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The state of the rare coin market

ZoharZohar Posts: 6,629 ✭✭✭✭✭
I know this thread topic comes up once in a while, yet its always helpful getting perspective from each member's experience and viewpoint. While we are told the economy has recovered, see the art market, housing market expand, stock market at all time high, there seems to be deflationary pressures on rare coins.

Here are some observations -

1) Most of the better material flows through auction houses. Some large collections hit the market of recent setting record prices at high end.
2) Limited inventory with dealers who seem to be very cautious with their buying
3) Ebay has pretty much nothing to offer. Less quality and variety, dealers hesitant to run an auction due to weak support and some bad behaviors
4) High end material on auction does extremely well
5) Middle-High tier has lost buyer support/interest - this is apparent in US coinage as is in world.
6) Commodity prices remain flat
7) Good time to buy if you can find nice coins for sale

A few possible reasons I see for this is:

1) Coins are linked to commodity prices which have been flat
2) Too many large collections coming to the market at once - over supply relative to capital
3) Disposable income is spent elsewhere
4) Money is saved rather than spent
5) Strong dollar weakens foreign coin market prices
6) Commodity prices - perhaps hit dealers who were strong into bullion and lost much of their equity as a result of the drop.
7) Weak European economy?
8) Loss of interest in coin collecting

Thoughts?

Comments

  • SmEagle1795SmEagle1795 Posts: 2,135 ✭✭✭✭✭
    If this past week's NAC sale is indicative of the overall market in ancients, then there isn't any slowdown. Multiple coins realized nearly $1M, I was outbid to the stratosphere on one six figure coin and won another after an extensive battle, paying just a hair under my personal record.

    There are indeed a lot of people selling at the moment, but not all are knee-jerk reactions to the US market: much of the 2000+ lot sale was prepared last year from intact, completed collections, and prices remained consistently strong throughout all ranges.

    Granted, ancients are likely different from US/world because of a different collectorbase, but I certainly feel bludgeoned after this past week image
    Learn about our world's shared history told through the first millennium of coinage: Colosseo Collection
  • bidaskbidask Posts: 13,834 ✭✭✭✭✭
    I have been paring my collection of coins as I have far too many.

    Selling mostly thru Heritage Sunday auctions.

    Someone's getting a good buy!

    I do still buy but am much more picky and trying to rid
    myself of the habit of being a spontaneous buyer of a coin (s) of the type that
    frankly I'm selling out of my rambling collection.

    But when I do that it's the addict in me which I'm trying to tame.

    I am attracted to Mexico now. I think they are undervalued relative to Canadian.

    Also I have recently bough 3 ancients ( 1 aureus and 2 denari ) in the last year that have biblical meaning as those are the only
    ones I'm interested in.
    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.




  • JCMhoustonJCMhouston Posts: 5,306 ✭✭✭
    1) Most of the better material flows through auction houses. Some large collections hit the market of recent setting record prices at high end.
    True, but has been for quite some time. Back in the 80's and early 90's a lot of people would put their top collections through a high end dealer, not so much any more. I'm
    thinking particularly of companies like Spink and Baldwin's, back in the day if you wanted to find the really rare British stuff those were the places to go. And if you had really rare
    stuff to sell that is who you called. Now you go to the major auction houses, and business is so good they have all raised their buyers fee to 17.5%, and the good stuff keeps
    coming in.

    2) Limited inventory with dealers who seem to be very cautious with their buying
    Interwebz, people can see what a coin sold for at auction, then see it pop up on a dealers site for much more money, so it sits. I know a lot of dealers say they only make
    10-20% margins, and I believe it if they have a storefront, pay taxes etc., they have to sell at those prices. But that matters not when people see a coin that sold at auction for $X
    a couple of months ago in an auction, now it's at a dealers site for $1.5-2X. People forget that dealers have expenses to cover also.

    3) Ebay has pretty much nothing to offer. Less quality and variety, dealers hesitant to run an auction due to weak support and some bad behaviors
    I can't remember the last time I bought a coin off ebay. I used to buy a lot, but as you say almost no auctions any more. Everyone seems to start their coins at more than retail
    planning, I guess, to negotiate down to retail.

    4) High end material on auction does extremely well
    True, but has always been so, at least since the internet allowed people to see and bid on coins that might not have known existed in the 80's.

    5) Middle-High tier has lost buyer support/interest - this is apparent in US coinage as is in world.
    Indeed, with the advent of the TPG's pop reports and being able to look at thousands of dealers inventory I think most people shop based on price these days, just looking for the
    best price on a MS64/65 whatever. And to be honest the great majority of rare coins aren't rare at all, you just wait around until the right price comes along for the coin you want.
    I also think the middle class is still getting killed with finances, unemployment is down but it's a lot of people selling each other hamburgers on their way to work at Wal-Mart. As
    an example in the oil business we've laid off over 100,000 people in the past 4 months, and those were jobs paying from $65,000 (entry level engineering graduate) to $225,000
    (15-20 years engineering experience). The great majority of those people won't find a job paying similar amounts of money, so they need to make a major change in lifestyle.

    6) Commodity prices remain flat
    Unless a dealer was heavily invested in gold/silver I'm not sure this makes that big a difference except for common stuff.

    7) Good time to buy if you can find nice coins for sale
    Indeed, especially for better grade coins of common dates. For example over the past 8-12 months someone could have put together a run of Vicky 6d's in MS65 for probably
    1/2-2/3 of what it would have cost a couple of years ago. These aren't particularly rare, but attractive 65's aren't growing on trees either.

    1) Coins are linked to commodity prices which have been flat
    I think only for the most common bullion related coins
    2) Too many large collections coming to the market at once - over supply relative to capital -
    But the best stuff sells sells for mostly record prices
    3) Disposable income is spent elsewhere
    I don't think a lot of the middle market has much disposable income at present.
    4) Money is saved rather than spent
    And the average person doesn't have as much for saving or spending
    5) Strong dollar weakens foreign coin market prices
    Agreed
    6) Commodity prices - perhaps hit dealers who were strong into bullion and lost much of their equity as a result of the drop.
    Don't know
    7) Weak European economy?
    Definitely in the middle market, but rich people still have plenty of money
    8) Loss of interest in coin collecting
    I don't know if I would say loss of interest so much as all the financial things discussed. I've been seriously collecting since the 80's, and people have always said there are no
    young people, but they keep showing up every generation.
  • ZoharZohar Posts: 6,629 ✭✭✭✭✭
    Jeff - thank so much for taking the time to articulate your thoughts. I think that you fine tuned some of the points. Much appreciated.
  • TIF2TIF2 Posts: 233
    Maybe it's different for world coins, but within ancients I'm having increasing difficulty acquiring coins at auction. I'm solidly a mid-level collector with infrequent forays into 4-digit coins.

    Granted, I've only been collecting for a couple of years but the trend sure seems upward. I bet the recent NAC extravaganza will set a new record in ancient coin auctions.

    There are some specific types which have seen particularly large jumps-- types which I suspect gain their momentum from wide exposure on coin forums. Suddenly everyone is gunning for an example.

    Once in a while I see a specific coin sell for less than t it brought in a prior year but there will always be anomalies. On average, I'm noticing higher and higher prices.

    As for the better material flowing through auction houses, since the advent of a functional internet, has it ever been otherwise?
  • coinkatcoinkat Posts: 22,721 ✭✭✭✭✭
    Interest observations-

    My comments will exclude Ancients and Hammered issues.

    There is a continuing wave of interest and excitement in connection with World Coins. I see this in part because there is history, artistic merit and value. Rarity is worthy of discussing but certain world coins really do not surface that frequently. Many coins remain under appreciated and that will change as the world economy develops and matures in other countries.

    It will be interesting to pull this up in ten years and look back at our thoughts of today

    Experience the World through Numismatics...it's more than you can imagine.

  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    One more issue, which has not been mentioned. The market is rapidly becoming more sophisticated. Many relatively common coins that until recently seemed special to many now appeal to fewer buyers. Conversely, many truly rare coins that until recently were on few people's radar now attract more bidders.

    This is a trend that played out dramatically in the US market over the past 25 years or so. (For example, compare the markets for classic US commemoratives to that for condition census early copper.) For world coins, it's much earlier in the game, but the trend is clear.

    Although I wouldn't say that this is the primary reason for any recent shifts in the market, recognizing this trend is critical if you have a long term perspective.
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • dizzleccdizzlecc Posts: 1,111 ✭✭✭
    For Mexican Cap and Rays, the market is good but growing grade aware. Common dates in common condition have lagged and even fallen in demand and price. High and medium quality stuff has done well in recent auctions. You can still find some stuff on ebay and even true auction items about once a month.
  • I want to thank the contributors to this thread as it is a decent learning tool for a modest collector. I wanted to know what the term Interwebz means or if indeed there is a website. I checked via Google using "Interwebz"and "Interwebz - coin auctions". I could not find anything of use.

    Many thanks again for the education and observations.
    Sullykerry: Numismatic interests: Canada, Newfoundland, Japan pre-WWII, Ireland, Commemorative Coins (1892-1954) Celtic. References available on request.
  • ZoharZohar Posts: 6,629 ✭✭✭✭✭
    I believe Jeff was referring to the Internet in general.
  • OriginalDanOriginalDan Posts: 3,713 ✭✭✭✭✭
    I don't have much to add, but I enjoyed reading others' thoughts.
  • worldcoinguyworldcoinguy Posts: 2,999 ✭✭✭✭
    Good thread and in depth comments.

    I think you have nailed it on your assessment of the current market. It is a real shame that ebay has lost its position as a marketplace for the middle tier player. I imagine almost all of us have had a sour experience but I would not be in the position that I am today if I was not able to sell things at a decent level and make some money. Before ebay, the average collector was at the mercy of their local dealer or coin show. Although my coins were decent, I simply did not have the local expertise or knowledge to get decent money for things I had collected due to obscure nature of the material. I don't blame local dealers; they can't be everything to everybody and world knowledge is limited with most dealers. The realization that my collection had value was the fuel to reinvest funds and start to specialize. I fear the decline of ebay as a go-to market for the average hobby guy is going to harm the average collector, as it makes the common widget more difficult to move.

    On the topic of reasons, I fully believe that the average middle class American has less disposable income as they did a decade ago. I am certain that you could provide me with 100 "experts" that would tell me otherwise, but I am cynical about the true health of this US (and world) economy. I see too many statistics that make me question the strength of the supposed recovery: record people living from the government hand, miniscule emergency savings, low retirement savings rates, etc. With that said, we are all in different life stages with different influences. Personally, I am trying to be as responsible and conservative as possible myself as I have kids nearing college age in the coming years, so my collecting is fueled largely by what I can sell to raise funds.


  • ZoharZohar Posts: 6,629 ✭✭✭✭✭
    Brent I agree with your assessment of the economy. What bewilders me is the run up in the coin market in 2009-2012 or so... Such growth was experienced in various tiers of the area market as well. Some things are tougher to figure out.
  • Last night I witnessed a 1904 Philippine 20 Centavo MS 64 (only 11,000 minted) bid well over what I thought (fully researched) would be a reasonable price. The final bidding within the last one minute jumped by 75% of the last bid (three minutes before expiry).

    This small example indicates to be that coin buying and selling is more behavioral than based on rational economic value. My college degree and my masters degree were in the field of economics and finance.

    Returning to the question of the collector incomes are disjointed as we often here in the press. Real income growth for most of us has been stagnate (source Bureau of Labor Statistics - Personal Income). What the average individual seems to be doing is saving more rather than spending. Why? The Federal Reserve has made it next to impossible to obtain a real rate of return on deposited funds, social security and any other fixed income instrument that is not graded junk.

    Coin collecting like the bullion market will remain flat at best for the foreseeable future. Inflationary expectations are low. International central bank policy worldwide is to maintain zero interest rate policy (ZIRP). There is no economic reason to invest.

    So why buy coins? It is a rhetorical question. I collect purely for the love of history, design, cultural background - all behavioral reasons.

    As for E-Bay, my interests are only prurient. In the movie "Being There" Peter Sellers playing Chauncy Gardner said "I like to watch". It pretty much summarizes what I think of E-bay.

    As for this Forum - I have a different outlook "I like to learn".

    Thank you for this thread.
    Sullykerry: Numismatic interests: Canada, Newfoundland, Japan pre-WWII, Ireland, Commemorative Coins (1892-1954) Celtic. References available on request.
  • ZoharZohar Posts: 6,629 ✭✭✭✭✭
    Sullykerry52 - you noted a scarcity which seems to have the market support - as long as 2 or more people view it as a must have you will get such bidding activity.

    Not the same for middle tier level coins - what happens to the XF40-MS62 range common coin pricing trends? That is where there seems to be persistent weakness and price drop. The theories have been presented above.
  • neildrobertsonneildrobertson Posts: 1,179 ✭✭✭✭✭
    1) Almost all of my coins come from auction since it's always way, way cheaper than buying from dealers. I am basically forced to buy coins at auction.
    2) I know several dealers that have a decent inventory and often have coins I am interested in. They always want way too much. Buying from them is basically a last resort for me. When I do buy from them, I'm usually mad about it beforehand, during, and after.
    3) Ebay has some decent items in my area of collecting, but there's probably <5 items per week that I'd be interested in bidding on.
    4)yup
    5) Being a world collector, I think there are just too many things for people to collect. I just don't see how mid-range material can sustain prices when there is so much of it out there as a whole. I'm consistently surprised when US collectors buy F15 and below American coins that aren't true rarities. It's never a surprise to see that stuff doing poorly.

    IG: DeCourcyCoinsEbay: neilrobertson
    "Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me

  • SYRACUSIANSYRACUSIAN Posts: 6,445 ✭✭✭✭
    All in all, I agree with pretty much everything that has been said. Excellent comments by everyone, great topic Z. I would have liked MrEureka to give a world coin example of the phenomenon that he's describing and that he illustrated with some US categories, but I'm not sure I'll get a reply. image

    Not the same for middle tier level coins - what happens to the XF40-MS62 range common coin pricing trends? That is where there seems to be persistent weakness and price drop. The theories have been presented above.




    IMHO, they still haven't reached rock bottom. They will keep on dropping. Having said that, it does not mean that collector-dealers (practically everyone these days), can't make a succesfull deal with these coins. Experience is absolutely necessary for this of course. Personally, as a collector, I've realized this over 10 years ago and got rid of almost everything in that range, even if it meant that I had slight losses. Today they would be tenfold.

    Regarding the auction houses, I see some very expensive coins selling for record prices, that reappear for sale after a short period of time, and almost always, they sell for far less than they sold the first time around. Are the bidders suspicious that something's wrong with the coin to see it back for sale so quickly? Or is it karma punishing these quick flips? The end result is the same.

    I too buy a lot from auction houses, but practically always after the advise of a very knowledgeable person/dealer. And I still believe, that whoever is trying to build a memorable set or collection, he/she definitely needs to have great connections with several important dealers. It's impossible to build a world class set from auction houses alone, DIY. As for the argument that the dealers are asking much more, or that they have inferior material, maybe the truly top stuff is first shown privately to their best customers and it never reaches their tables at shows or websites. Some food for thought? image
    Dimitri



    myEbay



    DPOTD 3
  • marcmoishmarcmoish Posts: 6,209 ✭✭✭✭✭
    Such great comments and observations in response to a great thread - thanks Z

    Neil welcome to the boards - nice to see you jumped in and got your feet wet with your observations.image
  • santeliasantelia Posts: 138 ✭✭
    Having cut my teeth on early american coppers, and CWT's, I agree with Syracusian. It not only the dealers that keep the best stuff off the market, it is also the collectors. EAC collectors were (are) famous for swapping stuff, or borrowing for a couple of years to claim a complete collection. If you collect something obscure enough, everyone knows everyone, and the market doesn't need E-bay.

    As for collecting Asian coins, I rely on retired CIA operatives, and smugglers :-)

    Chinese cash enthusiast
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