Buying coins with the market in a downward Spiral

Discussion in 'Coin Chat' started by jfscmedic, Dec 7, 2017.

  1. jfscmedic

    jfscmedic Well-Known Member

    Going to look at a coin collection this afternoon from a couple who are wanting to sell.
    I'm not a major coin dealer but a collector and seller at a local flea market. My biggest problem is I have no clue what this collection contains..It belonged to a family member who passed away and the people know nothing about coins. First off..I always pay fair prices..sometimes more than my local coin shop if it's something I want for my own collection. But with silver prices falling everyday it limits what I can afford to pay. I can't afford to buy it and hold on to it for Months waiting to see what happens. Just a few weeks ago we were selling Silver at 12X even 13X Face. Now my local coin shop is paying 10.5 X face which means I'd have to buy it at 9.5X or 10X face and sell it fast before the price drops even farther. Morgans...slabbed coins...key dates I'm more comfortable buying. Just have to see what I find. They may turn out to have a bunch of Ike Dollars...Bicentennial Halves and Quarters...Non silver Kennedy Halves...and Worn out wheat cents as I have found before. Or maybe they have a 1893-S Morgan. Who Knows ?? Maybe I'll at least find something nice for my collection and simply send them to the coin shop to sell the rest if It's more than I can afford.
     
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  3. Treashunt

    Treashunt The Other Frank

    GOOD LUCK.
     
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  4. GDJMSP

    GDJMSP Numismatist Moderator

    It sounds like you are mostly worried about the price of silver since you say this -

    But if I were you, I'd be more worried about THAT than I ever would would the price of silver ! I mean sure, the spot price of silver has an effect on the price of cull coins, but that's all it has an effect on. The actual coin market though, that has an effect on all coins, and the market is currently at levels not seen since 2003. And it is still going down just like it has been for almost 10 years now !
     
  5. jfscmedic

    jfscmedic Well-Known Member

    I still buy at cautious prices that I'm comfortable paying..anything you buy has a risk involved but I'd rather buy a nice coin that I will enjoy owning than a handful of bulk/cull coins.
     
  6. V. Kurt Bellman

    V. Kurt Bellman 2016 Secretary, Red Rose CC

    And this, ...THIS... is why I keep saying the hobby is shrinking, Doug. You can't explain a 10-year downward trend any other way. Supply is staying steadier than demand is, so prices FALL. Elementary Econ 101.

    In my area, supply is outright burgeoning, and demand is meh.
     
    Last edited: Dec 7, 2017
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  7. GDJMSP

    GDJMSP Numismatist Moderator

    I don't fault you for that in the least ! My comments were merely addressing the comments you made.
     
  8. GDJMSP

    GDJMSP Numismatist Moderator

    Sure you can Kurt, for that is exactly what happens when a run up was unjustified. As you say, elementary econ 101.
     
  9. V. Kurt Bellman

    V. Kurt Bellman 2016 Secretary, Red Rose CC

    What you describe makes a sharp downward correction. A 10-year slide is a hobby imploding slowly on itself.

    Your "new member kiddies" watching YouTube videos and then rushing to the bank to search $25 cent boxes for non-error PMD is NOT an adequate replacement for experienced collectors!
     
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  10. Blissskr

    Blissskr Well-Known Member

    Many times in instances similar to what you've described I've found the collection to be mostly junk and the peoples expected valuation way beyond reality. Now I always, always ask for some grouping photos first to avoid wasting my time and theirs (+shattering dreams)
     
  11. jfscmedic

    jfscmedic Well-Known Member

    Sad But True
     
  12. GDJMSP

    GDJMSP Numismatist Moderator

    And when it takes people a while to figure out that the TPGs were doing the very same thing in 2001 to 2008 that they did back in '89 when they caused the market to explode upwards - and then collapse.

    In other words - people are finally wising up - not leaving the hobby.
     
  13. jfscmedic

    jfscmedic Well-Known Member

    True also...sadly pictures were not possible. Guess I'll find out soon
     
  14. mark_h

    mark_h Somewhere over the rainbow

    Well I can't say one way or another - but I welcome a downward turn since I am not going anywhere. Maybe I can get some nicer coins. But I still lose a lot of auctions. And then again I am not worried about selling - just a bonus for those that inherit it. :)
     
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  15. V. Kurt Bellman

    V. Kurt Bellman 2016 Secretary, Red Rose CC

    Yeahhhh, you keep telling yourself that. Stiff upper lip and all.

    They're not just leaving the hobby; they're leaving the ranks of the breathing.
     
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  16. cpm9ball

    cpm9ball Cannot Re-Member

    Please, let us know what you find. More often than not, I've found that the heirs think the collection is more valuable than it really is.

    Chris
     
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  17. SuperDave

    SuperDave Free the Cartwheels!

    One of your options - heck, probably your most-likely option - is to be bluntly honest with your client regarding the current state of the numismatic/metals market. Depending on what you see, the smartest option might be for them to hold.
     
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  18. Conder101

    Conder101 Numismatist

    Maybe not, but that is where a lot of experienced collectors will come from.
     
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  19. Gregg

    Gregg Active Member

    I think that it is very possible that coin collecting is falling out of favor.
    This has happened with other types of collectables - it certainly can happen to coins.
    I cannot say that you're wrong.

    That aside, I'd like to offer a different theory for your consideration.

    I think the downward correction may be better explained by the rise of the internet - collectors are no longer held hostage by local coin shops. I can visit a local coin shop and they may not have a key date available (and they don't have to negotiate) - but I can find hundreds of that key date on eBay 24/7.

    The past 10 years is the first time in history these coins have been subject to actual market conditions - that is, where the entire population of a given key coin is put on the market in front of thousands of collectors. There are no geographical barriers anymore.

    My local coin shop wouldn't sell me cull Peace Dollars for anything less than $23.00. I logged onto eBay and bought 6 uncirculated Peace Dollars for $22.00 each - did the price drop there because culls are worth $22.00 and the number of collectors is shrinking or because cull Peace Dollars were never worth that much and the coin shop had artificially high prices that the internet has unmasked?

    Look what the internet has done to retail shops of every description. Amazon is killing them - it isn't because people are buying less stuff; but rather, they're just buying it smarter and the costs have gone down. (I can buy some stuff on Amazon for 1/3 what it costs locally - 1/3 less even with the cost of shipping - I'm buying more than ever and spending less doing it.)

    The downward correction may be showing us the actual value of these coins on the open market once the mask of 'rarity' as imposed by the local dealer monopoly has been removed.
     
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  20. V. Kurt Bellman

    V. Kurt Bellman 2016 Secretary, Red Rose CC

    Hmm. I never use either a local coin shop OR the Internet. This is a region where flea markets, farmer's markets, local coin shows, coin clubs and live coin auctions are all we need to maintain a vibrant market. Depending on the precise weekend, one farmer's market may have as many as 5 coin sellers. We get to see the coins in the hand and don't need to rely on crappy photos. NOBODY here is under any delusions about quasi-monopoly power.

    I haven't bought a coin from a local coin shop since... I can't remember EVER doing it.

    The issue I have is NOT finding great places to look at great coins in the hand, it's deciding how to cull down those opportunities to a manageable number. I blew off a coin club meeting tonight that's less than 6 miles away.
     
    Last edited: Dec 7, 2017
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  21. V. Kurt Bellman

    V. Kurt Bellman 2016 Secretary, Red Rose CC

    Maybe they will and maybe they won't. Every one dying IS a loss. The newbs MIGHT BE a gain, and so far, they're not.
     
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