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Who got caught holding the bag in 1989?
Sunnywood
Posts: 2,683 ✭
When coin prices plunged in 1989, who was sitting on all the speculative inventory? Did a lot of dealers go out of business? Did a lot of people lose their shirts? Would any one of them admit it today? How many collectors were permanently driven out of the market by their losses?
Just curious ...
Best,
Sunnywood
Just curious ...
Best,
Sunnywood
0
Comments
This market is more stable and liquid then in the past. It's on real money, not borrowed, slabbed coins and ebay.
If you saw the post last week asking for ages of members. There were very few in the fifty, sixty range. Part of this could be they're out with a very bad taste of this business.
though joe 6 pack probably got nicked the lions share.
i likely ate a little,actually i know for a fact i ate at least a 1000 buks,but i did buy and sell over 50 k in coins that year.
my big loss was a 41 S walker in ms64 that was out for regrade when i sold everything else @ San Diego,by the time it got back the game was over !
the ex wife still has it !
it was a 1k coin then about a 100 now
Proof
Russ, NCNE
<< <i>my big loss was a 41 S walker in ms64 that was out for regrade when i sold everything else @ San Diego,by the time it got back the game was over !
the ex wife still has it !
it was a 1k coin then about a 100 now >>
I'll take all the MS64 1941-S Walkers you want to sell at $100.
Russ, NCNE
Dealers who also didn't do so well, probably don't want to even think about it, until it clearly happenED again.
He went bust, and was rumored to have become a paper hanger (bad checks) before he went belly-up.
I wonder where he is now??
havent checked the price lately ! (just checked teletrade for the last year,about 185 average)
think i cracked it out and sent it to PCGS for regrade,cracked it again and sent it to Hallmark,thats where it was when the music stopped !
in fact heres the slab !
the ones who go along with the crowd because "this time it's different". Some collectors
lost some money and perhaps a lot of money on some coins but it was those who thought
there was no way to go but up who took the brunt of the losses. They were buying coins
which were not rare or especially choice because they expected huge sums of money com-
ing in from Wall Street. The reasoning was that this money had to go somewhere and the
best bets were gems of obsolete type. Dealers were selling huge numbers of choice and
gem coins to people who'd been in the hobby only a short time. The grading services were
expected to make coins fungible since there would no longer be any question as to a coins
grade. The real world was ignored by most participants as prices were pushed still higher
by a market which would never exist. Eventually everyone was "fully invested" and there
was no more money coming in from the outside causing the market to implode. Some of the
newcomers owned nothing except a "porfolio" of over-hyped and often overgraded coins. Lots
of coins for which the investor made significant sums for often brought only ten cents on the
dollar.
Few local dealers were caught up too much in this as they were buying and selling all along.
Some might have large inventories but these were the exceptions. There were a few major
firms which failed however.
Looking for PCGS AU58 Washington's, 32-63.
<< <i>With easy access to coins via the internet, I think coins will always be popular and prices will remain stable. >>
With easy access to stock trading via the internet, I think stocks will always be popular and prices will remain stable.
Russ, NCNE
Boy was that a mistake! Even at 50 cents or 40 cents on the dollar, the correction was not yet over. I still have a few reminders from that period that are still worth 1/3 of the orig price.
A large number of mid-range dealers got their butts handed to them.
I can think of 2 or 3 off-hand that owed Heritage money so they went to work for them to pay it off. Beavertown coin in New Jersey started going bellyup in 1990 but dragged it along until 1997. Old Elliott Goldman was offering guaranteed 90% buybacks at the peak of the market and you could just see how ridiculous that was. Anyone offering guaranteed buybacks...forever...is full of it. True collectors knew better than to be in the market past March 1990 but dealers who had to do business had a tuff time....the crack out guys especially. Most of them went down the tubes at that time not to return until 1995-1996.
roadrunner
<< <i>
<< <i>With easy access to coins via the internet, I think coins will always be popular and prices will remain stable. >>
With easy access to stock trading via the internet, I think stocks will always be popular and prices will remain stable.
Russ, NCNE >>
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Check out some of my 1794 Large Cents on www.coingallery.org
I do think the buy-and- hold collectors took a paper loss at this time - probably haven't got to the positive side even yet. I have a couple of pieces that I bought in '89 that have not seen the same pricing levels. But, keep in mindl, that there has been some grade-flation and they might grade a bit higher now. This would offset some of the loss.
Cameonut
“In matters of style, swim with the current; in matters of principle, stand like a rock." - Thomas Jefferson
My digital cameo album 1950-64 Cameos - take a look!
of course my beloved jefferys (martys killer capital dispaly and 2 full books of bu&proofs) along with serioushigh grade jeffery rarities will never go anywhere, as well as my statehood proof reg set and sac reg set which is for a little one near n dear to me heart
Go BIG or GO HOME. ©Bill
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
(I knew there would be a wise guy out there somewhere)
Good point, but I think there's a big difference between stocks and coins.
Dennis
COWQ
Looking for PCGS AU58 Washington's, 32-63.
Spring National Battlefield Coin Show is September 5-7, 2024 at the Eisenhower Hotel in Gettysburg, PA. WWW.AmericasCoinShows.com
<< <i>With easy access to stock trading via the internet, I think stocks will always be popular and prices will remain stable. >>
Said with just the slightest hint of sarcasm?
<< <i>
<< <i>With easy access to stock trading via the internet, I think stocks will always be popular and prices will remain stable. >>
Said with just the slightest hint of sarcasm? >>
Sarcastic? Who me?
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
One interesting side note here. I have had several PM’S the last few days, on my dealer market post, from people that had this warning, “if you think the market is beginning to turn down and you have coins on consignment with dealers to sell, get them back quick. I lost all mine in the 90’s turn down as dealers went belly up”
I knew it would happen.
<< <i>I was on the sidelines at the time. I didn't loose a thing. Lucky I guess! >>
Same here ... only purchased a few Mint products at the time...
<< <i>With easy access to stock trading via the internet, I think stocks will always be popular and prices will remain stable. >>
Stocks have always been liquid. Until the internet, rare coins were not.
This coin also happened to be Premium Quality for the year, and for the issue price of $11.00 he smiled and put it away. Thus, launching a new breed of collectors. All seeking dreams, and enjoyment in the hobby of coin collecting.
And the rest is history
Yep, someday those 1971-s Ike proofs are going to be worth more than the $10 I paid for them!
Wondercoin
Worry is the interest you pay on a debt you may not owe.
Seeing that made me a very strong opponent for sight unseen trading. I hope it is dead.
He was buying 1909-S VDB's using his famous "I want them all" tactic. He had about 2 double-row boxes filled with MS-64RB to MS65RD slabs of these. I leaned they were not that rare then. I think he made out OK on these only because there was someone else who "wanted them all" .
Actually it was a REAL learning experience that kept me safe in other speculative markets at other times since then. However, I still have several coin that I bought back then that I've been VERY happy to have owned for 20 years(and yes, I'm quite sure I've made a handsome profit on them), such as (all grades are Rattler grades)...
PR64
MS63
MS61 (The shield is fully struck, the haze there is an artifact of imaging.)
PR65 (The white flecks in the field are an artifact of imaging, they do not exist.)
U.S. Type Set
Ken
Positive BST Transactions (buyers and sellers): wondercoin, blu62vette, BAJJERFAN, privatecoin, blu62vette, AlanLastufka, privatecoin
#1 1951 Bowman Los Angeles Rams Team Set
#2 1980 Topps Los Angeles Rams Team Set
#8 (and climbing) 1972 Topps Los Angeles Rams Team Set
<< <i>The coins I was pursuing back then (highest quality 1934-58 wheat cents, Jeff nickels, silver Roosies and Wash quarters, MS Franklins, Ikes, all 1965-date clad, etc) - no impact whatsover in 1989-90 best I recall - most of the markets were still in their infancy stage. I did lose some money on the generic MS65 Morgans and Walkers I "diversified" into at the time. Overall, in 1989, if you had been pusuing /dealing coins dated 1946 and newer, I believe you did not get hurt very badly at all.
>>
There was no speculation in these coins then and I don't think there's
very much now. A lot of the speculation was in gem dollars and walkers
but it extended to other series as well. While the price guides will say
that people in these areas were wiped out and still have huge losses,
this is very misleading. Real collectors buying Morgans in those days may
have paid too much for an MS-65 morgan but that coin might be an MS-67
today and he has a substantial profit. It was the speculators who could
be assured of mostly getting low end and common coins.
Raw moderns did get hit in '89. When dealers need liquidity they sell ev-
ereything that isn't nailed down and prof/ mint sets are the first to go.
Ikes and other moderns were mostly unaffected.
<< <i>Will the current situation be as bad as '89 or not? I know that there is no crystal ball, but I'm very interested in the opinions of forum members. >>
As someone already pointed out there is not a lot
of speculative money in the market as there was in
1989. Some erosion in value on in inflationary ad-
justed basis might be expected until the economy
recovers but a drop will occur only in overbought
and overspeculated areas for the main part.
In 1989 the rise in prices was fueled by rising sight unseen bids. If you had the guts to take all offers, you could put out a high sight unseen bid and the market would magically rise with you. If you were pushing the prices higher than what anyone else (including your customers) would pay, you took a big risk. If you got hit with one or two coins, you could maintain your bid. If you got hammered (a real numismatic term from 1989) you had to pull your bid and the market would drop. Multiply that by the number of dealers with sight unseen bids and you have a precipitous drop in prices overnight.
I think of it kind of like a Bernie Madoff ponzi scheme.
Today the coin prices are not governed by sight unseen bids. They are derived from retail sales (CW Trends and PCGS) and dealer to dealer sight seen transactions (Grey sheet). If there is a softening of prices (and I think there should be in many series) it will come from weaker retail sales rather than weaker dealer buy prices. The difference is huge. One could drop overnight (dealer buy prices) and the other takes months to show up in the market (slower sales).