Will There Ever Be A Bubble?

Watching through the trade papers at all of the incredibly high hammer prices on rarities and semi rarities, I'm wondering if there will ever be a time when this craziness ends with a bubble that eventually bursts. Like art, I realize people can use these items as investment vehicles for tax purposes and of course, it's only the rich that can pay these prices, but will it suddenly come crashing down at some point? I have seen blips in the past where some rarities have gone for less than the last highest price.

 

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There was a bubble in early 2008 that got burst when the subprime lending crisis struck. I can admit that I bought stuff in 2010-11 that was selling for a fraction of what it auctioned for in 2007-8.

 

Does a hobbyist consider the impact of a bubble, other than a buying opportunity?

Is it only a worrisome consideration for the investor collector?

What is the impact on a non-collecting retail seller? Should this type of entity hodl?

 

I would suppose there will be. I have no practical reason but for some reason I just don't think it will be a devastating drop. I think it creep back up ...then stay there for a long long time. Just a gut feeling.

But whatta you do? Just buy wisely. Try not to make any big mistakes that will exaggerate later. Buy pieces that you know you will never really want to sell.....or at least not until your homeless. That way it'll probably really never matter that much.

Just my thoughts.

 

It’s not really an answer but on some things yes other no. For the most part premium prices are on premium pieces and has been happening for many years now.

Realistically the bubbles happen when metal prices soar. Metals have always come back down from their highs

 

There are always ups and downs, I've stopped buying rolls and lots of "junk" silver to sort through for my quarter collections, I've been more interested in graded slabs and foreign silver lately as the prices have been better, especially vis-a-vis the pound since the whole Brexit thing started. As a collector I'm not worried much. Not only have coins been up, so has the stock market, real estate and even some commodities, we are bound for a correction, and it will come sooner than later. Now is a time to be a very choosy buyer and hold on for the ride.

 

Bubbles also occur when someone, or some group, thinks that they can beat the market by some "innovation" of leveraging debt far beyond the value of the base asset. These "get rich quick" schemes, often a variation of the "pyramid" or "Ponzi" scheme, have a history going back to the 17th century and will likely continue to cause speculative euphoria and subsequent crashes as long as our form of society exists. These crashes can permeate out into the larger economy and cause serious damage (1929, 1987 and arguably 2008 remain the perennial recent examples). A small book from the 1990s (below) provides an interesting look at these episodes and says to expect them to recur as people seem forever gullible to the correlation of intelligence to wealth and to their poor assessment of their own market acumen.

 

You are unlikely to make money. Buy to enjoy or lose money.

 

Collectibles are an even worse investment than many others - with real estate a house has a purpose, with stocks you own a part of an active enterprise etc. With collectibles they only really have the emotional value which can go up or down with the winds.

 

A bubble is like a fart in a rain barrow, it only smells when the bubble pops. My opinion only!

 

LOL. Rain barrel/wheel barrow. CT spell checker.

 

Thanks for the correction tommyc03.

 

What's the old saying... "Can't see the forest for the trees"?

 

I doubt we'll see a 1989 style bubble in collectible coins again. That one was largely excitement over a market innovation and an unrealistic expectations about the supply of so-called "investment grade" coins.

I can see the occasional bubble over individual issues, such as happened with the 1st five ATB "hockey pucks." In fact, we may soon be in one with the 2021 Peace and Morgan Dollar Coins.

 

This one's old for double. PCGS guide it already jumped a grand in the last 6 months. Buyer could have gotten five 64's for that price.
https://www.greatcollections.com/Coin/1054076/1928-S-Peace-Silver-Dollar-PCGS-MS-64-CAC