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Is the inability of a major dealer to buy good coins the best indicator of the strength of the marke

LongacreLongacre Posts: 16,717 ✭✭✭
In another thread, a board member of excessive prominence made the following statement:

“Seems to me the fact that a major dealer can't find coins and is practically begging to buy nice ones is the type of news that people really should know. It's a far better indication of the strength of the market than most signs.”

This is an interesting comment, and I have the following questions:

(1) Is the inability of a major dealer to buy good coins the best indicator of the strength of the market?
(2) If not ,what is a better indicator?
(3) If a dealer only deals in ultra, high end coins, isn’t it a given that they would have a much tougher time finding good coins than a dealer whose trademark is Widgets ‘R Us™? If so, does that change your answer to # 1 above?
Always took candy from strangers
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Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)

Comments

  • A better indicator would be rising prices at public auctions.

    Who is John Galt?
  • renomedphysrenomedphys Posts: 3,838 ✭✭✭✭✭
    No, that's just a fact of life.
  • yellowkidyellowkid Posts: 5,486
    More an indicator of that end of the market only.
  • keetskeets Posts: 25,351 ✭✭✭✭✭
    Longacre, please don't make me do another SongParody™ this close to the other one!!image
  • PerryHallPerryHall Posts: 46,895 ✭✭✭✭✭
    Sounds like this dealer needs to raise her bids.

    Worry is the interest you pay on a debt you may not owe.
    "Paper money eventually returns to its intrinsic value---zero."----Voltaire
    "Everything you say should be true, but not everything true should be said."----Voltaire

  • jhdflajhdfla Posts: 3,030 ✭✭✭
    Great coins are always available, if you are willing to pay the price.

    Question then becomes, how deep are you willing to bury your customers? image

    At what level do they meet resistance from high-end retail buyers? Multiples of sheet are not uncommon for amazing coins at auction, from dealers as well as the collecting public.
  • BearBear Posts: 18,953 ✭✭✭
    Lack of quality , high priced coins ,is also a sign of inadequacy

    of prices offered for the coins.The desired coins are being held

    off the market until the market goes from sluggish and soft to

    strong. I have often found ,that many wonderful coins become

    available as a market peaks and disappear when that market

    weakens.Looking at the mid market of coins from 1000 to 10,000

    dollars, the prices offered to buy coins by dealers has been disappointing

    for the past 2-3 years. It may be tied to the General Economy, but if the lust

    for mid value coins by collectors was so hot, then prices offered would be up

    and strongly instead of languishing in the doldrums.
    There once was a place called
    Camelotimage
  • LakesammmanLakesammman Posts: 17,464 ✭✭✭✭✭
    Seems like an indicator of low prices and people (who can afford to) hanging on to their coins waiting for better days.
    "My friends who see my collection sometimes ask what something costs. I tell them and they are in awe at my stupidity." (Baccaruda, 12/03).I find it hard to believe that he (Trump) rushed to some hotel to meet girls of loose morals, although ours are undoubtedly the best in the world. (Putin 1/17) Gone but not forgotten. IGWT, Speedy, Bear, BigE, HokieFore, John Burns, Russ, TahoeDale, Dahlonega, Astrorat, Stewart Blay, Oldhoopster, Broadstruck, Ricko, Big Moose, Cardinal.
  • 291fifth291fifth Posts: 24,710 ✭✭✭✭✭
    That definition of "good coins" seems to be too narrow to make any statement regarding the market as a whole.

    I want to know about how the vast middle of the market is doing. The billionaires and their trophies mean little to me.
    All glory is fleeting.
  • RYKRYK Posts: 35,800 ✭✭✭✭✭
    I think we tend to over analyze things here. image
  • MrEurekaMrEureka Posts: 24,427 ✭✭✭✭✭
    Seems like an indicator of low prices and people (who can afford to) hanging on to their coins waiting for better days.

    I don't think it's so much about prices being low, because they're not. I think it's more that most people simply don't have strong opinions about the direction of the market, so they're in no hurry to buy or sell.

    Of course, this may be the calm before the storm. But if we can't figure out what type of storm we're going to get, how can we know if we should buy or sell?
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • AMRCAMRC Posts: 4,280 ✭✭✭✭✭
    What that message is really saying is that they cannot buy coins at the discounts they are used to. A show is full of coins for sale - it is always just a function of at what price. So I do see this as an early indicator of stabilization.

    I also honestly think that with the newer generations of collectors/buyers coming in the disintermediation of dealers is iin full swing. I beleive there is more collector to collector buying/selling today then the hobby has ever seen do to the internet. This makes it harder for dealers to buy coins with the margins they are used to.

    Think about what happened to the full service stock brokerages 20 years ago when Schwab created the discount trade market. They were able to do this because of technology. The same thing is repeating itself through all of our areas of commerce.
    MLAeBayNumismatics: "The greatest hobby in the world!"
  • TahoeDaleTahoeDale Posts: 1,785 ✭✭✭
    No, it is not an indicator of a fast rising bull market, nor a declining market.

    Most dealers cannot find high end coins for sale, thru their contacts/previous clients, or from auctions. They are just not available. I think Andy hit it on the nose--this market is not going up or down, very fast-- so we see some uncertainty by owners of coins/and buyers as to the direction of the next market cycle.

    If it is down, we probably will see even fewer, and if up-- the sellers and buyers will come out in force.

    Unless, the major dealer you are refering to puts out some bids for high end coins that will draw out the big ones. I remember a list created by the dealer, and the point that few have been seen in years. Double the prices recently obtained, and coins will appear out of nowhere.
    TahoeDale
  • RYKRYK Posts: 35,800 ✭✭✭✭✭


    << <i>Seems like an indicator of low prices and people (who can afford to) hanging on to their coins waiting for better days.

    I don't think it's so much about prices being low, because they're not. I think it's more that most people simply don't have strong opinions about the direction of the market, so they're in no hurry to buy or sell.

    Of course, this may be the calm before the storm. But if we can't figure out what type of storm we're going to get, how can we know if we should buy or sell? >>


    This assumes that collectors will buy/sell in response to market forces.

    As a collector, probably to my detriment image , I have not allowed the market to significantly influence my buying and selling. Specifically to the point of selling, if I have nothing better to do with the money, be it another coin, a new kitchen appliance, a car repair bill, etc., why should I bother selling? And if there are enough collectors of like mind, how will a large enough number of coins ever make it back to the market?
  • JCMhoustonJCMhouston Posts: 5,306 ✭✭✭


    << <i> also honestly think that with the newer generations of collectors/buyers coming in the disintermediation of dealers is iin full swing. I beleive there is more collector to collector buying/selling today then the hobby has ever seen do to the internet. This makes it harder for dealers to buy coins with the margins they are used to. >>



    Never has a truer word been spoken. I still buy from a couple of specialist dealers, but the majority of my purchases come from auctions, where I am competing with them directly to buy the same coin.
  • roadrunnerroadrunner Posts: 28,313 ✭✭✭✭✭
    “Seems to me the fact that a major dealer can't find coins and is practically begging to buy nice ones is the type of news that people really should know. It's a far better indication of the strength of the market than most signs.”

    It can also be a sign that:

    1. The dealer is a tightwad and never pays up. There are more in this category than the other.

    2. The dealer doesn't know a quality coin when he sees one / or the dealer cannot grade and is expecting far more coin for the money than should be expected (ie built in profit with zero downside at all times).

    A better sign of market strength is when the average to lower end coins are moving as well. In the last upswing those didn't start moving and advancing in price until 2005-2007.

    roadrunner


    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • MrEurekaMrEureka Posts: 24,427 ✭✭✭✭✭
    As a collector, probably to my detriment , I have not allowed the market to significantly influence my buying and selling. Specifically to the point of selling, if I have nothing better to do with the money, be it another coin, a new kitchen appliance, a car repair bill, etc., why should I bother selling? And if there are enough collectors of like mind, how will a large enough number of coins ever make it back to the market?

    There have been and always will be a segment of the numismatic community that does not "play the market", and another segment that does. Obviously, it's the latter group that is most responsible for big swings in supply, demand and prices.
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • bidaskbidask Posts: 14,032 ✭✭✭✭✭
    Are not many if not most great coins transacted by private treaty, and if so how do we really know the real strength of the coin market?
    I manage money. I earn money. I save money .
    I give away money. I collect money.
    I don’t love money . I do love the Lord God.




  • BearBear Posts: 18,953 ✭✭✭
    I will sell the minute I get an offer that I can't refuse.
    There once was a place called
    Camelotimage
  • lordmarcovanlordmarcovan Posts: 43,895 ✭✭✭✭✭


    << <i>Is the inability of a major dealer to buy good coins the best indicator of the strength of the market? >>

    I doubt it's the best indicator. AN indicator, maybe, but far from the best.

    The inability of a major dealer to buy good coins could just be an indicator of how cheap he is. image

    (Or how small a margin he's willing to work off of, really.)

    Explore collections of lordmarcovan on CollecOnline, management, safe-keeping, sharing and valuation solution for art piece and collectibles.

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