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In a down market, what percentage of a coin's value is acceptable as a loss to move the coin?

For example, coin X in PCGS / CAC was selling for $1.9k-$2.2k range. You bought the coin for your collection and have $1.8k in to it. Now the coin is not really even selling for $1.6k in the market (looking at auctions and inventory) and it has been 12+ months.

Should you liquidate the coin and cut your losses (at say $1.5k) or should you continue to try to market the coin at some premium to what it might sell for today? Or do you keep it until prices go up (maybe never?) .

This is not entirely a hypothetical as I have bout 15-18 coins that fit this bill, and thinking should I dump them now and take the losses, or should I wait for the market to come back to where it was 2 years ago?

A good friend of mine who was an options trader told me that there is no such thing as a long term investment, there are just short term investments that go bad so cut your losses...but wondering if the same holds true for coins.

Comments

  • joebb21joebb21 Posts: 4,769 ✭✭✭✭✭

    There will always be coins you wish you hadn't sold when you did but there will also be others your glad you got out when you did.

    may the fonz be with you...always...
  • roadrunnerroadrunner Posts: 28,313 ✭✭✭✭✭
    edited December 20, 2016 12:02PM

    It depends on the coins' potential upside....if there are any. The coin market as a rule has taken some lumps from 2008 to 2016. A lot of coins are worth considerably less today...and could continue on that same track for years to come. Just because something is cheaper today doesn't mean it can't be a winner a few years from today. Current pops, how strong for the grade they are, potential to grade higher, how many more them will be made in the years to come, and whether a rising or lowering collector base for those particular coins all factor in. Some coins peaked in 1980. The next wave was 1989-1990. The next one was 2006-2008. And then just recently 2014-2015 for some of the cool pop tops (ie the best of Newman, Gardner, Pogue coins) and other high end, low pop monsters. You have to figure out if your coins have already reached their tops in those previous peaks. I don't think 95% of gem classic commems will ever reach their 1989 values again....at least not without a change in our currency system/devaluation.

    Your options trader is wrong about long term investments in the "better" coins. At least he was wrong from say 1970-2008 which I consider long term. Thing is, the pool of "better coins" has been shrinking since 1990. What was considered "good enough" then, isn't near good enough today. I'd review your coins in depth with some dealer or seasoned collector you trust. Can't hurt to get some different views. A rising rare coin market linked to inflation will probably lift all boats. But, when is that next train coming? And there's no limit on what % down one should accept before tossing in the towel.

    My brother owned a raw 1893 Columbian half back around 1990. I had it graded for him and it came back NGC MS65 with a CDN value of $3500. I actually felt the coin had rub and was a super slider....lol. In any case I called one of the top commem dealers on it and was offered $2800 sight/unseen. That seemed like a big spread to me. He cautioned me that I might want to take it as the market was thin and under promotion and that time. We decided to wait and watch. A year later they were down to $1250. Ouch. And that point we just decided bailing out was the only thing to do. He had paid $475 for it so it wasn't a crushing defeat. Those coins are $350-$400 today if you can sell them. So since the 1989 peak they've dropped over 90%....and hence it was never too late to take what you could and bail out. For all I know those are great buys today.....or not.

    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • roadrunnerroadrunner Posts: 28,313 ✭✭✭✭✭
    edited December 20, 2016 1:27PM

    A coin I have followed for 40 yrs initially went from $1800 to $30,000 in 5 years (1975-1980). 6 years later it went for $10K at auction. An absurd price drop for how rare that was. The previous owner took a -65% hit. 4 years after that it was worth $50K. 6 years later around 1996 it was worth around $25K. My gut feel was that the coin would eventually recover the previous $50K high and head to $100K. I was proved correct though it took some time. By 2004 that coin was worth $75K and by 2008 it was approx $100K. Its last time out in 2015 it brought $88K at Gardner. So just a declining price doesn't mean the world. Even the 1794 $ SP66 took a better than 50% haircut after the 1990 market down turn to under $500K. And today it's $10 MILL. It still has a "reason" to be worth a lot more someday.

    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • oih82w8oih82w8 Posts: 12,560 ✭✭✭✭✭
    edited December 20, 2016 12:22PM

    If you the time, hang on to at your current price. If you need to move it now...cut your price.

    I am working on "letting go" of a coin or two to get another...I just need to see what the buying collectors/dealers are wanting in their display case.

    oih82w8 = Oh I Hate To Wait _defectus patientia_aka...Dr. Defecto - Curator of RMO's

    BST transactions: dbldie55, jayPem, 78saen, UltraHighRelief, nibanny, liefgold, FallGuy, lkeigwin, mbogoman, Sandman70gt, keets, joeykoins, ianrussell (@GC), EagleEye, ThePennyLady, GRANDAM, Ilikecolor, Gluggo, okiedude, Voyageur, LJenkins11, fastfreddie, ms70, pursuitofliberty, ZoidMeister,Coin Finder, GotTheBug, edwardjulio, Coinnmore, Nickpatton, Namvet69,...
  • DollarAfterDollarDollarAfterDollar Posts: 3,215 ✭✭✭✭✭

    Like stocks, nobody can predict the market. If you don't need/want it, sell it at a FMV and move on. Your next purchase might be a huge winner.

    If you do what you always did, you get what you always got.
  • 291fifth291fifth Posts: 24,674 ✭✭✭✭✭

    You have to answer the question "Why isn't it selling at the price asked?" Is it because the collector base isn't there anymore? Is it because it was part of a "well managed promotion"? Is it because the coin is now regarded as overgraded? What is the chance the interest in the coin will recover in a reasonable period of time?

    All glory is fleeting.
  • jonrunsjonruns Posts: 1,197 ✭✭✭✭✭

    If you are planning on using the proceeds to buy different coins...their prices are probably down too....so you might be losing 10 to 20% but you may be getting a 10 to 20% discount on the NEWPs...

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