"The good old days...."

thought about putting this as a poll but i prefer to hear opinions.

we have had a run up of many prices as well as large increases in general of precious metal prices (coinciding w/ high oil prices and lackluster stock market performance....i remember vividly 1980 markets).

will we ever look back on this as "the good old days of coin collecting", or will we view it as a bull market that ran its course?

i know it is only opinions, but i would love to hear how both experienced numismatists and new collectors view this market and the prices of the various series of coins available.
all responses are valid and welcome, especially those who wish to expound on thier own views.

thank you all for responding.......steve

 

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steve:
Well, I already look back at 1998 as the good old days, before the current run up in prices.

So, I hope that these will be the good old days in another 10 years.

Then I can sell some stuff and do okay.

 

Todays coin market is being fueled on the lower end by those having been introduced by the State Quarter program. I suspect that that lever of interest will wane with the end of the series. The high end of the market is dominated by the baby boom generation who now have more disposable income to spend on their interests, and investors who see coins as an alternative to stocks. In both cases the passage of time will change the dynamics and the market will subside, perhaps to a level greater than the late 90's, but lower than what we see now.

About four times in my collecting days I stopped buying because of artificially high prices. Each time the market cooled off and I see no reason for this runup to be an exception. The most notable was the late 80's to early 90's when the investors entered the market. Common date Morgan and Peace Dollars were selling at around $700 in MS65. Once the investors left, prices went through the floor.

 

Sort of agree with vavet. The coin market will subside a little soon. I'm really afraid this time the Mint will distroy the hobby as was done with the US Postage stamp hobby. Just to many different coins being minted in massive quantities. First attempt was the Bicentennial coins. Now we have massive new collectors from the State quarters and then the baby sized dollars that no one wants already. Just a few more of these and the new collectors will fade out and the entire coin market will start to subside.
At the post office a few days ago I saw an add that the Postal service will allow you to have a stamp made with your own photo on it. And I thought the Elvis stamp was overkill. So when will the Mint have coins with your own picture on them?
I've been a coin collector for well over 60 years and have seen the hobby come up and go down several times. It happened before and will happen again.

 

I believe the soon to be seriously souring economy will have more of an impact on coin prices than anything else. Some signs are already apparent, I cannot see much so far with the Millennium sale, I think those prices will be high to firm, but have noticed with lesser sales that lots are starting to make a downward trend against the estimates, the latest CNG sale is an example.

This really has not hit the fan yet, but as more people face mortgage and finance issues, more collectibles will be let to raise funds. A good time if you have the funds to buy stuff, and a bad time if you want to sell. Much like real estate is now.

 

I think the prices will cool down a lot on most coin sets, but not for a few years yet. Those series that have traditionally sold well will remain selling well, where as moderns will decline. It happens in cycles, as many of us have witnessed before. When bullion prices decline back to real world market levels, those that bought to invest will sell everything off, and we'll finally see reasonable pricing for gold and silver again. I can't wait till the bubble bursts, as I hate buying high. Just like with the housing market, those who wait get the spoils.
Guy~

 

We've seen this graph before, but it bears posting again. Here is an index based on a broad market basket of 3000 various coins.

Different folks will see different things in there. Personally, I see a relatively slow, stable increase over the last several years. Doesn't look like a radical "bubble" to me.





If you like, look at smaller market segments and different time spans here :

http://pcgs.com/prices/frame.chtml?type=coinindex&filename=index

 

That increase is in realation to inflation, not so much an increase in a coin's value, per se. If you made a graph on th price of milk, it would look similar.
Guy~

 

900Fine:
Can you get a graph in date order?

 

One thing about graphs, the results are determined by the data used, which I don't happen to see here. If the 3000 index includes Three Cent Nickel coins for example, the results would be skewed since there is little demand for them. The makeup of the 3000 index should be representative of the market activity for all series as well as all the coins within each series. In other words, representative of the market as a whole.

For example, my 1916 Standing Liberty Quarter has increased in value by 400% in the last ten years, whereas many other coins were stagnant for most of that same period. According to the graphs, the market has increased only 40% over that same period. It all depends on what coins make up the 3000 index as to what the results will be.

BTW, as a former engineer, I can tell you with certainty that those types of graphs are designed with a certain result in mind, if you get my drift.

 

This is certainly true.

And your point about the 3c is well made. If one uses ONLY those, one gets a very skewed result, which is not indicative of the real world

Perhaps that's why they used 3,000 different issues.

Well, perhaps SOME graphs are. But as a currently practicing engineer, I can assure you we do NOT start with a certain result in mind. We analyze piles of data in an effort to get to a truthful picture of what's actually happening. Anything else is self-deception.

Any attempt to deceive others will be found out soon enough. Strive for truth.

I can't say what PCGS did or didn't do.

I do know there are mega-factors at play driving all sorts of economics, and I don't see major changes in those factors anytime soon. Oil, precious metals, expanding economies in China and India... all mega-factors.

So yes... there will be ups and downs in all things, but I think overall coins will continue to appreciate as a group, with high quality coins doing the best. As always.

I personally don't see a 1990 style plummet. What factors are at play to make that happen ?

 

I don't think anyone said there would be a plummet. What I said is that the bubble will burst on inflated billion prices, which will bring the modern bullion prices to within reason. Bullion isn't trading at par with other commodities, except maybe oil, so it will level off with time. If it doesn't, the economies of the entire world will suffer something far worse than a mere depression....currencies will be so undervalued as to be worthless, much like during a civil war.
Guy~

 

I don't see a 1990 style plummet either, but I do expect a noticable downward trend sometime in the future. Just when that will happen is anybody's guess and I may not be around to see it. There is an interesting section about how the coin market fluctuates in relation the certain market indicators in the VAM book if anyone is interested.

If someone could direct me to a listing of the 3000 coins in the PCGS index I could shed some light as to how accurately it represents the entire market.

 

Actually all commodities are up across the board. Look at the prices for Milk, Eggs, Corn, Copper. It is not just Gold and Oil with silver being drug up the slope. Many commodities are at all time highs. Also some have different reasons for being high. Corn is high due to E85 a worthless fuel that takes 1 gallon of gas to make 1.2 gallons of E85. Most metals other then precious metals are up due to higher demand in China and Indian. Oil is high due to high demand as well as speculation by investors.

 

Here ya go !

http://pcgs.com/prices/frame.chtml?type=coinindex&filename=PCGS3000Indexlist

I don't see anything which indicates any given coin is given more weight (i.e. a multiplier).

To me, that means more expensive coins have more impact than lesser valued coins.

 

I gave a quick glance across the list... they sure weren't afraid to include some VERY spendy coins in there. woo hoo !!!!

Lots of regular stuff, but plenty Big Bombs as well.

 

Thanks for the link 900Fine. I did a quick scan and one thing caught my eye right away so I dug a little further.

If that 3000 coin index isn't weighted than it's bogus. Commoratives make up 21.8% of the 3000 coins and Commemoratives do not constitute that big a portion of the market. Morgan and Peace Dollars make up another 16.5%. Together they don't represent 38% of the market either.

 

Thanks for your opinion GDJMSP. I see that the only circulated Indian Cent on the list is the 1877. Are we to believe that MS Indians trade more commonly that their circulated counterparts given that the number of circulated examples available is exponentially greater than the MS versions? Looked at from another angle, do you really believe that more collectors are assembling MS sets than circulated sets?

I don't belong to CU and aside from presenting the "rest of the story", I really have no need for PCGS. That said, I'm also not interested in any of the other nine indexes, especially after seeing what went into this one.

 

Those indexes were compiled by PCGS, so of course they're going to only list the higher end coins. The majority of the money flowing from coin sells is from this area of high-end uncirculated coinage, even though it makes up a very, very small percentage of overall coins traded. This is what makes these index graphs unreliable and disproportionate in regards to coin trading as a whole.
Guy~