Is the inability of a major dealer to buy good coins the best indicator of the strength of the marke
Longacre
Posts: 16,717 ✭✭✭
In another thread, a board member of excessive prominence made the following statement:
“Seems to me the fact that a major dealer can't find coins and is practically begging to buy nice ones is the type of news that people really should know. It's a far better indication of the strength of the market than most signs.”
This is an interesting comment, and I have the following questions:
(1) Is the inability of a major dealer to buy good coins the best indicator of the strength of the market?
(2) If not ,what is a better indicator?
(3) If a dealer only deals in ultra, high end coins, isn’t it a given that they would have a much tougher time finding good coins than a dealer whose trademark is Widgets ‘R Us™? If so, does that change your answer to # 1 above?
“Seems to me the fact that a major dealer can't find coins and is practically begging to buy nice ones is the type of news that people really should know. It's a far better indication of the strength of the market than most signs.”
This is an interesting comment, and I have the following questions:
(1) Is the inability of a major dealer to buy good coins the best indicator of the strength of the market?
(2) If not ,what is a better indicator?
(3) If a dealer only deals in ultra, high end coins, isn’t it a given that they would have a much tougher time finding good coins than a dealer whose trademark is Widgets ‘R Us™? If so, does that change your answer to # 1 above?
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
Who is John Galt?
Empty Nest Collection
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Question then becomes, how deep are you willing to bury your customers?
At what level do they meet resistance from high-end retail buyers? Multiples of sheet are not uncommon for amazing coins at auction, from dealers as well as the collecting public.
of prices offered for the coins.The desired coins are being held
off the market until the market goes from sluggish and soft to
strong. I have often found ,that many wonderful coins become
available as a market peaks and disappear when that market
weakens.Looking at the mid market of coins from 1000 to 10,000
dollars, the prices offered to buy coins by dealers has been disappointing
for the past 2-3 years. It may be tied to the General Economy, but if the lust
for mid value coins by collectors was so hot, then prices offered would be up
and strongly instead of languishing in the doldrums.
Camelot
I want to know about how the vast middle of the market is doing. The billionaires and their trophies mean little to me.
I don't think it's so much about prices being low, because they're not. I think it's more that most people simply don't have strong opinions about the direction of the market, so they're in no hurry to buy or sell.
Of course, this may be the calm before the storm. But if we can't figure out what type of storm we're going to get, how can we know if we should buy or sell?
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I also honestly think that with the newer generations of collectors/buyers coming in the disintermediation of dealers is iin full swing. I beleive there is more collector to collector buying/selling today then the hobby has ever seen do to the internet. This makes it harder for dealers to buy coins with the margins they are used to.
Think about what happened to the full service stock brokerages 20 years ago when Schwab created the discount trade market. They were able to do this because of technology. The same thing is repeating itself through all of our areas of commerce.
Most dealers cannot find high end coins for sale, thru their contacts/previous clients, or from auctions. They are just not available. I think Andy hit it on the nose--this market is not going up or down, very fast-- so we see some uncertainty by owners of coins/and buyers as to the direction of the next market cycle.
If it is down, we probably will see even fewer, and if up-- the sellers and buyers will come out in force.
Unless, the major dealer you are refering to puts out some bids for high end coins that will draw out the big ones. I remember a list created by the dealer, and the point that few have been seen in years. Double the prices recently obtained, and coins will appear out of nowhere.
<< <i>Seems like an indicator of low prices and people (who can afford to) hanging on to their coins waiting for better days.
I don't think it's so much about prices being low, because they're not. I think it's more that most people simply don't have strong opinions about the direction of the market, so they're in no hurry to buy or sell.
Of course, this may be the calm before the storm. But if we can't figure out what type of storm we're going to get, how can we know if we should buy or sell? >>
This assumes that collectors will buy/sell in response to market forces.
As a collector, probably to my detriment
<< <i> also honestly think that with the newer generations of collectors/buyers coming in the disintermediation of dealers is iin full swing. I beleive there is more collector to collector buying/selling today then the hobby has ever seen do to the internet. This makes it harder for dealers to buy coins with the margins they are used to. >>
Never has a truer word been spoken. I still buy from a couple of specialist dealers, but the majority of my purchases come from auctions, where I am competing with them directly to buy the same coin.
World Collection
British Collection
German States Collection
It can also be a sign that:
1. The dealer is a tightwad and never pays up. There are more in this category than the other.
2. The dealer doesn't know a quality coin when he sees one / or the dealer cannot grade and is expecting far more coin for the money than should be expected (ie built in profit with zero downside at all times).
A better sign of market strength is when the average to lower end coins are moving as well. In the last upswing those didn't start moving and advancing in price until 2005-2007.
roadrunner
There have been and always will be a segment of the numismatic community that does not "play the market", and another segment that does. Obviously, it's the latter group that is most responsible for big swings in supply, demand and prices.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Camelot
<< <i>Is the inability of a major dealer to buy good coins the best indicator of the strength of the market? >>
I doubt it's the best indicator. AN indicator, maybe, but far from the best.
The inability of a major dealer to buy good coins could just be an indicator of how cheap he is.
(Or how small a margin he's willing to work off of, really.)