For Two Years The Coin Market Has Been In A Freefall........

[coinman_23885]

Over that 10 year period (and more to the point the past 6 years since recovery from the 2008 crash) compare coins to the stock market, if one uses for example the S&P as a normalizer, the the 10-20% drop in coins is even bigger compared to what is considered the bread and butter investments. Stocks are pretty much an indicator of the economy as well, so up in stocks and the economy at the same time down in coins. That is a free fall............

 

Best, HT

 

A freefall (or lack thereof) has nothing to do with the stock market or other investments.

 

And the PCGS 3000 index looks to have fallen roughly 8% to 9%, whether measured over the last three years or the last two years. That seems like a far cry from a freefall.

 

When one compares that to the greater economy performance, as marked by a stock index, call it what you want, but a poor performance at least. Since its low point of March 6, 2009 after a fall in 2008, the SP500 was $683.38, today it is 2151.33. PCGS 3000 was around $66,500 then, and $62,000 now. That equates to 314.8% increase and 6.8% decrease for the SP500 and the PCGS 3000, respectively. You can take just about any 3 to 10 year time interval over the past decade and the SP500 outperforms the PCGS 3000 by multiples.

 

So coins have dropped during a strong economic boom. Just buying an SP500 index fund, you would have multiples of value compared to buying coins. To me, that is a freefall......

 

Best, HT

 

Whatever we call it, it is not a very happy set of circumstances, I agree. I am very concerned about the long term health of this hobby and not based on the PCGS 3000, but based on what I think is systemic risk with plastic, stickers, grade inflation, and faltering guarantees (but I won't bore you or side track this thread).

[MarkFeld]

Over that 10 year period (and more to the point the past 6 years since recovery from the 2008 crash) compare coins to the stock market, if one uses for example the S&P as a normalizer, the the 10-20% drop in coins is even bigger compared to what is considered the bread and butter investments. Stocks are pretty much an indicator of the economy as well, so up in stocks and the economy at the same time down in coins. That is a free fall............

 

Best, HT

 

A freefall (or lack thereof) has nothing to do with the stock market or other investments.

 

And the PCGS 3000 index looks to have fallen roughly 8% to 9%, whether measured over the last three years or the last two years. That seems like a far cry from a freefall.

 

When one compares that to the greater economy performance, as marked by a stock index, call it what you want, but a poor performance at least. Since its low point of March 6, 2009 after a fall in 2008, the SP500 was $683.38, today it is 2151.33. PCGS 3000 was around $66,500 then, and $62,000 now. That equates to 314.8% increase and 6.8% decrease for the SP500 and the PCGS 3000, respectively. You can take just about any 3 to 10 year time interval over the past decade and the SP500 outperforms the PCGS 3000 by multiples.

 

So coins have dropped during a strong economic boom. Just buying an SP500 index fund, you would have multiples of value compared to buying coins. To me, that is a freefall......

 

Best, HT

 

You're talking about a very poor relative performance. On that, we agree. But that has nothing to do with a "free-fall", which is an independent event, having nothing to do with alternative price investments. Look it up.

 

And yes, you're obviously free to call it whatever you want. But that doesn't change the meaning of the expression.

[Nutmeg Coin]

Maybe the entire collectibles market is sending a message of a slow economy.

 

This today from Dr. North:

 

The Collectors' Markets

 

 

Effect of election on hobbies/collectibles Has anyone else, ebay or Amazon sellers noticed a fall off in sales? I've heard people in collectibles say that business will get better after the election. Is the presidential election sucking that much oxygen out of society or toxifying it?

http://www.garynorth.com/members/forum/openthread.cfm?forum=25&ThreadID=230311

Take a look at this:

 

 

http://fortune.com/2016/09/22/investors-sothebys-art-market

Big money has lost money big time in the art market. I see this as an indicator of a slowing economy. Stocks go up because pension funds have to put their money somewhere. They cannot legally buy art. The art market is dominated by the rich and super-rich. They have suffered major declines in these investments.

 

My guess is that the little people who think they will make money on eBay selling "art" are going to suffer the same sorts of losses that the super-rich have suffered.

 

Nobody needs to own collectibles. These buyers are middle-class people who have extra money to spend on trinkets. They think the economy is OK. It is not OK. It is going to go through the wringer.

 

When the grim reality of recession hits their wallets, they will stop buying and start selling. Prices will fall.

 

The bubble has popped for the rich collectors. It will soon be time for the "echo bubble" of middle-class collectibles to pop.

 

[PocketArt]

 

Does the long term graph take into account ASE sales and modern commemorative's too? I'm wondering if U.S. mint offerings, especially the latter 80's where the market started to peak if the U.S. mint had anything to do with this- 1986 introduction of ASE with resulting public awareness and demand? Silver Eagle demand has been strong past few years, and curious what the market would look like if this data removed. That is; if it's accounted for as well in data.

 

 

The PCGS3000 is a compilation pricing index based on the values of a published list of 3000 popular coins. It focuses on rare coins, not on moderns or bullion. You can find that list here: http://www.pcgs.com/prices/PCGS3000.aspx

 

PCGS also tracks a variety of other market segments (one of which is 20th century coinage). You can see all of their market segments here: http://www.pcgs.com/prices/frame.aspx?type=coinindex&filename=index The 20th century index over the last 10 years shows and even more impressive drop than the overall market - moderns are weak, which should come as little surprise to most:

 

 

Thanks for posting the link on the PCGS3000; clears up a bit of confusion on my part on what is tracked. Has NGC ever explored historically tracking the value of a group of coins? Would be interesting to see if there's correlation with different data sets developed by other stakeholders besides PCGS. I suppose this would give a clearer picture of collector buying behavior, and sentiment.

[Hard Times]

Thanks for posting this nutmeg and putting into better context. To re-phrase in light Mark's definitions - perhaps we are at the beginning of a free-fall? Only time will tell.

 

I think coinman's point about stickers, gradeinflation etc. is poignant relative to the topic. How many enthusiastic newbie's get turned off pdq when they realize what they have to go through to insure or recognize the value in their purchases? Has it gone too far?

 

Best, HT

[MarkFeld]

Thanks for posting this nutmeg and putting into better context. To re-phrase in light Mark's definitions - perhaps we are at the beginning of a free-fall? Only time will tell.

 

I think coinman's point about stickers, gradeinflation etc. is poignant relative to the topic. How many enthusiastic newbie's get turned off pdq when they realize what they have to go through to insure or recognize the value in their purchases? Has it gone too far?

 

Best, HT

 

I applaud your open-mindedness.

[Mr.Mcknowitall]

Thanks for posting this nutmeg and putting into better context. To re-phrase in light Mark's definitions - perhaps we are at the beginning of a free-fall? Only time will tell.

 

I think coinman's point about stickers, gradeinflation etc. is poignant relative to the topic. How many enthusiastic newbie's get turned off pdq when they realize what they have to go through to insure or recognize the value in their purchases? Has it gone too far?

 

Best, HT

 

I applaud your open-mindedness.

 

Mark, are you viewing the (very limited and misleading) data with a view of inflation in mind?

 

As an example, if I paid $20 for a coin in 2008, in 2016 it would cost $22.43, adjusted for (cumulative) inflation. That is 12.1%, +or-. The earlier percentage that you mentioned would have to then be adjusted accordingly, I think. The average purchaser in hobbies does not think in such terms, IMHO.

[MarkFeld]

Thanks for posting this nutmeg and putting into better context. To re-phrase in light Mark's definitions - perhaps we are at the beginning of a free-fall? Only time will tell.

 

I think coinman's point about stickers, gradeinflation etc. is poignant relative to the topic. How many enthusiastic newbie's get turned off pdq when they realize what they have to go through to insure or recognize the value in their purchases? Has it gone too far?

 

Best, HT

 

I applaud your open-mindedness.

 

Mark, are you viewing the (very limited and misleading) data with a view of inflation in mind?

 

As an example, if I paid $20 for a coin in 2008, in 2016 it would cost $22.43, adjusted for (cumulative) inflation. That is 12.1%, +or-. The earlier percentage that you mentioned would have to then be adjusted accordingly, I think. The average purchaser in hobbies does not think in such terms, IMHO.

 

John, I was not. And even with that aside, I take such data with a very large grain of salt.

 

In some of the areas I follow, prices are down much more than indicated by the data. Then, of course, I imagine that other areas might be better. Such is the case when various groups are lumped together in order to arrive at a composite reading.

[Mr.Mcknowitall]

Thanks for posting this nutmeg and putting into better context. To re-phrase in light Mark's definitions - perhaps we are at the beginning of a free-fall? Only time will tell.

 

I think coinman's point about stickers, gradeinflation etc. is poignant relative to the topic. How many enthusiastic newbie's get turned off pdq when they realize what they have to go through to insure or recognize the value in their purchases? Has it gone too far?

 

Best, HT

 

I applaud your open-mindedness.

 

Mark, are you viewing the (very limited and misleading) data with a view of inflation in mind?

 

As an example, if I paid $20 for a coin in 2008, in 2016 it would cost $22.43, adjusted for (cumulative) inflation. That is 12.1%, +or-. The earlier percentage that you mentioned would have to then be adjusted accordingly, I think. The average purchaser in hobbies does not think in such terms, IMHO.

 

John, I was not. And even with that aside, I take such data with a very large grain of salt.

 

In some of the areas I follow, prices are down much more than indicated by the data. Then, of course, I imagine that other areas might be better. Such is the case when various groups are lumped together in order to arrive at a composite reading.

 

In general, I concur. Thanks. I just wanted to call attention to the misleading aspects of the charts and comparisons presented so far, especially as it applies to buying power and relative cost of an item.

[david3142]

Regarding the art market chart from that article, global sales do not directly correspond to valuations. Prices are probably down a little from the peak, that's true, therefore people aren't bringing big items to market. That's your drop. The art market is driven by people who generally do not have liquidity needs so they might as well hold on and wait for a better time to sell.

[Hard Times]

There are lots of areas of the market that are not doing well for the past decade.

 

Here are two examples:

 

1932-D key date Washington Quarter.

MS63

Feb. 1 2006 - PCGS price $3,750

Oct. 1 2009 - PCGS price $2,600

Aug. 1 2016 - PCGS price $1,650

 

1842-C Small Date, #1 rarity for Charlotte Half Eagle series

XF40

Feb. 1 2006 - PCGS price $27,500

Oct. 1 2009 - PCGS price $22,500

Aug. 1 2016 - PCGS price $18,500

 

I stand corrected, 2 years of Freefall on key dates and some extreme rarities is incorrect. Looks more like a decade, I will wait another 5 years and get me a 1842-C Small Letters for my half eagle collection.

 

I have no doubt that there are more examples like this than there are successful increases in rare coins, despite a constant rise in stocks from 2009 to present. So it looks like we may be in for a long decline for the next decade as well.

 

Best, HT

 

[coinman_23885]

Here is one of my favorites HT:

 

PCGS Price Guide Value $10,500

08/12 SB - $10,350

12/15 LM - $7,638

03/16 HA - $8,813

08/16 SB - $1,998

 

The coin that sold for under $2k was CACed and looked very PQ from the images. Unfortunately, I had several things going on and forgot that the coin was in the Stacks sale!

 

P.S. I think the coin was the exact piece that sold at LM on 12/15.

[SkyMan]

Here is one of my favorites HT:

 

PCGS Price Guide Value $10,500

08/12 SB - $10,350

12/15 LM - $7,638

03/16 HA - $8,813

08/16 SB - $1,998

 

The coin that sold for under $2k was CACed and looked very PQ from the images. Unfortunately, I had several things going on and forgot that the coin was in the Stacks sale!

 

P.S. I think the coin was the exact piece that sold at LM on 12/15.

 

It might be nice to know what Type/date/mm and what grade you are talking about...

[Hard Times]

I suspect coinman was talking about this:

 

https://coins.ha.com/itm/jefferson-nickels/nickels/1939-5c-reverse-of-1940-fs-901-pr67-cameo-pcgs-cac/a/1233-4773.s?ic4=ListView-ShortDescription-071515

 

Best, HT

 

[okbustchaser]

I still haven't seen any so-called "freefall" in prices on the coins in which I'm interested. I haven't even seen a softening of prices.

 

Sure wish that I would see such a drop.

[coinman_23885]

It might be nice to know what Type/date/mm and what grade you are talking about...

 

I'm sorry for my oversight.

 

HT apparently knows my taste very well (and one of my areas of interest is pre-1950 cameo coinage). It was the 1939 PCGS PF67 CAM CAC 5c. While I don't claim that it represents the entire market (and obviously there is confirmation bias in selection), it did stick out in my mind for the very sharp drop in a short time frame based on actual auction data. There were no indications in softening for proof 1936-1942 cameos generally (save for the cents where populations seem to have exploded in recent months), until this.

 

Other areas that I have noticed significant declines are Seated and Barber coinage (especially proof and mint state Liberty head Nickels) and basically proof/mint state type.

 

While this is a generalization (and I am sure there are many exceptions), the market appears to be down overall. The areas that seem to be the strongest to me are early Bust/Capped Bust coinage, antebellum rare gold, true monster toned coinage (not the sketchy stuff that is making it into plastic these days), and the very high end/high dollar segment of the market. Interestingly, not only have these areas remained strong, there have been price increases. It will be interesting to see if these areas continue to do well or will follow the rest of the market.