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One thing that really concerns me about the current market is...
BillJones
Posts: 35,796 ✭✭✭✭✭
The fact that there are so many deals around these days that are in the five figures. Just recently I got in trouble again when I express conerns about a Jefferson Nickel with a mint mark punching error in MS-63 FS at more that $11 thousand.
In "normal" markets $10 thousand + usually bought something that was really distinctive or nice. It might not be the rarest or finest known, but it was unusual like a decent Chain Cent or a nice piece of early gold. Now I see some pretty ordinary stuff bring these prices.
I've seen this before, and it was back in the late 1970s when inflation was going nuts, and people did not want to hold money any more. "Invest in THINGS" some finiancial people said, and coins became the latest "THING." Many coins in Mint State and Proof hit some very prices and then the market just imploded. For example a couple of dealer friends bought a 1912 Proof set for $21,000. Within a couple months they were lucky to sell it at $12,000. A little while after that it was down to $5 or $6 thousand.
Does anyone catch my drift? Is there anyone else who is concerned about this?
Let's face it the average American family income is what, $35 or $40 thousand. When "ordinary" coins are selling for a third of the gross before tax family income, could there be trouble in the offing?
Let's hear what you might think ...
In "normal" markets $10 thousand + usually bought something that was really distinctive or nice. It might not be the rarest or finest known, but it was unusual like a decent Chain Cent or a nice piece of early gold. Now I see some pretty ordinary stuff bring these prices.
I've seen this before, and it was back in the late 1970s when inflation was going nuts, and people did not want to hold money any more. "Invest in THINGS" some finiancial people said, and coins became the latest "THING." Many coins in Mint State and Proof hit some very prices and then the market just imploded. For example a couple of dealer friends bought a 1912 Proof set for $21,000. Within a couple months they were lucky to sell it at $12,000. A little while after that it was down to $5 or $6 thousand.
Does anyone catch my drift? Is there anyone else who is concerned about this?
Let's face it the average American family income is what, $35 or $40 thousand. When "ordinary" coins are selling for a third of the gross before tax family income, could there be trouble in the offing?
Let's hear what you might think ...
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
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Average Americans with $40k income aren't buying $10k coins.
It seems the rich got so wealthy they are having a hard time spending all of their money.
My posts viewed
since 8/1/6
I can remember when a million was alot of money.
<< <i>Does anyone catch my drift? >>
Yes - you modern basher.
Russ, NCNE
W.C. Fields
To get this back on topic - I have to agree with Bill on this - the market is headed for a crash and a lot of people are going to need intensive care from the burn unit to recover from the fire!
Total Copper Nutcase - African, British Ships, Channel Islands!!!
'Do not meddle in the affairs of dragons, for you are crunchy and taste good with ketchup'
Now I don't run into many people who ask me about coins or recommend coins. Can I expect my barber to talk about coins? Will that be the top? Or will there be more and more articles in the local paper suggesting coins might be the Thing To Buy?
The average income is one thing. However there are well over a million millionaires in this country. Forbes says there are 244 billionaires.
The extreme concentration of wealth that has occured over the past 15 years or so, combined with egomania that is exhibited by many of the newly wealthy, has caused the current price run-up at the very high end of the market. Can it last?
put forth on the eBay / Forum Member Directory. Thanks Russ!
I don't do anything but upload it to my site. Robert created it, and maintains it.
Russ, NCNE
My bad, I misunderstood what I read..but thanks anyway!
<< <i>
In "normal" markets $10 thousand + usually bought something that was really distinctive or nice. It might not be the rarest or finest known, but it was unusual like a decent Chain Cent or a nice piece of early gold. Now I see some pretty ordinary stuff bring these prices.
>>
Perhaps your idea of "really distinctive" or "ordinary" doesn't match other collectors' opinions.
All the new advances in the hobby that weren't around (or at least not around to any degree) have made a serious and lasting impact on the hobby and industry. Internet, Ebay, State Quarters, Registry Sets, liquidity and the overall acceptance of the top 3 grading co's have turned our little thinly traded hobby into a serious growth industry.
Personally, I think discounting the upside potential is far more risky than emphasizing the lofty prices compared to a few years ago. While I wouldn't advocate risking anything other than discretionary income into numismatics, I am putting my money where my mouth is and am still buying problem free rare coins. And yes, I do think there are areas of the industry that are considerably more speculative than others. I'm just speaking in general terms.
When we are planning for posterity, we ought to remember that virtue is not hereditary.
Thomas Paine
“Average Americans with $40k income aren't buying $10k coins.”
This is exactly right, but the question I have is if a person is making $100,000 per year how many $10,000 losses can he take?
“I can remember when a million was alot of money.”
I can remember when there was a Forbes 400 with only 4 Billionaires listed in the U.S. The last estimate I heard was that there were 20 million Americans with net worth’s over one million dollars !
In Sunnywood’s thread the other day there were lots of opinions as to how long the bubble would last and the guesses were all over the map, if I remember correctly we had some of this discussion last year and many thought the market was ready to drop then. By the end of the year all these prices may be up another 50% who knows, but this is still pretty crazy.
Go BIG or GO HOME. ©Bill
I think it is funny. For $10,000, you can get a real coin, like an attractive Seated $ or a nice 13 S quarter.
If you gave me those two Ike $s, I'd probably spend them.
"Seu cabra da peste,
"Sou Mangueira......."
Someone spent $10k on 2 Ike dollars??? Shoosh!
I can remember when a million was alot of money.
Uhhhhhhhhh.... A million is a lot of money to 99.999% of the world's population, with me being firmly in that demographic!!
I think your average collector coins under a hundred bucks ain't gonna take much of a beating. Stuff like a G4 Indian cent or a Fine common-date Seated quarter has eternal appeal. Let the bubble of five-figure-pricetags break. I'll be right down here with the little folk, having a grand ol' time.
If it really gets bad, I'll go completely Darkside.
Collector since 1976. On the CU forums here since 2001.
I am surprised no one has expressed such outrage about the high prices of real estate, automobiles, auto/home/health insurance, medical care, etc. All up well into the double digits over the last 4-5 years. Aren't coins simply reflecting the same appreciation/overinflation of assets? Perhaps it's too much money chasing too few nice coins? People are afriad to put money into stocks and real estate is too high so they look for collectibles [art is very hot now].
That's It !
It's all about diversification. If you have 10% or less of your portfolio in rare coins, then a crash should not bother you too much, if you are a diehard collector w/no plans to sell.
It's like my big screen TV. Do I care that I could buy one much more cheaply now? Not really. I like watching my big screen TV, and I don't really care what the big screen TV market does. Let the big screen TV market go to crap......who cares, as long as I can watch Simpson's reruns
Russ, NCNE
The Ludlow Brilliant Collection (1938-64)
As far as only "wealthy" people buying five figure coins, I would disagree. I have a couple five figure coins in my collection but I hardly consider myself wealthy in the monetary sense.
I think that it all depends on what you spend your money on. So many "average income Americans" are so far into debt because they live above their means. If you dont have debt and are responsible with your money, it is possible to purchase higher value coins as a normal collector from time to time.
That is my two cents about that.
As far as people paying 10 G's for two Ikes, well, I dont have much sympathy for them.
I truly wish that the whole market would just tank, or at least settle down. I am not planning on selling so I really dont care about the short term. I just want to be able to buy nice coins...
John
siliconvalleycoins.com
<< <i>.
As far as people paying 10 G's for two Ikes, well, I dont have much sympathy for them.
>>
There are Ikes worth close to six figures. There are dozens worth far more than five figures.
Bill: Consider this hypothetical:
1. A collector who loves Jeff nickels (or for that matter Walking Liberty Half Dollars or Merc Dimes) desires a complete set of the finest coins available in the market today.
2. Actually, 2, 3 or even 4 collectors feel the very same way about a series.
3. A coin comes up that is seldom available - it could be a 42D/D nickel in MS63FS or, for that matter, a 1945(p) Merc Dime in true gemFB.
4. Each of these collectors is more comfortable than the next. Any one of them could spend $10,000 on dinner and not even think about it.
5. The coin in question sells for $10,000 or $12,000 as these (3) collectors battle it out for the specimen.
COULD IT BE THAT THERE IS REALLY VERY LITTLE TO BE "CONCERNED" ABOUT, ESPECIALLY ASSUMING A COIN SALE SUCH AS THIS IS MOTIVATED BY PURE COLLECTING JOY?
I read on the boards the other day about possibly "(2) billionaires" who have decided to collect the entire pattern series. While that remains to be seen, assuming that was truly the case and each of these guys loved the concept of patterns (and that they were collecting out of pure joy) - if pattern prices started to rise, would this be a "concern" to the hobby? Granted, it would probably prevent me from finishing up my pattern nickel personal collection as I have some coins that only 2-4 specimens currently exist in any company slab (and if the "billionaires" really wanted them there is little chance I could refuse to sell) - but, if coins started "taking off" like classic artwork due to COLLECTORS placing ownership of coins ahead of some money in the bank - that creates an interesting scenario. And, incidently, I am not convinced that any "billionaires" are aggressively buying complete pattern sets. Yesterday, I bought a high R-7 (Pollack lists as R-8) Three Cent pattern in PCGS-PR66DCAM (3 grades higher than the next known coin) for well under the price of the 42D/D nickel. The three center had a mintage (not pop, but total mintage) of around 5-6 coins. No billionaires in sight
Wondercoin
<< <i>Last month, when I was getting a lot consultation from a guy at Heritage, we discussed this very topic. He was somewhat amused and grossed-out that some guy paid $10,000 for two Ike Dollars.
I think it is funny. For $10,000, you can get a real coin, like an attractive Seated $ or a nice 13 S quarter.
If you gave me those two Ike $s, I'd probably spend them. >>
There are only a few million other collectors who agree with you or have in the past. It's a wonder
there are any at all left.
Pls dont take offense. You know how I feel about the modern market...
Wasnt trying to make light of the market.
John
siliconvalleycoins.com
old timers that their hobby exists in a vacuum. That it doesn't matter what happens in the
wider world or even in other collecting pursuits because there will always be demand for
their precious coins and this demand will somehow magically create a supply and distribu-
tion network. That there'll always be lots more people who think exactly as they do and
that the appreciation of great old coins is a given. They run up the prices of many of these
coins based largely on the fact that there is a great deal of new demand for coins and then
they'll belittle the new collectors and their little dogs too.
It concerns me because I won't be sure with whom to sympathize when the real world interferes
with their misconceptions.
Heck - that's nothing. I paid close to $40,000 for a single IKE dollar in a Bowers sale last year
Wondercoin
Thanks for making my weekend
sign me
edited for:
Hows the Justman doing?
Go BIG or GO HOME. ©Bill
In "normal" markets $10 thousand + usually bought something that was really distinctive or nice. It might not be the rarest or finest known, but it was unusual like a decent Chain Cent or a nice piece of early gold. Now I see some pretty ordinary stuff bring these prices.
There is nothing ordinary about a 1942 D over hoiztonatal D in MS63FS. It is quite rare. Pricing simply comes down to supply and demand.
My Jefferson Full Step Variety Set (1938 - Current)
My Jefferson Proof Variety Set (1938 - Current)
Bill (Pontiacinf): Justin (now 12) spent a lovely day at the coin show today. He selected the MONSTER TONED Oregon NGC-MS68* over the PCGS-MS69 Boone as his favorite Commem over at MS68's table. He also got to see Donn Murphy's #1 MS State quarter set on display at the PCGS Tables. He is being taught early to respect and enjoy all types of coins, be it modern or classic. He presently shows no prejudice.
Wondercoin
P.S. I had to laugh about that comment made above that if the board member would have had those (2) Ikes at $10k he would have spent them. Funny thing is the Ike I bought at auction for close to $40k last year WAS REPORTEDLY SPENT in or about 1976 and found in a cash register in the Wash. DC area. Now, there is proof to check your change before spending it!!
But if you buy coins for investment purpose, then it's just like investing in anything else. Deal with the stress/joy, up/down, bull/bear, bubble/burst, etc.
A 22% annualized rate. It's stuff like this that explains why the prices of investment type hard assets and commodites are going up. They will print money even faster if needed to keep the economy floating. We may not see the final effects until early 2005
when everyone wakes up at once and says, aw...sheesh.
roadrunner
To summarize, some commodities have gone up due a combination of increased demand from places like India and China, coupled with the relative decline of the dollar compared to other hard currencies. Part of such decline can be explained by the intentional weak dollar policy of the current administration. As proof of this, compare our prime rate with that of other industrialized countries.
Mitch, in an unrelated matter, if you can pay $40,000 for an Ike dollar and make a living sellling it to someone else, the more power to you. I simply cannot relate to that and to me, an Ike Dollar is no different than a $1 Federal Reserve Note. I guess if everyone collected what I collect, I'd have to find another hobby.
"Seu cabra da peste,
"Sou Mangueira......."
Elcontador: When the two "billionaires" come looking for that UNIQUE pattern Ike Dollar to put the last coin in one of their 100% complete pattern collections, that should be something
Wondercoin
The coin market is riding a wave of unleashed debt and credit. That wave will reach shore at some point. I don't want to be standing on the beach when it comes in.
roadrunner
Elcontador
Collector
Posts: 1800
Joined: Feb 2001
Friday June 04, 2004 10:09 PM (NEW!)
No offense intended, but if you really want to know how the economy works, get the Wall Street Journal, the Economist, etc. and read them for awhile. I have degrees in this stuff and make a living this way. Your analogy re short term money supply in the last four weeks is at best, anecdotal and means nothing.
To summarize, some commodities have gone up due a combination of increased demand from places like India and China, coupled with the relative decline of the dollar compared to other hard currencies. Part of such decline can be explained by the intentional weak dollar policy of the current administration. As proof of this, compare our prime rate with that of other industrialized countries.
Mitch, in an unrelated matter, if you can pay $40,000 for an Ike dollar and make a living sellling it to someone else, the more power to you. I simply cannot relate to that and to me, an Ike Dollar is no different than a $1 Federal Reserve Note. I guess if everyone collected what I collect, I'd have to find another hobby.
-------------------------
"Vou invadir o Nordeste,
"Seu cabra da peste,
"Sou Mangueira......."
Edited: Friday June 04, 2004 at 10:11 PM by Elcontador
End of interruption.
and it sets us apart from practitioners and consultants. Gregor
Some coins such as the commoner CC dollars and the 1936 Proof Walker are way overpriced. They're not THAT rare. I guess speculators have run them up (see "Topstuf's" thread about buying CC dollars, CC gold, chain cents, etc). One day someone will be stuck "holding the bag."
roadrunner
let's set the record straight here while you try to weasel out of what generally gets you in trouble, that being the bashing of the preferences of other collectors because they don't share your interests and have the audacity to collect in areas that drain money from your target segment.
you said A fool and their money are soon departed. People who pay inflated prices like this usually lose their shirts in the end. now you wanna throw gas on the fire by saying Now I see some pretty ordinary stuff bring these prices and When "ordinary" coins are selling.......... as though you are this guru of what's ordinary and what's really collectible, like say maybe something that was really distinctive or nice. It might not be the rarest or finest known, but it was unusual like a decent Chain Cent or a nice piece of early gold.
please don't try to come off like a dealer who's concerned about the health of the hobby and modern's being the ruination of it all. what's going on is actually quite transparent----you don't like the fact that a segment of the hobby you view with disdain is prospering in any degree. it infuriates you, always seems to have since i've been here.
let it go, enjoy what you like and quit the belly-aching. it's rather juvenile for a man of your years to whine so much.
al h.
That 1942 D horizontal D nickel is RARE, and it is not like 10 new ones are going to show up tomorrow. Simple economics -- Real estate, individual stocks, collectables like coins, etc. go up in value because the demand has risen, but the supply can't keep up. I have an 1864-L on Rib PR64 RB IHC. I know there are 8 original and 10 restrike proofs. There are 18, period. The collector base may expand, but there will always be just 18 of these proofs, forever. The supply will never increase.
I hate it when you see my post before I can edit the spelling.
Always looking for nice type coins
my local dealer
I personally hate this hot market but my perspective is that of a long time collector and the prices seem nuts. On the other hand new money coming in looks at this market with much different eyes. Last week I bought an 1864 PR-64 NGC Seated dime priced at a little under the current market for a few hundred dollars. There were only a little over 400 of these minted, and maybe less than 300 in all grades still in existence. To someone new in the market to buy one of only 300 of anything on the planet has to seem like a great opportunity even at twice the price. I think this market still has legs and will keep going up for the next several years until all the bargains are gone. When we must look for a month to find anything worth buying, that is not “ over valued”, then the end may be near. You have to ask yourself this question? If you had the money today could you find a coin you could buy at a fair price? Until that answer is NO then the market keeps going until all sectors are to the moon.
The same general situation existed in the 1978-1980 era with inflation. It took many years to fully see the effects of coming off the gold standard in 1971. At the end of this inflationary run, it took interest rates over 10% to start to slow down the collectibles train. We are back in about the same boat. IMO gold was slowly unleashed from massive manipulation starting about 2001. The net effect of this may not be fully seen for several more years. Coin prices will follow the fortunes of the dollar and gold.
roadrunner
<< <i>The modern coin market infuriates me too...but only because I wasn't farsighted enough to understand the effect of the coin registries. Heck, I didn't even know what a registry set was until around 2001!
roadrunner >>
Most of the old timers look at the modern market and can only see junk with some of it trading
at very high prices. They believe that the grading companies are capitalizing on the fleecing of
those who are too ignorant to see that the coins aren't even collecible much less worth five or
six figures. They see the hobby press pandering to this and believe that their involvement is
strictly about the ad revenue that the modern markets generate. They imagine legions of the
sheep lined up with multi million dollar collections on the verge of becoming worthless almost
overnight. Even if they did become interested in a modern series they would stay far away be-
cause they believe the prices have gone far beyond sanity already.
In actuality Most of the circulation issue moderns have barely moved at all. There are still lots
of scarce coins that can be purchased for very nominal amounts. The coins which are selling at
very high prices are coins which are rare or extremely scarce and have several well-heeled col-
lectors competing for them. (often many are registry participants). But the whole time there are
rarities in circulation and high grade coins which can be purchased for a song.
Far from having missed the boat, it is still under construction.