Heritage's Bloodbath at FUN

Common, inexpensive and low-end material has not been selling for several months.
I noticed it and asked some dealers about it at the November Whitman show in Baltimore.
They concurred.
But many dealers weren't dropping their prices.
Didn't believe? Didn't want to take a loss? Didn't notice?

Now according to reports in this thread the situation is reaching the more expensive, higher-end coins.
This may be the wake-up call that will cause all dealers to rethink thier pricing.
The ones that caught the trend early may have escaped with no serious harm.
The ones that weren't paying attention or didn't believe may have to take some serious hits.

My next real-time look at the market will be the March Whitman show in Baltimore.

 

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The fact that you tend to lose coins and that some other asset classes have appreciated more than coins does not translate into coins not being an inflation hedge. I can agree that coins are not an investment depending on how you define investment. But they are an inflation resistant asset class.

 

well i would like to agree but with the word rare coins however some have said you are blessed if you get half your money back for the hobby in general.

 

To add a little perspective, I found a 1975 Red book and wanted to share some more "middle" prices.

1975- High relief $3000, Low $375-400

1975- $500

1975-$150

1975-$70

1975-$2000 ($1100 jump in 1 year)

 

I think that by March reality may have set in with the coin buyer as well. If you escaped the tech bubble fiasco in the early 2000's, it's been relatively smooth sailing for about the past 20 years. A large percentage of the work force has seen nothing but relatively good times. Inflation during the 70's, the depression, etc. are things of lore.

On Sunday night, one of the guys didn't show up for work. There was the e-mail - had to "better leverage our current resources" - yup, the guy was no longer "needed". It was quiet in the room that night.....

 

Look closely at the Heritage Long Beach auction, SVDB's are coming out of the woodwork. I know I'll be glued to the auction during that session. In most cases as a watcher

 

I guess my collection will go down.

Seriously though, if the market for lesser coins goes down it may be a great time to add some mid grade coins to my collection. Everybody seems to like to watch prices go up, but from a "collectors" point of view we should be glad if prices drop. It will be the investors that cry.

 

You are probably correct. But not everyone makes money in stocks or real estate either. A lot depends on what you buy and when. If you buy when prices are high after a period of rapid appreciation in any asset category, disappointment is a likely outcome. I was just making a general statement that coins are resistant to inflation and tend to attract buyers worried about the purchasing power of cash.

 

I question this statement because I think many confuse using rare coins as a hedge vs using bullion. I agree bullion can be a good hedge for inflation and should be part of a diverse portfolio, but rare coins? Some rare coins are winners and some may just stay even. From the previous post I think that it was defined that coins should be bought as an investment and that you are seeking a high rate of return.

 

I'm not comparing anything. You brought up real estate. Yeah, a lot of people missed out on the opportunity to make a fortune in real estate and land. Just like everything else. Can't argue.

But on normal property with normal gains (not talking downtown NY City now) how much capital gains tax are you going to pay on coins? How much property tax do you pay on coins? How much interest will you pay on the loan? How fast can you sell that property if you wanted to?

Look how long the stock market took to recover from the depression. Maybe people don't have 20 years for the market to recover either. If some stocks ever recover. Then get ready for the big capital gains tax bill when you sell anything.
Other companies, you don't know how much manipulation is going on or who's cooking the books, now or will be in the future. Simply holding off their collapse for a future date. We've already seen it. Who hasn't been caught yet?

I merely was defending the idea that rare coins could be held onto for a handsome profit if you wanted to. You basically say that's impossible. Obviously you were wrong because people have.

Nobody's advocating that everyone put everything in one basket.

 

Nicely said.

 

I'm saying that I believe they can provide a reasonably safe, stable return without a lot of the other baggage that comes with the stock market. Perhaps most coins will never have a high rate of return.

But I know several people who invested money in the stock market in the 70s, hoping for huge gains, listened to their brokers and now have less than they started with. Right now. 2009. 30+ years later. People who would have appreciated getting ANY type of consistent return from any investment vehicle other than the stock market. They could have put it all in coins, sold today in a bad economy and made a killing.

Maybe there's a fortune to be made in the market right now. Although, good luck picking which places will still be in existence a year from now.

What makes people feel better? Throwing money at the greed, ignorance, and corruption on Wall Street or a rare coin in the safe? Roll the dice.

 

I'll believe that. Eye appeal can play a huge roll. Just like a good picture in an auction can bring more money than a bad picture for the same coin. People will pay more for an exceptional example.
Which is why it is hard to understand why mass groups of investors don't understand that aspect. I would think true hobbyists would have the advantage.

I don't look at coins as an investment tool right now. Nothing I have purchased to this point do I plan to sell when I retire. Although I would expect values to substantially increase within that time, if not only for the simple fact of inflation.

 

I bought (2) S-VDB's in the Dallas sale, both PCGS, both 64-RD, they were $747.50 apart

 

Property taxes in NYC are LOW,and have to be paid anyway if you live here. But let me drop a hint on you, Jacob Astor was correct when he said with his last dieing breath, "The only thing I regret is that I didn't buy more (property) of New York.

Let me give you another hint. It's never a bad time to buy real estate in NYC.

And one last point, that 4 story walk up in Park Slope have 3 tenants paying about $3500 a month rent each for nearly a decade.


Show me ANY coin that is going to give you a gross profit of 10,500 a MONTH. I'm all ears.

You really need to rethink the position.

Ruben

 

Can be done with cars as well Ruben....

I belong to a small machine shop that has ownership in Shelby Mustangs (
as a group ) as well as a gullwing 300SL. We opted out of the 401-K in 98 to buy these.

Barrett Jackson to us is like a big Heritage sale, we are selling everything and pulling out, hopefully with a profit.

 

Not to mention that a coin can turn in the slab, burn in a fire, be stolen, aside from just plain lose its value.

Remember that thread I started about asking how these dealers finance their inventory. Not a small issue. Banks don't love your coins like you do. They do love your property and stocks.

Ruben