When the coin market was on fire in the late 1980's...

GoldenEyeNumismatics

were there a lot of people that thought the new prices were actually sustainable? Or did most people know it was a very temporary thing?

metalmeister

I remember folks going into the local coin shop ( I was an observer) pulling out
rolls of newly cashed payrolls buying up mostly silver bars and 90% Silver at $20, $25, $30......... per ounce!.
Every coin was going up,up,up with no end in sight. Home mortgage intrest
rates were up to 19% for a time.

RedTiger

Inside a bubble, the majority always thinks prices are going higher, much higher. Folks using sound reasoning and logic often sell 50% below the peaks because that's where logic would indicate that prices have already become unsustainable. This applies to all bubbles, all markets, it is part of human nature, crowd psychology and the nature of markets.

The old time pamphlet on bubbles is "Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay, first published in 1841. Human nature hasn't changed much since that time. Greed and fear still drive all markets, including the coin market.

ctf_error_coins

During the Internet Bubble of 2000 all the old timers were saying this is wrong. No way these prices are correct for these stocks.

The shorts started shorting like crazy and the market went up, and up and up. Many shorts got wiped out.

Of course the old timers were right about it being overbought, but it went way higher than they thought.

In the long run the old timers were right.

Unknown

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ricko

Well stated RedTiger. Cheers, RickO

kwmorgan

<< <i>During the Internet Bubble of 2000 all the old timers were saying this is wrong. No way these prices are correct for these stocks.

The shorts started shorting like crazy and the market went up, and up and up. Many shorts got wiped out.

Of course the old timers were right about it being overbought, but it went way higher than they thought.

In the long run the old timers were right. >>



Sounds a lot like the housing market of late, eh? Glad I thought "Bubble market" on housing in 2005 and steered clear of buying one. That decision has saved me thousands of dollars.

I think I am becoming an "old timer"...LOL.

ctf_error_coins

. >>

I think I am becoming an "old timer"...LOL. >>



Me too from past experience

Bear

There really are no paradigm changes in investing. The same old rules

still apply. The price of a stock is still self regulated by the increase in

earnings and the velocity of that increase as well

as dividends.. The same general rule applies to

PMs. Except in commodities we have availability, demand as well as a hedge

factor against future inflation risks. The rules can, by public hysteria, be suspended

for a time, but reality always returns values to the mean. This means that a whole

lot of good but misinformed people lose their shirts in investments that never really

existed. Mankind has followed such investment frenzies as long as investments have

existed in a cultures scheme of things.


The old standard warning still applies

"Bears make money, bulls make money....but pigs get killed and eaten."

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Bayard1908

You should read David Hall's book if you want a feeling for this time in the market. He explicitly stated this was your last opportunity to buy and if you didn't buy NOW you'd be stuck just looking at pictures of coins instead of owning any.

Bayard1908

<< <i>I remember folks going into the local coin shop ( I was an observer) pulling out
rolls of newly cashed payrolls buying up mostly silver bars and 90% Silver at $20, $25, $30......... per ounce!.
Every coin was going up,up,up with no end in sight. Home mortgage intrest
rates were up to 19% for a time.
>>



That was late 1979 and early 1980, not the late 1980s.

Bear

Since Realone has done so well,

he is buying the first round of drinks

and maybe the second round as well.

yellowkid

I was dabbling in coins at that time, had bought a few commems, luckily my other collecting interests took over. I can remember a local coin dealer telling me that people on Wall Street were putting together coin portfolios that were going to trade like stocks, who knew where it would end?

GrumpyEd

<< <i>You should read David Hall's book if you want a feeling for this time in the market. He explicitly stated this was your last opportunity to buy and if you didn't buy NOW you'd be stuck just looking at pictures of coins instead of owning any. >>



I've been reading his book "A Mercenarys Guide to The Rare Coin Market". It's a good book. His prices for 64+ RB Lincolns are interesting, $725 for an S-VDB and $1500 for a 14-d.

Fairlaneman

"It is currently worth $ $925k"

Its not worth anything untill you have the money in your pocket. Its the same as anyother item that someone puts a value on.

Oh yea.... by the late 80's the coin market was heading toward the dumpster.

Ken

CaptHenway

<< <i>were there a lot of people that thought the new prices were actually sustainable? Or did most people know it was a very temporary thing? >>



The bubble of the late 1980's was generated by talk that a mutual fund was going to be set up that would invest in rare coins. Had this happened, the bubble would have sustained itself. When word came that the fund was not going to launch, it popped.
TD

Unknown

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Bear

Point schmoint, I want a root beer float.

Unknown

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