U.S. Coins are Currently Overpriced

Discussion in 'Coin Chat' started by Endeavor, Oct 17, 2017.

  1. baseball21

    baseball21 Well-Known Member

    Really with how the hobby has changed it is going to be impossible to get an accurate estimation. Any number is going to end up low given the number of collectors that are more than happy to quietly buy online and never leave a footprint anywhere.

    PCGS might have their membership numbers in their earnings reports they have to release, NGC is private so they don't have to say anything if they don't want to. If you really wanted to put a ton of effort into it you can scan YouTube, Instagram, Facebook, Reddit ect and see the massive number of collectors that use those platforms and never leave a trace in more traditional ways.

    The only thing we can say for sure which is backed by sales numbers on the internet with auction houses, eBay, dealer sites ect is that there are A LOT more collectors than anyone who is worried about the future thinks. The traditional style collector (eg travels to coins shows, ANA member ect) generally aren't the ones buying up all the moderns or collectable bullion that gets trashed in many numismatic circles. There's plenty of collectors from all age groups and demographics, you just won't ever see most of them at a traditional venue for a variety of reasons.
     
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  3. Michael K

    Michael K Well-Known Member

    There's only 2 Peace keys and that's a very poor sample to make a judgment on.
     
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  4. SilverWilliesCoinsdotcom

    SilverWilliesCoinsdotcom Well-Known Member

    Not only is the demographic changing, but the speed of the hobby has increased. People who flip coins buy and sell in a matter of days or weeks when in the past the smaller audience exposure and reach stretched that out to months or even years. We make money faster, and lose money faster.

    Continual losers eventually drop out. Many of the successful online dealers make their money by bundling cost efficient sales based on shipping & handling cost efficiency. It's hard and costly to sell a single small ticket coin online today, especially when everyone seems to want to micro-manage their mailbox arrivals every step of the way.

    Also, the amount of information available online is overwhelming and fuels our passion for spontaneous gratification. It must be increasingly difficult for the traditional dealer to make a living now considering that with a few clicks, even the most casual collector can reach a massive audience through the internet through such online sales and auction venues as eBay. We complain about eBay fees but when you look at the major traditional auction houses they are slight in comparison, the only real difference perhaps being that one has the impression of wearing a tuxedo at the door and serving you wine and cheese.

    The bottom line rules today more than ever.
     
    Last edited: Oct 18, 2017
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  5. GDJMSP

    GDJMSP Numismatist Moderator

    Maybe so, however it is US coins that are being discussed, not world coins.

    They are ?

    I'll grant you that they haven't dropped as much as the rest of the US market, nonetheless they have dropped lower than they were 10 years ago.


    [​IMG]
     
    Gregg likes this.
  6. Gregg

    Gregg Monster Toning

    Silver,
    I went into a local coin shop the other day shopping for heavily worn (near cull) peace dollars. The owner showed me a box with a couple of dozen beat up coins and offered them for $22 each. I offered $19 for a Peace Dollar, common date, in good condition.

    He said 'No'.

    So I logged onto eBay and bought a common date uncirculated Peace Dollar for $25.00 (no shipping costs). I received the coin on Tuesday and it was a fantastic specimen, no damage, not cleaned - one of my more beautiful coins so far. That dealer on eBay will be getting thousands of dollars of my business over the next few years as long as the quality holds.

    On the other hand, I'll likely never visit that local coin shop again.

    I don't know much about the travails of being a coin dealer; however, I do know that in this day and age dealers that are unaware of the opportunities that internet has opened up for collectors can hang onto their $22 culls. This is a really good time to be a collector; however, I can see how it would really be hard to be a dealer, especially an old school dealer if you are accustomed to ruling your 'territory' with an iron fist.

    Thank God for them internets.

    -Gregg
     
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  7. kkathyl0

    kkathyl0 Active Member

    Market dictates price and so if the markup is healthy in the US, then the US coins are worth collecting. This news to me is not a problem at all.
     
  8. CoinCorgi

    CoinCorgi Tell your dog I said hi!

    Interesting chart.What happened in Aug 2013 to cause that spike?
     
  9. Gregg

    Gregg Monster Toning

    Any idea what accounts for the peak in '13?
     
  10. GDJMSP

    GDJMSP Numismatist Moderator

    Personally, I'm with Conder, I think the numbers reported in the article are ridiculously high.

    However, if you are really interested in making a reasonable estimate you might want to start with contacting the authors of the article to which you referred and ask them how they define a "serious collector". And then ask them what they based their numbers on.

    I realize that you probably aren't aware of it because you've only been a member here for a few months, but this is a subject that has come up on this forum and been discussed many times over the years. And in those discussions it has been pointed out how and why it is so hard to come up with reasonable numbers. For example, you suggest trying to count frequent buyers from the different venues. But when you thought of that did you think about how you would need to discount the numbers you arrive at, and why ? It's fairly simple when you actually think about it - it's because the vast majority of buyers are dealers, not collectors. And very few dealers are collectors. And when I say vast majority, we're really talking about the vast majority. Of all the coins bought and sold through all venues about 80% of them occur between 2 dealers. In other words 1 dealer buying or selling to another dealer. And the same thing can be said about trying to use the number of TPG submissions for the vast majority of them are made by dealers too. And that 80% number, that's a fairly accurate number.

    So what are you going to count then ? I mean there's not a whole lot left to count. But there are a few things. You can count the number of people who subscribe to coin magazines for example. There's 4 or 5 of them if memory serves: Coin World, Numismatic News, Coins, Coinage and the Numismatist. Historically Coin World has had approx 150,000 subscribers, Numismatic News and the Numismatist about 30,000, and the other 2 less than that. But let's say there's 4 with 30,000 just for the sake of argument and 1 with 150,000 and round it up and say we've got 300,000 subscriptions total. Then we have to subtract some of those because a lot of folks buy more than 1. The subscription numbers are reasonably accurate because they are reported. But the discount, well we gotta guess on that so let's say 25% and round our number total number to 225,000.

    Now that's a pretty low number. But it is also reasonable to assume that if one is a serious coin collector then he/she is going to subscribe to coin magazines, or at least 1 of them. But I'll grant you maybe not all of them do so we've gotta get the number up some more. So what else do we count ? How about coin forums, there's quite a few: CT, CC, NGC, PCGS those are the biggest and most popular. But, just about everybody who belongs to one also belongs to the others, so again the numbers are repeated, duplicated. And they all report how many members they have. CT is the biggest I know of with about 44,000 members - right now. But over the entire life of the forum we've had about twice that number register here, so let's round it off to 90,000 total. Of that number most, and I'm hesitant to guess at a number for this but given my position here I think I can guess as well as anyone, I'd guess that maybe only 10,000 of them would qualify as a serious collector. I say that because most folks who register here do so for a short time and then are never seen again. Usually all they want is to find out if some coin they have is worth anything. So I think 10k is generous.

    The membership numbers of NGC and PCGS might be higher when qualifying for the serious label, so let's just assume they all are. But all the other forums combined are pretty much like CT. So what do we come up with ? Let's just round it all off and be generous again and say we have 100,000.

    That means we've got about 325,000 serious collectors total based on those things. And again that's a pretty low number. Not even a fraction of what the article suggests. So where do all the rest of them come from ? OK, we missed some, not every serious collector subscribes to coin mags or participates on coin forums - but how many ? If you look at the numbers at any given time we'll have anywhere from 50-100 members online and about 250-300 guest reading the forum. The numbers are there for all to see. But how many of those are serious collectors ? All we can do is guess, but to be generous and not leave anybody out let's triple our total number of 325,000, when we do we end up right around that 1 million number that Conder101 mentioned.

    Could we be high, could be low ? Yeah, but how much ? I sure as heck don't think it could be by a factor of 10. I mean the numbers are the numbers and that's what we get.

    Is there something better to count ? Maybe, but if there is I don't know what it would be. I'll sure listen to suggestions though.
     
  11. GDJMSP

    GDJMSP Numismatist Moderator

    In most markets it's referred to as a dead cat bounce. It's an old saying that derives from the visual of throwing a dead cat out the window and watching how high it bounces when it hits the ground.

    Same kind of thing happens with markets when there is a big correction. The market drops and drops, but then it tries to recover and moves back up again. Historically this happens most of the time. But it usually falls right back down even lower while it is looking for support - some kind of a bottom. Once a bottom is found then it'll go sideways for a while and eventually move up again, slowly.

    But until it does that, historically they continue to drop.
     
  12. fish4uinmd

    fish4uinmd Well-Known Member

    In all US denominations?
     
  13. SilverWilliesCoinsdotcom

    SilverWilliesCoinsdotcom Well-Known Member


    All good points.
    >>>>>vast majority of buyers are dealers, not collectors. And very few dealers >>>>>are collectors. And when I say vast majority, we're really talking about the >>>>>vast majority.
    Easy enough to detect, just need to set the values to measure whether or not they fall into the hybrid category. Also, it raises a good and meaningful question,
    Are dealer/buyers collectors? I guess you could use net income figures as a measure, but kinda rough to get people to give up their tax returns, eh? Even when coins are small change compared to those of politicians, so let's try another tack...

    As far as print magazine subscriptions, now you're getting tricky.

    PRINT IS DEAD is no longer just a clever line from Ghostbusters, it's more and more a reality. I've been collecting coins since 1964, and I haven't subscribed to a coin collecting print publication since perhaps the early 70s. My guess is that you'll find spikes in coin collecting magazine subscriptions on the ends of the Belle Curve age-wise, with the majority not spending their money on such.

    Personally, I have never felt it necessary to pay for membership to ANACS, NGC or PCGS. Yes, I am new to CoinTalk, and I think it's one of if not THE best online forum, but I'm a picky and tough critic of where and what I applaud on the Internet, being one of the first developers of serious interactive web applications, going back to the 90s. I was programming custom web based shipment tracking and proof of delivery applications for shipping carriers long before it became the norm and taken for granted.

    The duplication of members across similar applications numbers are easy to detect while data mining for our answers, this is not really hard to do in general, it's really just a matter of deciding where to look and what sorts of repetitive activity constitute significant behavior. Bottom line being the bottom line, it all comes down to how much people spend and the total number of transactions over a period of time.

    Am I a serious collector? I don't know. Define serious. My activity over the last 53 years of collecting looks like an EKG that would warrant a pacemaker, I was obsessed for a few years when younger, probably flatlined a few times, when I discovered women and rock and roll, but I always have come back. I still buy more than I sell, and while I usually keep in mind the possibility of reselling anything I buy, some coins I just buy because they make me feel young again and because they're fun to hold and listen to, not unlike women and rock and roll, you know?

    Regarding my original comment and your excellent point regarding, go to the source, that comment came from MarketWatch, fairly reputable I'd say. But figures sometimes lying and liars sometimes figuring, you always have to ask, "What's their motivation?" Someone with an interest in that study no doubt had an interest in the impact of publishing its results, and that's where the juicy story really dwells.

    Here's another good article: https://coinweek.com/education/coin-collecting-large-rare-coin-market/

    Anyway, enough from me on this. I'm interested enough to wonder to toy with the idea of getting the answers on this, but battle-worn enough that I probably wouldn't give it a real effort unless I were getting paid to do it, but then, I'd be at the mercy of spinning it the way of the people who pay me.

    Once again, it's all about the bottom line, and I like to be paid in Silver.
     
    serafino likes this.
  14. baseball21

    baseball21 Well-Known Member

    No it's not. Magazine subscriptions of ANY genre have been declining massively for years. They simply aren't needed anymore and are by no means a remotely accurate measure of gauging the public interest in any subject.

    You're falling into the same trap as all the alarmists do using antiqued measurements. You don't have to be part of a coin forum or have any subscriptions or club memberships to be a serious collector.

    You have also excluded countless venues that do have wide ranging memberships with coin activity. The way people communicate and share things has greatly changed even in the last 5-10 years.

    Using these types of memberships/subscriptions to judge the total amount of collectors is the equivalent of saying that people don't like movies anymore based off of movie theater sales while ignoring Netflix, Hulu, Amazon Prime, Video on Demand, movies on TV ect. Or saying that no one talks to other anymore because landlines are declining.

    The only thing that is delcling is the traditional way of collecting. Changes have occurred and the hobby has grown due to them. If someone wants to ignore those changes and just use old measurements they'll see a dying hobby, if someone wants to actually look around and see what's happening they'll see one that is growing and will be alive and well for a long long time.
     
  15. baseball21

    baseball21 Well-Known Member

    I agree. It's possible now for dealers to survive solely online without anyone knowing they're a dealer and collectors have more options than ever for selling if they decide to sell something. Anyone who is able to survive selling coins with no online presence at all is definitely the exception not the rule.

    Another thing I think people fail to consider a lot is that with grading and the internet collectors have changed in that they will dabble in a lot more areas and have a much wider variety than they used to. Probably most US collectors have one foreign coin or more, most are more of a type collector than a set builder ect. In 30 minutes online you could build a more diverse expansive collection of nice coins than you used to be able to in several years if not decades.
     
    Last edited: Oct 18, 2017
  16. Michael K

    Michael K Well-Known Member

  17. GDJMSP

    GDJMSP Numismatist Moderator

    One thing you're missing guys, those numbers include, not exclude, online subscriptions.
     
  18. CoinCorgi

    CoinCorgi Tell your dog I said hi!

    Endeavor, Kentucky and C-B-D like this.
  19. baseball21

    baseball21 Well-Known Member

    Which is still the same thing, online magazine subscriptions have been declining as well. People don't see a reason to pay when they can find the information for free elsewhere. It wasn't the paper vs digital delivery method that has been the downfall of publications. There has been large trend away from pay for information subscription based content by the public. The most successful platforms have been the one's that can successfully monetize a free to use service. Facebook considered charging for use many times and always decided against it, if they thought they could keep the same user level or close while charging they would have done it in a heartbeat.
     
  20. GDJMSP

    GDJMSP Numismatist Moderator

    That's just it they are not declining. They have remained fairly constant for about 20 years.

    But hey, you tell me then - how many serious collectors do you think there are ? And based on what ?
     
  21. Charles REid

    Charles REid Active Member

    As the number of coins minted has increased, the ability to start a collection from circulation, have it interesting on the difficulty to find, has decreased. Losing this entry level, loses new entries into the hobby, and thus demand. I started with 32 coins from my father in 1958. I cashed my paper route money into silver dollars monthly. Old Buffalo nickels. Mercury dimes etc. were a part of my life. Finding a 1916-D Mercury from circulation was very exciting. That is hard to match today. Yet our classic coins are a national story, which I could not afford back then. It is a leap for young collectors still. It is all about demand and entry into the hobby.
     
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