“[The coin market] is not driven by fundamentals like good business models and strong balance sheets
Longacre
Posts: 16,717 ✭✭✭
In another thread, an excessively prominent member of these boards made the following comment in response to the theory that collectors follow what other collectors do, as opposed to reacting like actors in a more mainstream market, such as equities:
“The point is that this isn't the stock market - we aren't driven by fundamentals like good business models and strong balance sheets. In the collector realm, a "strong balance sheet" is formed by the collective opinion of everyone else. So everybody keeps their eye on each other.”
*******
I found these comments intriguing.
(1) Does anyone else hold this view?
(2) What exactly was the excessively prominent member saying?
(3) Does the emperor truly have no numismatic clothes (Lord help us all after meeting many collectors on these boards
)?
“The point is that this isn't the stock market - we aren't driven by fundamentals like good business models and strong balance sheets. In the collector realm, a "strong balance sheet" is formed by the collective opinion of everyone else. So everybody keeps their eye on each other.”
*******
I found these comments intriguing.
(1) Does anyone else hold this view?
(2) What exactly was the excessively prominent member saying?
(3) Does the emperor truly have no numismatic clothes (Lord help us all after meeting many collectors on these boards
)?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
merse
as long as you can find new suckers the scheme continues to function
but once the new blood stops rolling in the whole pricing structure
collapses in an amazing fashion.
a coin that is worth more then the metal it is made from has the potential to
lose a staggering amount of its value when things go south.
<< <i>collectibles always struck me as a pyramid scheme.
as long as you can find new suckers the scheme continues to function
but once the new blood stops rolling in the whole pricing structure
collapses in an amazing fashion.
a coin that is worth more then the metal it is made from has the potential to
lose a staggering amount of its value when things go south. >>
I have always thought that the value of the metal itself was part of the Ponzi scheme as well. The 'value' of gold is driven by a lot of factors other than its usefulness as a malleable, conductive metal.
merse
<< <i>
<< <i>collectibles always struck me as a pyramid scheme.
as long as you can find new suckers the scheme continues to function
but once the new blood stops rolling in the whole pricing structure
collapses in an amazing fashion.
a coin that is worth more then the metal it is made from has the potential to
lose a staggering amount of its value when things go south. >>
I have always thought that the value of the metal itself was part of the Ponzi scheme as well. The 'value' of gold is driven by a lot of factors other than its usefulness as a malleable, conductive metal. >>
i just mentioned that part, the intrinsic value, because one could take
a gold lib half eagle and at the very least sell it to someone who has no
interest in coins what so ever for the full value of the gold.
Whatever you think of rare coins and bullion, it's hard to argue that fiat money is less of a "Ponzi scheme".
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>collectibles always struck me as a pyramid scheme.
as long as you can find new suckers the scheme continues to function
but once the new blood stops rolling in the whole pricing structure
collapses in an amazing fashion.
a coin that is worth more then the metal it is made from has the potential to
lose a staggering amount of its value when things go south. >>
Stocks are a ponzi scheme too. You have to hope there are higher buyers than you bought for for the useless paper you are trying to peddle.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
I believe that the rare coin market is correlated to GDP and individual wealth. Maybe I will run a regression analysis of the PCGS rare coin index vs GDP and a consumer discretionary index tomorrow. There is also a drift factor which is the risk free rate of interest/inflation.
earlyAurum
<< <i>Longacre,
I believe that the rare coin market is correlated to GDP and individual wealth. Maybe I will run a regression analysis of the PCGS rare coin index vs GDP and a consumer discretionary index tomorrow. There is also a drift factor which is the risk free rate of interest/inflation.
earlyAurum >>
That should be interesting.
Coins cannot be equated with businesses. They are inanimate objects that do no create anything, do not cash flow, do not pay dividends, interest, or distributions. Comparing the two is like apples to the NFL.
<< <i>
<< <i>collectibles always struck me as a pyramid scheme.
as long as you can find new suckers the scheme continues to function
but once the new blood stops rolling in the whole pricing structure
collapses in an amazing fashion.
a coin that is worth more then the metal it is made from has the potential to
lose a staggering amount of its value when things go south. >>
Stocks are a ponzi scheme too. You have to hope there are higher buyers than you bought for for the useless paper you are trying to peddle. >>
last i checked coins do not pay a dividend while some stocks do for example.
but over the last year it is popular to bash stocks and the dollar so
i expected to see it.
I would say that the coin market is a far better representation of a market driven by fundamentals and balance sheets that the Wall Street world. There are few strong balance sheets out there esp. when one considers what is purposely hidden off the balance sheets. Why even have a balance sheet if everything that affects the business is not visible there? The SM has proven to be as much psychologically driven speculative medium just as our coin market is. I'd trust most coin dealers long before trusting most bankers. Most coin dealers have a lot of "skin" in their business and run it accordingly. Don't sell the coin business model short. Maybe the banks could take something from it.
roadrunner
Correct. They are not investment vechicles. But as we all know, the more discretionary income we have the more we tend to spend on coins. Our discretionary income is a function of our wealth which generally increases in step with the broad economy.
The above statement should only apply over long periods of time of 5 to 10 year at least.
early
<< <i>Longacre,
I believe that the rare coin market is correlated to GDP and individual wealth. Maybe I will run a regression analysis of the PCGS rare coin index vs GDP and a consumer discretionary index tomorrow. There is also a drift factor which is the risk free rate of interest/inflation.
earlyAurum >>
I think this would be interesting to see and if you post it in a thread, we can all interpret the results.
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)
<< <i>
me 2 THINKS this if funny.
This is natural for people in general since we are a very social animal but we
collectors tend to take it to an extreme.
Ironically there are a lot of contrarians and others who don't follow the current
trends collecting coins. ...go figure.
Camelot
No Way Out: Stimulus and Money Printing Are the Only Path Left
It just seemed to me that in the rare coin market the currency is the collective opinion of everyone else, whereas in the stock market the currency is, well, currency.
All that said, I will never be able play the piano as good as this guy on the Dave Brubeck record I am listening to right now. Someday I'd sure like to hear Sunnywood give it a try though.
Camelot
<< <i>
“The point is that this isn't the stock market - we aren't driven by fundamentals like good business models and strong balance sheets. In the collector realm, a "strong balance sheet" is formed by the collective opinion of everyone else. So everybody keeps their eye on each other.”
>>
The fundamentals of the numismatics world are static, I think. I always look for a characteristics like condition, strike, luster, originality, etc. and I don't think that will change or become "passe". What do I care what the other guy is doing? If he is following market trends and trying to capitalize on some movement in the short term then he isn't collecting or investing. He is gambling.