Time gives perspective
Gazes
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There are a lot of threads in this forum that discuss prices of a specific coin or a series in general. Often predictions are made that someone paid far too much for a coin or will be buried. Others predict the price was fair or a bargain. Bottom line---it is all speculation (although some is educated speculation and some not so educated).
I saw this quote by David Akers in the Handbook of 20th Cent Gold where he discussed a full unc set of Indian Half Eagles for sale at the ANA in 1977. He said "the set [of Indian Half Eagles] contained a number of Choice Uncirculated examples as well as several gem quality pieces and was priced at a figure considerably less than $20,000. There were no buyers, in fact, no one was even seriously interested in the set and one very prominent dealer took me to task about the price, insisting that I go over the set with him, pricing each coin individually, to justify how I could possibly come up with such a high price for the set." He then states the set would be worth 5 or 6 times that amount-----and he wrote this in 1988.
Today that set would be worth at a minimum of $300,000 and probably much more depending on which coins were gem. It is very easy to say that "well that was then and things are different now---prices won't be that cheap again." However, Akers point was at that very time, people thought the exact same thing! They looked at that set and no one wanted it at that price because they thought it was already priced way too high. So the next time you look at a coin and think it is way overpriced----maybe it is but maybe it will be viewed as a bargain in 10 years.
Comments
The key is to know which has potential, what likely does not.
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IMHO, there is little chance to do this except for a limited number of particular coins. Collectors are a fickle group.
There are two primary differences between today and 1988.
First, the increased level of speculation in every major asset class and many if not most "alternative assets". Generically, the currently inflated price of (practically) every asset is dependent upon a continuation of the credit mania.
Second, the US price structure reflects TPG grading and CAC whereas in 1988, it was just getting started.
This being said, I do agree that with a specific coin, anything is theoretically possible since prices are set at the margin and there is no way to predict the fickle preferences of the handful of buyers who are competing for it.
As with individual stocks, a coin may move counter to the main trend - whether the trend is up or down. I just wouldn't bet on it.
Imagine if the population reports are so far off that supply can't support a small uptick in collector interest.
I suspect there are half as many coins in some specific cases.
(Saint 1920 MS64+ pop report says 99......I suspect about 50)
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The coin market has three different phases.... the flipping phase - for new or suddenly popular items, the steady collector market, and the long held, or scarce items that appreciate in value over time. That is the observation from a collector who does not sell coins, but does watch the market. Cheers, RickO
There is far more information on coins available now than in 1988. This has had an effect on future potential since there are fewer "secrets".
You've chosen well for your research. Any collector desiring more than a cursory knowledge of 20th Century gold must
have this book. It is essential source material that cannot be ignored. No one on the planet before or after will ever know as much about US Gold as DWA did. His acolytes have had glorious collections and very worthwhile numismatic careers.
ing! They looked at that set and no one wanted it at that price because they thought it was already priced way too high. So the next time you look at a coin and think it is way overpriced----maybe it is but maybe it will be viewed as a bargain in 10 years.
Anecdotal and not terribly helpful in a general sense. Look at the price of classic commems in 1989 versus today. If you got a BARGAIN on a set of commems in 1989, you are still absolutely buried.
It is also worth pointing out - using your numbers that the 1977 set was $20k and in 1989 according to Akers it was worth $100k. That was a nice win. But if you still own that set today at $300k you got CRUSHED. $100k in the S&P 500 in 1989 would be worth $1.5 MILLION today.
In fact, if you bought the set for $20k in 1977 and still own it, it would have to be worth $1.8 million today to be equal to the S&P 500 fund.
Considering opportunity costs, even the 1977 to 1989 numbers are not that good. $20k in an S&P 500 fund in 1977 was worth $108,000 in 1989.
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All comments reflect the opinion of the author, even when irrefutably accurate.
Perhaps, since the generalization surely has virtue, you would suggest some sources. Sarcasm hopefully noted, Capt. Obvious?
"Insiders" have known these secrets for 30+ years. Helped most of us make a whole lot more money than we've lost
Having looked at coins for 35 years with Dave Akers' notes has informed my search as much as looking through his eyes.
By all means, use current imagery. And population. And auction results.
I pity the fool who tries to maintain his chops without them.
Just using his book to make your own corresponding notes will help organize and crystallize your knowledge.
That is the trick, knowing what will go up and what will go down. Knowledge is power.
Homey's recipe for enjoyment:
As a collector, buy the coin because you want it and not for its "potential."
As a dealer, find several "fish" and bury them!
Maximize profits by dealing with only truly rare and mostly unattainable coins. Fortunately, when it's time to sell, their are other fish in the sea.
I figured someone would use the old S & P argument---respectfully, you have completely missed the point of the OP.
1) The OP was about how a coin today may seem overpriced but only time will to determine that. No one wanted that set of Half Eagles because they thought the price was outrageous---it clearly wasn't. That's all. On the other hand, coins can look like a bargain but are not (like your example of commens).
2) The OP was not about maximizing profits for an investment. This a coin forum. Most of us use some of our extra money to buy coins. You could argue every purchase is getting "crushed" because we didn't buy the S & P 500. No one has ever said use all your investment money and retirement funds to buy coins. You can do both---collect coins with discretionary income and also invest money wisely.
3) I think it anecdotal that you backward looked and picked the S & P 500. Why not Enron, AOL, CMGI, Sears, etc or any other investment that did not perform so well? Reminds of me people some years ago who were all about the Dogs of the Dow. Back testing showed it beat the S & P 500. It is easy now to say put all your money into the S & P 500 back in 1977. How many people tell you to put all your money (100%) into the S & P 500 right now? Almost all investment pros would argue against that (age being a factor as well). Again, hindsight is 20/20.
4) You kept quoting the $20,000 asking price for the set--the quote actually said it was "considerably less". Back in the late 70s that was a lot of money but it was not so astronomically that someone could not buy that set and also invest in the stock market. If my father had bought the set and I inherited it and it was worth $300,000 (by the way my guess from the description is that it would have been worth quite a bit more but I was conservative) , I would not be cursing him that he put close to 20k into coins.
5) Every single penny can't be invested. We need to enjoy life. How did those coins do against people who used their extra money for travel, country clubs, expensive restaurants, etc? By the way, I am not saying they were wrong to spend on those things. Life is about enjoying oneself and that may be the right choice for them. Coins happen to be a way a lot of us enjoy ourselves and sometimes we are lucky enough to make money too. In this case someone could have been "crushed" turning less than 20k into more than 300k and having a gorgeous collection to admire everyday.
Again, my main point was it is really hard to judge in the present whether someone overpaid for a coin. Last night I lost a couple of coins auctioned by Goldberg that I thought went too high (and I bid aggressively). I have a feeling I will regret it down the road but who knows. The OP was not about how to invest your funds.
Quality of the set in 1988 would likely surpass any but the very best today. However, $20k seems extremely high - even given the quality - for back then. As for present value, even at $300k today it would have been an extremely poor investment of $20k.
I understand your point, but I don't think this is how most financially motivated US coin buyers think or that they are buying coins as an alternative to other asset classes. I'm not saying none do, but it's a minority. If they did, I don't believe hardly any of them would buy coins. Those who hold a different opinion than I do here on the price prospects , I think they are overly optimistic but they still seem to have some interest in collecting. Those I communicated with on the South Africa coin forum, about all they discussed was the "investment" aspects of "collecting".
The set h> @Gazes said:
Upon what basis do you conclude that the price for the set "clearly wasn't" outrageous? Its value at a future date says nothing about the reasonableness of the price at the time it was offered.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I probably inferred it was not outrageous by the comments from Akers---however i did not collect in 1977 so maybe it was. My main point in the OP was some of the "outrageous" prices we discuss on this forum are not as straight forward and simple as it may seem at first blush.
I could price out an all-but-the-very-best for over double that today. The best, in excess of $1M. Your pricing for the Kruthoffer $5's?
Oh, who's he? How nice was his 09-O?
I hadn't started looking over DWA's shoulder yet.
Were you on the bourse floor?
Based on your total ignorance of Akers' grading standards (which tend to conform much more closely to more generally accepted ones than yours do), how could anyone, with any intellectual rigor, think you were capable of imagining values based on Dave's visual observations and thinking.
Your tone has the austere presentation of a dispassionate observer.
It masks the established fact that you have no practical way to evaluate any coin between MS60 and MS70.
Accordingly, your bookish estimates, while they may conform in some way to others' simplistic map of reality, have zero expert authority in the area of grading.
Making pricing impossible.
Making your observations in this area worthless for learning.
About anything else besides hubris.
Presenting yourself as an avatar for Mensa?
. You don't qualify. 
Take it from someone who's faced the vicissitudes of being a multi-talented idiot-savant
I wish I'd just said "You don't know crap about this, so shut up", but I'm not sure that's within Forum boundaries
Apart from any discussion of that particular set, I can certainly agree that "some of the 'outrageous' prices we discuss on this forum are not as straight forward and simple as it may seem at first blush." You can probably find a number of such coins in just about any auction.
It's not particularly uncommon to see posters comment that a winning bidder must have been caught up in auction fever and/or the registry game and buried himself. At the same time, I've been aware that more than one extremely knowledgeable/sharp bidder thought (or knew) that the coin was under-graded and would almost certainly end up in a higher grade holder - perhaps higher than the critics could even contemplate.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I agree. I also think that the creation of other avenues for selling (B/S/T, eBay, GC, HA, Facebook, Insta etc...) have had an impact (largely downward) on the price of coins as well.
Going back to OP's main topic, hindsight is 20/20 and that will never change. One important thing to think about is what new/young collectors want (cue the old dogs here that say the hobby is dying
) and start focusing on collecting those series to POSSIBLY make gains. That is what I'm doing... and I think my collection is in a good position and I also LOVE what I collect.
Seems to me, "outrageous" prices are identified by being higher than similar coins offered at the same time. Not by how time, inflation, and changing circumstances make the selling price look years later!
In other words, if you could have purchased a "similar quality" set for, say, $15,000 at the time, then the $20,000 price tag WAS outrageous. Don't care if it's worth $300,000 today....
(Yes, comparison of alternative coins is impossible by us today, 40 years later. And the concept of "similar quality" gets dicey when you get into the realm of "best of the best". But if the prevailing opinion AT THE TIME was that it was a crazy price...it probably was.)
Most collectors don't buy the coins they prefer the most. Presumably, collectors only buy coins they like but the supposedly most popular series are also substantially bought due to budget limitations and supply constraints in other coinage. In the 44 years I have been a collector, I am not aware of even one US series which has overtaken a previously preferred one. (New series and coins differ somewhat.) The same applies to the world coin series I know well enough. If it happened, it occurred in isolation and isn't the norm. The most noticeable changes have been at the macro level, a preference for high coinage along with increased focus on specialization (toned coins, full strike collecting, die varieties).
Hardly any coin is collected in isolation and must compete with comparable alternatives. One of the reasons the historically most widely collected US series are in trouble financially is because the internet makes it easy to buy coins that were a lot more difficult to buy before. However, very few are as interesting to other collectors as those who buy it might believe.
so much has changed from 1977 through 2019 that the Hobby as it's practiced today would be almost unrecognizable to someone from 1977. in other words, in 1977 at the ANA sale of these coins if you were to "Hype" them by saying that:
--- Gold will be priced at $2,000 per ounce in 35 years.
--- coins will be graded according to a 70-point scale.
--- there will be "Independent Grading Companies" that encapsulate and guarantee the grades of coins.
--- a thing called "The Internet" will revolutionize the World, Commerce and the way coins are bought and sold.
--- add whatever else you think is germane.
............................you would have been laughed out of the hall.
so much has happened that no one, including Mr. Akers, could have predicted the escalation of prices. go search out some price history and compare how these kind of coins performed during the previous 30-40 year period, back to around 1940.
There aren't many hobbies that have any hope of any return. Perhaps one of the attractions of collecting many things is the possibility that one can have a lot of fun and get their money back. I don't think it's relevant to compare collections to investments, or at least it shouldn't be. I will admit that I pay attention to value and future value, but only so I don't look like a total idiot, just an eccentric.
The OP states a set worth $20,000 in 1977 would be worth $300,000 today.
The first reaction from most would be Wow, a missed opportunity. But lets look at the alternative:
The Dow Jones Industrial Average was at 835 on June 8, 1979...the farthest back I could go with a simple search. Today, the Dow is above 25,000... So, one could have made 15 fold on their money if they had purchased the gold set...and could sell it without commissions. Or, one could have made THIRTY fold on their money by buying the Dow....and a tremendous amount more...several times that....from reinvested dividends.
I suspect I could make the same point with real estate.
The reason one uses the S&P 500 @Gazes is for the exact opposite reason you suggest. It isn't a cherry picked stock, it's a broad based portfolio that doesn't require any knowledge to buy.
It would be silly to compare to a single stock or I could pick Microsoft and make you $100 million.
My simpler point is that is NOT a good rate of return as an investment not that you shouldn't buy it. But you should buy it because you want it and not decide whether it was a good decision based on future value. The $20,000 should be the right price for you even if it is worth spot 40 years later.
You and Akers are using future value as a sales pitch. In my humble opinion, such tactics ruin as many collectors as grade inflation, shill bidding and all the other things people lament on this board. People become disillusioned when there are no gains and stop collecting.
Akers was both a smart numismatist and a smart salesman.
All comments reflect the opinion of the author, even when irrefutably accurate.
Frankly, I would also suggest that if I paid $20k for a set worth $10k in1977, that was a bad decision even if it was worth $1 million today.
All comments reflect the opinion of the author, even when irrefutably accurate.
Another thing to throw in the analysis is that interest rates were extremely high back then and have done nothing but drop over the next few decades. Unlikely to happen going forward. So, return expectations are very different.
People become disillusioned when there are no gains and stop collecting.
I mention this to people all the time about bullion. right now the market is stagnant and people holding bullion tend to want some kind of movement to help them in their decision process.
I feel like you don't read my OP but just imagine what it is you wanted me to say. No where did I do what you accuse me of --"You and Akers are using future value as a sales pitch." All my OP stated was that sometimes when we see a price of a coin that we think is outrageous and the person will be buried---often it is not that simple. As I say, it may be an outrageous price or maybe it will end up being a bargain.
I can't believe you made this statement. Right above it in another post you say "you should buy a [a coin] because you want it and not decide whether it was a good decision based on [sic] future value." You are totaling discounting the idea that you or whoever paid that amount bought the set because they wanted the coins, admired the coins, and are collectors of coins! You are the one who is basing whether or not to purchase a coin strictly on value!
If I understand the point of your thread correctly, the eventual value of the set was immaterial. So, while I agree with your premise, I think it was diluted by the example you provided. That example focused on what the set ended up being worth and that, in itself, does not speak to whether the set was a bargain or a burial at the time it first traded.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
a lot is being read into my OP. I really saw an interesting quote in a book and thought I would share it with the forum. I also made the point that when we see a coin go for a very high price and people comment on that price that it really is all speculation and as my title states "time gives perspective."
I meant using your "value" justification. If the whole point is "value" why would you pay double the market value ever? You can only judge the decision based on the moment of purchase.
I say buy what you want for whatever you are willing to pay and don't even look at the price guides until you are ready to sell.
All comments reflect the opinion of the author, even when irrefutably accurate.
That's exactly what your OP did. You justify a current "outrageous" price paid based on what the future value ended up being. The implication is that time heals all self-inflicted wounds. If I think spending $1000 for a colorful MS65 common date Morgan is "outrageous" today, the possibility that it is worth $10,000 ten years from now does NOT make it a reasonable price today. Of course, "outrageous" is an opinion and someone thought the $1000 was perfectly reasonable. And, if he did, it remains "perfectly reasonable" even if it is worth $100 ten years from now.
If you are telling me - and implicitly you are - to withhold judgment now because you may be "right" 20 years later, you are using future value as justification ("sales pitch") for the price today.
All comments reflect the opinion of the author, even when irrefutably accurate.
Well that is a new one---don't look at price guides before buying a coin!
and was priced at a figure considerably less than $20,000.............................He then states the set would be worth 5 or 6 times that amount...................................Today that set would be worth at a minimum of $300,000 and probably much more depending on which coins were gem.
much is being made about what we infer, but above is what you posted so you have to excuse us if we reference that and make other comparisons. here's what I infer from the above: Mr. Akers had the set priced at perhaps $13K and estimates that if it was priced individually it might be valued at $65-$78k. that's a switch from dealer-to-dealer wholesale to dealer-to-collector retail,two different animals that aren't a good comparison to assess value.
I meant don't look at the price guides between buying and selling. People who track the current value of their collections will inevitably become disillusioned if the market is flat or moving against them.
I have personally ended the coin collecting of numerous people when they came to sell part of their collection because they needed money. When they found they could not recoup their initial expense, they angrily shopped around, came back to me (as the higher buyer) and sold everything. They will probably never buy a coin again.
All comments reflect the opinion of the author, even when irrefutably accurate.
One of the wild cards is that the coins were raw in 1977. Today they would have to be graded to get the best price. What if the grading services don't care for the 1920-S, 1930-S or 1933, which are the key coins in the set? That could change the completion of the whole deal.
absolutely the grade would matter. I do believe Akers knew how to grade and when he described the coins as all UNC and "a number of Choice Unc examples as well as several gem quality pieces...." I take him for his word.
The other point I think Akers was making in his book is that when this set was being sold there was very little understanding of how legitimately rare many of these issues were in high mint state grade and then he gave the example in my OP.
I guess I don't really understand the point of the OP if it's not about the increase in value...personally I've always lived by a philosophy of "don't look back"...
So many of the threads on this board only revolve around value and cost vs future sale. I wonder are there any true collectors that actually enjoy collecting coins or is everyone just dealers, flippers, and investors here
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I just looked at the first page and I saw threads about new purchases, post of pics of coins (i.e. seated liberty, gold, etc), questions about surface of a coin, the latest action in a major collection, someone's find in change, grading questions, etc. There are plenty of discussions on the forum that don't involve value.
The point of the OP is that just because a coin seems to have been sold at auction for a price that seems to not make sense to many here, don't be quick to condemn it. Akers pointed out the example in the OP as reflection that at the time the true rarity of the half eagle series in high grade was underappreciated. Akers appreciated the rarity while most collectors did not.
If the set sold at auction, (at least to me) that wasn't apparent in your initial post. Additionally, with so much information readily available on the internet these days, it's difficult to imagine that many coins are (still) underappreciated.
Still, as I posted previously, "I can certainly agree that 'some of the outrageous prices we discuss on this forum are not as straight forward and simple as it may seem at first blush'. You can probably find a number of such coins in just about any auction." It's just that (my guess is) most of those examples probably have little or nothing to do with the coins being underappreciated for their scarcity.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
If the set sold at auction, (at least to me) that wasn't apparent in your initial post.
There were no buyers, in fact, no one was even seriously interested in the set is what the OP credits Mr. Akers as saying, so no, the set didn't sell.
the OP strikes me as an explanation of a non-sale in a series that at the time may have been "cold" and was being promoted by a niche dealer. hindsight being 20-20 I suppose it would have been wise at the time to buy this set, but the point of the thread is still confusing.
lol ---I guess I need to be super careful about my words. If a coin sells at auction OR anywhere else that doesn't make sense, don't be so quick to assume someone overpaid. There you go. Honestly, one problem is that someone makes a point in the OP and certain members make comments that get away from the original OP. Then when you respond you bring up new facts and then another comment points that out.....
The point of the OP is simple----I found an interesting antedote from Mr. Akers in his book and posted it (I thought people might enjoy it or find it interesting). I also found in my opinion (yes, it is my opinion) that sometimes there is more going on when a coin seems to fetch a price that seems too high. That's it. Now, back to a discussion about the S & P.....
Well, for what it's worth, I'm a part-time dealer. But anything I buy for myself is not assessed based on future value, just my desire to have it.
All comments reflect the opinion of the author, even when irrefutably accurate.
But that's NOT what the Akers story means. Failing to buy a set of coins no one wanted isn't a mistake or an illustration of "more going on". In fact, clearly the price tag WAS TOO HIGH because the coins didn't sell. I know it is sacrilege to say it, but Akers mispriced the coins for the market in 1977.
The only possible point of the Akers story is that the FUTURE VALUE implies it was a mistake to not overpay in 1977.
All comments reflect the opinion of the author, even when irrefutably accurate.
Unattributed variety.
Unattributed pedigree.
Pop numbers way off.
Change in registry that might effect its status.
Upgrade potential.
Intrinsic value increase.
Collector interest.
Inflation.
Those are all I can think of that might increase its price in the future.
Edit...
one more
The realization that there aren't any more hoards that are likely to be found.
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