Collectors Universe agrees to be acquired by investor group 1 1

[GoldFinger1969]

On 8/8/2021 at 7:06 PM, World Colonial said:

What you described in your post I see as predominantly speculation.  I do not follow this hobby segment but particularly anything of more recent vintage (like Michael Jordon or even worse, LeBron James) is way too common.  316 GEM-10 Jordan rookie cards already and it's selling for $700K?  That's nut's, far worse than the price of any coin and I find the price spreads on the most common condition census coins ridiculous.

This could all be a result of restricted supply, ala OPEC in the 1970's.  Once the graders start to increase the supply, unless demand increases, prices will collapse.

What would happen to the price of a 1927-D (worth about $2 MM right now in MS-65) with about 10 publicly traded....if you knew that 2 or 3 a year for the next 5 years would be coming onto the market once PCGS and NGC caught up ?

Edited August 8, 2021 by GoldFinger1969

[bernard55]

@GoldFinger1969 I do agree with all your points and also believe any economist would see cards in a bit of a bubble... I also agree with the sports culture motivations.. 

but forgive me, I think my comparison between coins / cards muddied up my questions. 

• What forces motivate coin collectors?  and do these forces exist across demographics? -- Why do you invest in coins?  Why do you believe others invest?
• Is the coin-collecting industry shrinking, stable or growing and why? I went to the last Long Beach show (right before lockdown) and all the old dealers were telling me about how the show has been shrinking every year.  Is that the show or the industry?  Why was it hot once but not now?  Was there a bubble and if so how did it occur?
• If we wanted to revitalize the industry what would need to happen?

[GoldFinger1969]

On 8/8/2021 at 8:24 PM, bernard55 said:

• What forces motivate coin collectors?  and do these forces exist across demographics? -- Why do you invest in coins?  Why do you believe others invest?
• Is the coin-collecting industry shrinking, stable or growing and why? I went to the last Long Beach show (right before lockdown) and all the old dealers were telling me about how the show has been shrinking every year.  Is that the show or the industry?  Why was it hot once but not now?  Was there a bubble and if so how did it occur?
• If we wanted to revitalize the industry what would need to happen?

(1)  Lots of different forces. Some are buying coins for bullion purposes...some bullion + numismatic (think high-quality generic Saints)....some buying strictly numismatic (Saints > $5,000 and pennies/nickles/dimes/quarters/Morgans where the metallic content is close to nil relative to the coin's cost).  Clearly, most buyers are representatives of large major metropolitan, East Coast cities.  They are found across the country -- just in smaller quantities.

You still have some people into collecting regularly circulated American coinage, though not in the numbers of the past.  And moderns, like the State Quarters program and stuff like that. 

(2)  I think it is growing -- mostly beause of online.  But the only way to be 100% sure is to do an apples-to-apples comparison of coin shows that existed 40 years ago and compare to today (FUN, Long Beach, ANA).  Ditto for smaller regional and/or local shows.   Ditto for dealers businesses -- though this can also be a beggar-they-neighbor situation with larger, more established dealers getting business from weaker or closeout businesses folding.

But online....Heritage, Stacks, GC, even Ebay and other niche dealers -- lot more people on those platforms than 3 or 5 or 10 or even 20 years ago.  I myself have been an on-again, off-again collector but a bit more stronger the last 20 years.  I only started buying from Ebay about 10-12 years ago.....HA and others in the last 2 years or so.

As for Long Beach.....from what I have been told/seen, FUN has been GROWING the last few years and the last few decades.  But that might be a function of the timing (January) and locale (Florida) which counts as a nice change of venue for most of the country trapped in cold Winter.  As other shows fold or lose relevance, some of this attendance might goto FUN or other big nationals or regionals.  I hear Whitman Baltimore (November) and Bay State Massachussets (April) are both doing nicely.

Coins took off in 1979-80 and again 1988-1990.  You had 2 major bubbles....prices rose in the 1970's as gold and silver each went up over 20-fold....they dragged up EVERYTHING that kids and adults had collected since World War II.  Collections that had cost a few hundred bucks were now suddenly worth thousands....collections that cost thousands were now worth hundreds of thousands.  Many bought MORE stuff at the inflated prices.  The 1988-90 bubble was accentuated by expectations of Wall Street $$$ coming in.....the emergence of the TPGs (PCGS, NGC)....and a fear following the 1987 Stock Market Crash.

(3)  Get people excited about the HISTORY of coins and not as INVESTMENTS or SPECULATIONS.  Having said that, watch show attendance triple or quadruple in the next few years once coins get hot again if/when gold crosses $3,000 an ounce and silver hits $50/oz. and crytpos tank or are severely regulated.

The X-factor with Robinhood and coin collecting is that 25 or 50 years ago, when you bought into a bubble or lost your shirt, you were alone.  Today, you have the power of the Internet to learn and commiserate.  Does that lead to longer staying power ?  Maybe.

Edited August 9, 2021 by GoldFinger1969

[World Colonial]

On 8/8/2021 at 8:47 PM, GoldFinger1969 said:

(1)  Lots of different forces. Some are buying coins for bullion purposes...some bullion + numismatic (think high-quality generic Saints)....some buying strictly numismatic (Saints > $5,000 and pennies/nickles/dimes/quarters/Morgans where the metallic content is close to nil relative to the coin's cost).  Clearly, most buyers are representatives of large major metropolitan, East Coast cities.  They are found across the country -- just in smaller quantities.

You still have some people into collecting regularly circulated American coinage, though not in the numbers of the past.  And moderns, like the State Quarters program and stuff like that. 

Generically, three groups of buyers:

1) Recreational collectors or hobbyists who buy coins predominantly as an alternate form of consumption.  This doesn't mean they are throwing money away or don't try to get value.  It means they will buy a coin anyway even if they know or have a reason to believe it may or will result in a loss.  They are overwhelmingly "low budget" buyers though I would put myself in this category, to a point.  I'd never buy what I do if I was mostly motivated to recover my outlay or make a profit.

2) A combination of collector and "investor".  This is most buyers with any "material" outlay or who buy most of the more expensive coinage, arbitrarily coins usually worth above $300 and maybe in the better quality if below it.  I'd describe these buyers as actual collectors but that doesn't mean they really like what they buy that much, not enough enough to lose "a lot" of money or a noticeable proportion of their outlay.

3) Speculators and "investors".  These may be collectors but are more interested in making money than collecting.  I infer this both from what they buy and the attitudes they express on coin forums or coin articles.  It's subjective but I would place most buyers of NCLT, common gold, and common crowns (like Morgan dollars) in this category, at least to the extent this dominates their collecting. 

Some are a combination of more than one.  Or maybe there is a fourth classification I am excluding.

The number one thing to remember when discussing this subject is what I have written countless times.  When "collecting" and the price level is driven predominantly by a marketing concept (the TPG label, registry ranking, and/or CAC stickers) under the collective pretense (which is exactly what US collecting is actually doing) that minor differences in predominantly actually common coins supposedly creates distinction, why would anyone ever expect that most buyers would be more interested in actual collecting than the price trend and at least recovering their outlay?

So many (mostly US) coins with limited if any actual distinction sell for such inflated and exorbitant prices, there is no reason to believe that most collectors remotely like what they buy enough to see it any other way.

This is, of course, a generalization but entirely consistent with what anyone can see in the psychology illustrated on coin forums or coin articles.  I saw this first hand with South African "collectors" which was much worse than anything I have ever seen on any US forum but I have seen it on these forums too.

[World Colonial]

On 8/8/2021 at 8:47 PM, GoldFinger1969 said:

(3)  Get people excited about the HISTORY of coins and not as INVESTMENTS or SPECULATIONS.  Having said that, watch show attendance triple or quadruple in the next few years once coins get hot again if/when gold crosses $3,000 an ounce and silver hits $50/oz. and crytpos tank or are severely regulated.

The X-factor with Robinhood and coin collecting is that 25 or 50 years ago, when you bought into a bubble or lost your shirt, you were alone.  Today, you have the power of the Internet to learn and commiserate.  Does that lead to longer staying power ?  Maybe.

The history aspect is mostly used as another marketing angle.  No one needs to buy a high grade or expensive coin for the historical connection and the best reason to believe it is used is to inflate the price level, which has nothing to do with collecting whatsoever.

Other than being struck in the year which the coin bears and existing, most coins have nothing to do with contemporary events or any event any collector can identify or knows anything about.  Lower priced lower quality coins actually have a more tangible connection than higher quality and more expensive coins for the obvious reason that it at least functioned for its intended purpose.

Most high quality coins (including those I own) sat in a coin cabinet for decades or centuries until it ended up in a TPG holder.  How exciting is that?

Someone either likes coins and coin collecting, enough or they don't.  Using contrived connections to "history" when the real industry intent is to try to inflate the price level doesn't sound like a winning long term formula to me, but maybe it does to  many others.

[World Colonial]

On 8/8/2021 at 7:27 PM, GoldFinger1969 said:

What would happen to the price of a 1927-D (worth about $2 MM right now in MS-65) with about 10 publicly traded....if you knew that 2 or 3 a year for the next 5 years would be coming onto the market once PCGS and NGC caught up ?

I would expect the price to decline significantly, as I would for any other coin.  It would probably also happen to other currently unique objects, such as the Faberge Imperial Easter Eggs I have used as examples numerous time too.

Edited August 9, 2021 by World Colonial

[World Colonial]

On 8/8/2021 at 8:47 PM, GoldFinger1969 said:

The X-factor with Robinhood and coin collecting is that 25 or 50 years ago, when you bought into a bubble or lost your shirt, you were alone.  Today, you have the power of the Internet to learn and commiserate.  Does that lead to longer staying power ?  Maybe.

I attribute this to the global asset mania and it's nothing positive if by positive someone is in favor of a perpetually higher price level.

The global asset mania is the single best explanation why so many assets (including coins) sell at such inflated prices.  Some of it is general inflation but not most of it.  Coins are a luxury discretionary purchase which no one needs for any purpose.

The price trend up to 1971 (before Nixon closed the "gold window) or maybe the mid-70's is a much better indication of hobby demand.  The US coin price level was already an outlier (versus other countries) but that's when coins were first widely bought as "investments".  Steady consistent price increases to the early 70's (per the Red Books) and then the explosion we see in the PCGS 3000 index from speculative buying and TPG.

[Henri Charriere]

On 8/8/2021 at 10:14 PM, World Colonial said:

....  Coins are a luxury discretionary purchase which no one needs for any purpose.

@World Colonial 

You sure know how to hurt a guy. Now I am obliged to sit down with each of my 🐓 🐓 🐓 and explain my motivations for acquiring them... 1899: because you were the first one made. 1900: no, it wasn't the luster, I got you because you were the rarest... 1909: because the "detective" I bribed had to convince your owner to make him an offer he could not refuse. (I didn't even have an Order #; I was told "she," presumably a reference to "Marianne," was "beautiful," wired her an obscene amount of money -- for that and two there, sight unseen, and she was, a full-fledged MS-67 with original mint luster!)

With all due respect, WC, some people carry a rabbit's foot, wear a talisman, maintain a "comfort" pet, etc.  I have my Roosters. They are costly, described as the "Best French Set" ever assembled, now or ever [by P-] and to a mere chiffonnier married to a French woman, both seniors living on fixed incomes, they serve a purpose: they stimulate my mind, and encourage a motivation to leave no stone unturned until I have found the very best available rooster possible.  As always, I am in accord with every thought you've heretofore expressed. I bid you, all lurkers and surfers, a pleasant evening.   🐓

[GoldFinger1969]

On 8/8/2021 at 10:14 PM, World Colonial said:

The price trend up to 1971 (before Nixon closed the "gold window) or maybe the mid-70's is a much better indication of hobby demand.  The US coin price level was already an outlier (versus other countries) but that's when coins were first widely bought as "investments".  Steady consistent price increases to the early 70's (per the Red Books) and then the explosion we see in the PCGS 3000 index from speculative buying and TPG.

I have to believe that just like stamps, that the basic American coin collecting targets that kids and later adults bought will suffer a lack of demand going forward.  And certainly no foreign demand for them.

However, I think that Morgans (silver) and Saints/Liberty's (gold) can rise alongside their underlying metallic content and count on some foreign buying support for some coins in some grades.

That PCGS 3000 index was clearly associated with 2 price bubbles in the last 50 years.  Personally, I'd be surprised to see a 3rd bubble but I don't discount rising prices for some types like I listed above.  In fact, during the 1988-90 coin bubble, MS-65 common Saints traded for 8-10x the underlying gold content; today that would translate into a price of $15,000 or more. 

So if you get a move in the gold price -- whether it's 20% from here or 50% -- you could easily see the generic benchmark for Saint-Gaudens $20 Double Eagles at $4,000 - $5,000 or more (up from about $2,500 or so) -- and they wouldn't be anywhere near the bubble-like nose-bleed territory of previous eras on a relative basis.

Edited August 9, 2021 by GoldFinger1969

[GoldFinger1969]

On 8/8/2021 at 9:57 PM, World Colonial said:

Someone either likes coins and coin collecting, enough or they don't.  Using contrived connections to "history" when the real industry intent is to try to inflate the price level doesn't sound like a winning long term formula to me, but maybe it does to  many others.

I think you misunderstood me.  One of the reasons I enjoy collecting Saints is the history behind the coins and the stories associated with each type (circulated or not, year or mint mark, era of striking and use in commerce, etc.).  To me, that's a reason to want to own gold coins in general and Saints in particular....NOT a marketing ploy to get me to "pay up" or perpetuate a pricing bubble.

Similarly, I would pay up to get an L88 or Big Block 427 Corvette as symbolic of the 1960's musclecar era.  I would NOT pay up for a Ford Pinto or Yugo as symbolic of the 1970's or 1980's. Junk is still junk !!  

I think this is why the Mickey Mantle 1952 Topps Rookie Card has done so well the last 10 years after basically flatlining for many years.  It tripled in price from 1990-2010....then has gone up 20-30 fold in the last 10 years.  Partly it's the new grading, but mostly it's lots of people who grew up with baseball and/or Mickey Mantle and associate the card with the Golden Era of Baseball and the idyllic 1950's America.  And lots of those people now have Big $$$ to spend on such a card.

Conversely, unless you know alot about American monetary history or are a numismatist, you are unlikely to know about Americna coinage, including Morgans and Saints.  For me, I was a bullion investor first and then learned about the coins from American's past.

Edited August 9, 2021 by GoldFinger1969

[zadok]

On 8/8/2021 at 9:44 PM, World Colonial said:

Generically, three groups of buyers:

1) Recreational collectors or hobbyists who buy coins predominantly as an alternate form of consumption.  This doesn't mean they are throwing money away or don't try to get value.  It means they will buy a coin anyway even if they know or have a reason to believe it may or will result in a loss.  They are overwhelmingly "low budget" buyers though I would put myself in this category, to a point.  I'd never buy what I do if I was mostly motivated to recover my outlay or make a profit.

2) A combination of collector and "investor".  This is most buyers with any "material" outlay or who buy most of the more expensive coinage, arbitrarily coins usually worth above $300 and maybe in the better quality if below it.  I'd describe these buyers as actual collectors but that doesn't mean they really like what they buy that much, not enough enough to lose "a lot" of money or a noticeable proportion of their outlay.

3) Speculators and "investors".  These may be collectors but are more interested in making money than collecting.  I infer this both from what they buy and the attitudes they express on coin forums or coin articles.  It's subjective but I would place most buyers of NCLT, common gold, and common crowns (like Morgan dollars) in this category, at least to the extent this dominates their collecting. 

Some are a combination of more than one.  Or maybe there is a fourth classification I am excluding.

The number one thing to remember when discussing this subject is what I have written countless times.  When "collecting" and the price level is driven predominantly by a marketing concept (the TPG label, registry ranking, and/or CAC stickers) under the collective pretense (which is exactly what US collecting is actually doing) that minor differences in predominantly actually common coins supposedly creates distinction, why would anyone ever expect that most buyers would be more interested in actual collecting than the price trend and at least recovering their outlay?

So many (mostly US) coins with limited if any actual distinction sell for such inflated and exorbitant prices, there is no reason to believe that most collectors remotely like what they buy enough to see it any other way.

This is, of course, a generalization but entirely consistent with what anyone can see in the psychology illustrated on coin forums or coin articles.  I saw this first hand with South African "collectors" which was much worse than anything I have ever seen on any US forum but I have seen it on these forums too.

possibly some truth in all three ur classifications but also some incorrectness in all three....i could build a case to define myself in each n could just as easily define myself as not fitting in any of them or even fitting in all three at the same time...as before, coin collecting is not a one size fits all....truthfully, i collect coins for entirely diff reasons than any u express in ur classifications n i suspect many others do as well....coin collecting can be an investment but in n of itself is not an investment....however for some those two can go hand in hand....the real definition of a coin collector cant be generalized as such....i guess u could apply ur definitions to the actual coin collections assembled if u choose to dissect them on their own merits but not necessarily the owner who assembled them....u seem to want to differentiate the american collector from foreign collectors n their driving motivations....to most if not all american collectors, we simply dont care what or why foreign collectors collect....i for one am an american collector that collects both american n foreign coins for various reasons, foreign collectors have very little if any impact on my collections or my collecting, except the occasional competition for a specific coin when it comes on the market....my personal collecting rationale simply doesnt fit in ur classifications.....

[World Colonial]

On 8/9/2021 at 12:45 AM, zadok said:

possibly some truth in all three ur classifications but also some incorrectness in all three....i could build a case to define myself in each n could just as easily define myself as not fitting in any of them or even fitting in all three at the same time...as before, coin collecting is not a one size fits all....truthfully, i collect coins for entirely diff reasons than any u express in ur classifications n i suspect many others do as well....coin collecting can be an investment but in n of itself is not an investment....however for some those two can go hand in hand....the real definition of a coin collector cant be generalized as such....i guess u could apply ur definitions to the actual coin collections assembled if u choose to dissect them on their own merits but not necessarily the owner who assembled them....u seem to want to differentiate the american collector from foreign collectors n their driving motivations....to most if not all american collectors, we simply dont care what or why foreign collectors collect....i for one am an american collector that collects both american n foreign coins for various reasons, foreign collectors have very little if any impact on my collections or my collecting, except the occasional competition for a specific coin when it comes on the market....my personal collecting rationale simply doesnt fit in ur classifications.....

I was attempting to define US collecting, not others.  I used South Africa as an example.  Collecting elsewhere has not been financialized nearly to the extent as the US, if at all.

I also specifically said there could be other categories I did not list.

I also specifically stated it was a generalization.

I'm not claiming money was never a factor, but my bigger point which underlies the title of this thread is that collecting has been driven more by money since coins came to be bought as "investments" starting in the 70's than previously.

I know my view is a very unpopular one, as I see in your reply.  Well, what's going to make actual collecting interesting enough to a meaningful number of new participants to increase the price level, other than mostly speculation?

I ask because that's what is driving this acquisition, to the extent it has anything to do with coins at all.  Collectively, dealers, TPG and auction firms are primarily interested in attracting new collectors to spend as much money as possible.  To the extent they actually care about coin collecting as a hobby, it's a distant second to inflating the price level..  I presume you read coin articles regularly.  That's the inferred measure of the "health of the hobby", the price level.  Partly it might be because it's a single visible data point but mostly, I reasonably infer that's what they actually care about.

The industry has somewhat (at least) painted itself into a corner.  The marketing variables I listed (TPG labels, registry sets and CAC stickers) aren't remotely interesting enough to maintain interest by the majority (I never said any) of current collectors at any "meaningful outlay, much less for those who aren't, unless the price level is at least mostly stable if not increasing.

Look at what (predominantly US) coins cost and what it actually is as a collectible.  Look at it from the point of view of the non-collector and then tell me why any meaningful number should be interested in paying current (much less far higher) prices for what they actually get?  That is, unless they can get most, all or more of their money back.

Edited August 9, 2021 by World Colonial

[World Colonial]

On 8/9/2021 at 12:04 AM, GoldFinger1969 said:

I think you misunderstood me.  One of the reasons I enjoy collecting Saints is the history behind the coins and the stories associated with each type (circulated or not, year or mint mark, era of striking and use in commerce, etc.).  To me, that's a reason to want to own gold coins in general and Saints in particular....NOT a marketing ploy to get me to "pay up" or perpetuate a pricing bubble.

Similarly, I would pay up to get an L88 or Big Block 427 Corvette as symbolic of the 1960's musclecar era.  I would NOT pay up for a Ford Pinto or Yugo as symbolic of the 1970's or 1980's. Junk is still junk !!  

I think this is why the Mickey Mantle 1952 Topps Rookie Card has done so well the last 10 years after basically flatlining for many years.  It tripled in price from 1990-2010....then has gone up 20-30 fold in the last 10 years.  Partly it's the new grading, but mostly it's lots of people who grew up with baseball and/or Mickey Mantle and associate the card with the Golden Era of Baseball and the idyllic 1950's America.  And lots of those people now have Big $$$ to spend on such a card.

Conversely, unless you know alot about American monetary history or are a numismatist, you are unlikely to know about Americna coinage, including Morgans and Saints.  For me, I was a bullion investor first and then learned about the coins from American's past.

If you disagree with me, that's fine.  I don't see any tangible connection between coins and history, much less one which is meaningful.

I know a lot of collectors do.

The point I was trying to make is that yes, I do believe the industry uses the history aspect as a marketing point.  It works for collectors mostly or exclusively because they are already interested in collecting.

I don't see any analogy with your car example.  Maybe some classic car buyers buy it for this reason but 99% of the time,  I'd guess it's either for nostalgia, as a status symbol and partly as an "investment".  A classic car has some utility.  No one needs one but at least you can drive it. 

With the MM card, I'd guess it's mostly those who grew up as avid fans of the game, might have been Yankee followers, and presumably admired him as  a player.  I don't see much similarity either, other than the price is also substantially driven by the label holder.

[World Colonial]

On 8/8/2021 at 11:52 PM, GoldFinger1969 said:

I have to believe that just like stamps, that the basic American coin collecting targets that kids and later adults bought will suffer a lack of demand going forward.  And certainly no foreign demand for them.

However, I think that Morgans (silver) and Saints/Liberty's (gold) can rise alongside their underlying metallic content and count on some foreign buying support for some coins in some grades.

That PCGS 3000 index was clearly associated with 2 price bubbles in the last 50 years.  Personally, I'd be surprised to see a 3rd bubble but I don't discount rising prices for some types like I listed above.  In fact, during the 1988-90 coin bubble, MS-65 common Saints traded for 8-10x the underlying gold content; today that would translate into a price of $15,000 or more. 

So if you get a move in the gold price -- whether it's 20% from here or 50% -- you could easily see the generic benchmark for Saint-Gaudens $20 Double Eagles at $4,000 - $5,000 or more (up from about $2,500 or so) -- and they wouldn't be anywhere near the bubble-like nose-bleed territory of previous eras on a relative basis.

The more expensive coins in these series are predominantly dependent upon the broader asset bubble.  Yes, collectors find them interesting but the only reason for current prices is because the bigger asset classes are so hugely inflated.  This isn't just true of coins but other areas too.

The premiums on generic US gold aren't that high except in the higher TPG grades.  But are very high on common Morgan and Peace across the board.  Even if one of these two sell for spot, that's about a 40% premium to the metal content which is hardly low considering how incredibly common some of these coins are. 

Current premiums are a lot higher than that.  Considering how common the most common dates are in grades at least up to MS-65, as a collectible, a more "reasonable" general premium would be a few dollars between one point increments.  The differences are minor, except to US collectors and anyone else who has been conditioned by the TPG culture.

So what I am telling you is that, as long as the broader asset bubble continues and living standards don't take a big hit, I don't expect much if any change.  But watch out if otherwise.  

[World Colonial]

On 8/8/2021 at 11:26 PM, Quintus Arrius said:

@World Colonial 

You sure know how to hurt a guy. Now I am obliged to sit down with each of my 🐓 🐓 🐓 and explain my motivations for acquiring them... 1899: because you were the first one made. 1900: no, it wasn't the luster, I got you because you were the rarest... 1909: because the "detective" I bribed had to convince your owner to make him an offer he could not refuse. (I didn't even have an Order #; I was told "she," presumably a reference to "Marianne," was "beautiful," wired her an obscene amount of money -- for that and two there, sight unseen, and she was, a full-fledged MS-67 with original mint luster!)

With all due respect, WC, some people carry a rabbit's foot, wear a talisman, maintain a "comfort" pet, etc.  I have my Roosters. They are costly, described as the "Best French Set" ever assembled, now or ever [by P-] and to a mere chiffonnier married to a French woman, both seniors living on fixed incomes, they serve a purpose: they stimulate my mind, and encourage a motivation to leave no stone unturned until I have found the very best available rooster possible.  As always, I am in accord with every thought you've heretofore expressed. I bid you, all lurkers and surfers, a pleasant evening.   🐓

I know my comments are unpopular.

Try seeing it from the standpoint of the non-collector.  

If the collector doesn't care about the financial outcome, then nothing I wrote should make any difference.  The fact is, most of the time it does.  That was my first primary point.

The second point I was trying to make which I will repeat is this one.

What's going to make collecting interesting enough to a large enough number of non-collectors to create "growth" in the "hobby"?

The industry doesn't or didn't care about SQ collectors, except to the extent they can convert them to buying more expensive coins later.  There is virtually no profit in the "traditional collector" base.  That's one reason (not the only one) why B&M stores are either closing or have been forced to survive selling something other than coins, whether it is bullion, jewelry or something else.

[GoldFinger1969]

On 8/9/2021 at 9:50 AM, World Colonial said:

IThe industry doesn't or didn't care about SQ collectors

SQ collectors ?

[World Colonial]

On 8/9/2021 at 10:02 AM, GoldFinger1969 said:

SQ collectors ?

State Quarters, an equivalent to those collecting out of circulation which predominated until the 60's.

[bernard55]

Thank you for all your thoughtful replies--additional questions in bold/blue below.

In reading your replies and other books/articles on the psychology of collecting:

•The psychology of collecting | The National Psychologist

•Wayback Machine (archive.org)

•Collecting as Luxury Consumption: Effects on Individuals and Households - ScienceDirect

 

would it be OK to summarize the discussion like this:

- There are macro economic forces that move both markets (coins and trading cards), micro economic forces (supply/demand of an asset), AND there are also human 'motivations' that move both markets.

 

 

The human motivational forces are of a lot of interest to me.  My gut (but again, i'm biased) tells me that there is a gap in the demographic between the young collector and the older collector in coins AND that 'middle' gap may have been filled on the trading card side by the first motivation (Incentive/Reward) which draws in the other motivating factors (FOMO, Affiliation and Power).

 

My gut also tells me that the coin industry does not have any celebrity endorsers like Resy co-founder Gary Vaynerchuk who speak to their millions of followers on youtube/twitter etc about the industry... This is marketing... cards has a lot of it but coins has almost none... Would a bit of this help the industry?

 

If this assumption holds true (my question to you is--do you agree with the assumption) then in order to make sure this industry continues to grow do we need to ensure our industry (coins) is also participating in businesses such as https://www.sportscollectorsdaily.com/collectable-offers-fractionalized-ownership-of-valuable-sports-memorabilia/  

 

A separate question -- As I previously mentioned, the last Long Beach show I attended was setup for old white retired men with nothing else to do but to attend a large flea market of coin dealers. The National show however was more like Comicon... If the Coin industry ran these shows better (Virtual and local 'youtube', mobile engagement, contactless checkin, gamification, drive meaningful connections, entertainment, classroom content etc..) would this motivate and build a bigger community (motivation 6) which could draw in the other motivating factors?

I'md

[GoldFinger1969]

Bernard, you sort of answer you own questions.  As I and WorldColonial have discussed with others here, there are a MULTITUDE of factors impacting the demand for coin investments.

Online has been a boom IMO....it's definitely a PLUS...is it enough to erase most or all of the demographic  and price headwinds that have been in place since the 1980's ?  I dunno....

An entire generation of coin collectors grew up with nothing on TV, if TV even existed when they collected.  There weren't the demands on one's leisure time that there are now (cable TV, smartphones, social media, etc.)  OTOH, you have higher disposable incomes....much greater access to information at the stroke of a keyboard....message boards to discuss and learn....online auctions to buy your dream coin by paying a buyer's premium instead of shlepping to dozens of shows and coin dealers....etc.

[Henri Charriere]

@zadok   Unbeknownst to My Cousin Vinny -- who appears to be making a complete mockery of the strict regimen I prescribed for him out of concern for his health and common sense acting in my unofficial capacity as  unchallenged, unlicensed, wannabe caretaker  -- I began my collection of coins much the way many here do, as type collectors who filled holes in Whitman albums in early 1960's, using nothing more than a stack of Whitman albums and a current Red Book, as a guide.

Regrettably, I made a statement he has thrown in my face, three times in the past 24 months:  my expectation that as soon as the bells rang and the gates at KY Downs shot open , I would complete the course [as a type collector] whether thr track is dry or sloppy, within 90 days. All I had was my wife's cell (with internet) eBay, and discretionary funds. I was unaware that the coins I bought were assigned arbitrary values, vowed I would not shift to slabbing rivalry and had no Idea what a TPGS was and what product they produced.

I discovered a concept called a Set Registry, but much to my dismay found out the primary ones a). do not accept loose coins (I later found out were termed "raw" and b) shunned miscegenation in encapsulations (as it is applied in this context),

The next discovery was a whopper:  not all coins assigned the same grade, whether by the same TPGS or another, may be identical, or even similar.  If you are a firm believer in science, precise incontrovertible evidence and firm conclusions, you will be annoyed by an entire hobby's reliance and meek acceptance (acquiescence) of opinions.  Have you ever heard the saying, Tell me how you feel about a particular individual or event, and I'll tell you what paper you read and radio station you listen to?

I am a collector of many different things, but only the American Psychiatric Association's bible, the Diagnostic and Statistical Manual of Mental Disorders [DSM-5] can tell us why.

Incidentally, though you may be a complex man, there is a striking validity to what you've said the most difficult aspect being honest enough to bring one's self to admit it.   😉   🐓

[zadok]

On 8/9/2021 at 9:15 AM, World Colonial said:

I was attempting to define US collecting, not others.  I used South Africa as an example.  Collecting elsewhere has not been financialized nearly to the extent as the US, if at all.

I also specifically said there could be other categories I did not list.

I also specifically stated it was a generalization.

I'm not claiming money was never a factor, but my bigger point which underlies the title of this thread is that collecting has been driven more by money since coins came to be bought as "investments" starting in the 70's than previously.

I know my view is a very unpopular one, as I see in your reply.  Well, what's going to make actual collecting interesting enough to a meaningful number of new participants to increase the price level, other than mostly speculation?

I ask because that's what is driving this acquisition, to the extent it has anything to do with coins at all.  Collectively, dealers, TPG and auction firms are primarily interested in attracting new collectors to spend as much money as possible.  To the extent they actually care about coin collecting as a hobby, it's a distant second to inflating the price level..  I presume you read coin articles regularly.  That's the inferred measure of the "health of the hobby", the price level.  Partly it might be because it's a single visible data point but mostly, I reasonably infer that's what they actually care about.

The industry has somewhat (at least) painted itself into a corner.  The marketing variables I listed (TPG labels, registry sets and CAC stickers) aren't remotely interesting enough to maintain interest by the majority (I never said any) of current collectors at any "meaningful outlay, much less for those who aren't, unless the price level is at least mostly stable if not increasing.

Look at what (predominantly US) coins cost and what it actually is as a collectible.  Look at it from the point of view of the non-collector and then tell me why any meaningful number should be interested in paying current (much less far higher) prices for what they actually get?  That is, unless they can get most, all or more of their money back.

every endeavor has to have a yardstick.....coin collecting's yardstick just happens to be measured in $s....its the only logical means to evaluate the hobby....it seems that the tpgs, registry sets, cac et al have succeeded in their goals to monetize the hobby....however, if the coin collecting community wasnt increasing in numbers then the $s wouldnt be increasing...the increasing number of collectors r increasing the $s n the increasing $s r increasing the number of collectors....the only losers in this environment r going to be the non-collector speculators...

[GoldFinger1969]

Monetization and differentiation taken to excess are bad....but they also transmit information and lead to transparency, something that wasn't the case pre-1986.

Of course, except for a few heavy hitters, coin collecting wasn't big business pre-1970's so you didn't need the transparency then you do today.

It is what it is, as my uncle tells me....just enjoy what you are doing and don't make any purchases you can't live with. 

Edited August 9, 2021 by GoldFinger1969

[zadok]

On 8/9/2021 at 12:32 PM, Quintus Arrius said:

@zadok   Unbeknownst to My Cousin Vinny -- who appears to be making a complete mockery of the strict regimen I prescribed for him out of concern for his health and common sense acting in my unofficial capacity as  unchallenged, unlicensed, wannabe caretaker  -- I began my collection of coins much the way many here do, as type collectors who filled holes in Whitman albums in early 1960's, using nothing more than a stack of Whitman albums and a current Red Book, as a guide.

Regrettably, I made a statement he has thrown in my face, three times in the past 24 months:  my expectation that as soon as the bells rang and the gates at KY Downs shot open , I would complete the course [as a type collector] whether thr track is dry or sloppy, within 90 days. All I had was my wife's cell (with internet) eBay, and discretionary funds. I was unaware that the coins I bought were assigned arbitrary values, vowed I would not shift to slabbing rivalry and had no Idea what a TPGS was and what product they produced.

I discovered a concept called a Set Registry, but much to my dismay found out the primary ones a). do not accept loose coins (I later found out were termed "raw" and b) shunned miscegenation in encapsulations (as it is applied in this context),

The next discovery was a whopper:  not all coins assigned the same grade, whether by the same TPGS or another, may be identical, or even similar.  If you are a firm believer in science, precise incontrovertible evidence and firm conclusions, you will be annoyed by an entire hobby's reliance and meek acceptance (acquiescence) of opinions.  Have you ever heard the saying, Tell me how you feel about a particular individual or event, and I'll tell you what paper you read and radio station you listen to?

I am a collector of many different things, but only the American Psychiatric Association's bible, the Diagnostic and Statistical Manual of Mental Disorders [DSM-5] can tell us why.

Incidentally, though you may be a complex man, there is a striking validity to what you've said the most difficult aspect being honest enough to bring one's self to admit it.   😉   🐓

i am a very flawed person, with a mixture of repairs n restorations that may or may not be permanent, my biggest collection is that of scars from life experiences that were both good n bad...why we choose to do what we do is uniquely our own....to minimize, collecting is the same...whatever we choose n to collect n to whatever extent is just that a choice....for whatever combinations of reasons u chose to put together a collection of roosters n for other reasons to submit them to registry sets, ur decisions ur reasons....while i may agree or disagree with the merits, its not relevant to ur collection...i dont feel that as collectors we must submit our collections for approval of other collectors, we only have to satisfy our own approvals.... the forum's intent i assume was just to share our collections with other collectors....but my rationales r as i said often flawed......

[World Colonial]

On 8/9/2021 at 12:42 PM, zadok said:

every endeavor has to have a yardstick.....coin collecting's yardstick just happens to be measured in $s....its the only logical means to evaluate the hobby....it seems that the tpgs, registry sets, cac et al have succeeded in their goals to monetize the hobby....however, if the coin collecting community wasnt increasing in numbers then the $s wouldnt be increasing...the increasing number of collectors r increasing the $s n the increasing $s r increasing the number of collectors....the only losers in this environment r going to be the non-collector speculators...

I see it as a balance.

The price level is very inflated for many coins now but too much of a price decline I agree would be a negative for collecting, since even those who are primarily motivated by the coin still reasonably consider the financial aspect.

Conversely, I don't see and don't remotely believe that a perpetually higher price level which prices out more and more or most collectors out of the coins they want to buy is a positive either.  Other than my posts, I don't recall anyone ever mentioning this even once. as if it doesn't matter.  It's like well, they can just buy something else that is still affordable.

This presume that what remains affordable remains interesting enough to enough collectors.  Whether it is depends upon the interests and psychology of the individual but as a common sense principle, it should be evident that access to more coins will generate and maintain more interest than the opposite.

No one knows whether the collector base is increasing or if so, how much.  Since prices are set at the margin, it's easy enough for a very low number of buyers (relatively) to maintain the price level, as long as there aren't many sellers.

[World Colonial]

On 8/9/2021 at 12:16 PM, GoldFinger1969 said:

Bernard, you sort of answer you own questions.  As I and WorldColonial have discussed with others here, there are a MULTITUDE of factors impacting the demand for coin investments.

Online has been a boom IMO....it's definitely a PLUS...is it enough to erase most or all of the demographic  and price headwinds that have been in place since the 1980's ?  I dunno....

An entire generation of coin collectors grew up with nothing on TV, if TV even existed when they collected.  There weren't the demands on one's leisure time that there are now (cable TV, smartphones, social media, etc.)  OTOH, you have higher disposable incomes....much greater access to information at the stroke of a keyboard....message boards to discuss and learn....online auctions to buy your dream coin by paying a buyer's premium instead of shlepping to dozens of shows and coin dealers....etc.

Recap of the mega trends I see:

Future appeal as a recreational activity - negative.  However, this is a lot less important for some coins versus others.  It's a lot more of a negative for the cheaper and cheapest coins, though lifetime collectors usually start at lower prices and spend more as their finances permit it.

Bullion prices - positive for now, but mostly for a low minority such as pre-1933 gold, Morgan/Peace dollars and NCLT.  The 2011 run-up in gold and silver did not correlate to the same price increases as in the 70's.  Too much of run-up in one or (presumably) both will be a negative though, as it would price out an increasing proportion of collectors from numerous series they can afford now.

The asset mania - big negative.  An end of the asset mania will have the biggest impact on the most expensive coins versus any other factor I know.  It will impact both the ability and willingness of these buyers to pay current or higher prices.

Long term economic conditions - negative.  There is a day of reckoning in store for the typical American's standard of living, which is substantially made possible by the asset mania and the unprecedented loose credit conditions that go with it.  Most Americans are destined to become poorer or a lot poorer in the future as the pulling forward of future demand through debt finally catches up with this country.  I don't see this as imminent but it's a factor I don't believe is mostly considered at all.

Demographics - Age I think makes some difference but mostly in the content of recreational interests.  The changing ethnic composition of the population is undoubtedly a negative for both coin collecting in the United States generally and the collecting of US coinage specifically.  The core collecting demographic is non-Hispanic white males.  Other groups have a much lower propensity to collect at all but when they do, will choose to collect US coins in lower proportion.

Internet - positive.  I agree with you.

[World Colonial]

On 8/9/2021 at 11:49 AM, bernard55 said:

The human motivational forces are of a lot of interest to me.  My gut (but again, i'm biased) tells me that there is a gap in the demographic between the young collector and the older collector in coins AND that 'middle' gap may have been filled on the trading card side by the first motivation (Incentive/Reward) which draws in the other motivating factors (FOMO, Affiliation and Power).

I'md

Many coins are hybrid collectibles (an alternate form of partial consumption) and "investments".  Attitudes toward each differ.

With consumer goods, higher prices discourage demand while lower prices incentivize it.  It's what we each studied in economics.

I don't know what is taught now but from both what I learned in the classroom and what I read, the psychology of "investing" isn't considered hardly at all and not in this context.  Looking at asset markets, it's evident that higher prices attract increased interest and lower prices less.  It's the opposite behavior toward consumer goods.  Higher rpcies make "investments" more desirable.  That's how we ended up with the biggest asset bubble in the history of civilization.

This is a generalization but it's evident somewhat in a lot in coin buying.

On 8/9/2021 at 11:49 AM, bernard55 said:

My gut also tells me that the coin industry does not have any celebrity endorsers like Resy co-founder Gary Vaynerchuk who speak to their millions of followers on youtube/twitter etc about the industry... This is marketing... cards has a lot of it but coins has almost none... Would a bit of this help the industry?

I'md

I'm of the belief that it will have no meaningful success with coins. If it works with sports cards now, my assumption is that it has been successful because it's in another bubble, not necessarily due to that much interest in collecting.

On 8/9/2021 at 11:49 AM, bernard55 said:

If this assumption holds true (my question to you is--do you agree with the assumption) then in order to make sure this industry continues to grow do we need to ensure our industry (coins) is also participating in businesses such as https://www.sportscollectorsdaily.com/collectable-offers-fractionalized-ownership-of-valuable-sports-memorabilia/  

I commented on this subject at length in another thread.  It may eventually be necessary for "growth" if by "growth" you mean inflating the price level as much as possible.  Since there is unprecedented historical speculation in practically everything, it may work temporarily.  Longer term, I'll take the "under" on this bet and predict (again) that any such attempt will fail spectacularly, just as it did in 1989 with the prior attempt to commoditize collecting.

As "investment", coins are a dead asset.  It's what Buffet says about gold but at least gold has some utility as jewelry, a central bank reserve asset and to some, an alternate form of money as a liquid store of value.  Today, the most expensive coinage also has an outsized dependency on the TPG label (plus the CAC sticker for some US coins) which doesn't mean anything to the non-collector, except for the price.

Coins generate no income in the form of interest, dividends, rents or royalties.  The annual yield is negative due to carrying costs.  Coins have no status value to non-collectors which, in the absence of "yield", is necessary to incentivize the non-collector to hold it.

There is no basis to believe that anyone will perpetually trade coins or a fractional interest as a type of "widget" at higher prices which is the only way this concoction can be successful longer term.  Without this behavior, coins will never be competitive versus other "investments".

So to sum it up, the idea of fractional ownership sounds great to those who are motivated to inflate the price level as much as possible but it contradicts human motivation in the real world.  It's only feasible longer term in the abstract.

Edited August 9, 2021 by World Colonial

[bernard55]

@World Colonial  "As "investment", coins are a dead asset." "There is no basis to believe that anyone will perpetually trade coins or a fractional interest as a type of "widget""

Companies like https://www.onlyalt.com/ are doing well with 'custody' and providing their users with the ability to trade with each other. https://www.wiv.io/ is doing 'custody' and secondary marketplace/fractionalization/collateral with high end collectible wines. Masterworks - Learn to Invest in Fine Art is doing it with collectible art.  Why not collectible coins? Why does it have to be a dead asset? All of these other collectible markets are enabling liquidity, secondary trading and fractional ownership (with custody). 

These efforts are breathing life (liquidity) into alternative assets that were previously considered "dead assets".  (I also don't deny that these new companies may also be successful due to a bubble... but this bubble may also have created an entire new type of company that leverages non fungible tokens as deeds for physical collectible assets enabling provenance -- not possible before now... )

my interest lies in 'how do we breathe life into the coin collecting market'. I personally love collecting and want to see others find it as interesting as I do...  (my bias--i'll try to tone it down)

Do you find that it is a prevailing view that most coin collectors (on this and other forums) do not want to breathe life into the market for fear of things like rising prices/bubbles?

 

 

[zadok]

On 8/9/2021 at 2:17 PM, World Colonial said:

I see it as a balance.

The price level is very inflated for many coins now but too much of a price decline I agree would be a negative for collecting, since even those who are primarily motivated by the coin still reasonably consider the financial aspect.

Conversely, I don't see and don't remotely believe that a perpetually higher price level which prices out more and more or most collectors out of the coins they want to buy is a positive either.  Other than my posts, I don't recall anyone ever mentioning this even once. as if it doesn't matter.  It's like well, they can just buy something else that is still affordable.

This presume that what remains affordable remains interesting enough to enough collectors.  Whether it is depends upon the interests and psychology of the individual but as a common sense principle, it should be evident that access to more coins will generate and maintain more interest than the opposite.

No one knows whether the collector base is increasing or if so, how much.  Since prices are set at the margin, it's easy enough for a very low number of buyers (relatively) to maintain the price level, as long as there aren't many sellers.

we obviously r not seeing the US coin collecting community the same....it is clearly obvious to me that the collecting community is expanding in both numbers n scope...i dont see the increasing prices reducing the number of buyers nor preventing them from buying the coins they want....they r not moving to more affordable less desirable coins, i see them still buying the higher priced coins but just fewer at a time or more spaced out to accommodate their budgets, i for one have have not ceased buying the coins i want/need just because of price escalation, instead of buying 5-6 coins in a signature auction i only buy 3-4...in fact i have spent more this past year than in previous years, true prices r higher but there were more desirable coins available because of the higher prices...investment concerns have never been a deciding factor in my coin purchase decisions...in the collecting orbits that i navigate in the number of competitors have literally tripled in the past 3-4 years....i recently read that not only have the major auction houses total sales increased but that the number of individual buyers have also increased....i dont see this dissipating in the near future.....

[World Colonial]

On 8/9/2021 at 3:39 PM, bernard55 said:

@World Colonial  "As "investment", coins are a dead asset." "There is no basis to believe that anyone will perpetually trade coins or a fractional interest as a type of "widget""

Companies like https://www.onlyalt.com/ are doing well with 'custody' and providing their users with the ability to trade with each other. https://www.wiv.io/ is doing 'custody' and secondary marketplace/fractionalization/collateral with high end collectible wines. Masterworks - Learn to Invest in Fine Art is doing it with collectible art.  Why not collectible coins? Why does it have to be a dead asset? All of these other collectible markets are enabling liquidity, secondary trading and fractional ownership (with custody).

None of this has anything to do with actual collecting.  It's pure speculation.  I already attempted to answer this in my last post.

So it's happening now with other areas?  The best explanation for it is the greatest asset mania ever in stocks, bonds, real estate and so forth.  What's going to happen when the mania eventually ends?  Or are you one of those who might believe it's going to last forever?  Because if you do, I'm one of those who doesn't.  I see no basis for such a belief whatsoever.

There is nothing remotely normal with current financial conditions, asset prices or economic conditions.  Unprecedented speculation in every major asset class and varying levels in smaller ones, including collectibles masquerading as one.  The loosest credit conditions, aggregate credit standards, and most overvalued asset markets in human history.  A predominantly fake economy driven by artificially cheap money and government deficit spending, not just since COVID but going back to at least 2008 with the response to the GFC.  What you are asking about here, this combination is what makes it (temporarily) possible because it's "normal" in the context of the surrounding insanity.

Did you read my definition of "dead asset"?  Where is the "yield" going to come from?  Are these collectibles being lent out (similar to gold bullion) where the borrower pays a lender to use it?  I can't imagine that this would have any meaningful appeal for any collectible where this fee is going to be more than a trivial amount relative to the value, if it is happening at all.

The questions you need to ask yourself are these:

What evidence is there that this has any long term appeal (outside of a raging financial mania like the one we have now) where anyone is going to trade this fractional interest like a "widget" at perpetually higher prices?  Why would anyone do that?

How are these fractional interests supposed to be competitive versus competing "investments"?  Negative yield forever where all return comes from perpetually higher prices, including by people who aren't even collectors.

The reason I disagree with what you are describing is that there is no evidence that people will exhibit the required behavior to make it successful.  It's all in the abstract.

In a prior thread, someone mentioned race horses as a comparison.  There is no actual equivalence and neither are other high profile alternatives.  There are a lot of horse lovers who might be willing to lose money on a fractional interest.  It's been a round for a long time and I infer most lose money, so it must be something other than profit to motivate them to do it.  There is status value associated with the social aspects within the social environment these people operate.

None of this applies to coins, except as a temporary speculation.  There is no such motivation with coins, other than maybe with a low minority of the existing collector base for a low number of relatively high profile coins.  Even this is questionable, longer term.

[World Colonial]

On 8/9/2021 at 4:41 PM, zadok said:

we obviously r not seeing the US coin collecting community the same....it is clearly obvious to me that the collecting community is expanding in both numbers n scope...i dont see the increasing prices reducing the number of buyers nor preventing them from buying the coins they want....they r not moving to more affordable less desirable coins, i see them still buying the higher priced coins but just fewer at a time or more spaced out to accommodate their budgets, i for one have have not ceased buying the coins i want/need just because of price escalation, instead of buying 5-6 coins in a signature auction i only buy 3-4...in fact i have spent more this past year than in previous years, true prices r higher but there were more desirable coins available because of the higher prices...investment concerns have never been a deciding factor in my coin purchase decisions...in the collecting orbits that i navigate in the number of competitors have literally tripled in the past 3-4 years....i recently read that not only have the major auction houses total sales increased but that the number of individual buyers have also increased....i dont see this dissipating in the near future.....

I attribute most of what you describe to the surrounding asset mania.  I'm not questioning your personal observations.