Will the new economy effect the future value of numismatics?

I've never read/heard anyone preaching "the hobby is crashing into oblivion" - but a few here allude to this. Reminds me of querrulous Paper-Bug rhetoric on financial forums, demanding investors "Sell Your Gold!" to "Buy US stocks NOW!" (As if Gold were to blame for stocks' poor decades' performance.) Problem is, almost NO US INVESTORS own any Gold investments ... so it's a bizarre assumption that misses the fundamental point: that retail play-dough of the gaga 80s-90s is lost. It's a Paper-Ploy of look elsewhere, blame something else, spin lies/make-believe. Whatever we do, we cannot admit investor exhaustion, the end of the paved road, or anything like grossly overvalued Paper equities lol The Peak is in, for US coins likewise: charts show!

But look at the median age of the average collector spending $100./mo (or whatever) inflation & wage-adjusted across three decades. If that avg collector is getting a year older every year (for example) then there's an obvious replacement problem. Remove the inordinate fixation on rich collectors, and the demographic reality of the middle mkt becomes glaringly apparent. Numbers I've seen suggest an average Age 60+ for serious collectors: that's almost geriatric.

Compare & contrast the younger demographic crisis facing Harley-Davidson, as explained here. http://wmoon.files.wordpress.com/2010/11/u-s-birthrate-1909-2003.png

No it's not same-same but it's a similar bell-wether. A scary-big 'older old collector' segment dominating the current US coin mkt only insures liquidations sooner rather than later. To "oblivion" NO but YES the seeds of this demographic crisis were sown decades ago.

Sure, coins will always be 'worth something' but what? Alot less than most here are willing to admit. (Of denial: I'd agree if they're dead and wrong it won't matter to them anyway.)

 

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You cherry pick some odd numbers to make your point. Of course anyone spending 100 per month will be older. Meanwhile the state quarter program brought many millions of young people into the hobby- these are usually upper class people and they will be the engineers and doctors of the next generation. They certainly will not spend 100 per month until they get out of college but once they hit the work force they will be a substantial group of collectors. Personally I know many families with kids who are enthusiastic about coins and yes ALL of these kids (every single one) is college bound (and I m not talking about "liberal arts" majors).

 

All in all I think we're doing pretty good with out investment! Especially if you compare it to the yearly US Postage sets my grandparents gave me in the 70's. They are still worth right around the price on the envelope!

 

I think we'll get some new collectors because people will move from bullion to numismatic coins. I am still only mildly numismatic, but the way I got into it was throught "junk silver". I bought a bunch back in 2001 and 2002, then became interested in the coins themselves, and now I buy all sorts of things. I like old French and Mexican coins for example. I think I'll start to sell the "junk silver", but I'm hanging onto the old numismatic coins. I relly don't care what the price is for most of them, since I didn't pay that much for most of them. I think if you keep it all in perspective, it's a fun hobby. Any time I go out on a limb and buy some expensive numismatic coin I have a bit of buyers remorse. I like to buy at or around silver price, or for up to around $10 for copper coins.

 

Danr-
I'm not "cherry-picking some odd numbers" : I wrote "$100./mo (or whatever)" Since you have a problem with my obvious guestimate, please state categorically and without equivocation exactly what the average collector spends. And then tell us, what did he spend in 2002, 1992, 1982, etc. Let us see your privileged data. Do you have any? Or are you just denying reality?

My point is: the US coin index charts show a price collapse, those high-value coins are held by whom? YES, older collectors. As they die off, their collections WILL get thrown on a collapsing mkt.

This is demographic trend colliding head-on with mkt reality - in coins as with homes (in many RE mkts.) Future buyers will need equivalent or higher salaries to afford these overpriced homes/coins. There's NO EVIDENCE the USA is seeing salaries rise; so (relative) prices must fall farther still. The US markets for most US collectibles are already glutted but nowhere near the bottom. It's high-time to face that reality.

eBay is awash in Beanie Babies that cannot sell... and lots of people spent hundred$ on those "investments" too. Apparently, so did the Ohio State Bureau of Workers' Compensation Pension!
http://blog.cleveland.com/metro/2012/03/the_beanie_babies_and_other_co.html

 

I noticed that you ignore the obvious- there is an cadre of young collectors who were brought into the hobby by the state quarters and they will be graduating college into high paying careers in the next ten years. Further you may have noticed that there is a growing population of "stackers" many of who are slowly shifting into numismatics through the Eagles. Charts are not really relevant to these trends.

 

Doug: It certainly looks like a bear market to me based on that index. However, like a stock market index during a bear market, I am sure it is still possible to find decent buying opportunities for individual stocks/coins or perhaps even certain segments of stocks/coins. I do not invest in coins, but perhaps people that do use this type of strategy. TC

 

Yes, Doug, I actually do disagree with that one point. Based on the 10-yr graph of the PCGS3000, it supports that the market saw a drop in 2008, but was stable by January 2010. Thus, for 3 years the market has been relatively stable. The only way you can make that PCGS3000 chart look like things are dropping NOW is if you truncate it to the past 12 months, and completely distort the y-axis. Now, honestly Doug, can you disagree with that?

 

FWIW, it's up to $165 as of this morning. (I wouldn't ordinarily do a dreary play-by-play, but I think there's a good chance it'll be pulled, so I'm trying to remember to check it periodically.)

I think I'm still not fully understanding you, because you're still kind of jumping back and forth between this particular premium type and "common Norfeds". I understand that the market for Norfeds has undergone a sharp perturbation -- a decision to ban them from exchange on what was perhaps their leading marketplace, coupled with a declaration that holding them may be illegal, will do that. Will their long-term value rise (like other black-market items), or fall (like counterfeit toys that have gotten bad publicity)? I'm sure I don't know.

 

Oh, I guess I forgot how you (with all of your years of wisdom) can predict the future.

The way I read that chart is that things have been pretty stable since January 2010. If you read it some other way I guess we just have to disagree.

Regarding your comment "Chart are charts, they show what they show". That's true, and often times, the charts people choose to present make a point that is completely misleading. Ever read USA Today? Or any media source for that matter? The media and world is inundated with pretty pictures that mislead and contort reality. The only plot you showed that had meaning was the full-picture 10-year "trends" plot that I reposted above. All of the other trends you are "seeing" are microscopic in relation to the big picture. To say the markets have been falling since 2008 is simply false Doug -- they fell sharply for about 18 months in 2008-2009, but have been stable after that precipitous fall. The chart shows what it shows...

 

jeffb-
As with US silver coins, there are various classes of Norfeds. Among premium types, the "Error/Rarities," cult State issues like Tx and PR, Ron Pauls and the plated Gold Hawaiians are the most pricey; among "common Norfeds" (almost all the rest) premiums were typically half as high, sometimes near Spot.

The Gold-plated King sold for $455. in late 2012; if that ultra-rarity cannot reach 50% that level, it's a price-collapse. But you can already see how the avg Norfed auction bid interest and sale prices are lower - 'market decline' such as it is.

 

When I first got into collecting I joined the local coin club, it had about 100 members and the average age was 55 years old. When I moved to where I live now I joined two local coin clubs membership was about 100 in the first one and 105 in the second. Average age in each was about 56 years old. I joined those last two in 1989, 24 years ago. Membership is now 160 and 110 respectively, average age is currently 56 years old. I'm still a member of that first club as well. Membership is still around 100 and almost everyone who was a member back when I joined is dead now. It was nearly 40 years ago that I joined the club. The average age today is 56 years old. The average age has risen one year in 40 years. I'm not really worried about the aging of the collectors. People moan about how you don't see many young people at shows. No you don't, but it has been like that for at least 40 years and almost all the "Old white guys" who were attending shows back when I started are dead and gone now, but the rooms are still full of dealers and the attendance hasn't gone down.

 

Couldn't have said it better myself. I have been hearing people whining about the absence of young collectors since I was 7. Truth is that it does not matter. Most serious collectors start after college, usually 30+. It always has been that way and this is true today. I am FINALLY not the youngest in my coin club like i hadd been for twenty years.

 

I like old type coins. I imagine there will always be a buyer for my 1795 half dollar. I worry about the modern coins with ultra high grades. These are the ones I think will suffer if the economy declines further.

 

This thread makes me want to get rid of everything now.

sigh...where's the good news in this?

lucy

 

trust me- those state quarter collecting kids will grow up into serious collectors