Name Some Over Valued Coin's

I used to think the same way...now that I'm learning to grade it put a better light on coin collecting...I would suggest that you get a few of the grading guides...ANA Grading guide...PhotoGrade.

They are a great help.

Speedy

 

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Well Speedy, it sure couldn't hurt.

 

Let me say a couple of things to you NEW collectors. Don't ever wish for the bottom to fall out of things as they might just fall much farther than you would have ever dreamed they would or could. You aren't old enough to remember the "bad" times and haven't lost enough money on anything yet to really feel the pain. Next I would say keep on buying as this market is not going to die for quite some time. As long as the mint is feeding the sharks (us) with new ideas and new coins everything will remain strong as new collectors are still coming out of the woodwork at this time! Supply and Demand fuel this hobby so when things are really good you must WATCH what you wish for! Some day you may want to sell a few items to put money back into other items you want worse! A strong market is always better than no market!

 

Scary. I bougth two or three from Littleton at the "bargain" price of $7 a few years ago. At the time it was not a bargain, but t is now. They look great but are not esepcially strong strikes. Still, glad I have them now!

 

Well, I wouldn't exactly call myself a "new" collector but it has been only in the last few years that I have had more time and money to devote to the hobby I'll admit. I'm a selfish collector because I like to buy coins when they are selling for less rather than more. I also like it when a collector hasn't bothered to try and interest his/her children in the hobby and the kids end up spending the collection on candy or selling it for nothing after they die. I love to pull old coins out of pocket change and I think that doing so for non-collectors brings them into the hobby. Nobody wants to lose their coins but you sure don't mind finding someone elses once they've been put back into circulation.
Also, you nor anyone else can predict whether or not the market is going to continue to be strong for any length of time. As a person who isn't interested in how much my collection is currently worth or will be worth in the future, I like to buy as low as possible. I try to collect 3 sets of everything because I have three sons to pass it on to and the lower the prices are the more I can buy. So drop coin values drop I say.

 

I think your "jumping the gun" a little too fast there buddy

I didn't say I wished the bottem would fall out...I think it will but I don't wish it...my collection has gone up a lot since I have begun and I would hate to see it fall but I DO see a bad day coming....don't you?
I might not be old enough to remember some of the hard times but I have read up on that and have talked to some people who remember it...

As for selling some to fund another coin...that is what I'm doing--I'm selling most of my rolls (SQ and Nickels etc etc) beacuse when you just stop and think about it....the mint makes billions...how are they ever going to be worth something...I know people who don't know a thing about coins yet they keep every SQ they find...when the SQ's end people will start to sell...for awhile the price will be high...then when it starts to show that there are a LOT more it will drop faster than you or I will be able to see--now again this is just my guess and I know I'm younger than some of ya'll but.....

Speedy

 

There's a few things about this thread that gives me pause. Overvalue is a difficult term for a couple of reasons. Say all prices are determined on supply and demand, the degree of that impact has to be less than 100%, but say that is the primary driver. In terms of collecting coins, the supply is fixed - there are only so many examples of each variety to cover its demand. The overall field of collectors should, hopefully, be ever expanding as a percentage of total population. That means prices must always climb above the rate of inflation... but they do not. Tastes change, popularity of certain areas goes up and down giving rise and fall to market value - because there will always be those collectors who only want to collect what is valuable. To some extent popularity effects us all, as (from time to time) our taste may change in what we want to collect.

So only two things can really determine overvalue of a coin - utility and information. Information as a function of what coins will sell for a higher or lower value in the future (which none of us can know), and utility in relation to 'is this coin worth more to me, personally, than the x amount of dollars I parted with to get it.'

I have bought many coins that are overvalued in one context, and undervalued in another.

 

Rick--you are dead on...I like it when y'all give a reason like that...it give it light another way...

Speedy

 

Rick, I really don't know you and haven't seen any posts to this thread by you until now but I have to say that I have no idea what you are talking about. For example, you stated, "Say all prices are determined on supply and demand, the degree of that impact has to be less than 100%, but say that is the primary driver". That sentence makes absolutely no sense! First of all supply and demand are the main drivers of price in just about any free market except for the countless intangibles that figure into any free market situation. The degree of what impact??? That is the primary driver of what???
Your basic discomfort with the term overvalued is puzzeling. Many free markets thrive on overvalued investments from the DJIA to the coin market. Speculation and hype drive values higher and eventually the markets correct themselves and you get winners and losers. Coin investing isn't any different than any other market. Investors come, they go, and the dealers always win because they recognize the market for what it is...Just another way to turn one dollar into two.
No disrespect intended.

 

Moen, to some degree you are right - you are right from the perspective of a coin investor. But coins usually make for a hard investment, with rather expensive lessons to be learned. But are the market mechanisms the only things play into the value of a collection? I don't think so.

To state what I was getting at with the economics of the situation: The impact I was referring to was the impact of supply and demand upon the market value of any particular coin. And it is less than 100% - that's just fact (or maybe my opinion, I'm not trying to sell anything here). Certain factors in micro environments cause artificial swing in both supply and demand. It is primary, but not exclusive, in price determination.

But overvalue brings complication to the table in relation to collectors. A collector will probably be more influenced by personal utility than someone who is looking at rare coins as an investment. I don't collect stocks, I buy them and I sell them often - but I never owned a stock that I held because it meant something to me. I don't invest in coins - I have never purchased a coin with the intent of selling it when its value supercedes my 'hold'. So why would I attach the same definition of value to two very different subjects?

No disrespect was taken. We all have our own thoughts, I'm just voicing mine. I do disagree with you in terms of dealers always winning. If anything, they run the greatest risk among any in the game - in terms of market value, the one who holds the most chips also assumes the most risks. I quite willingly pay a premium to my local dealer - for the same reason I pay a premium to the guy who sells me cigars... I want him to stay in business, and to do that, he must make a reasonable profit.

 

Rick, I don't pretend to be a market expert and I can say with certainty that I am no coin expert but I do know that the overvaluing of just about any commodity occurs to some degree on a regular basis. It is the cream that is skimmed off of the milk by savvy investors and it can drive a market as easily as supply and demand. The real difference between the two is that supply and demand are tangible and quantifiable if you will, whereas overvalued commodities owe in large part their excess to intangibles primarily speculation and to a greater degree hype.
I think that you are right that people will pay more for something that they really want. I know that I have. I’m sure that it happens regularly to those that don’t understand or are new to the business. But that behavior is just one intangible and on the whole probably doesn’t drive prices anywhere near as much as those in the business that overstate, hype-up, and take advantage of naïve investors. They are in the business to make money after all. As the truth-inflation builds you get a market that is overvalued and due for a correction. That is what I wait for before I go out looking for the coins that I need. In the meantime, I search through the bank-supplied horde for treasures that others have missed. But that’s just me.