2013 overview - any comments please?

SwK

The end of 2013 sales season are here – in brief in Europe and Britain it is only a few paragraphs.

Those numismatists and they are growing mainly via the internet who collects for historical interest are now able to buy at more stable prices for middle and lower quality pieces.

The finest quality like all Art is no different as it was in the 18th Century; individual collectors love quality and are prepared to pay a premium. 2013 was noticeably a year that there have never been as many buyers supporting the high quality pieces and creating new records prices.

British coins remain a fraction of US prices.

The US sold the AWESOME 1794 'Flowing Hair' Silver Dollar for $10m, what a wonderful coin; it was a gift purchase of 2013 for the collector or organization that acquired this piece of art. In my humble opinion it would not have surprised me if it had sold for $25m-$30m. A coin of a lifetime with a wonderful story.

Jeff
www.petitioncrown.com

JCMhouston

Agreed, the highest quality fetches big money, and the lower graded pieces languish. I started collecting British in 1985 and to be honest there just wasn't much price difference in grades. A GEF vs. uncirculated was maybe 10-20%, nowadays it can be orders of magnitude in price difference. If you are happy collecting AU and low mint state coins then there are some real bargains out there, including the major auctions, I remarked in the September sales if someone was wanting to put together a set of Vicky pennies in MS62-64 the prices were as low as I have seen in many years.

Zohar

Very strange dynamic in the coin market. I felt that the market rallied in its entirety during 2008-2012. I then see softness in the middle-high grades with higher grades/eye appeal being pursued.

Theory as to why:

1) Collectors took their money into the stock market chasing the ralley, while in 2008 the skies were falling and collectors wanted to own physical assets
2) The middle class is slammed and is flooding the market with more material, creating a softer market for the middle.
3) Currency exchange rate fluctuation
4) Auction houses offering too many lots in a single auction, without much support for the entire catalog
5) Collecting of coins is losing steam (probably a concern throughout the ages).

Happy holidays!

Zohar

EVillageProwler

Zohar - in general, I'm a buyer not a seller. I'm fine with prices staying sane for now -- especially for what I want.

Zohar

I think the area you play in stays strong.... The AU-low MS region got deflated.

LochNESS

Interesting to draw connection from 'Middle Class' to middle grades / middle market saturation. Here in the US, I think you're right, many buyers of middle market tend to be middle income.

I wonder if anyone has made a simple chart showing the relationships of super high grade pops to the pop of extreme upper class; high grade pops to upper class, middle grades to middle class pops, and everything under XF (good stopping point?) to poor class pops ... globally?

Of course this is relatively meaningless because some folks pay top dollar for AG slabs for their low-ball registry sets, and some are perfectly wealthy whom just prefer circulated coinage. But nevertheless I'd be intrigued to see what such a chart would look like.

Zohar

Unlike cars which are purchased under a leasing program, coins generally are bought outright so we are looking at disposable income along with preferences. There is also influence of currency exchange rates when foreign buyers are involved which in my view doesn't apply as much for US coinage which are mostly collected by US based collectors.

I would be very interested in deciphering the current trends from a supply and demand perspective. Definitely there is softness in the middle.

Cheers!

Silvereagle82

Great points Zohar.
Having been mostly on the sidelines the past 2 years and just getting back into studying the current market and feeling the urge to buy a few coins, I find my collection area (world gold) to be a contrast between moderate to flat pricing for the more common grade /availability coins to above average pricing for the higher grade with great eye appeal. (kinda like it always was but just a wider price margin IMO). I actually have had a hard time finding that unique high quality coin that I always tried to add to my collection in the past and when I have ... $$$$$$$$$$$.
So it put me in a conundrum ... makes me think of lowing my standard a bit to get a better price coin vs my core collection philosophy "build this collection within a common man’s budget ever so patient in buying that right coin at that right grade and at that right price; but with that said I'm always looking for a coin worthy of being added to my collection ... I think I will try to stick to the higher quality coins that elevate my collection because after all I'm a collector at this phase of my life (mid 50s) and quality trumps market timing ie. investment.

Zohar

Silvereagle82 - great to see you here - it has been a while!

LochNESS

The "middle class" continues to shrink while the upper and lower grow father apart. No doubt this will be reflected in the coin markets, but how?

syl

Like JCMhouston, collecting 30-40 years ago was a different animal ... XF, AU, BU had very little percentage price difference. It seems like today that new collectors (many are actually investors , not numismatics) are hung up on numbers ... a 63 is infinitely better than 62 and far subserviant to a 64. 30-40 years ago, EVERY collector knew how to grade .. now I would guess less than 50% since they would rather send the coin in for 10, 20, $30 and get it entombed in plastic with the other person's opinion written on it. In recent years, as a result of the above 3 items, you have a good portion of the bidding/buying population that relay on the number written on the slab and not the coin itself. The internet has opened up infinite opportunities for people from around the world to bid on 'numbers' from the comfort of their own home (with the coin not in hand), whether on Ebay or auction houses. Finding the good pieces to upgrade your collection is no longer in the purview of the best 'hunter'; it is within the power of the guy with the biggest wallet with his fingers on the keyboard. As long as Sheldon numbers and registry sets control and drive the market, the rich will get richer and the poor get poorer.

Zohar

syl - I believe what you are saying that investors have entered the market rather than pure collectors making this much more competitive. I would add that given the relatively low value when compared to US coins, you have seen demands go up for people converting over. Lastly, weakening dollar over the past 30-40 years and the Internet use has allowed for non-US (China. Russia, etc) to buy up at higher prices. It's well beyond the grading services which protect the investment and ensure the coin is secure, certified as genuine and easily tradeable. We have seen this in other assets (diamonds, art etc).

America is not as strong economically on a relative basis as it was in post WWII era and hence, its citizens have reduced purchasing power.

7Jaguars

Direction of market based on trajectory of last year?

I agree with much of the above. I don't see "real" collectors picking up these marquee pieces, or even Una and the Lion (at 50k + USD!). I see "collections" (accumulations??) come up for sale where a wealthy individual has commissioned a buyer to hooverize the market for these coins and then within a couple of years put them up for sale yet again.

This has coloured IMO our perceptions of the market as well.

asp

I agree, and in my opinion even the past 6-9 months have accelerated the pace of the spread between "the best" and lesser condition coins.

For example, in the recent Dix-Noonan-Webb auction, there were 4 Irish John pennies. I was prepared to add one to my collection.
Unfortunately, the best of the 4 (lot 3121) was auctioned last.
The realized price of the "lesser coin" lot 3009 was 130 pounds (estimate 100-150), compared to 980 pounds for the "better" coin (estimate of 300-400). It seems I wasn't only one waiting for the nicer coin.

The first auctioned (3009) was a perfactly acceptable coin, and actually I did not see a huge difference in condition (compared to the final price). I'm kicking myself for not bidding on lot 3009 and getting it for a reasonable price.

My numismatic lesson taken from 2013 is perhaps I can't always have the best, and that I will equally find enjoyment in the historical value of a somewhat less ideal coin.