The 100 Year Test

[LINCOLNMAN]

Occasionally, not often, I consider the future value of my collectibles, either as a group or individual items. This sometimes occurs with purchases or when choosing the direction or depth of my collecting interest. When this happens I may apply the "100 year test". I ask myself "will this thing (or group of things) hold its (or their) relative value 100 years for now?" The reasoning is that if the test is passed, value will also be there 10, 20, or 30 years from now. This is of course, simply my best guess.

An example of something that I believe would certainly pass this test: an Abraham Lincoln signed commission.

An example of a collectible that would never pass this test, for me: Beanie Babies.

If one assumes that US coins in general hold interest for collectors 100 years from now, which coin or class of coins pass or don't pass this test for you, your best guess?

I'll throw out the 1909S VDB as a coin that doesn't pass this test. Most of its demand is, IMO, generated by older collectors who remember searching in vain for this coin in their pocket change. In 100 years, collectors will be more objectively focused on the available supply, relative to other coins. (By the way, I bought one in MS64RB a couple of years ago, I just had to own one, common sense be damned.)

I'm aware that this topic has been explored from other directions, but thought this perspective might be of interest and generate some conversation.  

 

 

[kidrootbeer]

19 minutes ago, LINCOLNMAN said:

Occasionally, not often, I consider the future value of my collectibles, either as a group or individual items. This sometimes occurs with purchases or when choosing the direction or depth of my collecting interest. When this happens I may apply the "100 year test". I ask myself "will this thing (or group of things) hold its (or their) relative value 100 years for now?" The reasoning is that if the test is passed, value will also be there 10, 20, or 30 years from now. This is of course, simply my best guess.

An example of something that I believe would certainly pass this test: an Abraham Lincoln signed commission.

An example of a collectible that would never pass this test, for me: Beanie Babies.

If one assumes that US coins in general hold interest for collectors 100 years from now, which coin or class of coins pass or don't pass this test for you, your best guess?

I'll throw out the 1909S VDB as a coin that doesn't pass this test. Most of its demand is, IMO, generated by older collectors who remember searching in vain for this coin in their pocket change. In 100 years, collectors will be more objectively focused on the available supply, relative to other coins. (By the way, I bought one in MS64RB a couple of years ago, I just had to own one, common sense be damned.)

I'm aware that this topic has been explored from other directions, but thought this perspective might be of interest and generate some conversation.  

 

 

Probably, what's "Hot" 100 years from now hasn't yet been made; and wanna take a guess of what Slabs would look like then (if anything is still encased in them) at all?

[LINCOLNMAN]

17 minutes ago, allmine said:

what Slabs would look like then (if anything is still encased in them) at all?

My guess is that coins will be profiled in minute detail as to surface and color by scanning software. Collectors will be able to screw with coins or may store them improperly, but any guarantee regarding condition or appearance would be null, the next time the coin is "read" by a computer, such as when sold. Would allow us to display and hold coins as in the old days, but at risk of losing the "grade" or "grades" and the pedigree. Coin might also be given an invisible (to the eye) and irreversible fingerprint for additional identification and security. Not sure this will take 100 years.

[kidrootbeer]

1 hour ago, LINCOLNMAN said:

My guess is that coins will be profiled in minute detail as to surface and color by scanning software. Collectors will be able to screw with coins or may store them improperly, but any guarantee regarding condition or appearance would be null, the next time the coin is "read" by a computer, such as when sold. Would allow us to display and hold coins as in the old days, but at risk of losing the "grade" or "grades" and the pedigree. Coin might also be given an invisible (to the eye) and irreversible fingerprint for additional identification and security. Not sure this will take 100 years.

a lot of that is already accomplished by PCGS's "Shield"

[Six Mile Rick]

Do you think there will even be a U.S. mint in 100 years? All coins that survive will be of value in 100 years. We are turning into a society that no longer carries change.  Everyone uses their debit card and the change is moved back and forth without handling a single coin.  Computerized coin spending will delete the use of regular cash as we know it. We basically no longer get checks from work or write checks for bills. It's all digital transfers. 

[LINCOLNMAN]

Six Mile, my bet would be that you're correct regarding the mint. However, would that cause potential collector-types to be more or less interested in coins? Given the long history of coin collecting in general, I would agree that there will be interest, assuming that a reasonably large number of persons have an interest in collecting things at all. My OP asked that we assume that US coins in general would still be of interest - hoping to keep the discussion on specific coins. 

I'll throw out a class of coins that I don't think passes the test: the seemingly endless obscure varieties of coins. Hard for me to imagine that a collector in 100 years will care about the RPM or DDO whatever, once the cherrypicking fun us exhausted. But, on the other hand, look at the EAC guys.....  

[kidrootbeer]

Hate to say it, but if Cash were outlawed, Illegal Drugs as we know them would have to be made legal

[BillJones]

In general I would say that any older coin, token or medal that has some rarity and more importantly a good story will be of interest 100 years from now. Stuff that has been "made to sell" which includes a lot of the pieces with unusual surfaces (reverse Proof, burnished, whatever) will be worth no much more than melt or its face value if that is higher. A lot of the commemorative coins will be ignored. To an extent we have seen that happen to the "old commemoratives" issued from 1892 to 1954. The market for these coins has been poor for years.

Most of the stuff that the mint is now issuing every year will poorly regarded 100 years from now. Heck, it only takes a year or so now for that stuff to go on the back burner, even after it's had a time when it has been "hot." That stuff is made for flippers, not collectors, and collectors would do well to avoid buying it until the dust settles, if they want it at all. I don't want most of it.

[WoodenJefferson]

100 years from now, rare coins of today will be physically stored in a Ion chamber vault and you will own a virtual reality projection of the coin stored in your hand held 3-D projection simulator.  Want to see my 1804 Sultan of Muscat specimen dollar? The coin illuminates above the pad, a spectacular image that can be rotated, enlarged and admired...then it begins to flicker and it's gone. Hackers have stolen your image, but the coin it self is safe in it's ion fused vault, ready to be reprogramed with a new ID .

Looking for an up-graded, simply send the image via secured dealer line to NGCC  (the last C for Certification was added in 2038) for an on-line approval. Graders have been replaced with computer driven banks of  robot C.E.R.T.S. (Coin Examiner  Rare Testing Service) that can scan spectrums for anomalies and preservation of grade. If the CERTS comparative assessment quantifies an up-grade, a certificate of  authorization will be electronically sent to the vault company storing your coin. 

[LINCOLNMAN]

10 hours ago, allmine said:

Hate to say it, but if Cash were outlawed, Illegal Drugs as we know them would have to be made legal

And, since all transactions will be discoverable, the market for prostitutes will be largely limited to single men and politicians. (Hate to subvert my own post, but couldn't resist.)

[LINCOLNMAN]

1 hour ago, WoodenJefferson said:

100 years from now, rare coins of today will be physically stored in a Ion chamber vault and you will own a virtual reality projection of the coin stored in your hand held 3-D projection simulator. 

Very imaginative and probably right on. Seems like uber valuable cars and paintings are already handled in a similar manner in many cases.

[kidrootbeer]

6 hours ago, LINCOLNMAN said:

And, since all transactions will be discoverable, the market for prostitutes will be largely limited to single men and politicians. (Hate to subvert my own post, but couldn't resist.)

there will always be Illicit Markets; how they respond/adapt to a cashless society would be an interesting read

[bsshog40]

I would be surprised if in a 100 yrs that there would be any collectors left anyway. As it is, the generations growing now can't even distinquish quarters from dollars. Most can't even count change without the aid of a machine. Once coins are no longer made, they will be out of sight and out of mind. The only ones that will be collecting by then will be historians. 

[kidrootbeer]

2 hours ago, bsshog40 said:

I would be surprised if in a 100 yrs that there would be any collectors left anyway. As it is, the generations growing now can't even distinquish quarters from dollars. Most can't even count change without the aid of a machine. Once coins are no longer made, they will be out of sight and out of mind. The only ones that will be collecting by then will be historians. 

Ouch, but a possibility
still, I'd like to see how a slab weathers 100 years...

[World Colonial]

From a relative standpoint, I expect most 20th century US coins to be relative financial losers.  My comments can be applied to all (US) coins but I believe it will impact the most widely collected the most.

One: The supply of these coins is either disproportionately large or absolutely huge.  I don't place much reliance on PCGS Coin Facts estimates but even assuming high estimates, it should be evident that the supply vastly exceeds the real collector demand at current or recent prices.  This is not just true of "collector" grades but practically all grades. 

Two: Changing demographics should negatively impact values across the board.  Most US collectors are Caucasian men and there will likely be fewer of them in the future but if not, not many more.  Other ethnic groups have a much lower propensity to collect at all but even if they do, I don't believe they have or will have much of a preference for these coins at all.  As current owners (including a substantial proportion of non-collectors) die off, there will be far fewer buyers who will want these coins except at much lower prices.

Three: The end of the financial levitation act.  The existing price structure and price level is substantially a function of the financialization of collecting which in turn is driven by the greatest speculative bubble in history, the credit bubble.  I can't prove it will end completely but I consider it a virtual certainly that it will peak long before 2117.  Buying the relatively overpriced coins preferred by contributors on this forum and PCGS should prove to be a losing financial strategy because their actual numismatic merits aren't remotely in line with the prices.  It's entirely possible that CAC, NGC and PCGS may not survive the next century (likely in my opinion) but whether they do or don't, the preferences of future collectors even within the same coins will likely differ substantially .

Four: Further outsourcing, offshoring and automation will continue to adversely impact the economic prospects of the middle class.  Historically, the size of the middle class from 1933 onwards is an aberration and I expect most people to become poorer or a lot poorer for the indefinite future.

Five:  I agree with Six Mile Rick that the decreasing use of physical money will negatively impact mass market collecting.  Even if coins don't disappear entirely, absent a currency recall, existing denominations won't exist in 100 years because even at 2% "moderate" inflation, no one will be able to buy anything with any of them.

Six: The geopolitical landscape will change substantially and reflected in the map.  Will there even be a US Mint? 

[LINCOLNMAN]

15 minutes ago, World Colonial said:

From a relative standpoint, I expect most 20th century US coins to be relative financial losers.  My comments can be applied to all (US) coins but I believe it will impact the most widely collected the most.

One: The supply of these coins is either disproportionately large or absolutely huge.  I don't place much reliance on PCGS Coin Facts estimates but even assuming high estimates, it should be evident that the supply vastly exceeds the real collector demand at current or recent prices.  This is not just true of "collector" grades but practically all grades. 

Two: Changing demographics should negatively impact values across the board.  Most US collectors are Caucasian men and there will likely be fewer of them in the future but if not, not many more.  Other ethnic groups have a much lower propensity to collect at all but even if they do, I don't believe they have or will have much of a preference for these coins at all.  As current owners (including a substantial proportion of non-collectors) die off, there will be far fewer buyers who will want these coins except at much lower prices.

Three: The end of the financial levitation act.  The existing price structure and price level is substantially a function of the financialization of collecting which in turn is driven by the greatest speculative bubble in history, the credit bubble.  I can't prove it will end completely but I consider it a virtual certainly that it will peak long before 2117.  Buying the relatively overpriced coins preferred by contributors on this forum and PCGS should prove to be a losing financial strategy because their actual numismatic merits aren't remotely in line with the prices.  It's entirely possible that CAC, NGC and PCGS may not survive the next century (likely in my opinion) but whether they do or don't, the preferences of future collectors even within the same coins will likely differ substantially .

Four: Further outsourcing, offshoring and automation will continue to adversely impact the economic prospects of the middle class.  Historically, the size of the middle class from 1933 onwards is an aberration and I expect most people to become poorer or a lot poorer for the indefinite future.

Five:  I agree with Six Mile Rick that the decreasing use of physical money will negatively impact mass market collecting.  Even if coins don't disappear entirely, absent a currency recall, existing denominations won't exist in 100 years because even at 2% "moderate" inflation, no one will be able to buy anything with any of them.

Six: The geopolitical landscape will change substantially and reflected in the map.  Will there even be a US Mint? 

Didn't intend for this to be quite so serious a discussion. All of the above points are valid IMO. I would interject a more positive note, not in contradiction to the above, if we may broaden the subject to include the rest of the world and numismatic collectibles in general.  Considering genuinely scarce or rare US, ancient, and world coins, currency, and exonumia I see no reason that interest among a sufficiently large number of people in the world should diminish. The art, history and research aspects of numismatics may or may not diminish in the US or other developed countries, but may very well explode in developing nations as they take an interest in their own and world history, and have the leisure time to explore that history through numismatics. From a purely financial perspective, collectors of US coins should broaden their interests IMO, as many have, or at least focus on the truly rare or scarce (and not so much on condition rarity) and eschew the faddish. The enjoyment and learning one gets from such a "strategy" is the real payoff. 

[cladking]

1 hour ago, World Colonial said:

From a relative standpoint, I expect most 20th century US coins to be relative financial losers.  My comments can be applied to all (US) coins but I believe it will impact the most widely collected the most.

One: The supply of these coins is either disproportionately large or absolutely huge.  I don't place much reliance on PCGS Coin Facts estimates but even assuming high estimates, it should be evident that the supply vastly exceeds the real collector demand at current or recent prices.  This is not just true of "collector" grades but practically all grades. 

 

Why would you lump all 20th century coins together when people stopped saving large numbers of coins in 1965? 

How much money do you expect a chBU 1978 dime to lose while its current wholesale price is 11c  ?

[World Colonial]

4 minutes ago, LINCOLNMAN said:

Didn't intend for this to be quite so serious a discussion. All of the above points are valid IMO. I would interject a more positive note, not in contradiction to the above, if we may broaden the subject to include the rest of the world and numismatic collectibles in general.  Considering genuinely scarce or rare US, ancient, and world coins, currency, and exonumia I see no reason that interest among a sufficiently large number of people in the world should diminish. The art, history and research aspects of numismatics may or may not diminish in the US or other developed countries, but may very well explode in developing nations as they take an interest in their own and world history, and have the leisure time to explore that history through numismatics. From a purely financial perspective, collectors of US coins should broaden their interests IMO, as many have, or at least focus on the truly rare or scarce (and not so much on condition rarity) and eschew the faddish. The enjoyment and learning one gets from such a "strategy" is the real payoff. 

I am not positive on the future financial prospects of collecting and this is why my comments come across as negative.

I agree with you that coins whose numismatic merits have substance will continue to be viewed as desirable, collected and valued as works of art, but only at lower or much lower prices.  Modern collecting dates back to around 1500 and ancient coins have been collected for 2000+ years.  So I don't see any reason to believe this will change completely in the sense that coins with a long history of being preferred won't be in the future either..

To your point, the fact is that most coins collected by US collectors are not scarce or rare.  They are worth collecting but there isn't any reason to believe or expect that most coins will continue to maintain most of their current value which I interpreted as the intent of your OP. 

I understand you've been a long time collector, maybe longer than I have since I started in 1975.  If true, you know the price structure and price levels prior to the 1970's when financialization started to completely change collecting.  Well, the coins I referenced in my prior posts, gems and others from current specializations of common dates sold for nominal premiums to face value.  This is exactly where I believe they are headed back because their current prices are dependent upon the factors I listed.  I also believe "key dates" such as the 09-S VDB are also going to lose most of their value, including the for the reason you gave.

[World Colonial]

5 minutes ago, cladking said:

Why would you lump all 20th century coins together when people stopped saving large numbers of coins in 1965? 

How much money do you expect a chBU 1978 dime to lose while its current wholesale price is 11c  ?

You already know the answer to your question since we have discussed this subject more times than I can even remember.

My comments were a generalization.  At the same time, you know I disagree with your general theme and the reasons for it.  I disagree that what you consider significant in terms or scarcity and quality has any significance whatsoever, not just for the coins you like but practically any coin.  It is a contrived scarcity which only exists in US collecting and doesn't exist anywhere outside the US except to the extent other collectors adopt US practices.

In the example you gave, it should be self evident that a 1978 dime with a current wholesale of 11c is not going to sell for less than FV. 

[kidrootbeer]

1 hour ago, World Colonial said:

From a relative standpoint, I expect most 20th century US coins to be relative financial losers.  My comments can be applied to all (US) coins but I believe it will impact the most widely collected the most.

One: The supply of these coins is either disproportionately large or absolutely huge.  I don't place much reliance on PCGS Coin Facts estimates but even assuming high estimates, it should be evident that the supply vastly exceeds the real collector demand at current or recent prices.  This is not just true of "collector" grades but practically all grades. 

 

This, call it a Paradigm(?) One, is proven false by just MS65 Morgans: the supply is BagsHUGE yet they trade over $100.00

[cladking]

1 minute ago, World Colonial said:

 

In the example you gave, it should be self evident that a 1978 dime with a current wholesale of 11c is not going to sell for less than FV. 

The current wholesale is $5.50 for a roll of "50".  Where's it going to stop.

There are only a few hundred of these rolls so it's not very important how much they plummet from these levels but it would be interesting to those of us who own one to hear your prediction. 

Obviously you would agree that its current price is swollen by speculators and when this demand evaporates so, too, will its price. 

[kidrootbeer]

1 minute ago, cladking said:

The current wholesale is $5.50 for a roll of "50".  Where's it going to stop.

There are only a few hundred of these rolls so it's not very important how much they plummet from these levels but it would be interesting to those of us who own one to hear your prediction. 

Obviously you would agree that its current price is swollen by speculators and when this demand evaporates so, too, will its price. 

anyone remember the Roll Craze of 1964?

[World Colonial]

2 minutes ago, allmine said:

This, call it a Paradigm(?) One, is proven false by just MS65 Morgans: the supply is BagsHUGE yet they trade over $100.00

You obviously did not read my entire post which can be excused since it is long.

The Morgan dollar is disproportionately an "investor" coin with an outsized proportion of financial buyers compared to other coins.  It's price is substantially due to the financialization I described in my point number three.  You may  disagree with my claim that financialization may diminish or end but no one can dispute that if it does, the premiums on these coins will fall substantially, though the price may not since it is so dependent upon metal prices which may increase.

The Morgan dollar is an exception, as are some common generic gold, some modern bullion and maybe Peace dollars.  This doesn't apply to any other 20th century US coinage.

[cladking]

5 minutes ago, allmine said:

This, call it a Paradigm(?) One, is proven false by just MS65 Morgans: the supply is BagsHUGE yet they trade over $100.00

These original bags used to reveal countless Gems when opened with numerous PL's and well struck coins with pristine surfaces.  It's hard to estimate how many bags survive but the number is significant if not substantial. 

Where are all the clad dime bags?  It's very difficult to even find rolls and there are no sellers at $5.50

[cladking]

1 minute ago, allmine said:

anyone remember the Roll Craze of 1964?

Indeed.  There were literally millions of rolls being saved but this market crashed in '64 when the date freeze was announced and then it crashed again from lower levels when the switch to clad occurred. 

So where are the clad rolls?

[World Colonial]

4 minutes ago, cladking said:

The current wholesale is $5.50 for a roll of "50".  Where's it going to stop.

There are only a few hundred of these rolls so it's not very important how much they plummet from these levels but it would be interesting to those of us who own one to hear your prediction. 

Obviously you would agree that its current price is swollen by speculators and when this demand evaporates so, too, will its price. 

Did you even read my post or are you just intentionally trying to be difficult?

I wasn't referring to coins selling near FV as I just explicitly stated.  You know it yet you intentionally choose to use an irrelevant example to object to my position.

[cladking]

2 minutes ago, World Colonial said:

 

The Morgan dollar is an exception, as are some common generic gold, some modern bullion and maybe Peace dollars.  This doesn't apply to any other 20th century US coinage.

To what is the Morgan dollar an exception?

Morgans are as common as 1940's era quarters. 

[kidrootbeer]

3 minutes ago, World Colonial said:

You obviously did not read my entire post which can be excused since it is long.

The Morgan dollar is disproportionately an "investor" coin with an outsized proportion of financial buyers compared to other coins.  It's price is substantially due to the financialization I described in my point number three.  You may  disagree with my claim that financialization may diminish or end but no one can dispute that if it does, the premiums on these coins will fall substantially, though the price may not since it is so dependent upon metal prices which may increase.

The Morgan dollar is an exception, as are some common generic gold, some modern bullion and maybe Peace dollars.  This doesn't apply to any other 20th century US coinage.

if posting a Theorum, it doesn't do well to have the antithesis in another, separate part of your argument (it's like the NYT waiting until the 17th paragraph to provide a key nugget of information...)

[World Colonial]

1 minute ago, cladking said:

To what is the Morgan dollar an exception?

Morgans are as common as 1940's era quarters. 

It is an exception compared to most other coins generically because it is disproportionately an "investor" coin bought by financial buyers.  1940's quarters are or may be bought as a silver substitute but if so, it must be as "junk" silver because I have never heard of them being marketed the same way.

The Washington silver quarter is predominantly a collector coin.  Financially motivated buying is limited or minimal.

[cladking]

1 minute ago, World Colonial said:

Did you even read my post or are you just intentionally trying to be difficult?

I wasn't referring to coins selling near FV as I just explicitly stated.  You know it yet you intentionally choose to use an irrelevant example to object to my position.

You are making blanket statements about "20th century coin" to which I disagree. 

I believe there are numerous 20th century coins that will be of interest in 100 years.  It's funny that the future is the only thing about which predictions are almost meaningless.  But, there's no reason to believe a beautiful Gem 1916 quarter will somehow get less interest than it does today just as it is hard to believe nobody will want a nice Gem '84 cent with nice surfaces.  The cent will tell the story of a society that throws away resources and its scarcity will show the low level of quality that is tolerated by a throw away mentality.  Many coins from the 20th century have stories to tell and are scarce. Why would they have no interest? 

You aren't predicting the future so much as you are engaging in wishful thinking and predicting the present.