What effect will the Coronavirus have on current and upcomming coin auctions 1 1

[Coinbuf]

I an wondering if this coronavirus scare and the recent stock market devaluation that is in part tied to this issue will have any effect on auctions and coin buying in general.  Often when something like this happens the "non-essential" spending is put on hold, do you think this will have a short/long term effect on the spending habits of collectors?

[Revenant]

I think you're going to see it hit prices. Just look at what's happening to gold. You'd normally expect gold to be heading higher as a safe-haven play but it tanked on Friday - probably because people are getting hit with margin calls.

How much? Your guess is as good as mine.

[Six Mile Rick]

I think it will boost sales a little. People will be quarantined to their house. Schools and businesses will get shut down for a bit. It will be an adjustment but the internet will be running 24 - 7 and that will be the escape from the house. 

[RWB]

Although the net fatality rate seems to be about 1 or 2%, it is skewed away from children and toward old adults with exacerbating medical conditions. The fatality rate for endemic influenza is about 0.1% but disproportionately affects healthy children and young adults.

I'd anticipate more internet bids with an increase in bid changes/adjustments and so forth. In person bidding might be a little smaller in audience size, but not in dollars - competition remains. Some adjustment might be made in lot viewing, such as larger rooms, more hand sanitizer bottles, gloves for viewers and staff, frequent wipe-down of exposed surfaces.

Public panic fueled by repetition and the executive administration's incompetence - after all, they eliminated the very people who were preparing for this kind of event - will likely be more dangerous than this virus.

(Reminder - even for coin collectors - there is no cure for a viral infection. Only palliative care can be provided. Most people will come through fine, much like a common cold.)

[kbbpll]

Whatever impact it has, up, down, or sideways, is panic-based, and I think will only last 3-6 months. Look what happened a few years ago with ebola. As soon as the election was over, it disappeared from the news. This particular virus will just become background noise after a year. Regular flu killed 80,000 people in this country in the 2017-18 season and we don't strip the grocery shelves every year over it.

[Revenant]

23 hours ago, kbbpll said:

Whatever impact it has, up, down, or sideways, is panic-based, and I think will only last 3-6 months. Look what happened a few years ago with ebola. As soon as the election was over, it disappeared from the news. This particular virus will just become background noise after a year. Regular flu killed 80,000 people in this country in the 2017-18 season and we don't strip the grocery shelves every year over it.

If the market was otherwise healthy, I'd agree with you, but I don't think the market is healthy. I think we were close to a major recession - maybe something worse, like another credit crunch and financial crisis - before this happened. I think this has burst the mood of hope in the market and I don't think that's going to come back. But I could be wrong.

[World Colonial]

21 hours ago, Revenant said:

If the market was otherwise healthy, I'd agree with you, but I don't think the market is healthy. I think we were close to a major recession - maybe something worse, like another credit crunch and financial crisis - before this happened. I think this has burst the mood of hope in the market and I don't think that's going to come back. But I could be wrong.

I'm with you except that I consider the current environment the biggest bubble in history.  Didn't have a proper opportunity to answer the last time someone else questioned this claim (was using a terrible Spanish language keyboard while out of the country).  However, this opinion is easy to support, whether the bubble is over now or not.

I don't remember a specific event coinciding with a major market top.  (Psychology - the real driver behind market movements - usually leads and never.)  But given the exorbitant historical relative over valuation, I agree with you.

As for coin auctions, I don't think this event is a particular factor either way.  If it's negative, I would expect it will be at the higher end due to falling asset prices.

[Revenant]

54 minutes ago, World Colonial said:

I'm with you except that I consider the current environment the biggest bubble in history. 

I agree, but I find people tend to dismiss this view. I think when the bubble pops it will be very very bad but I'm not convinced this is the end yet. There's still too much optimism. That 1300 point dead cat bounce yesterday shows that plenty of people still want to believe and with easing this could yet continue 3, 5 or 10 more years.

[kbbpll]

14 minutes ago, Revenant said:

when the bubble pops it will be very very bad

Well, in my radical and uninformed naive view, the bubble started in 1983 when people began dumping trillions of dollars worth of 401k money into the market. These millions of people would never have gotten "into the market" otherwise. Look at the DOW 100 year chart and see what happened. Of course, that has nothing to do with coins, and maybe only a little to do with coronavirus, in that the latter might be the catalyst, but I still think this current panic is short-lived.

[World Colonial]

13 hours ago, Revenant said:

I agree, but I find people tend to dismiss this view. I think when the bubble pops it will be very very bad but I'm not convinced this is the end yet. There's still too much optimism. That 1300 point dead cat bounce yesterday shows that plenty of people still want to believe and with easing this could yet continue 3, 5 or 10 more years.

Several reasons for this common belief.

One:  Lack of historical context.  No, history does not repeat itself exactly since people aren't robots but it's relevant because enough people (including decision makers managing others money) believe it and act on this belief.

Two: Hubris and false confidence in the ability of governments and central banks to prevent falling living standards and market declines.  They can't.

Three: Per the above post, it has been going on for so long that it's considered "normal".  I date the origin to August 13, 1982 and "lift off" to either April 20, 1994 or November, 1994.

I think you're right about the level of optimism but to a point only.  Market participants have been conditioned to "buy the dip" due to FOMO but concurrently, the two market crashes in the prior decade have also conditioned enough of them to sell under the theory that it's better to panic first and beat the rush.  It's easy enough to think of market declines or crashes having no real world consequences until it actually happens.  Those who managed to recover from 2008 or prosper since have 12 fewer years now.  This matters, except to those who ignore reality.

Coming back to coin prices, I keep hearing how weak the US market has been since 2008.  Considering that this is the 10th year of an economic expansion (an artificial one mirroring an increase in government spending but still in process anyway) with these bubble conditions, if coin prices are weak now, what's going to happen later?  (This is a rhetorical question.)

It isn't just US coins either.  Of those I follow, South Africa had it's own bubble which flamed out at YE 2011 or in 2012 and has since crashed.  Coins in other series I own or occasionally follow have also gone nowhere or lost value going on 15 years, despite that many (maybe most) seem to think that world coin prices are doing great.  Some have, but it depends upon what you collect or follow.  I'd guess a low minority have (the ones collectors want the most or been subject to financially motivated buying) since most collectors have no idea what most of these coins are worth, now or previously.  In this coinage, what I have seen is that a minimal increase in known supply weakens prices noticeably because there is little demand.  It's anecdotal but it isn't uncommon when I check a coin, it's selling for less or about the same as it was years ago.

[Revenant]

3 hours ago, World Colonial said:

Per the above post, it has been going on for so long that it's considered "normal".  I date the origin to August 13, 1982 and "lift off" to either April 20, 1994 or November, 1994.

If you want to talk about "normalization." I was born in 1986. Try living your entire life in this regime!

[World Colonial]

3 hours ago, Revenant said:

If you want to talk about "normalization." I was born in 1986. Try living your entire life in this regime!

So true.

I also left out a fourth and most important reason.  A belief in something for nothing.  That's what a belief in a permanent never ending bubble represents.  Absurdly overpriced asset prices, lowest aggregate credit standards in history and artificially cheap credit.

[Coinbuf]

Some great thoughts and perspectives everyone thanks for the replies.  My thinking in tying this to coin auctions and prices is that if the market falls further many people will see a reduction in asset wealth and that could (or could not) be a wet blanket on non-essential spending like collector coins.  And I'm only expecting this to affect (if there is any change) the upper end of the coin market, not the very tip top trophy coins that the super wealthy buy but the next level down.  We don't yet know how or if the coronavirus will have any significant direct impact on the US economy due to business shutdowns or the like; but there will be some impact due to supply chains from places like China being disrupted and that is behind some of the chaos we have seen in the last two weeks.  between this and an election year I think that factors are in place for some buyers to pump the brakes on spending in the near term, I'll be watching with curiosity.  

[kbbpll]

The collector market right now seems to be in toilet paper.

I've given up trying to guess what people will do during stuff like this. "A belief in something for nothing" - so accurate. When it pops, everybody seems surprised. I'll buy a few more coins regardless, because I know what my disposable income is.

[Revenant]

7 hours ago, kbbpll said:

 because I know what my disposable income is.

This. Coins are bought with fun money and not relied on as an asset with me.

I'm using my tax refund and bonus to pay down debt.

[World Colonial]

9 hours ago, Coinbuf said:

Some great thoughts and perspectives everyone thanks for the replies.  My thinking in tying this to coin auctions and prices is that if the market falls further many people will see a reduction in asset wealth and that could (or could not) be a wet blanket on non-essential spending like collector coins.  And I'm only expecting this to affect (if there is any change) the upper end of the coin market, not the very tip top trophy coins that the super wealthy buy but the next level down.  We don't yet know how or if the coronavirus will have any significant direct impact on the US economy due to business shutdowns or the like; but there will be some impact due to supply chains from places like China being disrupted and that is behind some of the chaos we have seen in the last two weeks.  between this and an election year I think that factors are in place for some buyers to pump the brakes on spending in the near term, I'll be watching with curiosity.  

Expected outcomes depend upon individual assumptions.

For those who believe this will blow over and nothing else will change significantly, no reason to expect any adverse impact on prices.

This event might be the trigger, but even if it isn't, if the economy rolls over (led by the financial markets first as always) and it's noticeable (as it should be given the 10 year artificially induced expansion), it's going to effect practically all coins noticeably.

The lower end (especially US) has other longer term issues that aren't related to this incident and aren't going away either. "Lower end" is subjective but I'd describe it as the coins the lower 80% (budget wise) of the collector base buys.  As an example, I'm looking to sell a 17th century MS Spanish silver coin.  Somewhat comparable coins on Heritage sold for less than I paid for this coin (ungraded) 15 years ago.  This isn't some extremely common coin like practically every 20th century US  It's presumably primarily collected in Spain but with a very small collector base.

On the most elite US, I'd expect most of this low number to be held off market assuming the buyer can afford it.  It's very unusual for this coinage to sell at a loss since I have been a collector because the long term trend has been mostly up. For one level below, I probably wouldn't consider most of it to be "elite" while most other US collectors do.  Here presumably we are talking about coins with a preferred eye appeal or (near) the top TPG grade that are otherwise not that difficult to buy.  Or, something which is actually rare but is considered more esoteric.  Under extended adverse economic conditions, I expect the not really rare but very expensive coin to lose noticeable value.  I've seen it on occasion even without an extensive search.  Most of this coinage isn't really that interesting given the price.

Agree with the above post.  Buy what you like within your financial means for recreational purposes, not as a quasi "investment".

[Coinbuf]

13 hours ago, kbbpll said:

The collector market right now seems to be in toilet paper.

I've given up trying to guess what people will do during stuff like this. "A belief in something for nothing" - so accurate. When it pops, everybody seems surprised. I'll buy a few more coins regardless, because I know what my disposable income is.

Just the opposite for me every coin that I've bid on at GC or Heritage has gone for moon money, last week I was an underbidder on a coin that I've been wanting for over a year.  There are a couple other coins of this date and mm in the market but the two I know of are not all that attractive but priced right in line with guides.  This coin normally crosses the auction blocks at around 1K however last weeks coin went for close to 3K all in and I'm not talking about a top pop/wildly toned coin here.  I realize that there are always outliers on a bell curve but it seems that everything I like always seems to fall into that high outlier bucket.   100% agree that nobody should be spending outside of their own disposable income.

[VKurtB]

OLD THREAD. But... just a few days ago a Federal District Court in Pittsburgh struck down almost all the "mandatory" COVID restrictions put in place by Pennsylvania's Governor Wolf. He retains jurisdiction over actual state business, but the judge smacked him around fairly well over his ability to restrict rights to assemble and to attend worship services. High school football is, at least for this week, open for crowds in Pennsylvania.

Wear the mask.

But remember, this is Pennsyl-frickin'-vania here. The Bill of Rights was WRITTEN here, in temporary digs rented from my employer.

Edited September 17, 2020 by VKurtB

[Coinbuf]

Forgot all about this thread, it would seem that the collector market has been strong (almost unbelievably so) during the pandemic.

[James_OldeTowne]

My observation is that the dearth of in-person shows has driven up online prices, including at auctions.

[World Colonial]

On 3/1/2020 at 7:30 PM, Revenant said:

I think you're going to see it hit prices. Just look at what's happening to gold. You'd normally expect gold to be heading higher as a safe-haven play but it tanked on Friday - probably because people are getting hit with margin calls.

How much? Your guess is as good as mine.

What you are describing is tied to the current asset mania.  When the financial levitation act ends, nothing is going to be spared.

Higher gold and silver prices did little if anything to lift coin prices at the 2011 peaks.  It doesn't appear to be any different this time.

Among the more affluent, except those who happen to have much or most of their money in privately held small to medium businesses or commercial real estate, the current environment isn't noticeably reducing their spending power.

For the rest, it mostly depends if they are still employed.  Based upon where the job losses have mostly occurred at least until a few months ago, I don't think collectors who work in those industries were bidding in auctions anyway; mostly lower income to "working class".  More recently, I am hearing of large scale (planned) playoffs among "white collar" professionals.  If true, this will eventually make a difference.

The reason coin prices did not crash during the GFC in 2008 is because the financial duress was temporary.

[Henri Charriere]

On 3/3/2020 at 8:00 PM, kbbpll said:

Well, in my radical and uninformed naive view, the bubble started in 1983 when people began dumping trillions of dollars worth of 401k money into the market. These millions of people would never have gotten "into the market" otherwise. Look at the DOW 100 year chart and see what happened. Of course, that has nothing to do with coins, and maybe only a little to do with coronavirus, in that the latter might be the catalyst, but I still think this current panic is short-lived.

That's all well and good but enquiring minds still want to know where the "nefarious cabal" you once spoke of fits into all of this.  (Or would expecting you to cancel the ignore feature to provide an answer prove to be too embarrassing in front of all your influential friends?) 😉

[RWB]

Think of all the coin slabs sealed while the virus has been circulating. Crack them open and a new wave starts at coin shows and club crack-out feasts.

[Coinbuf]

2 hours ago, RWB said:

Think of all the coin slabs sealed while the virus has been circulating. Crack them open and a new wave starts at coin shows and club crack-out feasts.

Won't the virus be dead by the time a slab is cracked.  

[RWB]

34 minutes ago, Coinbuf said:

Won't the virus be dead by the time a slab is cracked.  

I'm being facetious -- but, viruses can live a long time in a benign environment.

[Coinbuf]

As was I. 

[Henri Charriere]

4 hours ago, RWB said:

Think of all the coin slabs sealed while the virus has been circulating. Crack them open and a new wave starts at coin shows and club crack-out feasts.

[Unfortunately,  there is nothing I can use effectively in my vast arsenal bolstered by a grade-school education to counter what you've alleged.  COVID-19, and its 18 milder predecessors poses no risk to the population.  The tried and true approach, wearing masks and practicing six-eet, "anti-social" distancing, will be an effective enough deterrent until 12:01 am, Friday, January 1, 2021. Any suggestion the virus lurks within hermetically-sealed slabs is unadulterated nonsense. (None of the foregoing should be construed as my having less than the utmost respect and admiration for our much esteemed, learned members.)]

[GoldFinger1969]

I think more people could discover Ebay, HA, GC, and other online auctions.  I'd be curious as to new sign-ups for HA and GC since March compared to pre-Covid.

Edited September 20, 2020 by GoldFinger1969

[RonnieR131]

I attended a funeral in Oklahoma two weeks ago, the father of a good friend of mine passed away. After parking, about two blocks away, I grabbed my mask, and walked to the funeral home. Outside standing were about 50 people, and I finally made my way inside to sign the register book. Outside, no one was wearing a mask. Inside, full to the brim, no masks! I eased my mask off and walked back outside. Found my friend, and inquired about why no one was wearing a mask. He replied with a smile, "Boy, this ain't Dallas." I was waiting for a follow up, but none came, because he was serious. I just shook my head and said I would meet him at his house. ---- The good news is, at his house I told him I was starting to get into numismatics, and he said "Really? I bet I have 6 or 7 hundred K of coins". He retired 3 years ago, had 3 pawn shops from the early 80's thru 2017. In his safe room, guns, loose diamonds, etc. Then he pulled out album after album of $5, $10, and $20 gold. Special ones he saved over the years, and leftovers after selling out the pawn shops. I asked him why none were graded, and all he said was that he just never wanted to, even though he had several bulk submissions of some Morgans and such to be graded over the years so as to sell easier in the shops. The larger shop was one mile from a huge Indian Casino. He said he really kind of forgot he had them, or hadn't given them a thought in a few years, "As a matter of fact on Monday, I better update my will to include these coins, who gets what, hadn't I"? Yes, you should.  I couldn't help but do a mental note on dates and denominations, and approximate grades, anticipating getting home and doing research, as I figured he was about right on the '6 or 7' estimation, but on the drive home I realized it just doesn't matter what their monetary value is, he doesn't care, so then I don't. Just another example of what is out there in the raw, and probably will remain, just like in his 20' x 30' 'safe room', with that huge Fort Knox steel door, digital this and that, bells and whistles and buzzers, in a small town in southern Oklahoma. No masks, no graded coins, to each his own I guess. Since he wants them to be 'passed down', I don't guess he's going to leave any to me, because he knows I know my way to the front door of Dallas Heritage Auctions.   

[Zebo]

It would be fun to go through them. I love the Dallas reference.