Yes.. I strongly believe the coin market IS dropping.

Seems more like a correction than a drop. Gold and Silver prices rising so high so fast had a trickle effect on the rest of the coin market. Now it seems prices are coming back down to where they should be.

 

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forgive me if I am totally off base on this one, but here's a thought:

If the buying public is preferring metals to coins right now, wouldn't the decreased demand for collector coins drive the market prices down?

This would create a valley in the pricing of collector coins, but more importantly would mean that as metals go back down and the desire for them lessens, that people would then move back into collector coins thereby driving the prices of the coins back up?

It would appear to me that this would say that the coin market IS down and that demand will indeed return when gold and silver come back to earth. When demand returns, the prices will as well.

 

Yes. It does. And it has.

But in response to that, many collectors say "this is no time to sell", so they hold on to some good material. When demand drops off and prices drop, supply drops off a bit... and that stabilizes prices a bit. It's a buffered system.

Much great material is held by independently wealthy people barely affected by recession. They don't need to sell, so they don't. Why sell into a down market if you don't need to ? They wait it out, the inevitable recovery comes along (as it always has), and they can sell when prices rise.

 

then by your theory (which has much merit, BTW) most of the collector coins currently being driven into the market are, relatively speaking, middle to lower-end coins that were owned by people of lesser means more so affected by the recession and that the "super coins" are not entering the market at all.

 

Look I've been going over each of the replies to this thread and as each of you know, I respect you all individually.

I do hope to see some more "facts" and "statistical data" or even "past realized auction prices" to back this theory up that the coin market is indeed in the dumps or headed to it.

Think science experiment.

BNB

 

To a point.

It's clear some folks sell for reason other than necessity.

Some really strong collections have come up in this market. Sometimes people sell late in life to enjoy the auction experience while they yet live and to relieve the burden from their heirs.

Some of these collector specialties are tight-knit circles - people who know each other well e.g. Early American Coppers. The earth-shaking Dan Holmes collection sold last September into this market. I know Dan wanted to experience it and watch some of his long-time friends wind up with some special treasures. Dan himself told me, so I know it's true.

And yes I would say that the quantity and quality of collector coins is a little off. But there are always some nice coins available.

 

When thinking science, it's unwise to assemble facts to back up a theory. Rather, assemble facts - all of them - and take a dispassionate view and see where the facts lead. Maybe they support the theory, maybe not. It's dangerous to start with the intent of proving - or disproving - a theory.

From what I'm seeing, "in the dumps" is perhaps overly harsh. But - to your point - that is based on anectdotal evidence. My data sample is way too small to pass muster as Good Science.

I feel summer 2009 was a low point and things are moving in a happier direction, in parallel (but lagging) other positive indicators.

 

Once is enough !

I love these sort of graphs for a number of reasons. There is a broad range is issues rolled in there, so one gets a broad view, not anecdotal evidence. But even better - PCGS did all the work, not me !

As mentioned before, it's wise to actually work the numbers, as graphs can be visually misleading - they can look almost flat to almost vertical depending solely on scaling. In this case, PCGS scaled such that it comfortably fills the graph vertically.

So let's look at percent change from the market high to low (I chose the red 6-month moving average). And here is the math :

graph #1
high 73000
low 70000
drop 3000 (4.1%)

graph #2
high 121000
low 114300
drop 6700 (5.5%)

graph #3
high 48830
low 48000
drop 830 (1.7%)

graph #4
high 94000
low 88000
drop 6000(6.4%)

graph #5
high 143000
low 135800
drop 7200 (5.0%)

graph #6
high 29450
low 28180
drop 1270(4.3%)

graph #7
high 50500
low 46500
drop 4000 (7.9%)

So the worst one was the last one (20th century coin index), which showed a 7.9% drop. The best was #3, which only dropped 1.7%. Which suggests we should all go out and buy a lot of proof gold coins !

Of course, no one can say if the market has bottomed out yet. The graph only goes to August - ANA time, which was certainly slow. And it was still trending down.

So yes, it's clear the market is off. Some coins more than others.

 

Just ask your local coin dealer.

 

Lol. Are you kidding me with that question?

That's not why I come on an online coin forum.. To "ask my local dealer"

Thanks, but no thanks

 

Now how about showing the graphs where the scale starts at zero. Those mountainous drops all but dissappear. I agree that coins are trending down but those graphs are completely misleading.

 

I hope the falling prices will scare off investors and leave us collectors to collect coins.

 

This is the most perfect and true answer on the thread!!

This is the most perfect and true answer on the thread!!

 

The graphs Doug presents are valuable because they represent a wide range of coins. I can tell you I see "some and some" with respect to coins I am interested in (mostly semi-key Lincoln cents at the moment). My experience is purely anecdotal and we can argue for pages and pages as to who's observation is more "correct". Well, actually, none of them are...

At least we are talking relatively fractional drops with respect to coins. Have a look at what's happening in other collectible markets or hobbies. In my main hobby which is model trains, "pennies on the dollar" is not an overstatement in terms of the current state of the aftermarket.

 

Yes, they are very valuable and I'm glad Doug posted them. One is foolish to ignore them.

I encourage everyone to check out the 3000 Index. Go look at the "wide range of coins" for yourself.

I have a minor concern - that index is not indicative or representative of a "shopping basket" for 99% of us. It has a large number of very valuable coins, well beyond the reach of the vast majority of collectors.

For instance, it contains 4 1793 half cents, ranging from F12 to AU55. It contains 6 chain cents, including F12 through MS64 ! How many of us own such coins ?

The hobby has many Lincoln cent collectors. Check the index - all the Lincolns are key dates. 1909-SVDB, 1914-D, and 1955 DDO. That's it.

The index is heavily skewed toward the high end, and is not representative of the values of the vast majority of collections.

Since most people feel that high-end coins have fared much better than the low end during this recession, the Index of 3000 has probably outperformed most hobbyist collections.

IOW, the news is probably worse than the 3000 graph indicates. Other specialty graphs (e.g. Morgan/Peace) might be closer to the mark for the average guy. Or not. It's possible the M/P $1 market basket is also skewed towards high end coins.

 

Excellent observation. Although I think there's too many variables in your last statement.
"Very valuable coins" as you put it that, (as I just stated in another thread), will see the most possible fluctuation and speculation because there's so much money involved. Along with fewer sales to go by and fewer available buyers. Very few people own an S-VDB, 14-D or a 55 DD. So what does the chart prove? That it's hard to sell an average, typical $20 - $50 collector coin? I don't think so. There's thousands of buyers. You want to sell a $2k penny? Ok, you might be waiting a while and you might get low balled severely if you need to sell it 'right now' at this moment!

Which is why every time Doug brings these up, it seems like we're comparing apples and oranges. I will say the charts provide a more detailed and accurate illustration than we can provide. At least it's something real to look at and argue over. But I think the point it proves is limited....
Not to mention, it would appear the people who were buying all throughout the 70s haven't been complaining at any point since. That entire decade was not a small window of opportunity. Who's to say this decade won't be the same?
Not that I see them as an investment but yes, I would (obviously) rather see an increase in value than a decrease if I had to pick!!

Lets also remember that 1970s dollars had "a wee bit" more buying power than 2009 dollars, before we get carried away and worry that the chart is going to come crashing back down to that level again. We also have over a 50% larger U.S. population now than 1970 which had to have some increase on demand since then. If you also factor in 'real' inflation, the long term charts don't look nearly as bad to me. As in longterm. Not year to year.

Aside from the key date chart, the past 14 years have been relatively flat. To say the whole market is at the top of a huge spike right now seems very exaggerated, if we're going by these charts.

 

Those graphs paint an overly OPTIMISTIC view of coins as an investment.

What they don't take into account are the transaction costs when it comes time to sell a coin -- typically 10 to 30% or more.

If one considers this point, the reality of making money on coins becomes much more harsh than what is painted by graphs of these types.

 

Exactly, Leadfoot. I am hopeful that the upcoming FUN show, post XMAS having sucked up some competing market money, will present opportunities, especially during the Heritage auction. I hope to view great type coins in hand that are down in price and experience less of a "dealer markup" even with buyer's premium. Even so, I'm still a small fry trying to make my money go far.