GDJMSP

A brief conversation got started on the World Coin Forum because of a comment I made there. But rather than hijack that thread I decided to broach the subject here. In some circles, it has been much discussed for some time already. In others - it has never even been considered. The subject in question is - what is the outlook for the coin market in general ?

I first started writing about this almost a year and half ago, but at the time my concerns were limited to the US coin market. In particular the market for modern US coins. My concerns then were that we were about to see a drop in values for the high and ultra-high graded examples. Bear in mind that I am talking about the market in general. There are always specific coins or series that do not follow the general trend. Sure enough, it came to pass.

But when the values of moderns did drop, the emphasis of collectors was simply directed to another area. Those older US coin series that had languished in the doldrums price wise soon began to creep up in value. This is not terribly unusual in a bullish coin market. In fact it is commonplace for the emphasis to shift from series to another until most series are experiencing an increase in values. This is what defines a bullish coin market. But what goes up - must eventually come down.

As a general rule, a bull market will last anywhere from 4 to 5 years. While a bear market can last from 8 to 10. These comments are merely based on observations of events that have occurred in the past. Nonetheless it is typical. It is also typical for certain other events to take place during the normal cycle that the coin market undergoes.

One of them is that it always starts out slowly. A given series or particular area of the coin market will begin to move up in value. Most collectors do not notice at first and express surprise when they do notice. And then everyone looks around to try and figure out why. Meanwhile - other series soon begin to increase in value as well.

Looking back, it is always easier to talk about these events and recognized what happened and when. But by doing so in this instance, one can see the beginnings of this bull phase in 1999 which coincided with the advent of the State Quarter series. At the time - most doubted it was the beginning of a strong upturn in coin values. But by 2001 - few remained unconvinced. Since then the coin market has been on a rampage with one series after another showing strong increases in values with some select series showing increases of 300% or more during this period.

But now the question - how long will this last ? If you were to ask collectors this question a great many of them will likely say they see no end in sight. Even more dealers will respond in a similar manner. But are they right ?

Perhaps they are. But what I have noticed in the past is this - at the beginning of the end of any bullish cycle the coin market has undergone in the past, strange things begin to happen. Usually slow or weak periods of the year show unusual strength. Prices in general reach what most consider being outlandish levels. And certain areas of the coin market that rarely if ever see meaningful increases - see sizable increases. So far this year - all of these things have happened.

So what is it to be in the days to come ? Are we seeing the beginnings of a bearish coin market ? Or are we witnessing something that has never happened in the past - a new paradigm for the coin market ?

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National dealer

While I would love for this market to continue, I am one that believes that we are nearing the end. The Statehood quarter program did bring many millions into the hobby, and quite a few have found more traditional series to expand their interests. Some tried and true aspects will always remain a steady side of the market. The registry programs at PCGS and NGC seem to be limited in their growth, which is a good indicator of the modern market. Many of the investors have begun to make their way back to the stock market. This also will limit the length of this bull market. With the advent of these specialized areas such as full steps, full heads, split bands, it seems as if the market is attempting to create an upswing within the given market. With venues such as online auctions we now sit in an interesting time frame. More collectors have access to better material. The major problems that I see for the market are lack of fresh material, and lack of knowledgeable collectors. This market is following those of the past. Collectors follow the trends too easily. They see that the prices for coin X is rising and they all flock to that area. When the knowledgeable collectors see this, they in turn sell. Many dealers are following the market with great interest to see how the next few BIG statehood quarters effect the overall market. Texas, Florida, and Michigan were really a disappointment.
With the lackluster designs, the new collectors are moving to new areas, yet without a strong base to propell one it will die off and people will move onto something new and different.
Here recently I have been tracking the foriegn and ancient markets, and I am seeing a spike in those areas. Maybe this is a new upswing, or maybe it is just fresh new material generating a renewed interest.
One of the coin magazines published a recent article on rarity in the coin market, and they hit the nail on the head. Most collectors don't look outside of the mainstream collected coins. This is why the market fails repeatedly. There are too many playing follow the leader.

susanlynn9

Realizing that I have only been watching the market for the last two years and most of my scope has been in the on-line auction venue, I have seen quite a bit of short-term fluctuation in the types of coins that collectors are buying, but the overall market has stayed relatively consistent (except for August which is just a bad month in everything on eBay). I think that new coins and new designs will continue to capture the collectors immediately after release and even for a little while following but I have not relied on the new designs or modern coinage as any kind of a mainstay. I still feel that the older designs and obsolete coinage will continue to maintain their place in the market. Many collectors that I have known throughout my life may have a collection or two of modern coinage, but I never spoke to one that wouldn't have loved to have a Colonial copper or 1700-1800 Bust coin of any denomination. There are definitely areas of the market that fluctuate on a regular basis, but I still believe in the "oldies but goodies". Those markets are here to stay if for no other reason that the demand will always outweigh the supply (if you don't take the counterfeits into consideration ). Just my 2 cents worth.

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Susan
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Education....the key to collector success!

jimmy_goodfella

what is it about these quarters i have a couple of the picked up along the way.

arent they only worth face value?

what is diserning there value ar all?

National dealer

The quarters found in circulation are only worth face value. Very few single coins bring a premium. Some dealers sell singles of each mint, but for the most part they are sold in rolls and bags. Mintage and region play a part in there overall value. Some are selling for multiple times face while most are traded for just a small premium.

Art

I don't follow the market in general. I believe that the outrageous prices for moderns, especially those considered to be condition rarities will flop. The classic coins will continue to move ahead for a while and when they fall they will not go below previous price levels.

A lot more people are starting to specialize in one or two classic series. Some of this is certainly an outgrowth of the statehood quarters.

cladking

What ever happened to the good old days when everyone had the common sense to not even look at pocket change made after 1964? Now some people look at it and the first thing you know they're finding rare varieties and grades right out in circulation. It seems obvious that putting the genie back in the bottle will be little trouble and we'll disinvent the internet and grading services at the same time. In fact the computer has been around long enough. People got along with the abacus or a slide rule for generations and they were much cheaper and easier to operate.

The only moderns that I've seen have any price decline in recent months are more common ones which got far ahead of their demand. It particularly applied to high grade proofs. Some raw moderns have backed off some also, but there are market forces responsible for this which are, in essence, temporary.

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Tempus fugit

aem4162

i don't know anything about the market. i buy what i like and i don't look at anything as an investment. they're just pretty coins.

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tradernick

Wouldn't surprise me if there's short term softness but I fully expect that GENERALLY speaking the bull market will continue, albeit at a slower pace. The new nickels are helping it along and I think the END of the states quarters program will bring another growth spurt.
Also, with gold holding steady in the $400 range and silver somewhat steady in the $6-$7 range, that should be considered too. A happy metals market will be good for the coin market too, to a degree.

Nick

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satootoko

I pay an awful lot of attention to market trends in the stock and bond market - that's where my jam and deserts come from (Social Security and a small pension check take care of the bread and butter).

But as anyone who has known me for very long is aware, I have never bought coins with a single penny which I could not have tossed in the garbage without affecting my lifestyle, that of my Beautiful Bride (or my kids when they lived at home), or my grandkids' shot at a good education.

That means I simply don't have to worry my head about whether my collection is worth more, less, or the same as I spent on it (although the premiums on my insurance floater do seem to keep going up).

It's a hobby folks!

sylvester

Well i feel i ought to contribute something to this.

I'm interested in the way the US market is working, from what i can understand the State Quarter program has brought millions of extra collectors world wide into the US coin market, and naturally many have drifted into the classic coins, others have stayed following the modern. This has created an upturn in the market, and yes i can understand why series will drop and all that. (As explained above)

Now i'd like to draw an interesting contrast between this and the UK market (which is the one i'm kinda in), there has been no state Quarter program and coin collecting here is generally only slightly on the upswing, pretty stagnant insome areas. Ebay etc. has helped to keep the numbers up, but prior to this only about 15 years ago coin collecting in the UK was a shrinking hobby. Many shops in the 1990s shut up for good or went bankrupt due to lack of interest, the 80s boom had sustained them the 90s killed them off. So maybe on a general level things have increased lately. My local coin dealer one of the very few in the north said business was kinda slow lately and had been for a few years. (this was a few months ago), he said some days you make somedays you don't... it's just a matter of attracting the tourists in. The profits don't sound too great though. Comfortable is about the best, he doesn't sound bothered though he's doing it cos he loves the hobby not because he wants a massive profit, i asked him if he ever thought about sending out mail order lists or the internet. He said he wasn't all that bothered these days. (He sells good stuff cheap too, alot of that sticks and doesn't sell!)

Which suggests that competition from the internet is taking it's toll, but most of the stuff i see on ebay is low grade junk or gold bullion not much in the way of collectable UNC silver. Some areas have shown a dramatic increase but it appears that non-English collectors have taken an interest in those areas.

I'm afraid the UK coin market though resembles that of something someone mentioned earlier. Someone mentioned that there was a time when no-one ever checked their change for coins newer than 1964. Well in the UK change checking is for the novices (yes the elitist approach is prevalent), the only coins considered worth collecting are the pre-decimal issues pre-1970 that have to be bought. And most dealers don't stock much after George V, nice coins after 1936 are run of the mill, infact it could be argued that most coins after 1920 are seen as run of the mill in general terms by alot of dealers, except for Wreath Crowns.

Most focus their stock on Victorian coins, and this is an area where alot of people start collecting coins, i certainly did, my first goal was to put together an 1887 set. (I came close but never achieved it, cos i decided to concentrate elsewhere). I'd say Victorian and Edwardian Silver in high grades is the hottest stuff around and the price will probably drop from those as interest in pre-1662 hammered coinage continues to build.

I don't think we tend to get excited by trends... so what if high grade Victorian and Edwardian silver is hot... i've talked about this on another forum but none of us have decided to actually buy any of it. One still collects his high grade 20th century bronze coins, the other is thinking of moving into maundy, i'm still on my mid-grade 17th and 18th century sixpences, and another is still collecting mid-grade Victorian coins. So there was no flocking from one series to another, the whole Victorian and Edwardian silver market could crash and i'd not even notice.

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To reiterate Roy's words , 'a £0.01 coin is a penny, and not a cent, the UK have never issued cents'

joecoin

The US market will always be priced higher than comparable coins in any other market, as long as the US stays on top as the only super power. Coin collecting in China will EXPLODE!!!! within the next 2 decades. The demand for gold in China is currently outstripping their domestic production. This means, for the first time, China is importing gold. Look out!

(I apologize for using the "EXPLODE!!!!" cliche', but I saw that darn "paradigm" word in the first post on this thread.

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Joe

cladking

This is truly a world wide phenomenon. People all over the world simply quit collecting new coins in the latter half of the 20th century. The exact date varies by country and perhaps the only exception is Russia. Even here though there are many dates of the Soviet coins which are extremely difficult to find.

In England there was a huge drop off in saving new coin in 1920 when the sterling coins ceased and the coins became only half silver. Finding these coins in high grade (even XF) from the early and mid-1920's is extremely difficult. Prices on these coins has begun to reflect the difficulty.

New Zealand makes a very interesting case study for the entire trend. Here the silver was dropped from the coins in the late 1940's and the new coins were made of cu/ni which no one bothered to save. Despite having the same very attractive designs as the silver issues, virtually the entire mintage was allowed to wear in circulation for a couple decades. Most of the few coins which survived were saved inadvertantly in mint sets or year sets. Now, despite having higher mintages and not containing silver, these coins usually sell for much higher prices than the older coins which really isn't bad when you consider that there still is very little demand for them. The even newer NZ coins may in many cases be even scarcer. The decimal coins were also ignored but the government did make significant numbers of mint sets. These sets contain very well made coins so the very few collectors who desired decimal coins normally would buy these. Unfortunately many of the varieties do not appear in the sets. In some cases these varieties account for the bulk of the mintage but finding them in uncirculated condition is a virtual impossibility. The president of the largest NZ coin collectors club said several years ago that "the rarities of tomorrow are in circulation today". ...and this same is true in country after country.

In many cases these coins have been destroyed by the issuer after many years of use. Millions of old coins are destroyed every day to make appliances for the Chinese markets or as alloy to make stainless steel.

...Nor is it as though the US coins are any different. There are dozens of really great coins in circulation which simply don't appear in mint sets. Some of these were scarce enough that it's entirely possible that not a single example survives in uncirculated condition. An entire run of great quarter varieties from 1977 to 1984 from both mints doesn't appear in mint sets except for one single year ('81-P), and it's scarce in the set. Still even today, with modern prices seemingly so "crazy", there aren't people scrambling to assemble sets of these coins. Rare modern coins sell for a tiny fraction of what comparably rare old coins sell for.

Indeed, many of the rarities of tomorrow are in circulation today.

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Tempus fugit

sylvester

I would rather use the word fortunately there! There are only 2 types of current circulating coins in England at the minute that as far as i understand have not appeared in a proof or UNC set, hopefully they haven't. I know what they are and i find one every now and again though it really is every now and again. Sure millions of them were minted but all of them went straight into circulation and thus hopefully they'll all get battered to kingdom come and my nice VF example with bagmarks will be worth a couple of hundred in the next 70 odd or so years...

If only!

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To reiterate Roy's words , 'a £0.01 coin is a penny, and not a cent, the UK have never issued cents'

ziggy29

All I know is that there are no signs that the stuff I'm looking for (nicer certified AU-58 type) is softening at all. Certainly the prices I've had to pay wouldn't point to a pullback. Not yet, anyway.

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Tim (ANA R-167586)

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