An Opinion Regarding the Future of Grading & the Hobby

Catbert

Agree or Disagree?



From a Seeking Alpha analyst report on CLCT:



Hopkins Article



The other serious consideration for investors is how long the rare coin hobby has until it loses its demand and thereby the necessity of third party grading. It has been said how numismatics has survived world wars, plague, recessions and depressions but our world is changing fast. Not only are we moving towards a cashless society quicker each day, but the generations being born today up to the millennials are not collecting like previous generations did. They will also be a much larger percentage of the population soon. Minimalist lifestyles, increasing costs of living, and ever increasing debt levels are challenging the desire of the ANA and others to maintain this hobby.



Still, for the investor with a timeline in mind who is wondering how long they can hold the dividend there is likely a window of opportunity so long as Collectors Universe can maintain a healthy and dynamic company. By 2030 all baby boomers will have exceeded 65 years of age and make up more than 20% of the population. From my experience as a personal property appraiser, I can attest that when these persons pass away they will very often leave estates in need of services like PCGS. The younger relatives of the deceased will want to cash in on their family's collection and look for verification of authenticity and grade which PCGS and NGC will be able to provide.



As a numismatist I would love the coin grading industry to continue after the baby boomers have retired and passed on. Realistically though, this small and esoteric market (PCGS is the only publicly traded company doing this) will likely fold and yield to one or two companies providing this service to a much smaller clientele. In the last article I took a hopeful look and received some feedback that I should have been more realistic. This is the more realistic thesis.

291fifth

The role of debt in the future of collectibles such as coins should not be ignored. People who are heavily in debt are not going to be collecting coins or anything else. So far as coins themselves go, the cashless society will prove to be a major negative for the coin collecting hobby. This has been discussed in other threads.

Catbert

Originally posted by: 291fifth

The role of debt in the future of collectibles such as coins should not be ignored. People who are heavily in debt are not going to be collecting coins or anything else. So far as coins themselves go, the cashless society will prove to be a major negative for the coin collecting hobby. This has been discussed in other threads.

I agree and thanks for your comments.



Regarding that these themes having been discussed in other threads, most topics on the boards have all likely been discussed before!

chumley

I am 64 and know no one in my area under 30 that is interested in coins...so when all of us boomers die...who makes up the market for what we left behind?

TopographicOceans

Originally posted by: chumley
I am 64 and know no one in my area under 30 that is interested in coins...so when all of us boomers die...who makes up the market for what we left behind?

Coins will reset just like other overpriced assets.

Housing will be a major one. As the aged population dies off, there will be a glut of houses on the market with a smaller group of buyers.

Justacommeman

I'll take the other side of the coin



I think that a cashless society would actually eventually help the rare coin market.



Americans in debt is like apple pie and Chevrolet.



People counted the rare sportscard market out as well. It is at a silly all time high. So much so I think a bubble is actually forward. When it does it will reset just like all assets classes and or collectables.



mark

Walkerfan

Originally posted by: Justacommeman

I'll take the other side of the coin



I think that a cashless society would actually eventually help the rare coin market.



Americans in debt is like apple pie and Chevrolet.



People counted the rare sportscard market out as well. It is at a silly all time high. So much so I think a bubble is actually forward. When it does it will reset just like all assets classes and or collectables.



mark

Fifty years ago, at coin shows, the demographics were the same----not many under 30 then, either, yet here we are.



As people age they have more disposable income and recreational time to get interested in and to pursue such things.

291fifth

The very high end of the market will continue to exist. Look at stamp collecting, a dying hobby if there ever was one. Yet the high end of the stamp market is still strong. If you have material that APS exhibitors need in order to win gold exhibit medals you are going to do well. If you have anything else you will be lucky to get 5-10% of catalog. The problem for the hobbies is that that very high end of the market probably consists of only 5% of the current or former participants in the market. The other 95% of the participants will be lost and the material they were interested in will plummet in demand and value.

Gazes

Originally posted by: Justacommeman

I'll take the other side of the coin



I think that a cashless society would actually eventually help the rare coin market.



Americans in debt is like apple pie and Chevrolet.



People counted the rare sportscard market out as well. It is at a silly all time high. So much so I think a bubble is actually forward. When it does it will reset just like all assets classes and or collectables.



mark

Agree !

Justacommeman

Originally posted by: Gazes

Originally posted by: Justacommeman

I'll take the other side of the coin



I think that a cashless society would actually eventually help the rare coin market.



Americans in debt is like apple pie and Chevrolet.



People counted the rare sportscard market out as well. It is at a silly all time high. So much so I think a bubble is actually forward. When it does it will reset just like all assets classes and or collectables.



mark

Agree !

and Chevrolet actually died and came back to life like a Games of Throne character.



291fifth your points are all valid and could prove to come true one day.im not being dismissive. But I don't think so and I'm usually Dr Doom



mark

ms70

I think baby boomers need to have their wills require their coins to be buried with them.

PaleElf

I agree with the author of the article. I am in my early 30's and was turned onto coins by my grandpa. However, I don't know many people my age or younger with collections of anything, let alone coins. Most are focused on paying for/off college. When my friends inherent coins, I pick one or two out and then they immdeiately go sell them to an old dude in a coin shop. I also agree the move toward a cashless society will present a huge demand issue, as the younger generations will not have much interest.

Unknown

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roadrunner

As long as there is rising debt, there will be a need for alternative investments to protect the consumer/investor. Coins have so far been a major factor/player. I don't see better collectibles in general going away as long as we continue to have rising debt and money supply (ie M2). Collectibles are one of those few things where your investments aren't mixed in with all the Wall Street "paper" and are under your own control. While the govt can eventually tax or legislate it all away, that could be decades left to go.

CoinZip

I get a kick out of reading reports that claim the numismatic hobby is a diminishing population. Do these analysts look at web site traffic data? According to google there are about 673,000 monthly searches in the US for the term coin, 201,000 for silver coins, 40,500 for rare coins, 74,000 for coin collecting.....



Google is just one of the sites folks use to find information about coins, check out this facebook post, over 15,000 people reached in a weeks time.







What is diminishing is the printed world, the younger generations will find all their information online. The only people paying $100 or more for a reference book are collectors or specialists.

bronco2078

Originally posted by: CoinZip
I get a kick out of reading reports that claim the numismatic hobby is a diminishing population. Do these analysts look at web site traffic data? According to google there are about 673,000 monthly searches in the US for the term coin, 201,000 for silver coins, 40,500 for rare coins, 74,000 for coin collecting.....

What is diminishing is the printed world, the younger generations will find all their information online. The only people paying $100 or more for a reference book are collectors or specialists.

If you cross about 10 PCGS forum geeks searches off the list the number will go down by 95%.

Unknown

This content has been removed.

TigersFan2

It's rare I've ever read anything intelligent from the Seeking Alpha articles. They generally are anyone with a biased interest in the stock and are writing from the perspective to try to sway others. I've seen a lot of crap in Seeking Alpha articles. Anyone can write and submit one.

halfhunter

Originally posted by: ms70

I think baby boomers need to have their wills require their coins to be buried with them.

Bet'cha that would cause a lot of midnight digging ! ! !







HH

Catbert

Originally posted by: TigersFan2

It's rare I've ever read anything intelligent from the Seeking Alpha articles. They generally are anyone with a biased interest in the stock and are writing from the perspective to try to sway others. I've seen a lot of crap in Seeking Alpha articles. Anyone can write and submit one.

Fair point, but how many call themselves numismatists?

silver2000

I honestly believe one day we will be cyber attacked. We will wake up and all of our electronic bank accounts will be wiped out. The all digital millennials will have a new appreciation for a hard asset such as a gold double eagle. Collector coins will go up and down with the markets but I beleive our hobby will stand the test of time in some form.

ShadyDave

There will always be collectors, it is in our DNA. Since we have stopped being nomads, we learned to save resources for the future (winter, drought or whatever). Collecting things has been going on and will continue on as long as humans are around: coins, cars, dolls, food, books, video games, shoes, clothes.



While the things we do collect change from generation to generation, we (young people) still collect thing that have value to us: coins, cars, jewelry, movies(DVD's), vintage computers, star wars memorabilia, magic the gathering cards, michael jordan sneakers and on and on and on. Having tangible assets these days is out of the norm, but that is the whole point I collect coins and stack PM's. I can hold it in my hand unlike most other investments I have! I don't get nearly as much excitement looking at my investment or savings account numbers slowly going up as I do when I get a shiny new coin in the mail...

Cougar1978

not worried

am investor buying and selling, taking retail sales profit here and there

no plans leave to estate. like coins but am in RCI for finc other interests

will gradually sell off reduce inventory as end of life nears

agree economy and debt can stifle investment - collectors will gravitate to coins under $50 or $100

the new world of work sux - workers treated like pack animals - job problems can decrease RCI, force unfav forced liquidation

successful RCI requires buy low / sell high - being cognizant of mkt cycles helps

shorecoll

Here's one to make your head spin and realize we really don't know...there is a theory that with the current pace of change in medical research, the last person who has to die of old age (in the US) has already been born. What does it do to collecting habits when today's teenagers could live 200 years or more. There's an old quote that says something like you have to be a genius to make a million dollars from scratch in 10 years, and you have to be an idiot not to in 100. So...?