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Jeff Garrett: The Difference a Point Makes
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19 posts in this topic

I generally agree with his dialogue but also think registry competition is one factor that has driven market prices so low and maybe bottom is melt or face in some cases. At some point dealers will have to say 'if it's not PCGS CAC sorry not interested'. Or how about 'wouldn't want to insult you, how much do you want for it ?'. Is there anything left for us normal collectors ?

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3 hours ago, kbbpll said:

I don't find anything to disagree with. To me it pretty much states the way things are right now.

 

3 hours ago, kbbpll said:

I don't find anything to disagree with. To me it pretty much states the way things are right now.

I’ll elaborate later in more detail.  I read his articles on Coin Week occasionally and it’s predominantly marketing hyperbole.  It’s what I expect but what it is.

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10 hours ago, numisport said:

I generally agree with his dialogue but also think registry competition is one factor that has driven market prices so low and maybe bottom is melt or face in some cases. At some point dealers will have to say 'if it's not PCGS CAC sorry not interested'. Or how about 'wouldn't want to insult you, how much do you want for it ?'. Is there anything left for us normal collectors ?

I infer that you reach this conclusion due to inflated population counts from resubmissions and "gradeflation".  I don't see how it can be anything else most of the time since the proportion of the collector base competing for this coinage is so low.

If this is correct, I still don't see how you conclude that the prices are so low.  The US series primarily subject to registry set participation and competition are the most common but concurrently among the most overpriced in the world.

The better explanation for falling prices is that this coinage is losing market share first to world NCLT, second to displacement by new US MInt issues, and third to all other coinage which can now be bought on the internet.  As a guess, I'd say maybe 10% to 20% of the US collector base no longer include this coinage as one of their primary series or where they do, not exclusively as in the past.  Probably also some economics as the root cause, as the majority of the US population isn't exactly doing that great since 2008 either.

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If numeric "grades" had a consistent, empirical base, one could find meaning in them. But, that is not the case so the premise of the article and similar ones is to help people self-rationalize the irrational and justify their gullibility.

Yep, that's a harsh assessment, but phony numerical "grading" is killing the hobby, enjoyment and economic foundation of coin collecting. (Just an opinion. Most will disagree.)

:)

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On 12/6/2019 at 10:33 AM, World Colonial said:

I disagree with practically everything in the linked article. 

Registry sets have a place in collecting but the focus of this article has little to do with it.

In every article of his I have ever read, Garret’s usage of “rare coins” is mostly marketing hyperbole.  In this context, he exaggerates both the scarcity and significance.  The label on the holder is rare but the coins in it disproportionately aren’t.

The single biggest difference between US numismatics and practically all others (not just Europe) is that US collecting has been financialized.  That’s the primary reason these differences are considered so important.  To those who disagree, the second reason is that the US series with the largest number of registry participants are so easy to complete even in “high quality” (literally in one day), that an additional challenge is necessary for some collectors.  Most European coins are also common but a much higher proportion are a lot more affordable to the typical collector. 

With world coinage, the actual best sets in the highest profiile series either disproportionately do not compete or don’t compete at all.  There are a very low proportion of series with a noticeable number of participants but I can infer that it’s mostly US based collectors who participate. US collectors will pay outsized premiums or multiples for these minimal differences in (perceived) quality for US coinage but others almost never will because there is no market for it.

“Buying the best you can afford” was good advice when the price level was “low” and price spreads between grades were “reasonable”.  In this context, it’s absolutely awful advice.  He mistakes a side effect (ridiculously inflated prices and exorbitant price spreads for predominantly common coins) from the greatest credit bubble in the history of civilization as interest in real collecting.  Per my post in another recent thread, forum posts make it evident most collectors disproportionately don’t find these coins compelling as collectibles at current and recent prices, except under the expectation of recovering most, all or even more of their money back. 

Registry set competition isn’t comporable to coin boards.  Most collectors don’t participate.  The impact he describes is mostly if not entirely financial and has little if anything to do with actual collecting. It makes no practical difference to 99%+ of US collectors because the resulting inflated prices don’t keep them from buying what they want.

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Garrett is a good author and I enjoyed the article.  I met him at the ANA. I did buy a nice Morgan from him and he sold it to me for wholesale, which I thought was nice.  

Edited by Walkerfan
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I will be winning two registry Awards again this year.  One for the Walker one per date set any other for the early Walker set.  I don't compete much, anymore, since I am 98% done with my full Walker set.  I never upgrade, as I am perfectly happy with the examples that I have selected. It is very nice to be recognized and I thank NGC for all they do.  They have been more than accommodating.  I buy the best I can afford but I also buy the best quality, which makes a huge difference.  It's not only about price.  When I first start collecting early Walkers I was buying mostly 64s that looked better than 65s.  That way I got more bang for my buck.  You have to know your series.  That's difficult to do these days, since most of the good coins have been 'mined', meaning they have been cracked and regraded.  Someday, I will have mine regraded but, since I am a true collector, I will not be doing that anytime soon.  At this stage in the game, it is just nice to kick back and relax and enjoy what I have accomplished.  Don't know where prices will be down the road but I plan to hold.  We shall see but I think that I'll be okay.

Edited by Walkerfan
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I think he's wrong about at least one thing: if a common Morgan is $200 in MS66, $750 in MS67 and $5,000 in MS68, I don't think that will last forever and it will prove to be a bubble. There IS subjectivity and a one point move up or down is always possible and many of the people buying these can't tell the difference between a 68 and 66 consistently. That pricing won't last forever.

Didn't this same person write an article some time ago saying, essentially, ask yourself, if TPgrading went away tomorrow, would your purchase still have value / be smart. I think the answer there is a BIG "No" with condition rarities.

Edited by Revenant
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1 hour ago, Revenant said:

I think he's wrong about at least one thing: if a common Morgan is $200 in MS66, $750 in MS67 and $5,000 I don't think that will last forever and it will prove to be a bubble. There IS subjectivity and a one point move up or down is always possible and many of the people buying these can't tell the difference between a 68 and 66 consistently. That pricing won't last forever.

Didn't this same person write an article some time ago saying, essentially, ask yourself, if TPgrading went away tomorrow, would your purchase still have value / be smart. I think the answer there is a BIG "No" with condition rarities.

The example you gave is an example of how the "hobby" has been financialized. 

US collectors didn't experience a collective epiphany with the widespread adoption of the Sheldon scale in 1986 where they miraculously discovered that the highest TPG grades were so much better than slightly lower or even much lower quality coins.  Concurrently, most collectors elsewhere don't collect in ignorance where they fail to understand the supposedly compelling nature of these quality differences.  It's predominantly for the three reasons I gave here.

This is evident in the differences between US collecting and practically everywhere else.  It's also evident in South Africa (one of the few foreign markets to fully adopt TPG)  where "collectors" have created an even more irrational price structure.  The price level is much lower but the price spreads are even wider.

Accepting it as a bubble is difficult for most people first, because it's hard to convince someone of something when it's contrary to their personal interest and personal preference.  That's the reality for bigger budget US buyers generally.  Second, bubbles don't normally last decades but this micro bubble with the higher TPG grades (and CAC) is a symptom of the real mega bubble, the one in worldwide credit which is the greatest in the history of civilization.  

It has been a process to get to this point and it's end will be a process but when it does, the price structure and price level will return to more closely resemble what it used to be before the hobby was financialized.  In between though, there is likely be another massive gold and silver bubble when the financial system comes under stress.  That should provide noticeable price support temporarily, though I expect temporarily to last for quite some time.

Edited by World Colonial
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You "true believers" in these "real mega bubble, the one in worldwide credit" and "when the financial system comes under stress" memes really make me laugh hard out loud. There is absolutely no reason for any such displacements to happen unless the world at large starts listening to you who believe this stuff. I hope they never do.

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Your reply displays your ignorance of financial and economic history.  No, of course there is no reason for it, for someone who believes people should behave like robots instead of real human beings and collectively awful economic decisions should have minimal or no consequences.  Under the logic you are using, there would never be an economic contraction anywhere since the same reasoning applies.

Every prior financial bubble has burst with negative consequences - no exceptions to date, not even one.  But this time is different, right?

I never claimed it was the "end of the US economy" as someone here once claimed.  I'm definitely not a metals bug, owning no gold or silver.  I have frequently argued against absurd claims on imminent hyper inflation or the USD losing reserve currency status.

I have claimed that most Americans (and by implication, most everyone else) are going to be poorer of a lot poorer when borrowing isn't an option under the lowest collective credit standards in history.  That's a reasonable inference confirmed by history.

To give everyone an idea of how weak economic conditions have been during the current US economic cycle, it has taken over $11T in incremental public debt and (near) zero target rates to achieve about 2.5% annual GDP growth since 2009.  Things are so great now, the Federal Reserve lowered its lending target three times this year and reinstated QE to the tune of $300B the last three months. If federal debt growth in this expansion approximated what it did immediately prior to the GFC, economic growth would have been (near) zero or negative most of the time.  

Unlike you, most people don't have effectively guaranteed jobs for life where their employer can raise everyone else's taxes to pay their salary, benefits and pension.  It's easy enough to be dismissive of the financial stresses most people face every day from your safe ivory tower.

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The problem with your analysis is that there is no bubble to burst, unless you're looking at cryptocurrencies. Then there is. The profits being "earned", whatever that means, support FULLY the valuations we see in the market today. There is no fluff in there anywhere. The raw numbers ARE MEANINGLESS. Only ratios matter. And while the raw numbers look bad and high, compared with the proper respective numerators and/or denominators, nothing is out of whack. Debt isn't even the worst it's been. Not even close.

 

Also, I do not believe in "business cycles", so history is meaningless. Only what we are doing now matters. Forget the past. This is a "new sheriff in town", with whole new norms.

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You are free to believe whatever you want.  It does´t change anything I told you.

Cycles do exist.  People get overconfident and make bad decisions which matter.  No different than any other area of life.  

If you don´t believe there is a bubble now, you´ll never believe there ever was one or ever will be.  No point in even debating someone who beluieves that. 

The concusion I draw from your posts in that it´s different this time.

2008 didn´t happen because anyone listetened to the pessimists.  It´s easy enough to show it.  People collectively changed their minds, the reason doesn´t matter.

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I disagree with the article on it's influence of collecting. It truly doesn't promote collecting when having these registries, but rather alienate those that can never compete with those with the finest choice of coin because those collectors having deep pockets. Why should there be competition?!? It should be more of admiration of someones top end collection and strive to have something close or better.... but enjoy what you have accomplished to get where you are.

I spend about $1000 a year getting the best coins I can and keep my Silver Eagle collection up to date (another story). Always improving my collection when an opportunity presents itself. However, I don't get much in coinage due to the inflationary costs of mid to high end coins because of this high end competition. The major dealers know this too and inflate even the most modern coin just to make a buck. Some call it free market (no such thing), Some say supply and demand (more price push up with known demand) or just plain GREED. I can't even buy a raw coin without having it at hand, but I'm supposed to rely on pictures online. I know if its not verifiable online, I don't buy.

I use registries to help me track my basic collections. I enjoy my coins for the artistic work that went into the dies that produce them. I've held some coins that were over 100+ years old, just to know what my Great Great Grand Dad held. he probably thought it was a fortune holding those $1 dollar coins. Or what my parents spent for a soda or malt. Many times I listen to my Mom talking about spending 40C for a burger and malt in the 50s. Today, I can remember gas being a quarter a gallon when I was 6 years old. it's these coins from those eras that make me collect, to make me think... how far things have changed.

So what is my point you ask? My point is how can we make these registries work for everyone and promote coin collecting?! As I said on another post, let's recognize those that improved their registries to start. Reward them for IMPROVING their collection through the registries. The whole idea, IMHO, is to get others into collecting (and inadvertently, preserving) history. Don't make new collectors compete with those that have deep pockets, but recognize them for improving and bettering their collection.

Amateur (HAM) Radio (another hobby/technical experimentation of mine) had the same problem, but they changed and adapted. Why can't the numismatic world do the same? I think registries do a detriment to the hobby when a 13 year old may see others look at the collection as inferior, but was built with heart and spirit. I think change is needed nd I hope many of you think the same!

Thanks for letting me write my diatribe!!.

Edited by ChrisInJesup
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