the two tiered market and the future
Gazes
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A number of threads got me thinking more about the direction of prices for top tier coins (i.e Dave Wnuck prediction, the Hansen Watch, etc). Rather than add to those threads and highjack them I figured I would start a new thread.
Every subscription based collecting newsletter or price guide I read seems to have some statement that we have a two tiered market---condition census coins bring strong prices and the rest of the market is spotty. Reading other threads I have wondered what will be the long term impact of so many "super collections" focused on top tiered coins being assembled now.
My conclusion is that over the next 10 years condition census coins (approx. the 5 or so highest graded coin for a date and mint mark) will see strong movement upward. By definition, condition census coins are limited to 5-8 coins for each specific coin so they will always be limited. Right now we have at least one collector buying an example of each coin at the highest grade possible. That by itself removes one coin. Then we hear about other series with collectors equally aggressively removing more coins. Factor in collectors who have been at it for awhile and have no plans to sell their coins---more coins locked up.
I had another thread asking about which collectors may sell their coins first and the consensus was don't expect sales from these new/established super collections in the near future. Therefore, it would seem that in the future (the next 10 years or so) we will see less and less of these coins pop up in the future, when they do it will be at auction, and collectors will realize that they may not get other chances. It is hard to see how these prices won't go up and possibly very aggressively.
I know a lot can happen in the next 10 years (i.e the economy, unexpected sales of major collections, etc) but I think the above scenario is likely. As for the rest of the coins---I don't know. They could be helped or hurt by all this.
Comments
I would actually predict the opposite for condition census coins. The market is frothy. Ego has its price. Sooner or later people will realize that the premium to go from a 66 to a 66+ is simply not worth it. That market is very thin, both in quantity of coins (by definition) and number of buyers.
All comments reflect the opinion of the author, even when irrefutably accurate.
Top tier coins are out of my reach so I'm in the camp of those who don't concern themselves with price or where they go. (Which is usually up until they go down).
I just enjoy watching giants flaunt their wares.
``https://ebay.us/m/KxolR5
Without agreeing or disagreeing, one must look at the depth of wealth of the players. The middle income guy of 2019 has less real disposable income than his predecessor of 30 years earlier. The deep pockets at the high end of the market enjoy unfathomable disposable assets.
Perhaps they will get bored and move on to silver bunnies, but that is difficult to determine.
Bifurcation has been talked about on these forums for the past 10-15 years, sometimes along with the bifurcation of the stamp market.
It will be interesting to see what happens going forward.
Two tiered market, yes. Especially for world coinage if those who hold different opinions than mine turn out to be correct. For US coinage, a positive trend substantially relies on financial conditions, metal prices or both.
I've been putting saints into 3 basic catagories.
Top 10, Top 100 & Top 1000
I'm a top 1000 collector who can snag a top 100 coin 20% of the time.
Not bad for someone who makes about the same as a public college professor.
Now...Top 1000 puts saints at about 2X melt. (wild generalization I know but not way far off)
My question is WHERE ARE ALL THE COLLECTOR'S????
I see great stuff at practically bullion prices.
My best guess is that there are only about ONE HUNDRED people in the world that are comfortably upper middle class and seriously interested in collecting one of the most beautiful coins ever made.
Weird
I feel like there is no way, with my income, that I should be able to own a top 100 coin.
I'm not complaining
My Saint Set
This IS the "sickness" of the coin market that gets masked by all the press associated with the top tier coins. You are right: if the coin market were vibrant and popular, there is no way that "Top 100" coins would be affordable to a middle class denizen. But the market is thin and supply is abundant, except for the rarefied air at the top.
Please see Stamp Market circa 1995. Just last year, a stamp set a record at over $8 million. At the same time, the sale price of a decent VF U.S. #1 is under $100, down from closer to $1000 in 1995.
A nice mint, never hinged $5 Columbian is a $1000 stamp, down from over $5k in 1995 despite only 20,000 being made and a small fraction of those being Mint, never hinged. Yet, put up an inverted Jenny and you'll get another record price and a big headline.
The big headlines and big prices in coins mask the carnage at the middle and bottom of the coin market. It is not (yet) as dire as stamps. But when stamp prices started to slide, the stamp guys refused to see it as the canary in the coal mine that it was. I still remember people in the late 1990s when $5 Columbians dropped under $5k screaming about what a bargain they were. If any of those guys are left, their $5k bargain is now $1k money pit.
It is also worth noting that stamps were THE HOBBY in the 20th century, dwarfing coins. EVERYONE collected stamps. APS membership was at least double ANA membership. APS membership is still comparable to ANA membership. But both memberships are smaller than they once were.
Now, you can talk about changing venues and changing tastes and assume there is a much larger group of uncounted coin collectors out there. Some of that is true. But there were ALWAYS closet collectors like my grandfather who hoarded novelties from change or traded with friends but never belonged to coin clubs. The important part of this argument about "CHANGING..." is change. There is no law of nature that says that people need to collect coins in any kind of numbers. There is especially no law of nature that says people need to buy condition census rarities. That "innovation" is very recent and need not be permanent.
Just my two pennies...[yes, pennies. English and LARGE!]
All comments reflect the opinion of the author, even when irrefutably accurate.
I see lots of room for growth.
This is not only because the wealthy are doing so well but so is the upper middle class. The key is likely second tier coins because these are widely available to most people especially with moderns. Right now really spectacular and scarce clad sells for peanuts. I'm lucky to get 10 to $40 per coin for it. Even top tier moderns are highly affordable when talking about common dates. $200 will buy most common dates in the highest grades. None of these are common in such high grade but the market is just that thin. Lots of people can afford to put together very high end sets but it's not happening for various reasons. I believe lack of supply is a large factor since it's so expensive to get the coins graded.
There are classic series that are affordable to wealthier collectors in second tier and these do command a little better prices relative populations.
Perhaps more importantly than cost of sets or coins is that there are so many more opportunities now days to collect coins (tokens/ medals/ world coins) that weren't available before the internet. Many of these can make scarce and desirable sets in their own right but the net has also opened the door to type collecting.
I expect robust growth nearly across the board in the next ten years. It's probably true there won't be much demand for all the Chuck-ee-Cheese tokens but how about the scarce ones? How about rare AR saloon tokens, soap token, HK medals, world zinc, 3c silver, and indian cents in Gem? How about that Chinese aluminum and Indian republic!
In my opinion the hobby is being transformed and it's way to early to turn off the lights.
There has always been a high end and low end. This isn't a new phenomenon. I see a lot more advocacy for high end collectors, especially from dealers. There is an illusion around here that high end is the coin market. It's a very small percentage of the collecting population.
The market is soft. People in the business always need to find the silver lining and build interest, excitement, and positivity. It's hard to sell expensive coins when you are telling people the market is soft at the same time. Any time I hear a dealer talking about a good part and a bad part, I read it as weak overall.
I imagine we'll see something similar to what we see on silver bullion. Right now when spot prices are low, retailers raise their premiums over spot to compensate. People are more reluctant to sell and realize their losses. If the spot stays low,prices eventually come down. Collector's can hold on forever and some are eventually forced to sell. But there is less overall commerce. I think people dealers will be slow to decrease prices and high end coins will seemingly go away for a while because there is loss profit incentive.
The current generation is likely spending more time on clad coins because it's all we know. We don't remember silver in circulation. The older generation has been avoiding it like the plague.
IG: DeCourcyCoinsEbay: neilrobertson
"Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me
You are right: if the coin market were vibrant and popular, there is no way that "Top 100" coins would be affordable to a middle class denizen. But the market is thin and supply is abundant, except for the rarefied air at the top.
>
How much do these Saints cost? I ask because I don't think these coins are affordable except as type coins to most six figure wage earners.
As for buying the Top 1000 coins:
How much does a partial set cost @ $2500 each? $60,000? $80,000? How appealing is that to most with this budget? My answer is that it isn't.
Second, anyone with the money can buy a partial set composed of the Top 1000 examples literally in one day and be done with it. The only obstacle is the money.
Very true.
See South Africa since the 2011 peak for an example in real time. In this bifurcated market, the highest TPG grade coins sell for absurd multiples over slightly lower MS grades and low MS grades at excessive multiples over nice AU-55 and AU-58. The price level was always much lower than the US but with the much smaller market and less liquidity, there is concurrently a much smaller pool of potential buyers to provide price support.
Most of the elite coins aren't and never were for sale. Now with the much lower price level, far fewer want to sell. What is available for sale on eBay (not much worth buying) and their local equivalent is offered at fantasy level prices.
Think of what it is going to be like trying to sell a $6000+ 1957-D cent or a $100,000 + 1964 Kennedy Half Dollar in a future recession.
You are right that the two tiered market has been around for awhile. What really got me thinking is I feel that right now the dynamics are different that will cause these condition census coins to generally rise aggressively. In the past 10 or 15 years we have had collections being built and being sold. Now we seem to have a few more super collections being built but less being sold.
The example I give is in liberty quarter eagles. I collect these coins and for the past 10 years it was a pretty sleepy area. Condition census coins on good dates could be had for reasonable amounts. I sold part of my collection about 2 years ago and the market ate them up quickly. Some of those coins are in Mr Hansen's collection. In the past couple years, I have noticed that bids that would normally win me these condition census quarter eagles were getting blown away (like 100% higher than the previous record price).
I still have some that I hold but have moved on to other projects because there simply are no condition liberty quarter eagles that become available with any frequency. I see this happening with other series and truly believe prices will surge for these top coins over the next 10 years. Finding other "sleepy" areas and buying top coins now I believe is not only a great way to spend time (my main objective) but will eventually pay excellent returns.
1989
Or 1637
Your argument is typical of what one hears in bubbles. Rather than see the rise as excessive, people see the rise as indicative of future rises.
History provides numerous examples of frothy prices. The result of froth is ALWAYS the same: the price collapses and takes years or decades to recover.
Look at the PCGS 3000 from 1989 until today.
You may now proceed to argue that things are different this time. That argument is also ubiquitous in bubbles.
All comments reflect the opinion of the author, even when irrefutably accurate.
It is just my opinion---I may be right or wrong. I do laugh when I hear the same people talk about how depressed the coin market is and then when it suits their argument discuss how "frothy" prices are.
My example was liberty quarter eagles. The idea that the prices are frothy and will burst like a bubble in 10 years makes no sense to me and I have followed every nuance in that series. But again---it is my opinion---who knows? By the way, jmlanzaf---are you currently collecting and if so what?
The disgruntled are those who refuse to learn and adapt.
High prices doesnt necessarily equate to froth. However, you initially mentioned condition census material. That sector appears frothy. But, as the saying goes in Wall Street: the market can stay irrational longer than you can stay solvent.
I avoid most US coins for collecting purposes, although I currently have a soft spot for classic commems. I wouldn't touch top pop in that sector either, by the way, except for a quick flip.
I mostly prefer world coins and exonumia.
I will, however, buy anything if the price is right. But I don't expect any of it to be profitable 20 years from now. I plan profit around short flips. I consider long holds to be sunk money. Add a result, I will buy a $10k coin to resell, but I have a hard time buying even a $1000 coin to "collect"
All comments reflect the opinion of the author, even when irrefutably accurate.
This is mainly a concern for high end collectors and dealers...IMHO.....Those that are just collectors and not competing in sets, and those without extensive financial resources, will continue buying what they like and can afford... enjoying the hobby. Cheers, RickO
What I have noticed on these boards is that those who are the most negative usually are not currently collecting US coins (which makes sense and also may contribute to why they are invested in being negative about the market.
It might be worth differentiating between 50 year old condition census coins and 250 year old condition census coins. IMO, not much future for the former because of the huge supply lurking below the highest graded coins as well as the raw coins still ungraded. As for the latter, I'm in. For example, if I could afford it I wouldn't hesitate to buy one condition census chain cent, rater than hundreds of condition census modern coins. Just my sense of value.
That's not the reason I am "negative" on US coins.
I state unpopular opinions if I have a supportable reason for it, regardless of the coin. Expressing these opinions doesn't mean I will always be right or I am infallible. It just means that I believe I can make a better argument for my position than those who disagree with me. If someone makes a counterpoint that I consider valid, I will admit it. If they don't, I won't agree with them, period.
When South Africa Union was my primary series, I told those collectors (on their forum and in private both) that this coinage was in a bubble before it peaked. I refused to pay the inflated prices not just because I considered it a bubble, but because the most heavily hyped coins (mostly highest grade coins as in the US) were not just among the worst financial values but also relatively overpriced as collectibles. I said so while I was liquidating most of my collection and they knew it, so no one could claim I was speaking out of both sides of my mouth.
With my current primary series (pillar minors), I don't collect it because I think it will be profitable. It doesn't matter to me unless I become I forced seller, as I would prefer to leave it to a family member anyway if they really want it. But I could tell in the other thread that some posters didn't like the opinions I expressed on the prospects for most world coinage either.
Disagreeing on the price prospects or the consensus perception of the collectible merits doesn't mean I dislike any coin, US or otherwise. But then, the next thing I am going to hear is that I am also negative on the coins i prefer as well.
What's the point of all of this? Markets go up, markets go down. Different segments of numismatics will go up and down in favor. Perhaps moderns go up 10 years from now and old US type plummets...who knows? I collect coins and enjoy the hobby. If the segment I collect goes down in the future then that means more for my money!
Certain posters on this forum always bring up what happened to stamps. They are two completely different markets and numismatics fate is not tied to the stamp hobby. I guess it is good to know the history of the stamp hobby but I see it as two completely different situations.
The "market" really is a mixed bag. I own two CC CT coppers, both around CC#6. The last time I checked there were 4 people working on CT variety sets, so the value of my coins just treaded water for a long time.
The market is horrible, awful and nearly dead...but I am buying $2-500 XF bust halves to go with the $50 XF bust halves I still have from 20 years ago. So if the $500 busties fall to $400 the market is dreadful, but if I sold my $50 ones for $400, I wouldn't think it was bad.
I have never been a gold guy but people telling me Hags were great because they were only minting x,000 of them I just didn't get... I don't want to tie up that much in those coins.
Lastly, people have been telling us for decades about the millions of US gold coins in Swiss vaults...did people just not believe them? 1 mm Saints is chump change to someone like UBS, at face OR at bullion value.
Wow, what a weird, disjointed rant. Lol.
If you're talking about me, I have a vested interest in being POSITIVE about the U.S. market because most of my business is U.S. coins. My current inventory is 80% U.S.
All comments reflect the opinion of the author, even when irrefutably accurate.
The markets are NOT that different if you look at the history of both. Coin people want to think it's different, but it simply isn't.
And coins have already tracked many of the changes in stamps: decrease in ANA membership, bifurcation of the market, etc.
You are right to treat it as a hobby and not worry about price. But I would not be so arrogant as to think coins are different. Stamps was the king of hobbies for a century, far broader and deeper than coins.
All comments reflect the opinion of the author, even when irrefutably accurate.
There's one major difference between stamps and coins.
If you take a match to a stamp, it's gone.
If you take a match or set fire to a Silver Eagle, you still have an
ounce of silver.
Except no one will buy it because if AT. LOL
And a slightly hotter flame at the recycler will put an end to your Eagle also.
You can also set fire to currency, by the way.
I would also argue that the fragility of stamps argues in FAVOR of that market: supply shrinks over time.
All comments reflect the opinion of the author, even when irrefutably accurate.
There are a ton of differences between stamps and coins. Coins have been around for thousands of years. Coins are far more durable than stamps. Many coins are made of gold and silver which are metals that have been around for thousands of years and have a certain "magic" attached to them. Coins have TPG and my understanding is it never caught on for stamps. You can easily compare coins to any collectable--why stamps? Why not works of art or collectable automobiles. Seems like people who compare coins to stamps just want to ratify their view of the direction of the market.
It is funny because right now we have major collectors pouring millions of dollars into coins---do you have inside information they don't ? Coin collecting has been around for centuries and it will stay. Further, individuals desire to own the best will always continue.
then follow your own advice and collect stamps!
As a collector of both numismatic and philatelic material, I've always preferred things numismatic. Never reasoned why until now. My take:
I do!
All comments reflect the opinion of the author, even when irrefutably accurate.
If you study the history of coin and stamp collecting, you will have the answer to your question without the subjective bias you are tossing around as "Facts".
The ANA and the APS arose at about the same time with many cross-overs in membership. Except for a brief interest in ancient coins during the Renaissance, stamp and coin collecting both arose at the same time in the industrialized world amidst a rising merchant class. Stamps and coins were both largely collected by upper middle class white men in industrialized countries.
Expert certification came to stamps FIRST! Photo certs are the norm because stamp people never liked the plastic coffins, but the first TPG is philatelic NOT numismatic.
Even some of the negatives of coins like NCLT were actually invented by the philatelic community that flooded the market with stamps that were never used for their intended purpose but made strictly for the collector market.
You could make some comparisons to the art market as well. And, frankly, the art market has the same basic bifurcation problem that the coin and stamp markets do. The art market is, however, thinner than coins and stamps and it is hard to make too direct a comparison.
The stamp collecting craze was FAR FAR FAR BIGGER than coins has ever been. And yet...
Coins may or may not suffer the same fate. However, if coins do go the route of stamps it will be because of the absolute willful blindness of people that insist that it "can't happen" because coins are "different". For people like myself who both collected and dealt both stamps and coins, it is hard to ignore the parallels.
But, hey, it's different this time. It's ALWAYS different this time....until it is not.
All comments reflect the opinion of the author, even when irrefutably accurate.
If the coin market falls apart like you say it will...because it did for stamps...then I'll still be collecting my US coins from the 18th through 20th centuries because I like the hobby. I'll continue to buy books and study coins and I'll save some dollars because there will be less demand and I'll still have as much fun as I do now. When I die, my heirs can complain about how much I overspent in 2019 on coins or maybe they will remember how much I enjoyed the hobby and not really care. Either way I'll be gone and it won't really matter then will it?
I agree---if prices crash---I for one will be buying all the early gold, proof gold, etc I can find. I will enjoy it immensely and hopefully I will go down in history as another Pittman long after I am gone. My hunch is that all those coins will probably never be cheaper than they are today though......
I'm not saying it WILL, I'm saying it COULD.
I recommend doing just what you are doing - have FUN, it's a hobby. It's the "investment trap" that leads to disillusionment.
All comments reflect the opinion of the author, even when irrefutably accurate.
I'll still have as much fun as I do now. When I die, my heirs can complain about how much I overspent in 2019 on coins or maybe they will remember how much I enjoyed the hobby and not really care. Either way I'll be gone and it won't really matter then will it?
See, that's the right attitude! Have fun! Consider it sunk money. Avoid the value trap.
It's a HOBBY! It should be FUN!
I'm pretty sure you can set my stamp collection on fire some day. I don't care. It's cheap (these days) and it's fun. Screw the (fleeing) crowds!
And my Fiji Coke bottle cap coin is never going to be worth more than melt. I DON'T CARE. I still laugh every time I look at it!
All comments reflect the opinion of the author, even when irrefutably accurate.
I don't know where to start except with pictures.
Hanson's 1920
Simpson's 1920
My 1920
You can't throw money and expect to have nice coins.
I haven't broken 6 figures in income/year yet.
I'm just obsessed.
If you want something just ask, I'm looking almost every day and I don't have any interest in making money.
Seriously.
You can get so super close to the "big guys" now that you need a 10X to tell the difference.
My Saint Set
No one who says, "Yipppeee, I can get more for less" really means it.
I'd like a penny for every 20th silver "buyer" who expressed their intention to ....load the boat.... if it ever came down.
None did.
I don't understand this. More for less is awesome.
It's complex.
Regarding my coins I can say that quality makes for me all the difference between enjoying a coin a lot and maybe not enjoying it. I just love my 66+ 1795 Eagle.
Better to get less for more?
I think I agree to this. It seems there are quite a few big new collections out there and it doesnt look like they will get sold during the next 20-40 years or so, if ever.
.
But would you hate a 66 1795 Eagle for 1/10th the money? Especially if there was no discernible difference in quality? That is the crux of the condition census "problem". In the case of 20th century coins, the difference in price between a 68 an a 67 could be a factor of 20 or more and the 67 could even have better eye appeal than the 68.
All comments reflect the opinion of the author, even when irrefutably accurate.
Since I am probably not yet in my "peak buying years" I would also welcome a significant decrease in coin prices in the next 10 years. Although I stretch sometimes to buy nice coins, if the value of my collection were to fall to zero I could still pay my mortgage and take care of my family, so there's no catastrophic impact of falling prices but the range of what I can collect would expand.
It's not clear to me that there will be a dramatic decrease in condition census coin prices going forward though. I haven't done all the math, but I think 100 years ago these condition census coins were selling for a couple days average wages. Now that segment of the market is selling for one year's average wages. I don't see anything on the horizon that would cause that long term trend to reverse.
LIBERTY SEATED DIMES WITH MAJOR VARIETIES CIRCULATION STRIKES (1837-1891) digital album
I think the condition consensus coins are already over promoted and due to their expense have a way to fall. What do those guys do when coin goes bad in Holder due to reaction with atmosphere? BTW just saw FIDO tv add $5 a trade.
The real coin market in my view is PCGS69 AGB, coins close to melt and coins like 1923-S PCGS 62 Peace Dollar, MS66 Oregon, MS 65 Walkers and Morgan’s 63-65, Mexico 1 oz silver onza. This is what people can afford vs the solar wind of big money players / posters here. Coin collecting with most I encounter at shows is about history, filling the hole not necessarily owning coins which would buy a porsche, house, yacht, or pay for x years of a sugar baby. Otherwise I guess those guys already have all that.
The most well off guy in my coin club buying rolls of one oz AGE.
Just fill the hole with a nice coin fits your budget you like.
there is no 66 Eagle 1795 eagle. I agree that this is different with coins from 1938.
@gazes, if you want to continue the stamp/coins parallel then even if prices crash you still won’t get to be Pittman. The top 1/10% will hold its value well enough (trophy stuff you want) while most everything else hollows out.
I’m not saying this will happen, but it’s what happened to stamps.
@topstuf, I know what you mean about buying more for less. It’s very hard to care about something if nobody else does.
scubafuel---I agree with you and in fact my opinion in the OP was that I believe that these condition census coins will be far more expensive in 10 years than they are today. We may look back to today and think these are bargain prices. At this point, the only chance I have to be another Pittman is to spend a couple hundred million or so.