Changes in prices of rare coins has nothing to do with supply and demand

Ed62 · July 8, 2013 10:47PM

It is the exchange of one asset (the coin) for another asset (a stock of money).

Discuss:

LindeDad · July 8, 2013 10:52PM

Those with the largest supply of money trump demand in most cases.

BryceM · July 8, 2013 11:14PM

No economic model is perfect but the concept of the supply-demand curve is just fine when it comes to rare coins. Exceptions to the "rules" abound.

MrEureka · July 8, 2013 11:30PM

Since every transaction has to be negotiated in one way or another, there's no such thing as a "market price" for a coin. Therefore, any attempt to determine a price by calculating supply and demand, or (for that matter) by looking at recent price history, is just an estimate.

Actually, you could say the same of every market, even highly liquid ones. Think about the mechanics of "flash crashes" on Wall Street and it becomes obvious.

AMRC · July 9, 2013 12:39AM

It has everything to do with Supply and Demand. Supply is not mintage, it is what remains and the grade. What someone pays for the coin is a proxy for demand. (Notice I did not say willing).

Kaline6 · July 9, 2013 1:58AM

1904-O Morgan.

410a · July 9, 2013 4:52AM

First lesson in economics ;Supply can create demand. If you pause to contemplate it in this light (metaphor). You will understand a lot about the "coin market "as well as, economics.

410a · July 9, 2013 4:53AM

Why would you say that mike? Well, because Say would say that's why.

DennisH · July 9, 2013 5:06AM

Changes in prices of rare coins has nothing to do with supply and demand

If you say so.

Davideo · July 9, 2013 5:22AM

<< ...Supply can create demand... >>

And demand can create supply, just ask the Chinese counterfeiters.

donzme · July 9, 2013 9:38AM

<< 1904-O Morgan. >>

I believe you mean 1903-O Morgan.

magikbilly · July 9, 2013 9:47AM

<<It is the exchange of one asset (the coin) for another asset (a stock of money).

Discuss:>>

The real fun and craziness is the intangible stuff between those two things you mentioned!

Eric

Kaline6 · July 9, 2013 10:03AM

<< 

<< 1904-O Morgan. >>

I believe you mean 1903-O Morgan. >>

Yup, thanks!

ricko · July 10, 2013 1:49AM

It certainly does....true, there may be other factors from time to time, but supply/demand is a major factor. Cheers, RickO

JustNeedCoins · July 10, 2013 2:45AM

Well.... a "rare" coin is one of limited supply. Demand is not measured in the total amount of people who want an item; it is measured by the number of people who are able to purchase. You toss in a few people who want an item with limited availability, prices elevate. Seems like a classic example of supply/demand.

steveben · July 10, 2013 3:39AM

there's a preponderance of empirical data that proves it's all about supply and demand. you have:

estimated survival rates and estimated mintages
number coins available on the market at any given time
number of coins graded
number of coins for any given grade

these all give you supply information.

you also have:

historic price guide prices
historic grey sheet prices
historic auction prices
historic tax data
historic show prices
show attendance
collector base
dealer base
number of coins sold

these all give you demand and price information that you can cross reference. yes, there is always a margin of error. but, with this much information at hand, that margin becomes insignificant.

once you have all that...there's all kinds of correlations you can draw. any major coin grading company, auction house, dealer, etc has access to this information. with the internet, we all can access a large part of that information.

yes, there are other data points...but what you derive from those boils down to a supply issue and/or a demand issue.

Overdate · July 10, 2013 4:05AM

<< Changes in prices of rare coins has nothing to do with supply and demand
It is the exchange of one asset (the coin) for another asset (a stock of money).

Discuss: >>

Any exchange is the exchange of one asset for another asset. Supply and demand determines the exchange rate. That's why a 1909-S VDB cent can be exchanged for a larger stock of money than a 1909 VDB cent (less supply) or a 2012-S proof silver half dollar can be exchanged for a larger stock of money than a 2012-S proof silver dime (more demand). The same logic applies to prices of genuinely rare coins.

yosclimber · July 10, 2013 7:36AM

Price level is determined by supply and demand.

Small price changes over time for scarce or unique coins in somebody's price guide may move up or down based on somewhat random factors,
such as the number of buyers interested in an item at a given auction.
It is still a demand effect, but does not move smoothly in one direction like something based on a large N, such as the total number of coin collectors.

lcoopie · July 10, 2013 10:49PM

Economics 111

Changes in prices of rare coins has nothing to do with supply and demand

Comments

Leave a Comment