Will the old coin market with market cycles ever return, or are we in a brave new world and a new ma
Longacre
Posts: 16,717 ✭✭✭
Here is an excerpt from a Numismedia article. I thought it was interesting because it refers to the "old" coin market that had fairly limited and discreet funds which moved from one hot area to another (thus creating cycles and market ups and downs). The contrasts that with the new market which tends to be better fed with total money, and seems to imply that there will not be as many swings in the market, because the void created by the movement from one hot area to another will be filled with new money entering the market overall. Do you agree with this?
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Us old-timers remember when the coin market was governed by market cycles; values went up, values went down. It all depended on the whims of the dealers and the collectors. The dealer and collector base was so tight knit that it did not take too much to move certain series in one direction or another. However, the ability to maintain values was limited by the amount of money in the entire coin market. Therefore, when interest began in another series, one of the previous hot markets would falter and the values fell. These cycles created momentous "ups and downs" in the coin market from the early 1970s through about 1997.
Today there seems to be no limits on the totality of money in the coin market. Personal wealth has been created in so many other areas of business that new, well-funded collectors begin their adventures into numismatics, many times with a major acquisition. We are seeing million dollar rarities selling at a record pace. Hundred thousand dollar coins are quickly sold as ready collectors buy them at the first opportunity; and there are other buyers in the background that just missed because they did not react fast enough or did not know of the availability of a coin they had been searching for over the past year. It is no wonder that numismatists speak of this market as multi-tiered.
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Us old-timers remember when the coin market was governed by market cycles; values went up, values went down. It all depended on the whims of the dealers and the collectors. The dealer and collector base was so tight knit that it did not take too much to move certain series in one direction or another. However, the ability to maintain values was limited by the amount of money in the entire coin market. Therefore, when interest began in another series, one of the previous hot markets would falter and the values fell. These cycles created momentous "ups and downs" in the coin market from the early 1970s through about 1997.
Today there seems to be no limits on the totality of money in the coin market. Personal wealth has been created in so many other areas of business that new, well-funded collectors begin their adventures into numismatics, many times with a major acquisition. We are seeing million dollar rarities selling at a record pace. Hundred thousand dollar coins are quickly sold as ready collectors buy them at the first opportunity; and there are other buyers in the background that just missed because they did not react fast enough or did not know of the availability of a coin they had been searching for over the past year. It is no wonder that numismatists speak of this market as multi-tiered.
Always took candy from strangers
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
0
Comments
Chris
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
offsetting any loss in the hobby base. These collectors did tend to move enmass
from one hot item to the next creating the illusion of growth. Today there is a
rapidly growing hobby base and millions of returning collectors with much more
wealth. This money pouring into the hobby has been focused largely on the clas-
sics because this is the area of the market where returning collectors are buying.
Moderns are doing well because many of the newbies are younger and are more
interested in states coins and less expensive issues that don't have to be slabbed.
There is a larger demographic change which is simply hiding the status quo of col-
lectors moving from one hot area to the next. This change also has a much longer
cycle and will not become apparent until the market tanks again in a few years to
reveal where the speculation really is. After that the demographic cycle will prob-
ably turn downward again and it will be a brand new market that has all the char-
acteristics of the same 'ol, same 'ol.
<< <i>Just wait until grade DE-flation kicks in. >>
If that happens, we'll see maxed out, newly graded 63s sitting along side inferior coins graded 65 in the gradeflation days, and it will be entombed as a 65 forever.
That could get ugly.
<< <i>it refers to the "old" coin market that had fairly limited and discreet funds which moved from one hot area to another (thus creating cycles and market ups and downs). The contrasts that with the new market which tends to be better fed with total money, and seems to imply that there will not be as many swings in the market, because the void created by the movement from one hot area to another will be filled with new money entering the market overall. >>
Translation: "This time it's different".
-J.M. Keynes
Once upon a time, Holland had tulips.
<< <i>These cycles created momentous "ups and downs" in the coin market from the early 1970s through about 1997. >>
Since I started collecting in 1997, I'm apparently responsible for the change in the market.
But I think they're probably mis-diagnosing a temporary situation with a long term change.
If it rains in Southern California after a long drought, it doesn't mean L.A. is going to become a rain forest.
Translation: "This time it's different".
the difference is: this time it IS different.
Liberty: Parent of Science & Industry
<< <i>Translation: "This time it's different".
the difference is: this time it IS different.
That was said tongue-in-cheek I hope.
It's never different.
The dollar has gone down over 30% vs. the euro
Inflation in starting to rise
there is more money in our markets (read: dollars) than ever before
the lending bonanza on homes is adding fuel to the fire
Gold is reflecting the global devaluation of the dollar
result: when lending stops (interest rates rise): BEWARE
My Auctions
BUT that does not mean will are without cycles. When real estate tanks, etc., and everyone is getting hit in their pocketbook, purchases will drop and prices will come down. I do think the long term outlook is very bullish. At one time, I was worried that the hobby was dying due to lack of participation. But with the state quarters, and flood of US Mint issues.... I think there will be many many collectors into the future.
cause you'll meet the same people on the way down
Ralph Kramden
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
How could there be a housing bust???
My opinion is worth what you paid for it
Then dated later 19th century gold. Then as some of these first timers have waned a bit, more interest in early gold, early mint marked gold, proof gold, and early type. Now generic gold is strong . Next will be commems, later 19th century type, Morgans, Peace dollars, etc. And some of the strength in the earlier moves is being passed along to the newcomers.
If no one wants to sell their home, and keep the low fixed-mortgage rate they are enjoying now...
How could there be a housing bust???
It will not be a matter of people wanting to sell their homes, but the ones that will be forced to. A huge number of people are locked into ARMS. A few hundred billion $$ of those Mortgages come due for rate adjustments in 2006. And then in 2007 more than 1 TRILLION $$ of ARM mortgages become eligible for rate bumps. You could very well see a significant # of these buyers default on their payments. This is how it could get ugly. As homes fall on to the market it doesn't matter the prices of those available will fall. While your fixed rate mortgage home may be worth $500,000 to you, the one next door on the ARM sells for $350,000......well guess what? Yours will be worth that if you need to sell also (job change, move, etc.). Will your banker be happy that you may be upside down on the equity in your home since it dropped $150,000? (and that same banker loaned you $150,000 during the last refi?) It could get uglier very fast as Topstuf alluded to.
roadrunner
How else could they have afforded a $500,000 home making $50K per year? They did it with no money down (or close to zero), interest only loans, and with over-appraisals to get them in. It's gonna get interesting if rates continue to up through 2007. If they don't, then things will hold together and the coin boom will continue on with the throttle stuck open.
roadrunner
<< <i>The infrastucture is WAY different with the internet. It has totally changed the situation; now everyone has access 24hr/day 7 days/week. That will keep money flowing in >>
On the flip side, that 24/7 access also means that if a top IS reached or a slide starts the news will spread much faster and the money will flow out MUCH faster than it could in the past. So the crash can come much more suddenly and be much steeper.