The growing divide between the best and the rest...

MrEureka · January 28, 2013 12:56AM

Probably since the bottom of the market in the early 90's, there has been a clear trend that has seen the best coins (in all categories and price ranges) rising dramatically in value and the rest more or less stagnating.

I attribute this to two primary trends. First, the market has become increasingly sophisticated. Second, the rich have continued to grow richer.

Two questions:

First, when the market finally tanks, will the gap between the best and rest narrow? (Some might argue that strong hands do not sell their greatest treasures into weakness. Others, myself included, will argue that the most inflated prices will be the ones that deflate the most.)

Second, after the next bear market, will it be the widgets or the rarities that first rise from the rubble? Will the buyers be primarily old-timers, or will a new generation of collectors and investors take the lead? In other words, what will the next cycle look like?

braddick · January 28, 2013 1:07AM

Your entire premise rests on your declaration there will be a bear market to such a degree either/or "widgets or rarities will rise from the rubble".

I disagree with your premise/question and thus there is no satisfactory answer.

Mowgli · January 28, 2013 1:08AM

I think there is another reason - the people who buy "the rest" no longer have money for coins. I also think "the best" have gone up because of Registry sets and the mindset that goes along with competing to have the best.

yellowkid · January 28, 2013 1:09AM

The top shelf will keep much of their value. We've seen this in ALL markets in the last few years, real estate tanked, unless you were on the water. It's been the same in every collecting field I follow , coins, antique toys, painted American Country furniture, early ceramics, you name it, the best pieces have retained their prices the most. With the exception of real estate, I don't see those middle markets coming back.

Coinsponge · January 28, 2013 1:09AM

Probably depends on the severity of a pull back. If it was severe then even the best would take a hit. I would go for the widgets to recover first due to the probable timidity of early buyers. Just my opinion.

DeliaBug · January 28, 2013 1:10AM

What I have always read, and seen, is that collector coins do hold somewhat steady, while the 'investor' material has the wild swings. To clarify that meaning, investor material was designated as MS-65 and above but I'm not entirely sure that definition holds true today.

MrEureka · January 28, 2013 1:11AM

I disagree with your premise/question and thus there is no satisfactory answer.

Are you suggesting that the coin market will never crash again? If so, how do you figure that? Seems to me that every market in every thing crashes sooner or later.

Steve · January 28, 2013 1:42AM

Listen to Laura. I think she has the right key. The true rarities will continue to rise in price over time because the people who can afford those coins will, in general, over time, continue to be able to afford those coins. I think history is in support of this and that is why that 1794 dollar is truely worth $10 million dollars today and will be worth more the next time it is sold. It will ONLY be sold when it is worth more. JMHO. Steve

BryceM · January 28, 2013 1:43AM

What clear evidence is there that this is a new phenomenon? Hasn't it always been true that the best coins have always demanded the highest premiums?

The real difference might be that with the widespread application of TPG that there is less market ambiguity about what is good and what isn't. The experts in any series have always been able to distinguish great coins from the dreck. Now, even a absolute novice can know with reasonable certainty that the coin in front of him is one of the 10 finest known just by reading the wrapper and looking at pop reports.

Obviously the enormous grey area between absolutely common and top pop is full of nice coins, doctored examples, overdipped junk, and problem pieces. There will always be overgraded coins at the very top too. Navigating those waters requires some careful sailing, but it isn't the wild west like it used to be.

MrEureka · January 28, 2013 1:47AM

The true rarities will continue to rise in price over time because the people who can afford those coins will, in general, over time, continue to be able to afford those coins.

I agree, although I also believe there will be ups and downs.

However, at the moment, I'm more interested in the price relationship between "the best and the rest", and how it may change in the coming decade or so.

oreville · January 28, 2013 1:55AM

Andy,

I wished I knew the answer to your question.

I wonder if anyone really can be sure of the correct answer.

Bayard1908 · January 28, 2013 2:04AM

<< The true rarities will continue to rise in price over time because the people who can afford those coins will, in general, over time, continue to be able to afford those coins.

I agree, although I also believe there will be ups and downs.

However, at the moment, I'm more interested in the price relationship between "the best and the rest", and how it may change in the coming decade or so. >>

I think ultra rarities are way ahead of themselves and will eventually either stagnate or drop. The only wild card that could prevent this is the onset of high inflation or hyperinflation. In regard to the rest of the coin market, I think ultra rarities and condition rarities will do worse in a bear market than the market in general.

braddick · January 28, 2013 2:07AM

<< I disagree with your premise/question and thus there is no satisfactory answer.

Are you suggesting that the coin market will never crash again? If so, how do you figure that? Seems to me that every market in every thing crashes sooner or later. >>

There will be highs and lows, always have been, always will be.
Your term, "rise from the rubble" suggest such a dramatic turn of events I don't see likely.

I don't see today's six million dollar coin(s) turning into $600,000. coins and I don't see today's $140. common date MS65 Morgan turning into tomorrow's $5,000. coin.
That would be dramatic. That would be, "rising from the rubble".

So, your question based on how you stated it is a premise I disagree with.

MrEureka · January 28, 2013 2:18AM

There will be highs and lows, always have been, always will be.
Your term, "rise from the rubble" suggest such a dramatic turn of events I don't see likely.

I don't see today's six million dollar coin(s) turning into $600,000. coins and I don't see today's $140. common date MS65 Morgan turning into tomorrow's $5,000. coin.
That would be dramatic. That would be, "rising from the rubble".

So, your question based on how you stated it is a premise I disagree with.

OK, "rising from the rubble" may have been overly dramatic, so I'll be clearer. I'm talking about market declines on the order of 40% or more, on average, at some point in time, and from some level.

TwoSides2aCoin · January 28, 2013 2:25AM

Will the hobby survive and will the collectors step up to the plate for the scraps that falls from the Master's table ? No sense in thinking it won't go on throughout the ages in the market. However radical the change, there is evolution and adaptation. The rich get richer and the poor collect widgets. One survives, while the other thrives.

Is that cause for celebration , or what ?

renomedphys · January 28, 2013 2:43AM

All this talk about the "best" I think gives the wrong impression. While I do definitely agree with the sentiment of the OP, I think Andy could just as easily have used the words "nicest" or "most difficult to acquire" to describe the coins which will lead the gap.

Viewing a well thought out and executed collection, there are almost always standout coins. A meticulous collector may actually have a high percentage of standout coins in his collection. These are the coins I'm talking about, the ones that imbue the owner with a sense of pride, and the viewer with a sense of awe. It's sort of like a coin that would make an educated collector say, "Wow! Where did you find that?", or even maybe just, "That's nice."

Coins like these primarily fall into two categories: absolutely rare, and conditionally rare. And then of course, a coin could be both.

lava · January 28, 2013 2:45AM

I see competitive bidding at Heritage, Stacks, and ebay, for coins at all price points. When there is a surprise to the sale price, more often it is to the upside than the downside. There may be no soft landing in the event the market for eight figure coins dries up, but for coins between $50 to $10,000, I think there is a group of people (whether you call them investors or collectors) ready to pounce when they see market weakness, translated as a buying opportunity. In other words, far more stability at the "rest" level.

ebaybuyer · January 28, 2013 4:20AM

"when the market tanks" ? could it get worse than it is ?

BillJones · January 28, 2013 4:30AM

My perception is that the middle class is getting pounded and will continue to be pounded. What is killing them is the weak job market. Sure, the unemployment numbers might be going down, but that is deceptive. Are the formerly unemployed getting jobs that pay like the ones they lost or are they settling for less? How many people are leaving the job market and therefore not counted among the unemployed? Finally I don't see people getting raises the way they used to get, which means they have less disposable income for luxuries like coins.

The bottom line is "stuff" is going to stagnate. The people used to buy it just can't afford to buy as much of it any more. Really nice material will hold its own or get more expensive. And yes, I see a bigger gap forming between the rich and the middle class and poor. This country is going to look like a lot of countries do in South America, a few very wealthy people and a lot of other people with little chance of really getting ahead. That is the price you pay for wealth and income redistribution policies.

DeliaBug · January 28, 2013 4:34AM

<< My perception is that the middle class is getting pounded and will continue to be pounded. What is killing them is the weak job market. Sure, the unemployment numbers might be going down, but that is deceptive. Are the formerly unemployed getting jobs that pay like the ones they lost or are they settling for less. How many people are leaving the job market and therefore not counted among the unemployed. Finally I don't see people getting raises the way they used to get, which means they have less disposable income for luxuries like coins.

The bottom line is "stuff" is going to stagnate. The people used to buy it just can't afford to buy as much of it any more. Really nice material will hold its own or get more expensive. And yes, I see a bigger gap forming between the rich and the middle class and poor. This country is going to look like a lot of countries do in South America, a few very wealthy people and a lot of other people with little chance of really getting ahead. That the price you pay for wealth and income redistribution policies. >>

+1

ColonelJessup · January 28, 2013 4:36AM

pennyannie · January 28, 2013 6:33AM

I think it is far easier for a 1 million to a 10 million dollar coin to go down in value than a 5k coin. The pool of buyers at the upper end is much smaller than the pool of buyer that can buy a 5k coin. My take is a coin that went up weekly a few years back could not stand the test of time, now that a correction has worked on some of them... time will tell.

On the big coin last week had legend not jumped in head first the coin may have stalled at 5.5 million. I would not want to put that same coin up for auction again in the next six months. If they got the holding power they can keep the price at 10million plus.

All you need on the upper crust is 2 determined rich bidders.

CoinZip · January 28, 2013 7:01AM

First, when the market finally tanks,
will the gap between the best and rest narrow? no

Second, after the next bear market,
will it be the widgets or the rarities that first rise from the rubble? both
Will the buyers be primarily old-timers, or will a new generation of collectors and investors take the lead? I would love to see a new generation of collectors, but it will be the old timers

roadrunner · January 28, 2013 7:06AM

The real difference might be that with the widespread application of TPG that there is less market ambiguity about what is good and what isn't. The experts in any series have always been able to distinguish great coins from the dreck. Now, even a absolute novice can know with reasonable certainty that the coin in front of him is one of the 10 finest known just by reading the wrapper and looking at pop reports.

Really? This would mean that the only 1857-0 half graded higher than MS64 is the best available. The pop 1 MS65 realized MS64 money last time out (ie the coin is no better than
a decent 64). I could make the same comment about the pop 1 MS65 1841 half and a lot of other coins. Or how about the pop 1 MS65 1849 seated quarter? A novice would/could get
their heads handed to them buying by the pop reports. And in the cases of the above coins, you might not even have the best one graded. Absolute certainty? Not in this market.

I would add a 3rd reason to Mr. Eureka's opening post. That is that there are just too many darn coins below the top pops. And those pops continue to grow. In each new market cycle
a host of coins that used to be good enough/low enough pop, are in fact no longer "good enough." That's why coins like an MS66 1794 $ continue to widen the gap from most other coins.
The way things are going in this current market the also-rans are not appreciating in price, hence they have a fairly short distance to fall. Whether the big dollar rarities fall depends on
how much money we continue to print along with a rising debt. If rarities fell in the 1990-1993 then I don't see why they won't fall in say the 2014-2017 period (or some similar time
frame).

To mitigate this rising disparity, the TPG's continue to add monickers to coins to make them more special than the next one. It's another form of "no coin left behind." But right now
there are a ton of NGC and non-stickered coins getting left behind. If those somehow don't get pulled up at some point they will act as an anchor on the rest of the market. I guess you
could consider those like the Mortgage Backed securities of the coin market. Currently the FED is buying up that stuff as well as Fannie and Freddie. The average guy in the coin market
has been the consumer of those lower end coins. And as Bill Jones mentioned he's not buying like he used to.

Edscoin · January 29, 2013 6:47AM

If the Market tanks, I would not want to be holding a Ten Million Dollar Coin!

roadrunner · January 29, 2013 6:57AM

If the market tanks, I'd probably rather be holding a $10 MILL national treasure than a few hundred thousand widgets. And in a crash, even gem 19th century type becomes a widget.

The $10 MILL coin may actually hold value, even if it didn't during the 1990-1993 crash. Back then it wasn't recognized for what it is today. A safer place to be would probably be
in problem free semi-key circ dates that have huge demand in the $5 to $500 range. Problem is, you'd probably need a Brinks' truck to move your collection around. You want to
be where the manipulators and speculators haven't been yet. But $10 MILL of anything just might buy you a speculative-sized position as well.

Justacommeman · January 29, 2013 7:07AM

All ships have not risen when this tide came in

All ships will not sink when the tide goes out

Depends

MJ

Lakesammman · January 29, 2013 7:29AM

The bear market I fear is when the boomers decide to sell and the next generation could care less about coins.

lava · January 29, 2013 7:38AM

<< My perception is that the middle class is getting pounded and will continue to be pounded. What is killing them is the weak job market. Sure, the unemployment numbers might be going down, but that is deceptive. Are the formerly unemployed getting jobs that pay like the ones they lost or are they settling for less? How many people are leaving the job market and therefore not counted among the unemployed? Finally I don't see people getting raises the way they used to get, which means they have less disposable income for luxuries like coins.

The bottom line is "stuff" is going to stagnate. The people used to buy it just can't afford to buy as much of it any more. Really nice material will hold its own or get more expensive. And yes, I see a bigger gap forming between the rich and the middle class and poor. This country is going to look like a lot of countries do in South America, a few very wealthy people and a lot of other people with little chance of really getting ahead. That is the price you pay for wealth and income redistribution policies. >>

Your points about the economy are well taken, but I disagree with your attempt to apply that in describing the economic impact on the coin market. If you have been looking to buy, you likely will not take issue with my observations:
1. When I bid on ebay, I find myself up against a bunch of bidders, and the sellers are getting good prices.
2. When I don't bid on ebay, I still see decent items generating good interest, with competitive bidding, and good prices.
3. Dealer inventory seems to be moving. A lot of the new stuff is sold before it can even hit the websites.
4. Heritage and SB are both having success with auctions of coins at many different price points, and the market seems to be very healthy. There are still some bargains to be had, but not so low that any sellers are losing their shirt.

So, while I agree with your sentiments about a sluggish economy, a deceptively high unemployment rate, etc., I do not see a correlation with the coin market, and I hope that remains the case. Even the stock market has been remarkably resilient in the past few years.

Unknown · January 29, 2013 7:41AM

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SmEagle1795 · January 29, 2013 7:45AM

Only buy coins that are worth your time to sell.

roadrunner · January 29, 2013 7:49AM

Yes, the stock market has put in a very nice 3 year cyclical bull market bounce in the middle of a 15-20 yr secular bear market. Price will once again revert the mean
after a washout in 2013-2014. Coin prices have been aboard this same QE boat from 2009-2013 as well. As long as QE is continually pumped higher then no problem.
The 1966-1982 stock market cycled between Dow 650 and Dow 1100 about half a dozen times. Once Dow is in the 14,000 range it will revert back to the bottom of the
trading channel once again. If oil gets too high in price like it did in 2008, it will be one of the catalysts to crush the market right back down again. We're now all conditioned
once again to think that 2009-2013 is once again the norm for stocks and "risk-on" investments. Hard to say what coins will do on the next stock downturn. But we already have
one data point from the 2008-2010 period. Coin prices lagged the Oct 2007 stock market top by about 9 months (similar to commodities). For the time being, coin buyers are
looking for ways to put their cheapening US dollars to work.

bidask · January 29, 2013 8:30AM

<< Probably since the bottom of the market in the early 90's, there has been a clear trend that has seen the best coins (in all categories and price ranges) rising dramatically in value and the rest more or less stagnating.

I attribute this to two primary trends. First, the market has become increasingly sophisticated. Second, the rich have continued to grow richer.

Two questions:

First, when the market finally tanks, will the gap between the best and rest narrow? (Some might argue that strong hands do not sell their greatest treasures into weakness. Others, myself included, will argue that the most inflated prices will be the ones that deflate the most.)

Andy, you say you have watched a clear trend that has seen the best coins (in all categories and price ranges) rising dramatically in value and the rest more or less stagnating since the bottom of the market in the early 1990's,

You also say the market has become increasingly sophisticated and the rich grow richer.....

You also suggest that your in the camp of 'inflated prices'....

Do you think prices are inflated for the 'bes't or the 'rest' ? Or both?

If you say the 'best' then clearly you are not a believer in the trend you just outlined above which in your own words has gone on for 22-23 years?

How could you not believe in that trend.......which by the way has included some horrible bubbles.......yet the trend remanins up......so I am not so sure about a crash.

If there is a crash it could be at a much , much more higher level when it comes to great coins......as trends can last a long time.

Second, after the next bear market, will it be the widgets or the rarities that first rise from the rubble? Will the buyers be primarily old-timers, or will a new generation of collectors and investors take the lead? In other words, what will the next cycle look like? >>

I think it will be a combination of new and old collectors....clearly their are international bidders coming in for US ultra rarities and you also know that there has been substantial growth in foreign coins, whose trend is accelerating......the overall world has more cash discretionary cash.

Nic · January 29, 2013 9:23AM

<< The bear market I fear is when the boomers decide to sell and the next generation could care less about coins. >>

Don't worry Lakes. I'll still buy your coins ... some of them.

The boomers won't sell en masse. When the coin market has crashed, it's been based on demand and perception, not on supply.

The best is the best for a reason IMHO.

K

Cougar1978 · January 29, 2013 10:41AM

I believe the future is in Modern World Silver. Silver is around where gold was in the mid 1960's and destined to rise into triple digits. My dental Hygienest / Assistant was giving me some "advice" that silver will be going to $450 an ounce. I gave her my card and advised her to call me so we can design her investment plan.

I like modern commem silver dollars, high quality ASE's, and many modern world silver issues. I think slabbed MS / PR 69 modern commems anywhere at melt + $15 or less are a bargain. We have been loading up on many of these we can get cheap.

As far as traditional rare coins, the money has simply been wrung out of many issues and the sticker game can only prop up others so far. I do believe affordable classic coins under $500 have a future espeicially considering set builders. We retail many better date Peace Dollars in AU 50-58 as set builders are looking for inexpensive coins to fill the holes. This is what coin collecting is all about. I recently sold a nice MS63 PCGS Peace Dollar for $375. The price jumps up dramatically in MS 64 and into the stratosphere in MS 65. Collectors are seeking nice coins to fill the holes without being buried in high price coins. They like coins that are wellstruck, brilliant, having nice luster, and no spots. Large coins like dollars and halves especially the Franklin issues have a good future. We have been hoarding the 1950 PF issue in grades MS64-66.

As far as the ultra expensive coins the rich buy? Can't continue forever and the younger generation isn't looking to pay big money for coins when that same money would finance a boat, BMW, or quality Sugar Baby (or combo therof). As far as making money off rich collectors you can only go to the same well so many times aka the 19th century tulip craze in Holland. I was talking to a guy around 45 at a show who told me he spent $150 K over the last 6 years on coins and girls (sugar babies, strippers - he was wearing some kind of strip club VIP shirt with wing like symbols like a pilot would have - he got his wings he said). I asked him how much he spent on coins and he said $25K. He indicated most of what he spent on coins were USM gold and silver issues and rolls of ASE's. He showed me what he bought at the show - nice roll of circ Indian cents he had picked up for around $75. He also had some circ common date Walkers he had picked up around melt to fill some holes in his album. He did have a want list which included MS 65 issues of the 1881-S Dollar and 1938-D Buffalo nickel as these were recommended by an investment book (about 15 yr old) he was carrying around. I sold him a 1938-D NGC 66 Buffalo nickel from a stack of this issue I have at my table (with better dates scattered around). When I am set up at a show and see most of the dealers are my age or older I wonder what will happen when we all die off. The classic designs will always sell but many are type collectors not looking to spend more on better dates.

I believe the TPG's may merge or be replaced by some new grading / holder methodology all together. A self grading holder that stores the coin in a vacuum (I have seen so many nice cons go bad in holders from reaction to heat, humidity,and the atmosphere) would be an improvement. I see these priced for no more than the whitman hard plactic holders (possibly an innnovative Chinese product like the BCW slabs - love these things as we self slab a lot of raw coins not worth it to spend money with TPG and they mesh well with our slabbed PCGS / NGC coins).

astrorat · January 29, 2013 4:04PM

Boy I hope the divide continues ... and grows. The "best" need to keep increasing and "the rest" need to continue to stagnate or, better yet, fall in price. I collect "the rest" so let's keep those prices low!

Unknown · January 29, 2013 4:36PM

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Sonorandesertrat · January 29, 2013 4:37PM

<< The bear market I fear is when the boomers decide to sell and the next generation could care less about coins. >>

I agree with Lakes.

I also think that the gulf between the cream and the rest will widen. Part of the reason for this is that, until relatively recently, prices of many top-shelf coins were being held down by those of somewhat lesser quality coins. CAC is starting to make a difference in this regard. Even if a mini-crash occurs, the cream will come back in price faster than the rest.

roadrunner · January 30, 2013 12:00AM

Quality coins are rising. CAC just ensures that everything else stagnates or falls in price.

Considering that the 1794 $ and other rarities have been rising since the 1940's, I don't think that trend is going to stop as long as we are on a debt-money fiat system.
If the system gets reworked, then all bets are off. It's been a good 65 year run so far if price inflation and transfer of wealth are the FED's two primary goals.

Nysoto · January 30, 2013 1:17AM

<< Probably since the bottom of the market in the early 90's >>

I collected through the late 1980's into the "bottom" of the early 90's. The bubble and crash of that time was with the MS65 and up coins, circulated coins were hardly affected. I was collecting various circulated early type, early copper, and just getting into bust halves, their prices were stable or gradually increasing during that period, then took a bigger jump in 1995-2005.

So, the highest will fall the furthest again, but I don't think it will happen for awhile as we are easing out of the great recession.

MidLifeCrisis · January 30, 2013 1:25AM

All of this is speculation. Why bother discussing it?

tradedollarnut · January 30, 2013 1:28AM

<< All of this is speculation. Why bother discussing it? >>

What fun is not speculating on things??

MidLifeCrisis · January 30, 2013 1:54AM

<< 

<< All of this is speculation. Why bother discussing it? >>

What fun is not speculating on things?? >>

OK, I concede that speculating can be fun and cause lively discussion. It's just that, after I finished reading through this thread, I couldn't help wonder what was the point.

But I'll play along...

First, when the market finally tanks, will the gap between the best and rest narrow?

No. The higher the price, the smaller it will fall. In other words, the best (higher priced) coins will hold their value better.

Second, after the next bear market, will it be the widgets or the rarities that first rise from the rubble? Will the buyers be primarily old-timers, or will a new generation of collectors and investors take the lead? In other words, what will the next cycle look like?

The rarities will rise first. See my answer to question one above. However, the buyers will continue to be predominantly old-timers. Lakes' response is worth repeating: The bear market I fear is when the boomers decide to sell and the next generation couldn't care less about coins.

SmEagle1795 · January 30, 2013 2:16AM

My crystal ball sees five segments to the market, with space in between them as people don't just hunt by price-tag:

$1M+ (Currently very strong. To play here, you obviously need considerable funds but this is where the famous coins of legend reside - no pun intended)

$150K-$750K (Recently some pull back, especially in early gold at this end of the market from the pieces I've been tracking. To play here, you need strong hands but this is more attainable by the 2%-ers)

$15K-$100K (A growth market. This is an area where desirable coins exist that are attainable by a broader public. I expect this to continue growing as baby boomers retire, realizing that the coins they lusted after in the Red Book are actually within their reach)

$2K-$6K (These contain the higher-end collector coins and are usually gateway drugs for collectors to start amassing real value in their collection. The average collector is unlikely to jump from rollhunting to buying $500K coins, and this is a stepping stone to get their feet wet. In the long term, I expect these to retain their value but perhaps not appreciate as quickly as the higher value coins which will fall more into the "investor" class as well)

$0.01-$500 (These are the "everything else" - the non-keys, common silver, etc. which fill Whitman albums worldwide. They're where most of us got the collecting bug and therefore priceless in our hearts but for those with more disposable income, they would rather get better examples. This end of the market (and probably a bit higher) is where the most risk is in my eyes as the populations of these coins are considerable)

I think it is very fair to say that today's young generations are largely ambivalent towards coins that aren't in their bank account. Baby boomers on the other hand are probably the highest population of coin collectors we've seen. The baby boom started in 1946 and went until 1964, meaning that they are all 49-67 right now. I see the stock market's irregularities as a blessing in disguise as it makes more people interested in alternate investment vehicles (myself included) and real-estate is no longer the safe haven as well.

I became interested in coins because of my father's collection and the time I spent with him learning about it. Over the course of the next 11-29 years (the time it takes for the baby boomers to reach today's average life expectancy of 78 years), thousands of collections will be passed down to their children. Most of these will probably be Whitman folders of coins pulled from circulation, but even base metal value will impress the recipients as long as they don't just pop the coins out and spend them. Of the collections which do have considerable value, we will likely see them come to market in auctions and I expect to see an increasing flow of new material for the next 20+ years. The prices on the mid-high range coins will likely continue to be strong as the younger baby boomers buy the coins of the older baby boomers for the next 20 years. However, I do worry about college debts and who will end up having to actually pay for them long term, and the ability for the next generation to afford houses with the heavy debt already on their shoulders.

The key in my eyes is how much time the baby boomers spend with their children/grandchildren to make coin collecting personal and important in their lives. The "keepsake" factor is helpful - children will realize that this set of metal discs meant something to their loved one, as is the age of the coins, which produces a novelty factor in itself.

We also have to remember what the State Quarters have done for us. The resurgence of coin collecting around the State Quarter program was just the first wave, likely fueling collecting for young generations. Once they get older, they'll be cleaning out their house and find their State Quarter map and hopefully have that spark of coin collecting rekindled when they realize they have enough money to afford more coins. I recently bought a house and was pleased to see that they had a State Quarter map hung on their wall (in a frame worth far more than the quarters themselves). It was clearly an important point in their lives. Even if 98% of transactions end up being cashless (I haven't touched a coin in any transaction this year yet), there will still be the historic appeal of them (Grandpa, you bought HOW much candy with this coin??)

Long term, I see world/ancient coins rising quicker than US coins. We don't like to admit it, but the US has had a very xenophobic existence for most of its history but the world is a much bigger place these days. Coin collecting grew in an era where the US focused very closely just on the US, and with the barriers of travel and information broken, an international interest is much easier to build. That being said, the inverse is also true - it is possible that other countries will take an interest in the historic coins of the US, as some have already done, but I don't see this happening as much as other countries taking interest in the coins of other countries, simply because of the span of history available to them (220 years for the US Mint versus 2700+ for coinage in general).

I do think this next generation is going to be looking for alternative investment vehicles - they've been brought up in an era of massive swings in stock prices, a bad real-estate market, and financial uncertainty. Tangible assets are a great way to ensure you have something at the end of the day, but the prices of them are collector driven which will always make it hard for pure Wall Street types to jump on-board (antique cars to a non-collector could be worth the same as a Honda Civic, paintings can be worth the same as a $100 digital copy, coins can be worth face/base metal value).

That being said, as I step down from my crystal ball soapbox, as long as there is disposable income, there will be collectors. Worst case, as the prices fall through the floor, I'll be there waiting to sweep them up, but I'm afraid that while there aren't as many as in prior generations, there are enough young collectors today to prevent that from happening.

Unknown · January 30, 2013 2:21AM

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topstuf · January 30, 2013 2:27AM

My opinion is that it depends on WHO is buying the wondercoins and their mindset in doing so.

If it's "fast money" from newly rich entrepreneurs, I think it will unravel like a cheap watch if something like precious stones becomes the topic of brag parties.

I can't imagine it is collectors seeking the best for their "sets" except if it is just competitive with the...... ooooohhhhh.... REGISTRY! In which case I still see them disposing of it when the novelty wears off or most have seen and oohed and ahhed long enough.

I see..... NO ...... disposable income from the destroyed working and middle class that would make it possible even be able to CONSIDER ..... coin collecting... as time progresses.

And I see ...NO... "income" at all for the older people who used to have a shot at a reasonable return on investment income.

I guess it's why I have kept only my older and larger EARLY coins and swapped out the others for bullion.

So I'm prejudiced.

cladking · January 30, 2013 5:27AM

<< 

<< The bear market I fear is when the boomers decide to sell and the next generation could care less about coins. >>

I could see this being the fear for each prior generation of collectors. Yet the batton keeps getting passed and the race just doesn't seem to ever end. >>

In the past it was a steady turnover with older collectors dropping out on a
fairly consistent and regular basis. This time is different because so few new
collectors started between 1965 and 1999. Nearly 80% of current coin collec-
tors will retire over the next 15 years. This has never before been true nor
have such huge numbers of collectors been poised to retire.

In a nutshell the hobby needs the states quarter collectors because there
just aren't enough middle aged and younger collectors to pick up the baton.

Fortunately many collectors are pretty independent and are not easily discour-
aged or there wouldn't be as many as there are left.

Justacommeman · January 30, 2013 5:45AM

When I was young I couldn't care less about coins and didn't collect them as a kid. Zero interest. Now that I have some grey in my hair and no longer run the 40 in 4.5 seconds coins and their merits appeal to me. I'm sure there will be others that follow this path. I did not collect coins to be hip, that is for sure.

MJ

originalisbest · January 30, 2013 5:53AM

I LOL (strongly!) at the thought of paying $15K and up for a coin as a "growth market." It will be so only for the 1%'ers. Most normal people (that's the other 99% of us) consider spending $20 to $100 on a coin a luxury, and to spend $500 on a coin will either get you in trouble with your spouse, or have to be a long, thought-out, scrimp and save process. I haven't spent close to $500 on a coin in many, many years (not counting bullion) and don't ever expect to, for years, years and more years to come.

Most people aren't hedge fund managers -- most people are very happy with their cheapie Mercs and Walkers (if those designs interest them) at $5 to $50 a pop, thank you very much -- and that's where the vast majority of people will stay.

The uber-wealthy can worry about their particular flavor of cake, and decide where best to put that spare $50,000 to $200,000 -- the vast majority will never have the luxury of such "problems."

Unknown · January 30, 2013 6:01AM

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SmEagle1795 · January 30, 2013 6:11AM

<< I LOL (strongly!) at the thought of paying $15K and up for a coin as a "growth market." >>

My post was based on observations of empirical data. Whether or not someone finds it funny, it is what it is.

The growing divide between the best and the rest...

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