of less discretionary collector income and unemployment angst.
I also think investors are being MUCH more picky about the right coins this time than in 1989. Back then money was often thrown at anything numismatic and we saw huge runups in generic MS-65 Morgans and MS-63 Saints. Investors are looking less for a "bucket of widgets" this time but more for quality and rarity of individual specimens, making it a little more like the fine art market. That the really nice coins are probably down no more than 10% as a group when so much collector money is out of the picture and most other investments have tanked by 1/4 to 1/3 or more suggests that investor interest is still keen, but unlike 20 years ago, it's very focused on a segment of the rare coin market which has historically never "crashed" in value. >>
Some good points! I suppose in due time, we'll know for sure.
"Please help us keep these boards professional and informative…. And fun." - DW --------------------------------------------------------------------------------------------------------------------------------------- BONGO HURTLES ALONG THE RAIN SODDEN HIGHWAY OF LIFE ON UNDERINFLATED BALD RETREAD TIRES
The market peaked in Sept 2008.....I think this graphic tells it all.
What you really should have said was that the PCGS 3000 Index peaked in Sept 2008, not necessarily the coin market, and certainly not the total value of the coin market. How does one account for all the dreck that has been steadily decreasing in value since 2004-2006 that was low end for the grade? You know, the same old stuff that sat in the same dealer's case forever and circulated around the auctions looking for a home? This does not show up in the price guides which only assume solid quality coins which are solid for the grade. The ever-increasing prices from mid-2007 to mid-2008 tended to reflect the increasing prices for top quality coins. In fact the pop reports and price guides assume all coins are created equal and priced as such. But we all know that is not reality. The PCGS price guide simply does not account for lower-priced transactions on less than "all-there" coins. And as long as the market was in a mania stage with no one questioning the grade vs. pricing (ie there was always another whale waiting in line to carry the torch), then the game continued. This is borne out by the fact that the index has dropped only 3% since its peak in Sept 2008. Who honestly believes the market index is truly only down that miniscule amount when your typical MS/PF Type coin, commem, Morgan, 20th century dated sets, are down 10-20% on average with many more down as much as 30%? Even the solid for the grade coins are down a lot more than 3%. The CDN doesn't reflect these changes either. But what is happening is that buyers are requiring a much higher quality coin for the grade than anytime in the last 7 years before they pony up a price at CDN bid or higher. This allows those publishing the price guides to save some face (plus editing costs) and at the same time to prevent scaring the public.
Comments
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
Well, just Love coins, period.
* "Fourth-Rate" grading services....
* "Do-It-Yourself" Slabs....
* Gradeflation at the major TPGs....
* Tom Noe and the Ohio scandal.....
* An infinite number and type of offerings from the US Mint....
* A flood of counterfeit and fantasy issues from China and elsewhere....
* High price differentials for one-point grade upgrades....
* The inability of the average collector to tell the difference between AT and NT....
* The inability of the novice collector to tell the difference between "natural" and "lightly cleaned" coins....
* Infighting at the ANA....
* Overpriced and misleading offerings snagging newbies on Cable TV and print media....
* Ebay's failure to control misleading and deceptive advertising on it's "venue"....
When first reading the article again and figuring it was written today for the fist time, I was thinking that hey, all those things in your list are still around. Nothing has changed. And they were around years before 2006 as well.
But in any case, the market for many coins basically peaked along with housing back in 2006. While prices meadered a bit (up or down), the prices in summer of 2008 were not all that different from summer of 2006 or 2007. There are exceptions, but for the general market I believe it is true. If there wasn't a gold or silver bullion market attached to the coin market, our markets would have started cratering in 2007 along with RE. More common coins and problemesque coins have certainly gotten cheaper since 2006. The OP's initial thoughts of a high were probably true, but not for all of the reasons stated. As long as gold and silver continue to offer increasing value to the asset markets, then it will act as a life preserver of sorts for better coins in general. It will not help the coins that have no real demand in the market place other than to fill the need to fill speculator's pockets.
roadrunner
imho, Most common coins are ridiculously overpriced right now.
Collector of Early 20th Century U.S. Coinage.
ANA Member R-3147111
I say we'll see the high breeched by FUN '10. Believe me?
Glad to be a YN and not have to ponder such things ......................... I stand for the love of collecting, not the prices
Young Numismatist ............................ and growing!
slowly, gradually with periods of sideways movement.
bid prices will weaken before ask prices, that will tend
to conceal the direction of the market, unless you try to
sell some coins from your collection. We have not really
seen the full grown growling bear in the coin values as
yet. But the bear cub may be growing, faster then we suspect.
This warning may be considered a blinking red light, which is one
step beyond a yellow warning light. It is a good time to stop, look
and listen before moving ahead.
Camelot
Bull markets come and go- but it is the hogs that get slaughtered.
I looked back at the original issues cited and they really are not going to dictate the direction of the market.
Now having written that, the US market is still about supply-demand and the ability to promote and there will always be peaks and valleys.
Experience the World through Numismatics...it's more than you can imagine.
<< <i>Looks like the top was in Sept '08...
imho, Most common coins are ridiculously overpriced right now. >>
I think this graphic tells it all. Collectors and to an extent investors drive the market. Big investor coin prices have declined this year. The massive layoff began late in the last Quarter of 2008 and through the first quarter of 2009. Collectors and investors who are laid off don't have the discretionary income to afford continuing to spend on their hobby or investment-grade coins.
The big banks and hedge funds have recently begun moving from PMs to commodities/futures such as oil. At a time when U.S. refineries are running at 85% of capacaty and demand for gasoline at a 15-year low, the price of oil has risen 70% in the past two months!
To summarize, the price level in the coin market will continue to decline as fewer collectors and investors can afford to partcipate in the market and if the big instutional investors are moving from PMs to commodities, the prices of PMs will also put downward pressure on the coin market, IMHO.
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BONGO HURTLES ALONG THE RAIN SODDEN HIGHWAY OF LIFE ON UNDERINFLATED BALD RETREAD TIRES
<< <i>
<< <i>
<< <i>Looks like the top was in Sept '08...
imho, Most common coins are ridiculously overpriced right now. >>
I think this graphic tells it all. Collectors and to an extent investors drive the market. Big investor coin prices have declined this year. The massive layoff began late in the last Quarter of 2008 and through the first quarter of 2009. Collectors and investors who are laid off don't have the discretionary income to afford continuing to spend on their hobby or investment-grade coins.
The big banks and hedge funds have recently begun moving from PMs to commodities/futures such as oil. At a time when U.S. refineries are running at 85% of capacaty and demand for gasoline at a 15-year low, the price of oil has risen 70% in the past two months!
To summarize, the price level in the coin market will continue to decline as fewer collectors and investors can afford to partcipate in the market and if the big instutional investors are moving from PMs to commodities, the prices of PMs will also put downward pressure on the coin market, IMHO. >>
I think looking at a short time period beginning in summer of '06 is deceiving you, imo prices were high in '07 & in "06, they may have not been as high as end of '08 but dropping to '06 & '07 levels is not a LARGE decline by any means in my book. Using analogies to prove a point are valid except that this is a hobby not an investment and you are comparing investment with a hobby which imo is comparing apples to oranges. >>
Realone, I believe the collector drives much of the coin market, but one cannot totally ignore the Investor's contributions. I also believe that the chart showing the recent downturn in the coin market coincides inversely with the increase in unemployment. Fewer potential buyers & investors mean reduced demand.
Further, as major investment funds move to non-PM investments the PM prices will decline, which has a direct impact on collector coins containing PM.
That said, I do agree that this is primarily a hobbyist market. And as a percent of hobbyists in this market lose their jobs, there will be less discretionary aggregate income spent on their hobbys. All of these are indicators of a bear market and not a bull market.
Cheers!
Kirk
---------------------------------------------------------------------------------------------------------------------------------------
BONGO HURTLES ALONG THE RAIN SODDEN HIGHWAY OF LIFE ON UNDERINFLATED BALD RETREAD TIRES
<< <i>Realone, I believe the collector drives much of the coin market, but one cannot totally ignore the Investor's contributions. I also believe that the chart showing the recent downturn in the coin market coincides inversely with the increase in unemployment. Fewer potential buyers & investors mean reduced demand. >>
I think there may be *increasing* investor interest in rare coins these days, as few investors today trust stocks and cash gets less than 1% in many cases. I could be wrong but I suspect that that has reduced the impact of less discretionary collector income and unemployment angst.
I also think investors are being MUCH more picky about the right coins this time than in 1989. Back then money was often thrown at anything numismatic and we saw huge runups in generic MS-65 Morgans and MS-63 Saints. Investors are looking less for a "bucket of widgets" this time but more for quality and rarity of individual specimens, making it a little more like the fine art market. That the really nice coins are probably down no more than 10% as a group when so much collector money is out of the picture and most other investments have tanked by 1/4 to 1/3 or more suggests that investor interest is still keen, but unlike 20 years ago, it's very focused on a segment of the rare coin market which has historically never "crashed" in value.
<< <i>
<< <i>Realone, I believe the collector drives much of the coin market, but one cannot totally ignore the Investor's contributions. I also believe that the chart showing the recent downturn in the coin market coincides inversely with the increase in unemployment. Fewer potential buyers & investors mean reduced demand. >>
I think there may be *increasing* investor interest in rare coins these days, as few investors today trust stocks and cash gets less than 1% in many cases. I could be wrong but I suspect that that has reduced the impact of less discretionary collector income and unemployment angst.
I also think investors are being MUCH more picky about the right coins this time than in 1989. Back then money was often thrown at anything numismatic and we saw huge runups in generic MS-65 Morgans and MS-63 Saints. Investors are looking less for a "bucket of widgets" this time but more for quality and rarity of individual specimens, making it a little more like the fine art market. That the really nice coins are probably down no more than 10% as a group when so much collector money is out of the picture and most other investments have tanked by 1/4 to 1/3 or more suggests that investor interest is still keen, but unlike 20 years ago, it's very focused on a segment of the rare coin market which has historically never "crashed" in value. >>
Some good points! I suppose in due time, we'll know for sure.
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BONGO HURTLES ALONG THE RAIN SODDEN HIGHWAY OF LIFE ON UNDERINFLATED BALD RETREAD TIRES
the key is selectivity. You must buy truly top of the
line coins that have that wow look. Yes, these coins
may go down in value if and when the big bear hits,
tou will find that these coins will go up in value nicely
when the big bad bear is gone.
Camelot
What you really should have said was that the PCGS 3000 Index peaked in Sept 2008, not necessarily the coin market, and certainly not the total value of the coin market. How does one account for all the dreck that has been steadily decreasing in value since 2004-2006 that was low end for the grade? You know, the same old stuff that sat in the same dealer's case forever and circulated around the auctions looking for a home? This does not show up in the price guides which only assume solid quality coins which are solid for the grade. The ever-increasing prices from mid-2007 to mid-2008 tended to reflect the increasing prices for top quality coins. In fact the pop reports and price guides assume all coins are created equal and priced as such. But we all know that is not reality. The PCGS price guide simply does not account for lower-priced transactions on less than "all-there" coins. And as long as the market was in a mania stage with no one questioning the grade vs. pricing (ie there was always another whale waiting in line to carry the torch), then the game continued. This is borne out by the fact that the index has dropped only 3% since its peak in Sept 2008. Who honestly believes the market index is truly only down that miniscule amount when your typical MS/PF Type coin, commem, Morgan, 20th century dated sets, are down 10-20% on average with many more down as much as 30%? Even the solid for the grade coins are down a lot more than 3%. The CDN doesn't reflect these changes either. But what is happening is that buyers are requiring a much higher quality coin for the grade than anytime in the last 7 years before they pony up a price at CDN bid or higher. This allows those publishing the price guides to save some face (plus editing costs) and at the same time to prevent scaring the public.
roadrunner