Leu Results

I received this by email following the Leu auction of Feb27-28. It's pretty apparent that prices realized are increasing over time, giving a nice return on investment to the auction house. Somebody already posted this graph on Facebook ancient and medieval coins. Any comments on the trend?

 

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I’m going to feel a lot less guilty about keeping their nice hardback catalogs now.

 

Someone(s) got got.

Also - who wants to open a new auction house with me?

 

Prices are getting crazy. I'm taking a break of buying coins. I'll buy a new guitar with the money saved. Tomorrow. And I'm not joking.

 

I've legit taken a break, even eBay prices have gotten out of hand. Usually, I find a bargain or snack to grab once a week, it's been a month now & not even anything coin-related on the watch list either.

 

I expect you to share a pic of the new baby.

 

My impression is that the general feeling around this board, is that the increased prices are due to:

• Covid 19; quaranteene, not much else to spend money on, self stimulation at home.
• Many people getting a windfall in the stock market (?)
• A tendency towards storing value in hard assets during uncertain times; look at gold, bitcoin, collectibles the last year.

I’ve been of the opinion that the market will adjust the coming years, but I’m getting increasingly uncertain the longer this hot market lasts. What do people here think? Do you expect to see 2018 prices again, or do you reckon that there will be support for the «bull market» in the years to come? Will people forget coin collecting when society opens up?

 

This graph tells me their estimates were worse than usual

 

Now that President Biden has passed the 1.9 trillion $ relief package inflation will kick in again, without regards to what the economists are telling us . They're already predicting higher food & gasoline prices coming this summer. The ancient coin market will fluctuate but the trend will certainly be higher prices. With new collectors entering the ancient coin market & the boom in slabbed ancients being a reality prices have to go up .

 

While I doubt this is the proper forum to debate macroeconomic cause-and-effect relationships, I would point out that it's much more likely that the 2018 tax cuts did far more to increase the prices of high-end collectibles (art, coins, rare cars, etc.) than the current COVID bill could possibly do. Since approximately 65% of the 2018 tax cuts went to the top 20% of income earners, and this group is more in a position to speculate in high end collectibles, a theoretical case can be made that the enormous rise in high-end ancient coin prices in the last two years is at least correlated to this tax cut.

Note that I'm not initiating a political discussion here, just pointing out the obvious correlation (which does not imply cause).

 

Agreed. And my salary won’t keep up with the inflation, so I guess I’ll just stay with the old strategy:
Buy the best coin that you can, in the highest grade possible.

 

Great to see you chip in with this, @IdesOfMarch01
I don’t read your post as political, just enlightening.

 

Too much cheap money floating around. All major countries passing around free money to those who don't need it like drunken sailors.

Yes, boredom at home, no vacations, etc having an effect too. However, if you are in Germany you need to pay the bank to take your money. I would be tempted to buy hard assets instead as well too. I think this explains the coin, stock, art, most markets really.

 

I can only speak for myself. When things get back to normal, I expect my coin collecting budget to be slashed by two thirds at least. I enjoy doing stuff like going out to eat, travelling, holidays abroad, going to gigs and the theater. I haven't done any of these for a year now. I simply won't have the same amount to spend on coins in the future like I have now. I suspect that the same will apply to many others, which may or may not drop the overall coin prices as people will become more conservative with their auction biding.

Having said that, I don't think that high quality coins will drop by much. Competition will remain strong for high value items, as the number of collectors have increased and in the future people will focus on quality rather than quantity. For the time being, I believe it is more likely for a bargain high quality item to be found among a retailer's stock rather than in an auction. Good coins attract attention and the hammer price is so high that you might as well save yourself from the stress and just buy it straight from a coin shop.

 

Biggest reason for the price surge is this: the demand for high quality World/ Ancients/ Medieval coins far outstrips the supply. Many of you have coins/ less then ten ex. known/ now think of a US coin/ where less then 10 are known/ the auction price realized would be 6 figures+
I think by 2030, we will look back to 2021 prices/ the same way we compare prices from 2010/ 2000/ 1990/1980/.....
Since 1900 prices have increased far in excess of inflation. Just look at the Farouk Sale in 1954.
John

 

A thought experiment I sometimes do with pre 1971 prices, is to count 1 USD as 1/35 ounce of gold (which it was). Old prices don’t look as cheap then.

 

Very true/ before 1945, coin collecting was truly the hobby of the very rich.....King Farouk/ Enrico Caruso/ Garrett/ Carnegie/ Eliasberg/ Jed Clempett/ Adolphe Menjou/ Getty/ Rockefeller/ Victor Emmanuele III of Italy.....

 

The graph is quite misleading:
On 25 June 2017, Leu Numismatik AG held its first ever auction with Web Auction 1. 1,500 lot numbers were offered with a starting price of 249,950 CHF, providing a total hammer price of 474,317 CHF.

Last weekend, on 27 and 28 February 2021, a total of 3,450 lot numbers with a starting price of 282,175 CHF came up for auction in Web Auction 15 resulting in a total of over 1.5 million CHF.

The amount of Lot numbers increased with 130%, from 1500 lots to 3450 lots. The starting price however was only ~13% higher. Their starting price were just on the high side in the past. So sure the prices of ancient coins increased lately, but the increase is not so dramatic as the graph shows when looking at ratio between the increase of the lots and the hammer price. More lots = more money.

 

I see what you did there