<< <i> A very intelligent money manager once said collectibles are highly correlated with GDP. I'll let the board members draw their own conclusions but I like the concept. If this argument holds water then perhaps the coin market will just drift lower and no bubble will burst.
There may be a correlation, but it's hardly one to one. While the coin market dropped (very roughly) 50% between April 19, 1980 and the ANA show of the same year, GDP certainly didn't halve. >>
Of course and I believe he was referring to 2000 and beyond. I would also argue the US economy and the coin market are quite different today. The internet and plastic has changed the coin market dramatically.
Andy, would you consider the 1980 experience to be an anomaly?
It is such a small market to begin with that the bubble could expand to 100X its current size and not be a pimple on the butt of, say, the oil market.
In addition to this the fact that current prices are a mere fraction of 1989 (especially using inflation-adjusted numbers), I don't have much fear of an imminent collapse. If anything, we've got years of growth to go to even remotely approach gains similar to the fine-art market.
Andy, would you consider the 1980 experience to be an anomaly?
The cute answer: It's always different, and it's always the same.
But more clearly: 1980 was just a variation on a repeating theme. Something - in 1979-80, an inflation-induced panic - set off a bubble-inflating chain of events, and the bubble burst on April 19, 1980. In 1988-89, the "something" was the TPGs ascent to power, which set off dreams of Wall Street fueled riches. What about now? The only bubbles I see are in the world of Registry sets and, possibly, nicely toned coins. In retrospect, we'll probably think of the internet as the "something" that set of our current "chain of events". When the bubble bursts, a few more people will learn that "this time is different" are the most dangerous words in the world of investing.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Andy, would you consider the 1980 experience to be an anomaly?
The cute answer: It's always different, and it's always the same.
But more clearly: 1980 was just a variation on a repeating theme. Something - in 1979-80, an inflation-induced panic - set off a bubble-inflating chain of events, and the bubble burst on April 19, 1980. In 1988-89, the "something" was the TPGs ascent to power, which set off dreams of Wall Street fueled riches. What about now? The only bubbles I see are in the world of Registry sets and, possibly, nicely toned coins. In retrospect, we'll probably think of the internet as the "something" that set of our current "chain of events". When the bubble bursts, a few more people will learn that "this time is different" are the most dangerous words in the world of investing. >>
I disagree with the contention that the registry or desire for toned coins are in themselves reflective of a bubble. Collectors have always sought the finest examples. This will never change because it's human nature.
In the last couple generations coin collectors have taken the passion for the finest to levels which may have never been seen before. The registries are a symptom of this not a cause. There are many collectors who seek only the best and have no interest in the registries and the high prices for the best are not always fueled by registry collectors.
I don't believe this is a small point. While the internet and grading companies may represent sufficient fundamental change that this trend never fully reverses the fact emains that any reversal will affect virtually all aspects of pricing. There is almost no difference to spending ten times more to get a modern proof in MS- 70 instead of MS-69 and buying a VF '26-S nickel for ten times more than a F.
Simply stated; if the trend reverses the spread between all the grades would narrow and affect almost all coins rather than only registry coins.
However, the one variable that is unknowable (is that a word?) is the amount of leverage in the coin market.
That is a very good point. There is probably more leverage than we know but probably not all that much relative to the overall value of the US coin market. Leverage can make a huge difference in a boom-bust cycle.
perhaps a related question is, " Are you comfortable holding the coins you're holding, and would buy more of them if prices dropped 50%, or are you "wondering" if now is the time to sell, such that if market values of what you're holding dropped 50%, you'd think, "aw shucks, I missed my chance to get out of this increasingly common material for which the "pops" are subject to the whims of the grading companies and market makers"
I know you know what I'm talking about RYK but I wonder if many others do?
There could be a correction at the high end of the market. For series that have a lot of depth in the number of active collectors, such as early copper and bust halves, I don't think there is a chance for lower prices on mid-range coins ($500-$5000), there are just too many players chasing these coins.
Robert Scot: Engraving Liberty - biography of US Mint's first chief engraver
cladking, no fair ... as a "modernist" you have no right to quote Shakespeare !!!
you should draw your wisdom from contemporary rap instead
after all, who needs the classics, right?
as you like it ....
as for the bubble ... oh yes, I have thought so for some time now ... the insanity ranges from routine six and seven figure prices for classic coins at auction to crazy prices paid for common coins in 70-graded plastic, and utterly meaningless designations such as "First Strike" ... oh and yes, I will also include crazy prices paid for some common date Morgans with spectacular color (just so nobody calls me a hypocrite) !! ... rising bids combined with INCESSANT gradeflation, crackout/upgrades etc, makes for skyrocketing actual prices in some cases ... and serious wealth chasing alternative assets while the US dollar and the stock market have underperformed ... at some point the dynamic will reverse, most likely with a sharp and nasty reversal
<< <i>In my experience, feature articles in Newspaper business sections are a contrarian indicator. --Jerry >>
So the articles I read that predicted the collapse of the internet stock bubble and real estate bubble were wrong? >>
While I do believe there are corrections in any market, one of the main differences between commodities and the US internet bubble and real estate bubble is that the latter was arguably wall street driven while commodities are being driven worldwide. At this point in time commodities have more sustainable real world demand.
I manage money. I earn money. I save money . I give away money. I collect money. I don’t love money . I do love the Lord God.
as for the bubble ... oh yes, I have thought so for some time now ... the insanity ranges from routine six and seven figure prices for classic coins at auction to crazy prices paid for common coins in 70-graded plastic, and utterly meaningless designations such as "First Strike" ... oh and yes, I will also include crazy prices paid for some common date Morgans with spectacular color (just so nobody calls me a hypocrite) !! ... rising bids combined with INCESSANT gradeflation, crackout/upgrades etc, makes for skyrocketing actual prices in some cases ... and serious wealth chasing alternative assets while the US dollar and the stock market have underperformed ... at some point the dynamic will reverse, most likely with a sharp and nasty reversal
OMG! I agree with Sunnywood. Things are worse than I ever imagined.
<< <i>cladking, no fair ... as a "modernist" you have no right to quote Shakespeare !!!
you should draw your wisdom from contemporary rap instead
after all, who needs the classics, right?
as you like it ....
as for the bubble ... oh yes, I have thought so for some time now ... the insanity ranges from routine six and seven figure prices for classic coins at auction to crazy prices paid for common coins in 70-graded plastic, and utterly meaningless designations such as "First Strike" ... oh and yes, I will also include crazy prices paid for some common date Morgans with spectacular color (just so nobody calls me a hypocrite) !! ... rising bids combined with INCESSANT gradeflation, crackout/upgrades etc, makes for skyrocketing actual prices in some cases ... and serious wealth chasing alternative assets while the US dollar and the stock market have underperformed ... at some point the dynamic will reverse, most likely with a sharp and nasty reversal >>
I assume your talking about coins when you refer to alternative assets. The question is have rare coins been sufficiently discovered as a bonafide alternative asset. Maybe, maybe not.
But many alternative assets have already slowed......be it real estate, private equity, or certain hedge fund stategies.
I manage money. I earn money. I save money . I give away money. I collect money. I don’t love money . I do love the Lord God.
You see again, when I see the term 'coin bubble' it seems to reference the US coin market only.
Hey, collecting darkside is growing literally worldwide. No bubble there that I hear about.
Even during the internet stock market bubble, there were clear winners in stocks that just kept going up ( IE: small, mid and large cap value, and especially international stocks)
I manage money. I earn money. I save money . I give away money. I collect money. I don’t love money . I do love the Lord God.
I'm not sure if anyone mentioned this because I didn't read all the posts. I do believe we are in a slight bubble however I also believe that foreign money is holding the value of our coins up and will continue to until we see the global recession that everyone is talking about. Remember:
In the last year or so the dollar has lost so much value that the Euro actually has 30% more buying power. I haven't even looked at other currencies.
March 2006 a $900 coin would cost $750 Euros March 2007 a $900 coin would cost $692 Euros March 2008 a $900 coin would cost $545 Euros
It may be looking like a good investment for people overseas. imo
I started collecting in the late 60's early 70's and got more serious in the early 90's and I still find some gems out there. A bubble may be a cosmic upheaval in smoe circles or possibly only a burp in the collective eye. This is the difference between the investor & the collector. And why coins resurface out of the blue, people die. The investor watches his money, the collector will cherish his or her coins. Monetary salvation is second fiddle and certainly a secondary thought, in the grand scheme of things.
<< <i>All this negative sentiment is VER bullish. >>
This is absolutely correct. And comparing the recent run-up in rare coin prices to the Nasdaq of 1999-2000 is ridiculous. When it becomes conventional wisdom in the U.S. that you should have part of your investment portfolio in the rare coin market, I'll say you have a point. Now, while I wouldn't necessarily say high-end rarities are cheap, Christie's Auction House had an ad in the New York Times today with a photo of a painting of a reclining(!) 400 pound woman that recently sold for $33 million. It was the most ever paid for a painting by a living artist. I know I'd rather have Steve Contursi's 1794 dollar.
In the overall market, nope. In moderns, possibly. Only time will tell. The only sure way to tell if a market is in a bubble is the observation that it has popped.
perhaps a related question is, " Are you comfortable holding the coins you're holding, and would buy more of them if prices dropped 50%, or are you "wondering" if now is the time to sell, such that if market values of what you're holding dropped 50%, you'd think, "aw shucks, I missed my chance to get out of this increasingly common material for which the "pops" are subject to the whims of the grading companies and market makers"
I know you know what I'm talking about RYK but I wonder if many others do? >>
Great point. I have all but stopped buying coins that are not key dates so I would be happy with a half off sale.
<< <i>In my experience, feature articles in Newspaper business sections are a contrarian indicator. --Jerry >>
So the articles I read that predicted the collapse of the internet stock bubble and real estate bubble were wrong? >>
Sort of OT but I'll tell my story anyway. When I was studying for the CFA in 1999 the required reading actually offered up theories as to why the market had changed. These theories basically said fundamental credit analysis was dead for certain sectors. I remember reading these articles and laughing out loud. At the very least I had a built in excuse if I failed - the matieral was complete BS.
My experience has been that when the reporters concede to the prevailing theory that is the beginning of the end. Robert is correct. The WSJ pounded the table about the housing market for many months. In the end, they were correct but their timing was off.
Bubbles occur when the intrinsic value of an item is ignored relative to its market price. Sadly, the most wealth destructive bubbles are seen only in the rear view mirror.
Real estate and stock fluctuate, but they can produce returns to the holder without having to be sold.
When a profit can be gained only by finding a "bigger fool", there is a good chance there is a bubble. JMHO.
The Golden Rule: Those with the gold make the rules.
<< <i>In my experience, feature articles in Newspaper business sections are a contrarian indicator. --Jerry >>
So the articles I read that predicted the collapse of the internet stock bubble and real estate bubble were wrong? >>
Sort of OT but I'll tell my story anyway. When I was studying for the CFA in 1999 the required reading actually offered up theories as to why the market had changed. These theories basically said fundamental credit analysis was dead for certain sectors. I remember reading these articles and laughing out loud. At the very least I had a built in excuse if I failed - the matieral was complete BS.
My experience has been that when the reporters concede to the prevailing theory that is the beginning of the end. Robert is correct. The WSJ pounded the table about the housing market for many months. In the end, they were correct but their timing was off. >>
The warning bell for bubbles is often sounded a couple of years too early in the popular press. Often at prices 20%, 50% or even 100% below the eventual top. Fundamentals are a poor timing indicator. Market sentiment is better--when prices have gone up for a long time and everyone believes prices can only continue to go up, even if it is only for another year or two, that's near the end. Few people listen to warnings at the top, because the same cry of wolf went up at much lower prices and prices kept going up and up.
Some of the auction results for rare, but not truly special coins, going for 3x to 5x what they sold for only a year or two ago, are the kind of price action seen in bubbles. A few of these coins are being bought by novices as investments, again, the kind of action seen at bubble tops.
As always, calling top is a fun game, but rarely profitable. The safer prediction is that many will rush in and buy on the first 10% correction after the major top, and lose their shirts as prices continue to slide. That price action is what folks can be much more careful about when the top is in place.
Jeez, and here I thought I bought coins as a collector, not as an investor... ya' know, along the lines of ONLY BUY COINS WITH DISPOSABLE INCOME. I buy coins because I LIKE to buy coins. I think they are pretty neat, and I can get just as much of a thrill out of finding a nice coin for $35 as finding one for $3,500.
If we are to look at coins STRICTLY as financial investments then here is a little somthing to consider. Just as of in the stock market no one can consistently call the top or bottom of the market, but we know that over time the market will go up. Even stocks, let's say the S&P 500, bought at the top of a given market almost invariably have a higher top at the next market top. In the interim anyone with an ounce of brainpower will enjoy the dividends thrown off by the stocks. A classic way to benefit from this is dollar cost averaging. Buy the same amount dollar wise over any given temporal cycle (let's say each year), which means buying less total stocks when the price is high, and more stocks when the price is low.
In a like manner, as long as you are using disposable income, buying coins consistently using roughly the same amount of money will keep you in "The Market", and allow you to increase your wealth long term. I would suggest that the "dividends" from owning coins, while obviously not a quarterly payout, are subtle but rewarding just the same. First and foremost, you get to look at them and hold them with all the assorted art/history/etc. associated with them. Secondly, you have something to talk about with other coin geeks, so they have a definite social aspect to them too. Third, you have the enjoyment of contemplating what to buy next.
So, are we in a coin bubble? Who knows? Do I care? Not really. I'll continue (the good Lord willing) to consistently buy what I'm collecting and think is a good value, with every now and then a little splurge thrown in.
Whether this market is near a top is a different question than is there a bubble.
I believe we are near a top and there are a lot of signs. The only one that doesn't fit is that there are still lots of people who are bears. A lot of these bears are still buying for collections so this may partially negate this as a contrary indicator.
I'd be surprised if any markets imploded to reveal they were a bubble however. The only investment going on tends to be in the multi thousand dollar early 19th century coinage but there is strong collector interest too. There's a little in the "usual suspects" and probably in very high grade recent mint products.
Market tops and bubbles are different things.
If there is a bubble it affects virtually all coins with any significant spread between AG and superb gem.
<< <i>Jeez, and here I thought I bought coins as a collector, not as an investor... >>
Believe it or not, I'm actually a collector. I work in finance and find it quite interesting. I also find it difficult to separate my hobby from my job (to a certain extent). I find coin market and pricing discussions to be fascinating. My only frame of reference is finance so when I think about the coin market I almost always use that particular backdrop.
Do I care if prices drop? No, I don't. I figure it will take me 10+ years to accomplish my goals anyway. I'm waiting for the right coin not the right price. In the meantime, I guess I will draw parallels between finance and the "coin market."
Same breakdown as above but perhaps condition rarities as not as defined
While a bubble argument can be made in some components of the market, certain collector coins that have a following seem to be fine and their value is less likely to be affected by the potential swings of condition rarities.
To suggest the entire coin market is one bubble is not a very compelling argument considering how different the participation is at various levels.
Finally, there almost always seems to be neglected areas of the coin market. I remember the days when one could not even give away Russian and even Polish coins and over the past 3-5 years, these two countries have basically out performed just about any area withing the overall coin market. Go figure... it seems to be about timing and making sure that the coins purchased represent quality for the grade.
Experience the World through Numismatics...it's more than you can imagine.
<< <i>Jeez, and here I thought I bought coins as a collector, not as an investor... >>
Believe it or not, I'm actually a collector. I work in finance and find it quite interesting. I also find it difficult to separate my hobby from my job (to a certain extent). I find coin market and pricing discussions to be fascinating. My only frame of reference is finance so when I think about the coin market I almost always use that particular backdrop.
Do I care if prices drop? No, I don't. I figure it will take me 10+ years to accomplish my goals anyway. I'm waiting for the right coin not the right price. In the meantime, I guess I will draw parallels between finance and "coin market." >>
Let's see. I own a lot of coins, so I stand to lose out if the alleged bubble pops. Boo-Hoo! I collect coins and like to buy them. I stand to win out if the alleged bubble pops. Yippee!
Seriously guys, I know that the investor in me would cry, but the "kid in the candy store" would sure like to come out and play.
Comments
Yes but it would more appropriately be described as a bubbling pool. Lots of "coin bubbles" have come and gone only to be replaced by yet another.
The name is LEE!
<< <i> A very intelligent money manager once said collectibles are highly correlated with GDP. I'll let the board members draw their own conclusions but I like the concept. If this argument holds water then perhaps the coin market will just drift lower and no bubble will burst.
There may be a correlation, but it's hardly one to one. While the coin market dropped (very roughly) 50% between April 19, 1980 and the ANA show of the same year, GDP certainly didn't halve. >>
Of course and I believe he was referring to 2000 and beyond. I would also argue the US economy and the coin market are quite different today. The internet and plastic has changed the coin market dramatically.
Andy, would you consider the 1980 experience to be an anomaly?
In addition to this the fact that current prices are a mere fraction of 1989 (especially using inflation-adjusted numbers), I don't have much fear of an imminent collapse. If anything, we've got years of growth to go to even remotely approach gains similar to the fine-art market.
Check out my current listings: https://ebay.com/sch/khunt/m.html?_ipg=200&_sop=12&_rdc=1
The cute answer: It's always different, and it's always the same.
But more clearly: 1980 was just a variation on a repeating theme. Something - in 1979-80, an inflation-induced panic - set off a bubble-inflating chain of events, and the bubble burst on April 19, 1980. In 1988-89, the "something" was the TPGs ascent to power, which set off dreams of Wall Street fueled riches. What about now? The only bubbles I see are in the world of Registry sets and, possibly, nicely toned coins. In retrospect, we'll probably think of the internet as the "something" that set of our current "chain of events". When the bubble bursts, a few more people will learn that "this time is different" are the most dangerous words in the world of investing.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I am, however, going to use this as an opportunity to rethink my overall commodities exposure.
will be the Bubble Gum Bubble!
Camelot
<< <i>Andy, would you consider the 1980 experience to be an anomaly?
The cute answer: It's always different, and it's always the same.
But more clearly: 1980 was just a variation on a repeating theme. Something - in 1979-80, an inflation-induced panic - set off a bubble-inflating chain of events, and the bubble burst on April 19, 1980. In 1988-89, the "something" was the TPGs ascent to power, which set off dreams of Wall Street fueled riches. What about now? The only bubbles I see are in the world of Registry sets and, possibly, nicely toned coins. In retrospect, we'll probably think of the internet as the "something" that set of our current "chain of events". When the bubble bursts, a few more people will learn that "this time is different" are the most dangerous words in the world of investing. >>
I disagree with the contention that the registry or desire for toned coins are
in themselves reflective of a bubble. Collectors have always sought the finest
examples. This will never change because it's human nature.
In the last couple generations coin collectors have taken the passion for the
finest to levels which may have never been seen before. The registries are a
symptom of this not a cause. There are many collectors who seek only the best
and have no interest in the registries and the high prices for the best are not
always fueled by registry collectors.
I don't believe this is a small point. While the internet and grading companies
may represent sufficient fundamental change that this trend never fully reverses
the fact emains that any reversal will affect virtually all aspects of pricing. There
is almost no difference to spending ten times more to get a modern proof in MS-
70 instead of MS-69 and buying a VF '26-S nickel for ten times more than a F.
Simply stated; if the trend reverses the spread between all the grades would
narrow and affect almost all coins rather than only registry coins.
<< <i>No, I haven't seen the euphoria which would be associated with a bubble; however, prices do seem to be high. >>
If this isn't euphoria, what is?
However, the one variable that is unknowable (is that a word?) is the amount of leverage in the coin market.
That is a very good point. There is probably more leverage than we know but probably not all that much relative to the overall value of the US coin market. Leverage can make a huge difference in a boom-bust cycle.
perhaps a related question is, " Are you comfortable holding the coins you're holding, and would buy more of them if prices dropped 50%, or are you "wondering" if now is the time to sell, such that if market values of what you're holding dropped 50%, you'd think, "aw shucks, I missed my chance to get out of this increasingly common material for which the "pops" are subject to the whims of the grading companies and market makers"
I know you know what I'm talking about RYK but I wonder if many others do?
Liberty: Parent of Science & Industry
I'm climbing the wall of worry.
<< <i>All this negative sentiment is VER bullish.
I'm climbing the wall of worry. >>
Now you know how I feel.
you should draw your wisdom from contemporary rap instead
after all, who needs the classics, right?
as you like it ....
as for the bubble ... oh yes, I have thought so for some time now ... the insanity ranges from routine six and seven figure prices for classic coins at auction to crazy prices paid for common coins in 70-graded plastic, and utterly meaningless designations such as "First Strike" ... oh and yes, I will also include crazy prices paid for some common date Morgans with spectacular color (just so nobody calls me a hypocrite) !! ... rising bids combined with INCESSANT gradeflation, crackout/upgrades etc, makes for skyrocketing actual prices in some cases ... and serious wealth chasing alternative assets while the US dollar and the stock market have underperformed ... at some point the dynamic will reverse, most likely with a sharp and nasty reversal
Sunnywood's Rainbow-Toned Morgans (Retired)
Sunnywood's Barber Quarters (Retired)
But I don't think important rarities and great condition census coins are put away by collectors who are leveraged.
There are dealers on leverage which is always risky to their business.
I think coin dealers have become less of a factor in a bubble as for as being market makers on these kind of coins.
They will continue to facilitate brokering of coins between parties if they know where the great coins and collections reside.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>In my experience, feature articles in Newspaper business sections are a contrarian indicator. --Jerry >>
So the articles I read that predicted the collapse of the internet stock bubble and real estate bubble were wrong?
<< <i>
<< <i>In my experience, feature articles in Newspaper business sections are a contrarian indicator. --Jerry >>
So the articles I read that predicted the collapse of the internet stock bubble and real estate bubble were wrong? >>
While I do believe there are corrections in any market, one of the main differences between commodities and the US internet bubble and real estate bubble is that the latter was arguably wall street driven while commodities are being driven worldwide. At this point in time commodities have more sustainable real world demand.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
OMG! I agree with Sunnywood. Things are worse than I ever imagined.
Sunnywood's Rainbow-Toned Morgans (Retired)
Sunnywood's Barber Quarters (Retired)
<< <i>cladking, no fair ... as a "modernist" you have no right to quote Shakespeare !!!
you should draw your wisdom from contemporary rap instead
after all, who needs the classics, right?
as you like it ....
as for the bubble ... oh yes, I have thought so for some time now ... the insanity ranges from routine six and seven figure prices for classic coins at auction to crazy prices paid for common coins in 70-graded plastic, and utterly meaningless designations such as "First Strike" ... oh and yes, I will also include crazy prices paid for some common date Morgans with spectacular color (just so nobody calls me a hypocrite) !! ... rising bids combined with INCESSANT gradeflation, crackout/upgrades etc, makes for skyrocketing actual prices in some cases ... and serious wealth chasing alternative assets while the US dollar and the stock market have underperformed ... at some point the dynamic will reverse, most likely with a sharp and nasty reversal >>
I assume your talking about coins when you refer to alternative assets.
The question is have rare coins been sufficiently discovered as a bonafide alternative asset. Maybe, maybe not.
But many alternative assets have already slowed......be it real estate, private equity, or certain hedge fund stategies.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Hey, collecting darkside is growing literally worldwide. No bubble there that I hear about.
Even during the internet stock market bubble, there were clear winners in stocks that just kept going up ( IE: small, mid and large cap value, and especially international stocks)
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Box of 20
In the last year or so the dollar has lost so much value that the Euro actually has 30% more buying power. I haven't even looked at other currencies.
March 2006 a $900 coin would cost $750 Euros
March 2007 a $900 coin would cost $692 Euros
March 2008 a $900 coin would cost $545 Euros
It may be looking like a good investment for people overseas. imo
<< <i>All this negative sentiment is VER bullish. >>
This is absolutely correct. And comparing the recent run-up in rare coin prices to the Nasdaq of 1999-2000 is ridiculous. When it becomes conventional wisdom in the U.S. that you should have part of your investment portfolio in the rare coin market, I'll say you have a point. Now, while I wouldn't necessarily say high-end rarities are cheap, Christie's Auction House had an ad in the New York Times today with a photo of a painting of a reclining(!) 400 pound woman that recently sold for $33 million. It was the most ever paid for a painting by a living artist. I know I'd rather have Steve Contursi's 1794 dollar.
Who is John Galt?
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
In the overall market, nope. In moderns, possibly. Only time will tell. The only sure way to tell if a market is in a bubble is the observation that it has popped.
-David
<< <i>If you're curious to see what $33 million will get you, click here. >>
I know a few guys who've gotten that with a six pack and a pizza.
``https://ebay.us/m/KxolR5
into a very rarefied price area. However, the more mundane
items such as Liberty seated, Barber , Standing Liberty Quarters
and walking Liberty Halves are well below the prices reached back
in the 80s. Taking into account inflation, I do not believe that todays
prices constitute a bubble for these series. Even the Bust coinage which
has had an active and continuing run does not seem to have escaped
the realm of reason as to pricing. I believe the flip flop items including many
Mint series of the past few years , aside for the platinum and gold series, have
seen there run ups and collaps. The Plat and Gold have been saved by the
surging price of those metals. While the world might come to a horrible end
in 2012, as prophesied by the Aztecs and Myans, I believe that most coins should
hold their value at least till the world ends in 2012.
Camelot
<< <i>Is there a US coin bubble?
perhaps a related question is, " Are you comfortable holding the coins you're holding, and would buy more of them if prices dropped 50%, or are you "wondering" if now is the time to sell, such that if market values of what you're holding dropped 50%, you'd think, "aw shucks, I missed my chance to get out of this increasingly common material for which the "pops" are subject to the whims of the grading companies and market makers"
I know you know what I'm talking about RYK but I wonder if many others do? >>
Great point. I have all but stopped buying coins that are not key dates so I would be happy with a half off sale.
<< <i>
<< <i>In my experience, feature articles in Newspaper business sections are a contrarian indicator. --Jerry >>
So the articles I read that predicted the collapse of the internet stock bubble and real estate bubble were wrong? >>
Sort of OT but I'll tell my story anyway.
My experience has been that when the reporters concede to the prevailing theory that is the beginning of the end. Robert is correct. The WSJ pounded the table about the housing market for many months. In the end, they were correct but their timing was off.
Real estate and stock fluctuate, but they can produce returns to the holder without having to be sold.
When a profit can be gained only by finding a "bigger fool", there is a good chance there is a bubble. JMHO.
<< <i>
<< <i>
<< <i>In my experience, feature articles in Newspaper business sections are a contrarian indicator. --Jerry >>
So the articles I read that predicted the collapse of the internet stock bubble and real estate bubble were wrong? >>
Sort of OT but I'll tell my story anyway.
My experience has been that when the reporters concede to the prevailing theory that is the beginning of the end. Robert is correct. The WSJ pounded the table about the housing market for many months. In the end, they were correct but their timing was off. >>
The warning bell for bubbles is often sounded a couple of years too early in the popular press. Often at prices 20%, 50% or even 100% below the eventual top. Fundamentals are a poor timing indicator. Market sentiment is better--when prices have gone up for a long time and everyone believes prices can only continue to go up, even if it is only for another year or two, that's near the end. Few people listen to warnings at the top, because the same cry of wolf went up at much lower prices and prices kept going up and up.
Some of the auction results for rare, but not truly special coins, going for 3x to 5x what they sold for only a year or two ago, are the kind of price action seen in bubbles. A few of these coins are being bought by novices as investments, again, the kind of action seen at bubble tops.
As always, calling top is a fun game, but rarely profitable. The safer prediction is that many will rush in and buy on the first 10% correction after the major top, and lose their shirts as prices continue to slide. That price action is what folks can be much more careful about when the top is in place.
If we are to look at coins STRICTLY as financial investments then here is a little somthing to consider. Just as of in the stock market no one can consistently call the top or bottom of the market, but we know that over time the market will go up. Even stocks, let's say the S&P 500, bought at the top of a given market almost invariably have a higher top at the next market top. In the interim anyone with an ounce of brainpower will enjoy the dividends thrown off by the stocks. A classic way to benefit from this is dollar cost averaging. Buy the same amount dollar wise over any given temporal cycle (let's say each year), which means buying less total stocks when the price is high, and more stocks when the price is low.
In a like manner, as long as you are using disposable income, buying coins consistently using roughly the same amount of money will keep you in "The Market", and allow you to increase your wealth long term. I would suggest that the "dividends" from owning coins, while obviously not a quarterly payout, are subtle but rewarding just the same. First and foremost, you get to look at them and hold them with all the assorted art/history/etc. associated with them. Secondly, you have something to talk about with other coin geeks, so they have a definite social aspect to them too. Third, you have the enjoyment of contemplating what to buy next.
So, are we in a coin bubble? Who knows? Do I care? Not really. I'll continue (the good Lord willing) to consistently buy what I'm collecting and think is a good value, with every now and then a little splurge thrown in.
U.S. Type Set
I believe we are near a top and there are a lot of signs. The only one that doesn't
fit is that there are still lots of people who are bears. A lot of these bears are still
buying for collections so this may partially negate this as a contrary indicator.
I'd be surprised if any markets imploded to reveal they were a bubble however. The
only investment going on tends to be in the multi thousand dollar early 19th century
coinage but there is strong collector interest too. There's a little in the "usual suspects"
and probably in very high grade recent mint products.
Market tops and bubbles are different things.
If there is a bubble it affects virtually all coins with any significant spread between
AG and superb gem.
<< <i>Jeez, and here I thought I bought coins as a collector, not as an investor... >>
Believe it or not, I'm actually a collector. I work in finance and find it quite interesting. I also find it difficult to separate my hobby from my job (to a certain extent). I find coin market and pricing discussions to be fascinating. My only frame of reference is finance so when I think about the coin market I almost always use that particular backdrop.
Do I care if prices drop? No, I don't. I figure it will take me 10+ years to accomplish my goals anyway. I'm waiting for the right coin not the right price. In the meantime, I guess I will draw parallels between finance and the "coin market."
Edited for grammar.
Bullion
1. Gold
2. Silver
Modern
1. Condition rarities
Classic
1. collector coins
2. Rarities
3. condition rarities
World Coins
Same breakdown as above but perhaps condition rarities as not as defined
While a bubble argument can be made in some components of the market, certain collector coins that have a following seem to be fine and their value is less likely to be affected by the potential swings of condition rarities.
To suggest the entire coin market is one bubble is not a very compelling argument considering how different the participation is at various levels.
Finally, there almost always seems to be neglected areas of the coin market. I remember the days when one could not even give away Russian and even Polish coins and over the past 3-5 years, these two countries have basically out performed just about any area withing the overall coin market. Go figure... it seems to be about timing and making sure that the coins purchased represent quality for the grade.
Experience the World through Numismatics...it's more than you can imagine.
<< <i>
<< <i>Jeez, and here I thought I bought coins as a collector, not as an investor... >>
Believe it or not, I'm actually a collector. I work in finance and find it quite interesting. I also find it difficult to separate my hobby from my job (to a certain extent). I find coin market and pricing discussions to be fascinating. My only frame of reference is finance so when I think about the coin market I almost always use that particular backdrop.
Do I care if prices drop? No, I don't. I figure it will take me 10+ years to accomplish my goals anyway. I'm waiting for the right coin not the right price. In the meantime, I guess I will draw parallels between finance and "coin market."
Have you read this article from a fellow CFA?
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Seriously guys, I know that the investor in me would cry, but the "kid in the candy store" would sure like to come out and play.
Empty Nest Collection