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<p>[QUOTE=&quot;GDJMSP, post: 3077587, member: 112&quot;]A few comments about your comments. There are some basic things that collectors need to be aware of, to understand, about the dynamics of the coin market, how it works, why dealers do what they do - things like that - so they can understand the pricing structure of the market.</p><p><br /></p><p>First, think of the coin market as a whole. Think about all the sales that take place each and every day in the entire coin market - all sales anywhere, anytime. That means all sales from collector to collector, collector to dealer, dealer to collector, dealer to dealer, auction venue to collector, collector to auction venue, all sales at coin shows, etc etc etc. If you think of all those sales as 1 large number - approximately 80% of all sales, every day, day after day, are dealer to dealer transactions.</p><p><br /></p><p>What this tells you is that it is the dealer market, and only the dealer market, that actually determines the real world value of coins at any given moment. Everything else that occurs with any and every sale of a coin is based on that.</p><p><br /></p><p>Next, you say you see the same dealers at coin shows. Well, that&#039;s completely normal. No matter what coin shows you go to, whether it&#039;s the small local one, the larger regional ones, or the big national shows - you&#039;re always going to see the same groups of dealers at those shows. That&#039;s because most of the business that dealers do is done at coin shows. And that 80% number, it applies to coin shows as well. Meaning approximately 80% of all sales at coin shows are between dealer and dealer. That&#039;s how dealers make the majority of their money, by selling to other dealers. You could put it this way - dealer to dealer transactions are the meat and potatoes, dealer to collector transactions are the gravy. And it has always been that way.</p><p><br /></p><p>This brings us to the prices when dealer to collector transactions are involved. Pretty much all the dealers realize that other dealers know how the market works just like they do. But they also realize that the majority of collectors do not know this. They know that the majority of collectors do not know how prices are determined, do not know what is a fair price at any given time, and to a large degree do not even know which coins are common and which coins are not. The dealers also know that a whole lot of collectors think the prices listed in the Red Book, or any of the other numerous price guides - are accurate. And that these collectors base their buying habits upon these listed prices.</p><p><br /></p><p>So ask yourself, if you&#039;re a coin dealer, somebody who makes their living buying and selling coins, when a collector comes up to you and wants to buy a coin - what are you going to do when you have to tell him your asking price ? And remember, these transactions are what puts the gravy on your meat and potatoes - literally !</p><p><br /></p><p>It is this point that separates the dealers into two different groups. One is going to be the ones who ask for as much as they think they can get. They gamble in other words, they play the odds. And they do this because they know that most collectors are among those who don&#039;t have any idea what a fair price really is. Then there is the other group of dealers, the ones who will almost always ask a fair price to begin with. They do this because they&#039;d rather not gamble, they&#039;d rather not play the odds. They&#039;d rather do whatever they can to make the sale and let the chips fall where they may.</p><p><br /></p><p>So your job, as a collector, is to learn all these things. And, to learn what the real world value of coins actually is, at any given moment. It is only by doing this that you can learn how to recognize which dealers fall into which group. And thus know which dealers to deal with and which ones not to deal with. And you also have to realize there is always going to be a markup. Dealers are not going to sell you coins for the same amount they pay for them - they have to make a profit. So you also have to learn what kind of percentage is a fair markup and what kind isn&#039;t. </p><p><br /></p><p>And, learn that those percentages are different for different coins. Sometimes those percentages are low and sometimes they are high - but in both cases they are fair. For example, the percentage of markup on a high dollar coin might only be 5%, while the percentage on a very low dollar coin might be 50% - and yet both of them are completely fair !</p><p><br /></p><p><br /></p><p><br /></p><p>It isn&#039;t. The number of coins that exist is and has been the same for many, many years. In most cases many decades. At any given time, the numbers of any given coin being on the market rarely changes by any significant number. The only thing that changes are the prices, and those rise and fall just like they do in any market, all markets. And they always have, and always will. Are there exceptions ? Of course, but we&#039;re talking generalities here - what is most often true.</p><p><br /></p><p>So what makes coin prices rise and fall ? Perceptions mostly. And those perceptions are influenced by outside forces, other things happening in the world. Often things that have nothing to do with the coin market. Granted, the number of collectors can change over long periods of time, and that can influence the market one way or the other. But like I said, those changes in the number of collectors tale a long time - years, decades. They don&#039;t just happen overnight. But yet the coin market often, almost always in fact, changes rather quickly. Sometimes just a few months or even weeks can bring drastic increases or decreases. And in just a few months or weeks the number of coins sure didn&#039;t change, nor did the number of collectors. I&#039;ve seen high dollar coins lose half their value in just 2 or 3 months - half, 50%, and sometimes more. And this is not uncommon. Other times it might take a few to several years. And it&#039;s not always just high dollar coins.</p><p><br /></p><p>For example, some years ago it was reported in the numismatic press that common date, common grade Kennedy half dollars increased in value 300% between 1998 and 2004. That&#039;s what ya call a huge increase in a pretty dang short time. And it sure wasn&#039;t because the number of coins on the market increased, and it wasn&#039;t because the number of collectors suddenly increased. It just happened, and nobody seemed to understand why - but happen it did. </p><p><br /></p><p>Of course at the same time the coin market as a whole was moving upwards, but few increases were as large as that one. So why ? Simple, perceptions. People saw the market moving, it was being reported in the press it was moving, and people jumped on the band wagon. Of course they jump off just as fast when the trend reverses. And that is exactly what happened just a few years later in 2008. And they are still jumping off today - 10 years later ![/QUOTE]</p><p><br /></p>

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