Were prices of rare coins super inflated in the 80s or was Heritage lying?

I've not been around CT very long. I frequent the other boards. But I have to say this is one of the best threads I've seen here.

I've collected for a long time so not a lot of this was new to me. But this was a great reminder of those insane periods...something that should not be forgotten.

Excellent posts!
Lance.

 

Log in or Sign up to hide this ad.

Early eighties was when I started collecting luckily mid eighties I started the family so not many coins during the really mad times. Came back at about 1996 with the divorce. Been a interesting ride since them

 

Yeah, I've seen this topic discussed here before, but the wealth of knowledge imparted (regarding that period) never came together like it has in this thread. Excellent indeed guys.......

 

I am just finishing up David Hall's 1987 "A Mercenary's Guide to the Rare Coin Market" and it is really shocking. There was a lot of good information that any person who buys expensive coins for collecting or investing can use, but man when he quotes prices, wow.
1880-s Morgans $750 1878-S 1250. And he reminds me a bit of the bullion bulls who say the prices can never go down. Still very interesting

 

I will agree with a few others here in that this is one of the best, most informative threads in a long time on Coin talk. Some of us youngsters (I'm not yet forty) need to just sit back and try to remember some of this.

 

I agree. This is a great, eye opening thread for the archives here. I was around at the time but wasn't able to read yet. I mainly was getting $5 ASEs and other bullion coins as gifts at that time. Still have them all. I'm pretty amazed by this information as well. Didn't realize it got THAT bad.

Would have to say though, prices should be as low as they should be able to go right now, with the advantage of the internet. Everybody has the internet now and are not held hostage by the local coin dealer to obtain that MS-65 1881-S Morgan.
Everybody is forced to compete with a national/world market now. More people should be much better informed because of the internet and forums like this as well.

 

Just for fun, I recently looked at some old Stack's auction books from '88 and '89. The sales results (at least based on what I saw) indicated that prices were pretty reasonable. Certainly much lower than prices are today. (One coin that stuck out as an exception was $3 gold pieces, which are now almost identically priced to what they were in the 80s) I know the PCGS chart says what it says but I didn't see much undue craziness from the auction results. Maybe compared to the prices of '82 and '83 they were frothy.

 

So the run-up in gold happened right after the stock market crash of Oct. '87. I guess that makes sense. People were talking about a new Depression and investors were buying gold and stocking up on ammunition and canned goods. However, if you toss out the late 80s bubble and the earlier gold buying frenzy of 1980, you will see that mint state coins provide a slow and steady appreciation in value. It is that chart that I like and the one which I believe truly reflects the value of being in this hobby.

 

Thanks for the charts. That was one of the greatest things I noticed when I came back to US collecting, (or at least paying attention to the market). Before, key coins were recognized as scarce and more valuable. Now they seemed to be idolized simply because of this accolade of it being a "key". It seems as the reputation of key is much more important than any real scarcity. The 1916s mercury is scarcer in the higher grades than the 1916d, yet is priced way below the price of the 16d. If prices of keys had anything to do with reality, the 16s in high grade would be more expensive. Since its not, its proof "key" REPUTATION is more important than reality.

I even see people who wish to put together type sets with "key" dates because they are "better". If anyone ever asks for investment advice and what coins to buy to get the best return, every single time multiple people recommend buying key coins. This herd mentality is extremely dangerous. I feel the chart illustrates well what my general feeling has been, that keys are so vastly overpriced nowadays as to not even be funny. I know many collectors simply do not know any better, since it has been that way since they started collecting, but it is not preordained by a superior deity that coins that others have labelled "key" to a date/mm set will go up forever.

The exact same expectation of investment potential was swirling around MS65 coins in the 80's that swirls around key coins today. So much so that I wonder if I am stupid for still holding some of these coins I got when I collected US coins. I never like selling coins, but I think sometimes I should sell off all of these "keys" today and wait for the correction.

Chris

 

Yes Chris

What you are saying is the exact reason why I do not own a 3-legged Buffalo. The coin is simply not rare. It's price tag is determined by demand. Of course the price of every coin is determined by the two factors, demand and rarity. I just feel a bit more comfotrable buying coins with rarity, For me I am talking about conditional rarities, which may or may not be the right way to go, but that is what I feel comfortable with.

With that all said, I do believe there are good times ahead of us for rare coins.

As you said in a previous post, the coin market trades thinly, so any influence that disturds that balance can really have an effect on the market, either up or down. That sword cuts both ways. Where the coin market is going, I'll be the first to say I do not know for certain, no one does, but I have invested all my life, sometimes I win sometimes I lose, but to me it always pays to go with the odds. In my opinion, the odds are that rare coins will go up. The reason being is rare coins will always be rare coins, thay are not making anymore of them (Except in China). The population is growing, which with all things being equal, should put demand on the rarities. Not only is the population growing, but as the former 3rd world nations become more and more affluent, we may get demand from those areas also. We have well over a billion freinds in India alone, so if only 1/100 of 1 percent gets the coin bug, it would be huge. We have many foreign friends right here on coin talk, so I know there is overseas interest.

That is MHO

Mike

 

Doug, you are simply reading the chart wrong. For what ever reason PCGS chose to use a linear chart instead of a logarithmic chart. While technically accurate, viewing the graph plot shows a distorted view of what is really happening. All stock graphs I have evers seen are shown on a logarithmic chart.

You stated the huge run up in prices has occured over the last 10 years, but if you look at the data, that is untrue. The last 10 years, the market went from 12,000 to a little better than 26,000. Around a 120% increase or about 8% a year compounded. Nice gain, but not through the roof, and certainly not idicative of a bubble. Also that is not even close to the 10 year period where the index got it biggest gains. Look from 1970 - 1980. It went from 1000 - 6000 for a whopping 500% increase or around 18% per year.

So what you are looking at is a misleading chart and not a huge spike. Where this market is going, I or any one else does not know for sure, but there was no spike, no bubble, no irrational exhuberance. When our old buddy Easy AL Greenspan was speaking those words he was speaking of gains north of 100%-200% per year, not 8%.

From the point of a chart technician, this chart looks solid as they come.

Mike

 

Last year was a minny microcosm of longer term volatility in metals and coins. I bought a couple of MS65 Morgans with a credit card from a dealer who was a little peeved I was buying them for $160 with a CC since it cost him a couple percent. I could have sold @ market top for $200, but missed it. I later ran them at Teletrade reserving them @ $160, they were blast white and nice, no takers in three auctions. Finally I ran them at Great Collections without reserve and I netted around $100 a piece on them! Timing is everything and common dates should not go to auction.

 

Do you have a similar chart for Early Date Large Cents? I don't remember it being as volatile, but fairly steady in its price progression.