Featured Do 21st Century Coin Collecting Methods Drive Prices Down and Hurt our Hobby?

As for me, I prefer the personal touch, so I suspect it will be a long time before I buy coins on the internet. I have what I think is a healthy suspicion of dealing online. Yes, I buy stuff online from reputable companies, but other than that, I stay away. Going to coin shows and my LCS will do it for me.

 

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I see one particular value -- people walking in to sell coins they've inherited or lost interest in (or, let's be honest, stolen). If there isn't a local shop, people will turn them in at the bank, spend them, or take them to a pawn/"We Buy Gold" shop.

There's plenty of room for a brick-and-mortar dealer to "buy right", paying well over what the pawn shops offer, but still buying low enough to sell at a healthy profit.

 

I only think this is true if the dealer uses his storefront as a base of operation for larger internet sales. But my observation and the reason I think the number of stores has declined so quickly. I just checked and there are 103,083 Morgans for sale on eBay and 1,031,485 US coins. The local dealer cannot compete based on just inventory size and needs to join the online sales bonanza not try to just compete locally.

 

From my perspective this works well if your collecting interests are very specific and if accumulation over a long period is your objective. But the introduction of PCGS and NGC make internet buying relatively safe if you stick to slabbed coins. In my case I am too old to work on a 20 year accumulation, so when I decide to study something I need the internet and the abundant inventory to make reasonable headway.

 

First, I'm not arguing that a coin shop must only buy and sell locally. As I understand it, dealers were trading with each other electronically long before the Internet came into being. Doug has said most transactions are dealer-to-dealer, and I have no reason to doubt him.

Second, I'm pretty sure eBay (or, more to the point, Amazon) has a thousand times more pairs of shoes than any local dealer -- but local shoe stores still exist. Some people just want to go out and see something in-hand before buying it.

 

Good points

 

I've been collecting a long time and one area I concentrate on is my albums. Some are complete, but some are an ongoing quest. I just ordered the Uncirculated Set from the mint. That will add to my Lincoln Cents, Jefferson Nickel, Roosevelt Dime, Kennedy Half, and Parks albums. To get the proofs, I'll wait for people to put both the clad and silver primary coins, in the lens, on eBay. I'll buy from Apmex, MCM, etc. for the 5 oz. Park series and any other new coins I'm collecting. I'm on good terms with the owners of the 5 coin shops in town and will buy if they have a coin I need or if one catches my eye. Coin shows can be a good source if you go to the same shows and get to know which dealers charge a reasonsble price. With the huge influx of counterfeit coins, I will only buy graded coins on eBay and even those are being counterfeited, so I tend to buy from people I have dealt with in the past.
Having said all that I think the thing that has the greatest effect on the coin collecting hobby is the graying of coin collectors. The number of collectors is declining, we old folks are not be replaced by new collectors. The coin club I belong to has and continues to try and bring young people into the hobby. We make sure we always have low priced coins at our club auctions, we gear events at our twice a year coin shops especially to young collectors, but we have the same problems other clubs have. There are just to many other things out there to interest young people. The coin TV Shows don't help, there seems to be a trend toward selling higher and higher priced coins and coin sets which young collectors can't afford. The chance to fill an album from circulation, unless you start from 1965 on, is just about impossible. I have a substantial collection that my grandson showed a great interest in, then puberty kicked in. At the last club meeting 60 members attended and 50 of them had gray hair. So I feel the number one thing that effects coin prices is the declining number of people available who will buy them.

 

I would agree and also assume that supply and demand works for coins like it works for everything else. There is a good bit of complaining on VAMworld about depressed prices, and rightly so if you invested heavily about a decade ago. But all things go in cycles and maybe we are just in a lull. heck I am old enough to remember 18% mortgages and kids now are complaining about less than 5%.

 

What's your point?

 

I'll never understand why people keep saying collectors are declining just because of their coin clubs.

Collecting isn't declining it's changing/changed. It will always look like it's dying if people just look at how people used to collect 30 years ago. Sometimes I think people forget that a 20s or early 30 year old will be treated very different by many dealers at shows than the guy in his 60s, the same goes for coin clubs.

People didn't stop communicating when writing letters died out, people didn't stop traveling when trains became less popular, nor did they stop getting milk when milkmen went away. Things change over time. Coin clubs are going to struggle going forward as internet forums are the new coin club and a lot of shows will as well as the internet is the new coin show. None of this means that the whole hobby is dying because its being done differently now.

 

I guess if I stick to slabbed coins I'd feel better about it, as long as I can return it if it didn't meet my expectations. And I'm working on Morgan's and Peace dollars. But I'm still wanting to support my LCS so I don't have to rely on mail order. And with the decline in "pure" LCS storefronts, I may have to check out the gold/pawn shops.

 

I understand that. In my experience, groups I've belonged to would gain and lose membership over time, but the group as a whole stayed around. So I certainly would expect the same thing for coin collectors.

Which makes me wonder: did the ancients collect "moderns?"

 

So does that mean we are in the club so long as this thread doesn't die? I like it, and no dues.

 

I still plan to gather some data on auction collector-versus-dealer sales at Long Beach. However, I just stumbled on a report of high-end coins sold at the recent Legend auction in New Orleans. See link. They stated whether the coin went to a collector or dealer. I imagine Legend knows their clientele pretty well. Of the 27 coins they list, 23 went to collectors and 4 to dealers.

Link: https://www.legendnumismatics.com/market-reports/the-new-orleans-pcgs-invitational/

Cal

 

I'm personally glad that it appears the majority of collectors today expect that virtually all coins, regardless of intrinsic value or scarcity, they should be able to acquire PM products at "junk" pricing. It allows individuals who recognize value to acquire same, reducing availability, at fair values, relative to the past. The sad thing is that better material is being withheld from the markets because of the prevailing attitude, and it's far more difficult to find valued products, but when located and certified, etc., appreciably greater premiums are commanded.

Todays "Grey Sheet" is generally a wish list for dealers, who I hear mumbling "where do they get these prices?" Generally, dealers who I've familiarity with, would love to buy some of the Gold coins listed at virtually melt value. They definitely will grab their "Sheets" when an individual brings some seldom seen material.

I'm seeing a believed diminished buyer-seller exchange, and the dealer who was too send a lot of Classic Gold in for me yesterday decided after their monthly show had only 4 dealers arrive last month, he wasn't going to waste any more time. He was about the last in the group who was just trying to reduce inventory, giving buyers a reasonable price. His price for submission was 25% less than the dealer who offered to take his place. Times may be changing.

JMHO

 

Some of that is true, but it's also true that a lot of the better material never makes it to market in the first place. A lot of it is in strong hands and much of it can be sold with a phone call or two where unless you have connections to someone you never get a shot at the material.

We also got spoiled a few years ago where SO much top quality stuff hit the market it spoiled us and now we are seeing that that isn't a common occurrence.

 

The hobby continues to bifurcate. On one end you have the raw coins, Dansco albums, mint & proof sets, and estate sale hordes. I'm pretty sure those prices will languish or fall gradually as I don't see great enthusiasm for that large volume of "stuff", or a growing population of collectors in that class. On the other end you have condition-rarity, PCGS, CAC, registry-quality coins. That market appears to be healthy, if not soaring. Witness the 1934 cent that just sold for $34,000. There is no shortage of wealthy collectors.

As is true in many aspects of our world today, the highest price/quality material continues to rise to new levels, while the middle/low-end material muddles along for now.

 

You sure are correct in your summarization!! It was a collectors dream!! I was able to collect semi-keys that I haven't even seen in the major auctions for many years. The best I've seen lately have been some scarce date half eagles.

Regardless, the "chase" is still exhilarating!

JMHO

 

Of course because eventually all our todays and tomorrows become yesterdays.