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Comparisons of the Current Coin Market

39 posts in this topic

PCGS MS65 common date dollars reached at least $800, and MS64's, at least $400.

Thanks Mark....so today those same MS-65's are $150 or so, give or take ?

As I recall, for most of 1989-90 the price of silver was $5-$6 or so, give or take. So the price of silver has TRIPLED since then yet these coins are still down 75% or so on average from the bubble peak, and I'll bet even 50% or so from the prices months before or after the Bubble Peak.

That's how crazy things got !

 

I think a good number of those MS65's are probably in 66 (or higher grade) holders today. And that they are therefore, worth more than $150 :devil:

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How small and thin is the collector coin market? Have you researched statistics concerning the matter - if not in broad terms, perhaps by coin type? I would think that the US Mint has done so in regards to what they specifically produce for coin collectors.

I'm not an expert on the coin market but am pretty knowledgeable about markets in general.

 

The coin market is what we would call a discontinuous or non-liquid market. By that I mean that with very rare exceptions the price of the coins can change alot even if the underlying metal prices do not. This is simply because a few buyers or sellers can greatly impact the price. You see this around Christmas time when people "pay up" and you see it at other times when the same coins can sell for 10-20% less than what was sold on Ebay or HA.

 

A classic example would be a price insensitive or inelastic buyer -- say a billionaire -- who doesn't care if the price for a coin should be $20,000 or $200,000. If he/she wants the coin, they'll simply tack on an extra 10% or 20% or whatever. It's like you or me quibbling over $20 UPS shipping and just deciding to pay it. :grin: Yes, some rich people are price sensitive but many others want something and want it right now.

 

Plus, if a rare coin only shows up every few months or years, the buyer may not want to risk another wait that long. You get 2 such buyers and chaos can ensue. The opposite can happen with an (estate) liquidation.

 

Many years ago the private bank I worked at handled an estate sale for some kids. Their parents had a nice art and coin collection. They wanted the CA$H right then and there and told us in no uncertain terms that they wanted 80% of FMV that week rather than FMV a month or two from now.

 

We had a painting that had comparables sold for $50,000; no way we should have gotten less than $40,000. We ended up selling it for $25,000. We also sold some Saints which were unslabbed; probably mostly MS62-65. We got like 5% over bullion if that. These kids were all earning $50,000 a year (if that) and spending like crazy. They wanted to split the estate of close to $5 MM ASAP and didn't care if we got $5 MM or $4.5 MM or $4 MM.

 

The only thing they held out a bit for was the main residence probably because it had some sentimental value (family had lived there almost 40 years). Realtor handled that and got a very good price, close to $2 MM as I recall (this was back in 1999 or 2000).

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How small and thin is the collector coin market? Have you researched statistics concerning the matter - if not in broad terms, perhaps by coin type? I would think that the US Mint has done so in regards to what they specifically produce for coin collectors.

 

I'm not an expert on the coin market but am pretty knowledgeable about markets in general.

 

The coin market is what we would call a discontinuous or non-liquid market. By that I mean that with very rare exceptions the price of the coins can change alot even if the underlying metal prices do not. This is simply because a few buyers or sellers can greatly impact the price. You see this around Christmas time when people "pay up" and you see it at other times when the same coins can sell for 10-20% less than what was sold on Ebay or HA.

 

A classic example would be a price insensitive or inelastic buyer -- say a billionaire -- who doesn't care if the price for a coin should be $20,000 or $200,000. If he/she wants the coin, they'll simply tack on an extra 10% or 20% or whatever. It's like you or me quibbling over $20 UPS shipping and just deciding to pay it. :grin: Yes, some rich people are price sensitive but many others want something and want it right now.

 

Plus, if a rare coin only shows up every few months or years, the buyer may not want to risk another wait that long. You get 2 such buyers and chaos can ensue. The opposite can happen with an (estate) liquidation.

 

Many years ago the private bank I worked at handled an estate sale for some kids. Their parents had a nice art and coin collection. They wanted the CA$H right then and there and told us in no uncertain terms that they wanted 80% of FMV that week rather than FMV a month or two from now.

 

We had a painting that had comparables sold for $50,000; no way we should have gotten less than $40,000. We ended up selling it for $25,000. We also sold some Saints which were unslabbed; probably mostly MS62-65. We got like 5% over bullion if that. These kids were all earning $50,000 a year (if that) and spending like crazy. They wanted to split the estate of close to $5 MM ASAP and didn't care if we got $5 MM or $4.5 MM or $4 MM.

 

The only thing they held out a bit for was the main residence probably because it had some sentimental value (family had lived there almost 40 years). Realtor handled that and got a very good price, close to $2 MM as I recall (this was back in 1999 or 2000).

 

 

 

So I take that as a no - you do not know how small and thin the collector coin market is?

 

 

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So I take that as a no - you do not know how small and thin the collector coin market is?

Umm...no....I think I acknowledged it above. :grin:

 

Some coins -- like MS-65 Saints and common Morgans and semi-rare Morgans -- have a more liquid trading history. You don't see the market for MS-65 Saints in common, semi-rare, or even rare condition change that much month-to-month. But the semi-rares or rares I have seen the prices change alot quickly. I'll leave it to the experts who have followed the market and actual sales offer their expert opinion as I value it.

 

But some coins so infrequently trade that you can't even call it a "market" -- it's like for some impressionist art, there's only 1 of a kind and it's whatever someone will pay.

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Not sure of these "millions of new collectors" -- where are they ?

 

Most of these collectors aren't buying coins yet or are just dabbling in the shallower end of the markets. A few are putting together collections from various sources and eBay is a significant one. They have folders and albums and are either actively working them or they're on a back shelf as they form families and become established financially. They run the gamut from wet behind the ears to quite sophisticated though in aggregate they haven't spent a lot of money on numismatic coins yet.

 

I don't think the Credit Crash of 2008 is impacting the coin market. I think the bottom line is that prices are DOWN from a few years ago, both bullion and numismatic prices. Interest follows prices.

 

You're right that it's no longer having a lot of impact on the classics. Some people are out of the labor force now but otherwise there's little impact on older coins. But moderns still haven't entirely worked off the huge numbers of raw coins that came to market in '08. Everybody was selling moderns and buyers have always been scarcer. It appears as of the end of last year this overhang has finally been tamed. There are very few new modern rolls, bags, or mint and proof sets hitting the markets and demand is continuing to increase. The supply is very inelastic but the demand is not. People will be amazed when they see how few of some of these "common" coins actually exist!

 

The Quarters program was a hit numerically, but did those people move on to other coins like Saints or Morgans or other rare U.S. coins ?

 

For the main part "no". Most either set aside their collections or gave up on a hobby that is not newbie friendly. It never has been very friendly to newbies but never less so than in the past couple decades.

 

But these people still have an interest and many are already hooked. This is hard to see in the classics markets but it's easier to see in moderns because even a little increase in demand is large on a percentage basis.

 

I hope you are right, but I'm not sure about the demographic angle. If we are seeing the equivalent of the demographic thrust that lifted stock and bond prices in the U.S. in the 1980's, then we should see sustained and persistent buying of popular coins like Morgans, Saints, Nickles, Pennies, Dimes, Quarters, etc. As I only track Morgans and Saints, I haven't seen it there -- yet.

 

It's going to take time to see it across the board. But we all know that collectors tend to follow a trajectory across their collecting career going to ever more esoteric and rare items. They tend to follow each other rather than the markets themselves. Morgans are great coins and are sure to collect a lot of interest going forward.

 

That buying should also be independent of the underlying metal price for silver and gold coins. It will be tough to swim against when gold falls 35% as it has done since October 2011 but if metal prices are flat, we should sop up excess supply and premiums should rise and then when gold/silver prices rise (slowly ?) we should see prices and premiums expand (like when earnings and P/E's both rise for stocks).

 

A lot of profits on gold and silver are plowed directly or indirectly into collector coins. The wealth effect of higher prices also spurs more buying just as lower prices cause less buying.

 

We might just have the perfect storm going forward.

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One thing that should be helping the price of numismatics over the last few decades is the increase in the overall U.S. population. In 1980, it was about 250 million. Today, we are at 325 million.

 

Unfortunately, it seems most of the new millenials and many immigrants are not into U.S. coins like previous generations.

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Unfortunately most of the population are geared toward their "virtual" reality devices and have less of an attention span than is required to develop and maintain intellectually rigorous hobbies.

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