Speaking of liquidity, if a numismatic property is liquid when you buy it, why does it suddenly beco

Longacre

In another thread, a board member of excessive prominence posted a thread about whether anyone here owns an illiquid numismatic property. I chimed in about my experience, and I see that others have responded as well.

My question is a bit different. If you purchased a numismatic property from a dealer (obviously the item was liquid at that point), why does the item suddenly become illiquid when it gets into the hands of the collector? Is it a matter of the dealer having greater access to the sales outlet for the item, or is it simply because certain items are just not popular? Is it indicative of the lack of a two way market in the numismatic property? Or is it for some other reason?

doh

Because you're one of the very few people - or perhaps only person - who wanted it at the price paid.

gecko109

Popularity of specific series follow cyclical evolutions. What may be hot (and thus command strong money) today, may be a cold series in 3-4 years. Classic commems come to mind.


Edited to add: As stated in RYK's post, in a few hours I will be purchasing a 1983 silver proof panda for $1,100. The coin consists of 27 grams of .900 silver. Should the panda coins become ice cold in the next few years, it is hard to imagine that I wouldnt be taking a SUBSTANTIAL loss on that coin if I needed to sell it.

TwoSides2aCoin

What goes up must come down. It's the law of gravity. That's why you have to catch it on the flip.

abitofthisabitofthat

<< <i>In another thread, a board member of excessive prominence posted a thread about whether anyone here owns an illiquid numismatic property. I chimed in about my experience, and I see that others have responded as well.

My question is a bit different. If you purchased a numismatic property from a dealer obviously the item was liquid at that point), why does the item suddenly become illiquid when it gets into the hands of the collector? Is it a matter of the dealer having greater access to the sales outlet for the item, or is it simply because certain items are just not popular? Is it indicative of the lack of a two way market in the numismatic property? Or is it for some other reason? >>



Not true about being liquid when you bought it. The term liquid implies a market with many ready buyers and sellers. Just because you bought it does not mean it had liquidity at the time.

rgCoinGuy

<< <i>In another thread, a board member of excessive prominence >>




Just curious, since you two seem to start most of your posts this way, is it time you just got a room?

jsf

because you, as the buyer, failed to grasp the impact of the "fool born every minute"-theory.

believe me, I know what I'm talking about.

291fifth

Many numismatic specialties have very thin markets. When one or two well-heeled collectors stop buying demand dries up in a hurry.

I recall some years back that two wealthy collectors would battle over Wisconsin National Bank notes. One of those collectors (actually a married couple) has since passed away. I wonder if demand for the Wisconsin Nationals is as hot today? Anybody know?

RYK

Liquidity can wax and wane over time. It is not a constant.

MrObvious

I think the previous posters have this pretty much covered, but just to prove that I deserve my handle...

liquidity = demand

Demand is the most difficult thing to control or predict in the "market." The thinner the market the less predictable.

ElKevvo

And the liquidity could depend on the price you are willing to part with the item...a common date circ Morgan might be pretty illiquid at 30.00 but will become very liquid at 8.00 given a silver price of around 12.00. In your example it sounds like the collector would be looking to get the same price for it which might affect it's liquidity.

K

rpw

I wonder if demand for the Wisconsin Nationals is as hot today? Anybody know?

Chet Krause is unloading his Wisconsin nationals and there are 906 of them in the Lyn Knight's PCDA auction. That market will be dead for years, decades maybe.

lkrarecoins

b/c you are the liquidity provider......now that you bought the coin, you need to locate a person who is willing to make a market and accept the risk of ownership