Coin values in 2007 vs 2012
stevepk
Posts: 238 ✭✭✭
I resumed collecting coins in 2005 and added the bulk of my collection in 2007 through 2009. Shortly after, the economy tanked while gold prices and the unemployment rate skyrocketed. I now realize that most of the coins I purchased in 2007 to 2009 have significantly dropped in value. I was forming a United States Type Set and most of these coins were problem-free PCGS/NGC certified type examples in AU to low MS condition. I know the keys are known to retain the most value, but most type set collectors don't hunt down the 1878-S seated liberty half dollar, but rather a more common date in higher grade with nice appeal. Like most type set builders, this was my strategy.
It is safe to conclude that coins overall are worth less today than they were in the 2007 to 2009 period with the exception of common-date gold? If coin prices are currently down, is now a better time to buy?
If this theory does not hold true, the alternative is that I have been overpaying for my coins, which I hope is not the case considering I felt I did adequate homework at the time.
It is safe to conclude that coins overall are worth less today than they were in the 2007 to 2009 period with the exception of common-date gold? If coin prices are currently down, is now a better time to buy?
If this theory does not hold true, the alternative is that I have been overpaying for my coins, which I hope is not the case considering I felt I did adequate homework at the time.
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PCGS3000 index ten years:
http://www.pcgs.com/prices/Graph.aspx?range=10 years&filename=index
link1
Sub-index for Mint-State Type coins ten years:
http://www.pcgs.com/prices/Graph.aspx?range=10 years&filename=index
link2
Some folks will likely come in with their anecdotes about how their coins are up in value. However, overall, what the op is saying, is confirmed by data for the broad trend. On average, the data shows maybe a 5% to 10% dip if a person averaged in by buying during the 2007 to 2009 time period, and that is retail to retail. Subtract out typical dealer or auction house fees, and a person might be down more like 25% on average. Of course those on the other side, buying at wholesale and selling at retail can make that back, but being on that side usually involves significant time, effort and skill.
<< <i>If this theory does not hold true, the alternative is that I have been overpaying for my coins, which I hope is not the case considering I felt I did adequate homework at the time. >>
You did do your homework...."at the time". Everything was still in the UP mode. How do you predict the down?
Looking at the graph, I was not in the position to buy coins when trends were low. As soon as trends were up, I was finally in a position where I could buy coins. I collected coins and enjoyed the hobby.
Do many people believe now is the time to buy rather than sell since trends are low? Is it quite possible we may never again see prices as high as 2007-2009, or is it likely to recover once the economy recovers (even though it may take ten to fifteen years)?
What other periods of time were coins valued higher than normal, and how does the 2007-2009 period compare?
Is it safe to conclude my only mistake may have been to buy during the wrong period?
Overall, I would be thrilled to be paying 2006 prices for new acquisitions.
<< <i>As a collector if I want to own for example an 1870-s in ms65 or higher, I can't choose when i want to acquire it, I can't predict what prices will be at when I buy it, and I can't predict when it will come up for sale or what price it will go out at. My point is that when it comes up if I can afford it then I will buy it, it would be nice if it came out during a period of time when prices ar elow and the seller agrees that he should be influenced by the ow prices but then i wake up in a sweat.
ie you get oppostunities whenever they might come up and then you take your best swing at the plate. >>
This is the answer that will help you form a great collection and enjoy the journey along the way. There is wisdom in Realone's words (even if he does need to take typing lessons!).
I think we all have a limit within which we are comfortable. If you collect coins for a while - regardless what type - eventually you reach a point at which you have a lot of money tied up in your collection. You have to decide how much is "a lot" is, i.e. your limit. Then you have to decide if you can remain in a hold position, if you can increase your comfort limit, or if you have to sell to put your finances back on track. At that point, hopefully, you have enjoyed the ride, and you have savings, job security, and other assets that will allow you to hold or even keep going.
Coin collecting is known as the hobby of kings for a reason. What's your risk tolerance level?
If you can't stand the heat, stay out of the kitchen. Don't let your ego get you burned.
<< <i>As a collector if I want to own for example an 1870-s in ms65 or higher, I can't choose when i want to acquire it, I can't predict what prices will be at when I buy it, and I can't predict when it will come up for sale or what price it will go out at. My point is that when it comes up if I can afford it then I will buy it, it would be nice if it came out during a period of time when prices ar elow and the seller agrees that he should be influenced by the ow prices but then i wake up in a sweat.
ie you get oppostunities whenever they might come up and then you take your best swing at the plate. >>
Well said!!!
Is now a time to buy?? I am always in a buying mood, the only think that changes is the prices i am willing to pay. I am only buying from motivated sellers at this time and passing on the sellers that a flush and do not need the income.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
Unless of course you're collecting common stuff that is readily available at any show. If that's the case then look for the best deal at the time and don't bother speculating on future profits or losses. Are you collecting or investing? If you were investing, you wouldn't be buying common stuff that is readily available at any show ... would you???
Amat Colligendo Focum
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Amat Colligendo Focum
Top 10 • FOR SALE
Few can think of the hobby only as a hobby. I tend to treat collecting as hobby much like golf or any other hobby. That's not to say that I don't spend too much money indulging myself. When I played golf regularly, I spent around $100 a week on green fees. I spend $50-$100 month on goodies such as Titleist Pro-V 4 balls, balatas, gloves, shoes, etc. I'd periodically invest in specialized clubs. For me, golf was a $600 a month indulgence. I got a great deal of joy from the game but have nothing to show for my expenditures but a photographic memory of the layouts of all of the local golf courses and a nice set of clubs that stay in my closet. If my coin collection were to evaporate tomorrow, I'd have approximately the same residue.
and it sets us apart from practitioners and consultants. Gregor
1. besides common date gold, early copper coins in all grades are up considerably from that time period. I also suspect better date Barber halves likewise are well up from that time period. There are undoubtedly others, like type coins with amazing toning, etc that have done Ok. It's hard to predict what will be in demand in the future. Even if you choose a current 'road less traveled', you're taking a gamble whether that series will ever become in vogue and pay off for you. Find a series or two that you really like, and study up on it, build a nice collection - if it pays off financially down the road, so much the better.
2. Did you overpay? Hard to say - if you paid a 'fair value' at the time, then you did not overpay, you just bought as the market was peaking.
Even with the market down now, it is still very easy to overpay if you don't know what you are doing. Dealers offering overgraded or problem coins at retail+ prices are still making victims of collectors.
Even then, though, I was looking at the bigger numismatic picture and getting a gut feeling that it was going to be difficult for any common coins to appreciate much in the future--even if those coins command high prices now. Go to any show and it immediately becomes clear that the supply for almost everything far exceeds current demand---or, I'm thinking, demand going forward. It seems to me that building a collection with a chance to appreciate from here will require a real focus on rarity and quality. Which usually takes some big money--and a lot of luck. This makes it hard for me to justify buying any coins these days unless I can get them at issue prices, or unless I see something I like that's just totally off the radar. I admire people who are trying to build collections of mid-range series, but it's too risky for my circumstances.
Bingo!
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
It's usually not wise to buy when the market goes up so fast. That's usually the time to start lightening up if retaining your capital is the primary concern.
One only had to look at the real estate market in 2006-2007, stocks peaking in Oct 2007, and gold going vertical from Sept 2007 - March 2008 to see that things were getting
way too frothy. Coins hung in there longer than most until the summer 2008 ANA. But the writing was on the wall months before this. The best times to be buying coins was
from 1995-2002. Hard to say if today is a great buying opportunity. The 1989-90 bottoming process took 6-7 years. We're into this one about 4 yrs. The 1980 market peak
only took 2-1/2 years to bottom out. If not losing money is part of one's collecting game plan, then when you buy is almost as important as what you buy....at least in those
market areas where investors, speculators, and dealers play a heavy role.
What's interesting on the PCGS3000 chart is that the market now sits a bit below the 7 yr uptrend line. Notice how the 2008-2010 downtrend took a very typical and distinct 5 wave
structure. Then another 5 wave zig-zag mini-bounce into July/Aug 2011. I would call those an A and B leg. An initial 5 wave down pattern (the A) is most often followed by
another 3 or 5 wave pattern downward of similar magnitude or at least sideways consolidation (the C). 5 wave impulsive patterns are more often than not, followed by another
downward impulsive pattern at some point. Also of note is that the bounce into July 2011 was halted at the 68.5K resistance line from the April 2006 and Oct 2009 peaks. In other
words that 68,000 line is very strong resistance right now...and it repelled the expected retrace/backtest last year. And now the market is at a lower low. The overall pattern is
suggesting a C wave down to the 60K to 62K range. That would fit well with the recession picking up steam in 2013-2014 as long term economic cycles bottom out. Those charts
could turn bullish at any time. But at the moment they are forecasting more of the same (ie 2008-2010) rather than return of the bull. If someone has a bullish interpretation of
those charts, please comment. Of course if we looked at the PCGS top 1% of the market chart (ie what millionaires are buying). It could be and probably is bullish. But that has little
to do with what most collectors, investors, and speculators are doing. If the PCGS3000 can push back above the 68,000 line it will have potential again. What doesn't quite fit so far
is that the July 2011 bounce wasn't even a 20% retrace of what was lost in 2008-2010. Normally they are much more significant. It could be that a bigger bounce above 70,000
is still in the cards before initiating a final corrective C wave. The first two goals are to regain that red line 6 month moving average, and then the 68K level. If one collects only for
fun w/o consideration of money spent or eventually returned, then all of this is irrelevant.
If bought primarily for "investment" and not so much for fun of of owning the coins, and are forced to sell now or soon for some reason, you might have to take a loss. You've been a member here for 7 years and made 29 posts, or about 4 posts a year, have you ever posted a picture of any of the coins for opinions? Participated in any of the discussions about coins you're interested in? How much time do you spend looking at your coins and reading about coins? Or is your goal more about potential profit than the numismatic aspect of collecting?
Liberty: Parent of Science & Industry
were available from 1995-2002. Of course, even if you bought bargains in 2002, you might have been underwater if you held them into 2009. One must figure on a sell strategy
that hits market peaks rather than wait for the margin man to come knocking on your door. I purposely put the wave analysis into a less friendly block format such that only the
truly inquisitive would bother reading it. I know that it will be of interest to less than 1 out of 20 people here. From my own perspective, I wish I knew this stuff back in the early
1980's so that I could have taken much more advantage of the various market cycles from 1982-2002. It was only with my interest in investigating gold and silver in 2002 that
over the next few years I started learning more about market cycles and charting. Hey, they work. And anyone stuffing money into a 401K or IRA should know this stuff.
I would have made far better investing decisions over those 20 yrs and avoided many painful losses if I understood market cycles a lot better. One of my dumbest decisions was
bailing on the stock market in 1997 because it was "too high" at Dow 7500. Had I simply analyzed economic stats and stock charts they would have told a different story. And then
in 2000 after the Nasdaq took it's first big hit, I jumped in with 20% of my 401K after a 3 yr absence to buy those "bargains"....only to see the Nasdaq continue to go down and down.
That one cost me $10K and I sold out only after a few weeks or months. Too much pain...too little charting knowledge. It still all comes to buying low and selling high and knowing
when the mania is in full force. Maniacal coin prices were a common subject around here in 2007-2008. It wasn't like we were blind to it. But one can get swept up in it and start
believing your own hype. The worse that can happen by learning analyzing techniques is that you get nothing out of it. But I suspect you'll look at your rare coins, ASE's and AGE's a
lot differently than you do know.
<< <i>I'm assuming the charts shown on pg. 1 are for PCGS coins, as that's usually the case. Not that anyone would know for sure, but it seems the peak in value (from '06 to '09 or so) may be attributable in part to the competitive advantage PCGS has carved out for itself - related to the premium one pays for their slabs - at the expense of ICG, ANACS, PCI and others. In other words, would a graph of ANACS coins for this period, show the same market movement? Am I clear on this? >>
NGC prices peaked in both 2006 and 2008 to within 5-15% of PCGS. They always tended to carry a discount during the 1998-2008 period. It got slightly worse as the grading got looser.
What changed after 2008 was that this 5-15% gap became much larger....say to withing 5-30% of PCGS. Both PCGS and NGC coins got slaughtered into the March-April 2009 lows.
The NGC charts would look similar to the PCGS charts as the price ratio was probably fairly constant from 2005-2008. The NGC charts would show a much deeper dip in 2009-2010,
and therefore a much more bearish looking chart. That makes sense since the NGC product has lost additional steam under sniffer and stickerization. You can say a premium was
paid for the PCGS slabs. I've always looked at it as a deduction for NGC. For those PCGS coins that were lower end for the grade, they saw deductions too, though nothing like the
NGC coins. A chart of the ANACS3000 would probably look similar to the PCGS or NGC charts. The ANACS coins have traded at a similar ratio (or deduction) vs the other TPGs. All
that does is shift the chart downwards though not altering the shape. The value in the 3000 chart is that it represents a very broad collector based market over a long time period
and is therefore less susceptible to the swings of any specific speculative or promoted areas. I was uncomfortable with rare coin prices by 2004/2005 and really only became a slow
seller from that point. Anything I did buy was intended for flipping rather than holding. When you saw what things cost only a few years earlier it made you think twice.
<< <i>I was uncomfortable with rare coin prices by 2004/2005 and really only became a slow seller from that point on. Anything I did buy was intended for flipping rather than holding. When you saw what things cost only a few years earlier it made you think twice. >>
I returned to coin collecting in June of 2006, after a 25 year absence. A few months earlier, my father had told me that gold was predicted to more than double and hit $1600. His comment prompted me to do some research on the rare coin market. I was shocked by how low rare coin prices were, lower than prices in 1980 in many instances. After learning about third party grading, I immediately started buying with both hands on eBay. I was exposed to Heritage via eBay Live and soon began buying at Heritage as well.
In late December 2007, I started getting concerned about how quickly the market was moving up. eBay ran a listing promotion shortly after that Christmas, and I listed my entire collection, selling perhaps 1/3 of my holdings, all at a profit. At the January 2008 FUN auction, I placed over $50K worth of bids and bought exactly one coin for $503. The bidding was too aggressive for my taste. It seemed bidders wanted to win regardless of price and were relying on a rising market to reward their aggression. That was my cue to lighten up even more. When eBay ran more listing promotions in the spring, I liquidated a bunch of my coins in April and May 2008, all profitably again.
I was selectively buying throughout this time, although I was cautious about pricing and didn't "step up" as some people say. I was able to buy two coins at the Central States auction in April 2008; however, I was completely shut out at the June 2008 FUN auction. In retrospect, that shut out at Heritage was the peak of the market. By the fall of 2008, I could regularly buy at Heritage again. Since that time, prices on nickel proof type have gradually moved down and prices for silver proof type have moved up; however, I like that the frenzy atmosphere is gone.
The only area of the market that I remember going down in early 2008 was proof Mercury dimes. They have continued going down ever since.
<< <i> If someone has a bullish interpretation of
those charts, please comment. >>
Well...looking at the moving average for the mint state graph, it is above the price line and it is on an uptrend. If you were to zoom in on the graph and look at the last couple of years only, that graph (only) would actually look pretty decent.
At the opposite end of the spectrum are "fad" coins. These are the latest and greatest "investment vehicles," and they can spike rapidly in price when everyone piles on. They are the beanie babies of the coin market. When the market crashes, the people who most greedily acquired the fad coins at speculative prices are left holding the bag. In 1989, MS65 and better Morgans and MS65 and better Type coins were the fad coins. They were indeed a great investment- for the dealers who flipped them and didn't keep much inventory around. Not so much for everyone else! What were the fad coins that suffered during the recent market dip? What are the fad coins right now? This analysis can save you from taking a beating some day.
but if you look more closely, many of them made little progress even in 2007. 19th century gem silver type took a 30-40% hit in only 4-7 months by March 2009. Most of them
are not even close to recovering. For the most part they still haven't reached the 1989-90 highs nor even the early 1980 highs. Gradeflation tends to hide this truth. While it was
true that gold ran hard from summer 2006 ($600) to spring 1980 ($1000+) rare coins did most of their moving from by 2006. You saw a lot of neat collections coming to market in
2005-2006 as the earlier investors were starting to leave. Maybe they were shifting into the stock market, bullion, RE,or just cash.
Well...looking at the moving average for the mint state graph, it is above the price line and it is on an uptrend. If you were to zoom in on the graph and look at the last couple of years only, that graph (only) would actually look pretty decent.
That's not how I would view it. The MS type coin market uptrend line from 2003-2007 was sharply broken in 2009 at the 85,000 level. There was a brief bounce to try and head back
there but so far it's failed, excepting the top 5-10% coins that the high end retailers and boutiques sell like hot cakes. I'm sure a MS "top 5%" chart would look much more bullish.
Until the current resistance level of 85,000 is taken out, the chart is not particularly bullish. In looking back at the 40 yr PCGS3000 and MS type charts, they give even less reason to
be too optimistic. Both charts peak in 1990 far above current levels. And the recent MS type coin highs in 2008 just marginally exceeded the 1980 high (95,000 vs. 93,000) while falling
way short of the 1990 high (95,000 vs. 190,000 - or 50%). In both 40yr charts the 2008 highs look like more like weak bounces after the fall from 1990-1995. The current market of
83,000 is a ways away from the 1980 high of 93,000. First step is to recover 85K, then shoot for the 1980/2008 highs again around 93-95K. On the positive side is that the PCGS3000 is
in the 5th wave of a 1 yr downtrend that should soon reverse. Speculators take note. It's also enlightening to look at all the 10/40 yr sub-index charts. The rarities/key date 40 yr
chart is stunning. The fact that key dates & rarities put in a triple from the 1980/1990 highs and have since only pulled back around 10% from the 2008 highs could spark an interesting
debate. Housing put in more than a triple since 1980 with a much greater decline that 10%. However the SM put in a 13X increase since the 1982 low with only a 6% pull back. Key
dates and rarities seem to perform much like blue chip and tech stocks. The proof type coin charts look much worse than the mint state charts. Didn't expect them to look different.
Properly graded and rarer PCGS MS bust halves are probably realizing their best prices ever. But when you consider that any 66 CBH was fetching $22K in 2008, with the nicer ones
reaching $32K. Today that range is $12K-$22K range, a big change. Average or lower end pieces across the mint state range have not done well. Let's not even talk about poorly
NGC 65-67 bust halves have done. But if you have an attractive stickered piece in a nice date/variety/rarity, then I could see those top 20% coins separating themselves from the pack.
<< <i>It does sound like you bought nice coins, but at historical high prices. Combined with the usual buy/sell spread, they're probably worth somewhat less than you paid, but if you got enjoyment out of them, then you got more utility than the (current) cash value and may be able to break even or even make money when the time does come to sell them.
If bought primarily for "investment" and not so much for fun of of owning the coins, and are forced to sell now or soon for some reason, you might have to take a loss. You've been a member here for 7 years and made 29 posts, or about 4 posts a year, have you ever posted a picture of any of the coins for opinions? Participated in any of the discussions about coins you're interested in? How much time do you spend looking at your coins and reading about coins? Or is your goal more about potential profit than the numismatic aspect of collecting? >>
I was hoping to hear that I could maybe eventually break even over time. I don't care anything about the concept of the value of money over time. If I were not a collector, my money would sit in my money market account earning a whopping 0.25% interest. Interest bearing accounts earn practically nothing right now. If the money I put into coins in the 2007-2009 period can be resold twenty years for now for the same amount I paid regardless of inflation or earned interest, I will be happy. Even if I only lost a few dollars, I would still be happy. I will, however, be very disappointed if twenty years I decide to sell and find my coins bring 50% of what I paid. Of course, no one can predict the future and no one knows where coin values will be in twenty years, but I would like to think it is possible to break even considering quality coins are bought.
I do not feel the expenses of collecting coins can be compared to other hobbies. Suppose I buy an uncirculated Barber half dollar for my type set today. That Barber half dollar will be identical in 20 years as it is today. A pair of golf shoes bought today will be a pair of badly worn golf shoes in twenty years. A set of new golf clubs purchased today will be a set of used golf clubs twenty years from today. Money spent skydiving today will be a memory of skydiving twenty years from now. Money spent on technology today will be undesireable obsolete technology in twenty years, not to mention being well used and possibly broken.
In most other hobbies, money is spent on something that will lose value over time because the funtionality or usefulness of that item decreases over time. My 1837 dime was a nice uncirculated dime in 1837 and is still the same nice uncirculated dime today in 2012. Why should I expect to lose money on something that has not deteriorated over time and is in the same condition as when I aquired it? Unless demand drops, it should retain value. As of now, I can understand why current demand has dropped considering the fact fewer people have disposable income. That could change in the future.
I am a collector, not an investor. I am not trying to get rich from coins and not trying to make a profit. I just want to be aware of what to expect when I sell my coins. I am in no hurry to sell and can accept that now is not the time to sell.
I have been a member for 7 years with only 29 posts because I have not been online. I have been a member of the local coin club where we met in person on a monthly basis. When I had questions, I would simply wait for the coin club and speak to someone in person. My lack of online involvement should not imply I have only been a very casual collector. I just had a preference for face-to-face conversations over online.
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