A Letter from Mark Salzberg 0

[Matt G]

The CCG companies are committed to serving the collecting community with expertise and integrity while ensuring the safety and well-being of our employees.  Read More

 

[Revenant]

It's an interesting read but...

I don't imagine this will make many collectors happy. It might make some dealers happy. It might make some speculative short-term flippers happy, but I don't see how a debt-fueled bubble in the collectables market is going to be good for collectors, the community or the hobby. I don't see how more people seeing this hobby as an investment is going to be good for the hobby long term.

Just my 2 cents.

Edited May 4, 2020 by Revenant

[Ronniegoforth]

can anyone tell me when phone calls to customer service will start back?? i am an older person and want to speak to a real person. not type emails. where is the customer service to answer questions? 

[World Colonial]

6 hours ago, Revenant said:

It's an interesting read but.I don't imagine this will make many collectors happy. It might make some dealers happy. It might make some speculative short-term flippers happy, but I don't see how a debt-fueled bubble in the collectables market is going to be good for collectors, the community or the hobby. I don't see how more people seeing this hobby as an investment is going to be good for the hobby long term.

Just my 2 cents.

Not those who are predominantly recreational collectors or where improving their collection is more important than making money.

However, I don't agree with the sentiments in the extract from the letter.  Gold bullion is a viable alternative to financial assets because it has scale (about $6 trillion capitalization recently) and fungibility but numismatic coinage has neither.  (Silver has no scale either.)  Coins also require substantial knowledge to make informed decisions and avoid pitfalls not associated with tradeable assets.

Numismatic coinage has no capability to accommodate meaningful fund inflows without the entirely self-defeating outcome where the prospective buyers will inflate the prices of what they are buying above true collector demand.  That's what happened during the TPG bubble ending in 1989 which left these "investors" as bag holders.  Only collectors derive any actual utility from collecting, not buyers of substitute "widgets". 

If anything should attract money into coins, it should be higher gold and silver prices.  Gold is about 10% below the all-time peak of $1921 from late 2011.  Physical silver is in temporary short supply but isn't bought by "big money" anyway and has gone nowhere in the recent gold runup.  Neither did much of anything to attract substantial funds, even at the last bubble peak in 2011.

Numismatic coinage is not an actual alternative asset class.  It's a luxury bought with discretionary income.  The current economic environment is almost certainly going to lead to most people becoming poorer or a lot poorer which is hardly a positive for the price level.

[Gambold]

Just another self serving CEO missive. When they are actually doing something to help the community that costs them something, then he can send us all an overlong advertisement disguised as a letter. 
 Gambold Vintage

[GoldFinger1969]

If anything, the forward returns on stocks and bonds (well, stocks anyway) are HIGHER and BETTER after the events of the last 2 months.  Hell, they were best on March 23rd at S&P 2,200. 

I respect Mark's opinions on grading and coins, but when he tries to make an investment case for coins and collectibles based on stock market volatility, let me off the train.  He'd be on more solid footing predicting a rise in gold to $3,000/oz dragging up coins than an investment case based on volatility of other assets that pay income and dividends.

Reading RWB's book on Saints with extensive price history from 1976-2015, plus my own research over the years, confirms that even if the long-term and rolling period (more important !) returns on coins/collectibles were positive and/or closer to stocks or a diversified portfolio of financial assets....the positive returns are so concentrated in a few years of gains that the inevitable market-timing means most people will not only lose but lose big.

 

 

 

Edited May 4, 2020 by GoldFinger1969

[GoldFinger1969]

1 hour ago, Gambold said:

Just another self serving CEO missive. When they are actually doing something to help the community that costs them something, then he can send us all an overlong advertisement disguised as a letter. 
 Gambold Vintage

I don't necessarily think he is being self-serving here.  I just think he has misinterpreted volatility and falling prices (temporarily) in stocks as good for Spiderman comics, Coins, and Currency.

WorldColonial said it best.  The numismatic community can't handle a few hundred million a year in new money, let alone billions or tens of billions.  Unless we are trying to re-create the Japanese Property Bubble, this benefits nobody.

[Voltyris]

His prediction of investment money flowing into Collectibles is quite funny. His analysis makes sense, only for him, because he is in Collectibles, and stands to benefit from such a dreamy scenario. Any analyst doing stocks would have a real laugh at what he is saying. 

I'll have to watch out for Goldman Sachs bidding on Morgans. That will really hurt my chances. 

Also, for all the ones advising people to buy Gold. If you wanted Gold, you should've bought it pre-disaster, and definitely not as Collectible Coins.

Gold is not a safe haven, Gold is a temporarily haven. It all flows back to Stocks, Funds, Etc.. when the disaster is over. 

---------------------------------

"Which continue to become increasingly liquid and fungible as a result of third-party certification"

That's what we call confirmation bias : )

The record breaking auctions mentioned is a warm up, to build anticipation. 

 

Edited May 5, 2020 by Voltyris
Injecting more humor.

[Voltyris]

7 hours ago, GoldFinger1969 said:

If anything, the forward returns on stocks and bonds (well, stocks anyway) are HIGHER and BETTER after the events of the last 2 months.  Hell, they were best on March 23rd at S&P 2,200. 

I respect Mark's opinions on grading and coins, but when he tries to make an investment case for coins and collectibles based on stock market volatility, let me off the train.  He'd be on more solid footing predicting a rise in gold to $3,000/oz dragging up coins than an investment case based on volatility of other assets that pay income and dividends.

Reading RWB's book on Saints with extensive price history from 1976-2015, plus my own research over the years, confirms that even if the long-term and rolling period (more important !) returns on coins/collectibles were positive and/or closer to stocks or a diversified portfolio of financial assets....the positive returns are so concentrated in a few years of gains that the inevitable market-timing means most people will not only lose but lose big.

 

 

 

I completely agree. However, the $3,000/oz prediction would mean he is on cloud nine rather than solid footing. It won't happen anytime soon. Most countries/economies are re-opening, and when they all get back to normalcy, all the money is flying back to where it belongs, where assets show what one defines as a "return". 

Edited May 5, 2020 by Voltyris

[GoldFinger1969]

6 hours ago, Voltyris said:

His prediction of investment money flowing into Collectibles is quite funny. His analysis makes sense, only for him, because he is in Collectibles, and stands to benefit from such a dreamy scenario. Any analyst doing stocks would have a real laugh at what he is saying. 

I'll have to watch out for Goldman Sachs bidding on Morgans. That will really hurt my chances. 

Also, for all the ones advising people to buy Gold. If you wanted Gold, you should've bought it pre-disaster, and definitely not as Collectible Coins.

Gold is not a safe haven, Gold is a temporarily haven. It all flows back to Stocks, Funds, Etc.. when the disaster is over. 

---------------------------------

"Which continue to become increasingly liquid and fungible as a result of third-party certification"

That's what we call confirmation bias : )

The record breaking auctions mentioned is a warm up, to build anticipation. 

 

Goldman Sachs is more likely to bid on MORGAN STANLEY than Morgan Dollars.  

He's on more solid footing when he says that holding a small % in gold makes sense.  I agree, Treasury bills and bonds are the go-to during times of turbulence.  But I would not be surprised to see gold have a great couple of weeks or months and making a sprint to $3,000 or even higher.

Or it could flop back to $1,100 an ounce.  

At least bullion you know what it will be worth in the future if you're buying it at that price without much of a premium.

Edited May 5, 2020 by GoldFinger1969

[World Colonial]

6 hours ago, Voltyris said:

I completely agree. However, the $3,000/oz prediction would mean he is on cloud nine rather than solid footing. It won't happen anytime soon. Most countries/economies are re-opening, and when they all get back to normalcy, all the money is flying back to where it belongs, where assets show what one defines as a "return". 

I don't see $3000 gold in the near future either but there will be no return to "normalcy" (as in pre-virus bubble conditions) either.

Since the financial markets are totally disconnected from the economy, new highs in the near future are certainly possible.  (It's only like 15% from here anyway.)

Most people will be worse or much worse off than they were a few months ago even if this happens.

[Revenant]

29 minutes ago, World Colonial said:

Most people will be worse or much worse off than they were a few months ago even if this happens.

Well, unfortunately, even if your 401K bounces back with the DOW you aren't going to be thrilled if you're unemployed.

I'm not convinced that gold will be shooting up anytime soon - even though you have BoA and even Jim Cramer talking it up intermittently - just because there have been polls and studies showing that 90% of people are using those stimulus checks to either save or pay down debt and people are not spending on nonessentials and people are going to cash, which in the short term will be deflationary and not inflationary.

[GoldFinger1969]

7 hours ago, World Colonial said:

I don't see $3000 gold in the near future either but there will be no return to "normalcy" (as in pre-virus bubble conditions) either.

All you need is a FAKE-OUT that inflation is making a comeback.....10-year Treasury bond rises back to 2% (which is ridiculously low historically) and a few outliers on the inflation data front.....you get some Chinese and Indian buying and gold takes off.

Then you see someone on these forums post an article or video from CNBC that gold might go to $10,000 an ounce -- remember, it went up 20-fold in 9 years in the 1970's -- and that'll be the panic you need to move gold to $3,000 or $4,000 an ounce.

If it happens, IMO, it will be in a compressed time period.  I'm talking weeks or months.  It won't be a multi-year rise (could be, but less likely, IMO) but a rocketship.  So there won't be time to get in slowly or learn about Saint-Gaudens coins and figure out the best way to take advantage.  You'll either be in gold or you won't be when the train leaves the station.

Edited May 5, 2020 by GoldFinger1969

[World Colonial]

1 hour ago, Revenant said:

Well, unfortunately, even if your 401K bounces back with the DOW you aren't going to be thrilled if you're unemployed.

I'm not convinced that gold will be shooting up anytime soon - even though you have BoA and even Jim Cramer talking it up intermittently - just because there have been polls and studies showing that 90% of people are using those stimulus checks to either save or pay down debt and people are not spending on nonessentials and people are going to cash, which in the short term will be deflationary and not inflationary.

The only way those polls make sense is if many are making more from unemployment than they were working.  That may be true but if so, only temporarily.

Whenever the economy returns to "normal", it will be worse or much worse than it was before.  The recent economic expansion was already the weakest since WWII.  it was hardly the "best economy ever".  This is evident by looking at median net worth and median income.

Most people don't own anything, even the majority of the supposed middle class, many of whom are better described as the working poor.  Financial assets in the aggregate have recovered (15% decline is nothing unusual) but that's not true of (commercial) real estate and private businesses which represents a noticeable proportion of net worth among the more affluent.

I also find it interesting how people find a way to ignore the obvious.  I recently read a website article covering the recent Royal Dutch Shell dividend cut of 66%.  It was the first since 1945.  Posters expressed "surprise" that a company recently yielding over 10% in a world of 2% dividend yields, virtually zero "risk free" interest rates and multi-decade low oil prices concluded it could not be supported.  Who could have imagined that? 

There is a lot more in store where that came from.  If Shell cannot support their dividend, what's going to happen to the majority of companies whose financial statements better resemble a stable rag and whose credit worthiness is actually in the gutter regardless of their credit rating?

At the macro level, what's not "priced in" in the future is negative political "blowback" as most people's living standards decline noticeably.  No economy can bribe the majority of the population forever through endless issuance of debt.

[Revenant]

21 minutes ago, World Colonial said:

The only way those polls make sense is if many are making more from unemployment than they were working.  That may be true but if so, only temporarily.

If you were making minimum wage or close to it you'll be making more than you were when working - for 4 months. After that... not so much. The people who aren't working also aren't spending money on gas for their cars and aren't eating out or haven't been. There's also been a thing going on where people have been getting rebates on car insurance because of something the government did - my wife and I got $50 back from Nationwide.

Between tax refunds, the stimulus checks, them waiving student loan interest and payments for 6 months, the insurance rebates... some people are getting insane cash dumps right now. It's not going to last. It isn't even generating the sugar-high the Fed and Trump were hoping for. But certainly the people that haven't been laid off and the minimum wage workers getting more on unemployment than they were working are doing unusually well... for now.

[kbbpll]

18 hours ago, Gambold said:

Just another self serving CEO missive.

I don't take it too seriously. I get the same from a real estate newsletter every month (as well as emails). It's a great time to buy (real estate, coins), it's a great time to sell, it's a great time to buy or sell. People who make money off of churn, whether it's stocks, property, gold, or coins, will always hype it up regardless of which direction it's heading.

[World Colonial]

32 minutes ago, Revenant said:

If you were making minimum wage or close to it you'll be making more than you were when working - for 4 months. After that... not so much. The people who aren't working also aren't spending money on gas for their cars and aren't eating out or haven't been. There's also been a thing going on where people have been getting rebates on car insurance because of something the government did - my wife and I got $50 back from Nationwide.

Between tax refunds, the stimulus checks, them waiving student loan interest and payments for 6 months, the insurance rebates... some people are getting insane cash dumps right now. It's not going to last. It isn't even generating the sugar-high the Fed and Trump were hoping for. But certainly the people that haven't been laid off and the minimum wage workers getting more on unemployment than they were working are doing unusually well... for now.

Correct.  My younger sister is one of them.  I estimate she will receive $10,200 from federal unemployment (maybe somewhat less as I believe she will go back to work before it ends), the $1200 stimulus check and any state unemployment.  So, potentially more than $11400 and in her case, I am also subsidizing her rent @$700 per month.  She should have more soon than she has ever had in her entire life.

[kbbpll]

4 minutes ago, World Colonial said:

She should have more soon than she has ever had in her entire life.

This is the stark reality that the current situation has made clear - the unbelievable number of people who don't have one month's worth of expenses saved up.

[World Colonial]

1 minute ago, kbbpll said:

This is the stark reality that the current situation has made clear - the unbelievable number of people who don't have one month's worth of expenses saved up.

Correct again, but this was also reported from the prior FRB survey, I believe as part of the 2016 tri-annual Survey of Consumer Finances.

This is the most glaring aspect of the disconnect between the financial markets and "real" economy.  The financial markets are dominated by institutions and the top 10% who purportedly own 84% of all stocks.  Those who manage others money aren't placing their own wealth at risk and to a great extent, are detached from the economic reality in which most people live.  Aside from financial promotion, that's the best explanation for how they can permanently believe everything is so great when for the overwhelming majority, their financial situation is precarious.

[Revenant]

2 hours ago, World Colonial said:

She should have more soon than she has ever had in her entire life.

My wife and I aren't / weren't in the same boat as her but we're already in the category of having more in liquid savings than ever before. It had been taking a long time for us and our reserves to recover from my long unemployment and then the financial disruption of Sam's birth but it's done now.

I feel like I'm one step away form putting on my tin-foil hat some days but I've been making some long-term minded purchases lately - getting my wife and I new shoes (good branded shoes in unpopular colors that I got for $40 a pair). Buying a backyard playset so my sons can have playground equipment that we control exclusively that they can play on during lockdown that will last for them for the next 5-8 years. Buying some nerf guns for my son(s) that are from a good brand that they should be able to get low / no cost fun out of for the next 4-8 years... Lots of thinking and actions lately with a 2 to 8 year time horizon on my mind.

[GoldFinger1969]

5 hours ago, World Colonial said:

I also find it interesting how people find a way to ignore the obvious.  I recently read a website article covering the recent Royal Dutch Shell dividend cut of 66%.  It was the first since 1945.  Posters expressed "surprise" that a company recently yielding over 10% in a world of 2% dividend yields, virtually zero "risk free" interest rates and multi-decade low oil prices concluded it could not be supported.  Who could have imagined that? 

There is a lot more in store where that came from.  If Shell cannot support their dividend, what's going to happen to the majority of companies whose financial statements better resemble a stable rag and whose credit worthiness is actually in the gutter regardless of their credit rating?

As a Shell shareholder who's followed the company for decades, their decison was in response to the double-whammy of The Virus and the OPEC/Russian oil glut.  Like many companies, they also screwed up with a dumb acquisition a few years back which added to their debt levels.  Without buying BG in 2015, they would have about $30 billion less in debt and would have been able to hold on to the dividend another 18 months at least.

[GoldFinger1969]

4 hours ago, World Colonial said:

Correct again, but this was also reported from the prior FRB survey, I believe as part of the 2016 tri-annual Survey of Consumer Finances.  This is the most glaring aspect of the disconnect between the financial markets and "real" economy.  The financial markets are dominated by institutions and the top 10% who purportedly own 84% of all stocks.  Those who manage others money aren't placing their own wealth at risk and to a great extent, are detached from the economic reality in which most people live.  Aside from financial promotion, that's the best explanation for how they can permanently believe everything is so great when for the overwhelming majority, their financial situation is precarious.

Don't blame Wall Street or financial professionals like myself, blame a government and school system which encourages consumption over savings.

I favor government giving back Social Security contributions to individuals so they can save on their own.  Have the government match and let it vest over time if matched by the individual.

I've never NOT had at least a 2-year emergency fund.  And sometimes, I still needed more !

 

[World Colonial]

1 hour ago, GoldFinger1969 said:

Don't blame Wall Street or financial professionals like myself, blame a government and school system which encourages consumption over savings.

I favor government giving back Social Security contributions to individuals so they can save on their own.  Have the government match and let it vest over time if matched by the individual.

I've never NOT had at least a 2-year emergency fund.  And sometimes, I still needed more !

 

You misinterpreted my post.  I didn't say what you imply and my post didn't have anything to do with what you think.

On your recommendation, it's far too late to transition to a funded system but if it did occur, it won't work the way most people think, though you may already know it.  

[World Colonial]

2 hours ago, GoldFinger1969 said:

As a Shell shareholder who's followed the company for decades, their decison was in response to the double-whammy of The Virus and the OPEC/Russian oil glut.  Like many companies, they also screwed up with a dumb acquisition a few years back which added to their debt levels.  Without buying BG in 2015, they would have about $30 billion less in debt and would have been able to hold on to the dividend another 18 months at least.

Agree, except that if I recall correctly, they would still have about $50B in debt without the acquisition.  I still think that's far too much though others may believe otherwise.

They no longer have the near bullet proof balance sheet they used to have.  I think they are an A+ credit now when they used to be AAA many years ago.  They are symptomatic of the decline in corporate  credit quality across the board.

In the oil sector, I expect most if not all of the majors to follow them, starting with BP.  Chevron probably has the highest likelihood of keeping their current payout.

[GoldFinger1969]

WC, your points are all on point.  I believe the debt portion of the BG deal was about $30 billion.  Without that, debt levels would be about half what it is today.  Totally agree on CVX.

[Voltyris]

12 hours ago, GoldFinger1969 said:

Goldman Sachs is more likely to bid on MORGAN STANLEY than Morgan Dollars.  

He's on more solid footing when he says that holding a small % in gold makes sense.  I agree, Treasury bills and bonds are the go-to during times of turbulence.  But I would not be surprised to see gold have a great couple of weeks or months and making a sprint to $3,000 or even higher.

Or it could flop back to $1,100 an ounce.  

At least bullion you know what it will be worth in the future if you're buying it at that price without much of a premium.

Hahah yes, good one! How did I miss Morgan Stanley though? It should've been Morgan Stanley bidding on Morgans : ) 

I expect Gold to go lower or at least hold at the current levels for some time. 

Bullion yes, Gold ETFs, a lot of things to buy if you want precious metals, but collectibles? A bit far reach.

Edited May 6, 2020 by Voltyris

[Voltyris]

9 hours ago, kbbpll said:

I don't take it too seriously. I get the same from a real estate newsletter every month (as well as emails). It's a great time to buy (real estate, coins), it's a great time to sell, it's a great time to buy or sell. People who make money off of churn, whether it's stocks, property, gold, or coins, will always hype it up regardless of which direction it's heading.

I think you summarized it in a very straightforward manner, without divulging into Economic discussions : )

[Just Bob]

6 hours ago, Revenant said:

 Buying some nerf guns for my son(s) ...

You didn't get one for yourself? 

[GoldFinger1969]

14 minutes ago, Voltyris said:

Bullion yes, Gold ETFs, a lot of things to buy if you want precious metals, but collectibles? A bit far reach.

By collectibles, if you mean Art and Movie Memorabilia and Comics, agreed.  Even Art tends to go down when the stock market goes down.

I like coins, even those with a (reasonable) premium to gold, if you think gold is going to go up substantially.  What I think will happen is that people will learn about numismatic coins once they are drawn into gold because of a rising price.  That's what happened to me.  I didn't know about Saint-Gaudens gold coins until my 40's.

[Voltyris]

1 hour ago, GoldFinger1969 said:

By collectibles, if you mean Art and Movie Memorabilia and Comics, agreed.  Even Art tends to go down when the stock market goes down.

I like coins, even those with a (reasonable) premium to gold, if you think gold is going to go up substantially.  What I think will happen is that people will learn about numismatic coins once they are drawn into gold because of a rising price.  That's what happened to me.  I didn't know about Saint-Gaudens gold coins until my 40's.

I completely agree. Bullion Gold Coins are a nice way for investors. Gold Classics require some degree of knowledge because of how they double as Collectibles. 

Modern coins & bars are always a good fast way to invest with style and fun, which is why they were sold out. 

People have time now, so why not learn about Numismatics, pick up a new hobby, Mr. Mark agrees : ) .. If the Investor is bored, and wants to learn about something new then Gold Classics are perfect, and it can be investing & collecting!

Edited May 6, 2020 by Voltyris