US Coin Market Stagnant

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We have DEMOGRAPHIC HEADWINDS with SUPPLY hitting the market in recent years and going forward. All of you Old Fogies who were around during the Golden Age Of Collecting in the 1950's and 1960's and 1970's are at a point in time when you are selling your stuff or your surviving family members or estates are doing so.

Population-wise, we also have fewer collectors among new Americans, immigrants and native borns, compared to 1920 - 1980 born Americans.

It all leads to a supply/demand imbalance that doesn't preclude higher prices, but makes it a steep headwind.

 

Duh......I'm one of those old fogies from yeah way back when.....who then, and now is still buying!
But it was our plan anyway......you see long ago us "old fogies" had a meeting.... that's where we decieded to unload all our collections on millenials.....

 

So true! That said, a decline of some type has been going on for years but I haven't seen any coin shops in my area close down over it. Besides that, I'm sure gold will go up in price again, hopefully within the next few years and when that happens, people will be looking for our expertise!

 

Some coins have miniscule PM content and others have a good deal of PM content relative to total numismatic cost.

Big difference in how they will both trade vis a vis gold and silver prices.

 

Classic commems

 

Not at all, people just collect differently and have a wider variety of interests. Common stuff is down as it should have been long ago. There's also a huge generational gap going on for what and how is collected by new and younger collectors and some people can adjust others can't.

CAC also isn't a fad, it's over a decade old and that ship has sailed. The market determines it's value and has. It's a second highly respected opinion from a team that the market respects.

The market loves pretty coins right now, that make not fit how some grade but the market is the final decider. There's plenty of reasons why common stuff and ugly stuff is suffering, there's also plenty of record prices happening and they aren't all 5/6 figures. The hobby is just fine, you just either adjust with the times or you dont.

 

I agree the chart says it all. Cac will not prop up a falling market in my view. While it’s a popular boutique it is a very small percentage of the graded material on eBay. It is focused on US coins only. While individuals may pay large premiums for CAC they could be the end user. Not all buyers are huge CAC payers but prefer to shop for PQ material close to bid whether CAC or not. On scarce 4-5 figure and up material of course the sticker can result in a considerably higher CAC bid in the sheet. The recent CAC market report illustrates this but in looking at these coins wonder if I would be that payer who paid more than anyone else in the country in this market in an auction which is a point in time.

Certainly coins that are truly PQ will realize more whether CAC or not. Coins deemed average quality by buyers (unattractive toning, spots) will lag behind the pack irregardless of sticker.

Many prospectors at shows and auctions out to acquire coins which will CAC and walla now bid at the higher CAC bid in the sheet.

 

Gold has traded $1,150 to $1,500 the last 4 years or so....up 15% overall...yet the chart shows numismatic coin prices falling about 10% last 3 years and almost 20% last 5 or so years.

I would like to know what makes up that PCGS Index -- as with stocks and bonds, that's the $64,000 question. Will do some research and report back.

 

It appears to be a super-large (3000 !) number of coins, pretty much the entire universe except maybe coins like a one-of-a-kind Draped Bust or a 1927-D or 1933 Saint:

https://www.cointalk.com/threads/my-analysis-of-the-pcgs-3000-index.324748/

PCGS or NGC should create an index for the most LIQUID coins or the ones colletors show the most interest in.

• It should be maybe 20-50 names
• It should have a bunch of generic/common coins and not the super-rarities. You can include somewhat more expensive years/mints/types but it shouldn't be something 20x or 50x as expensive.
• The commons should include Saints (i.e., 1924, 1927, 1923-D) and Morgans in 2 or 3 grades, not just 1 grade.
• AU-58 (highest non-mint state) is a good grade to include. MS-63 is OK but MS-65 is probably better and MS-66 pricing sometimes separates and should be included. If the condition rarity is extreme in MS, go down to MS-63 or AU-58 for inclusion.

An index should be representative, simple to update daily/weekly/monthly (3000 coins is NOT easy to track !! ), have liquid names, and be among the popular names in the field.

This is why the DJIA is still the go-to index for many stock investors instead of the S&P 500 or the Russell 2000.

 

But doesn't the DJIA do a poorer job of tracking overall market activity than the other two indices you mentioned?

 

Sure, but decades ago it was THE index because you needed something that was easy to figure out/understand, simple to compute, and represented the U.S. economy as well as the stock market.

The point is the coin industry needs an index that reflects what is active on Ebay, Heritage, and also what is in the average LCS and the display cases of dealers at shows.

What do most of the dealers have ? Saints and Morgans and Barbers and Franklins and Liberty Walking, etc. I don't know too many people who collect or can afford to collect 1794 Draped Busts in great condition or whatever drives up the price for that type of coin. I also don't want billionaires fighting over a 1927-D Saint to influence the price index, either.

The DJIA had 30 stocks that were supposed to be REPRESENTATIVE of the U.S. economy. We need a Coin Index that is representative of average coin collectors, excluding kids with Whitman penny and nickel collecting books.

 

I don't know what to think about demographics.

On the one hand, we have a lot of aging collectors whose collections will soon be returning to the market.

On the other hand, we've always had a lot of aging collectors. Collecting has always been weighted toward the folks who've had enough time to accumulate some discretionary funds, and have enough time (due to retirement) to devote it to the hobby. As older collectors die off, younger people get older, and move into the hobby.

Back on the first hand, it really isn't like the old days, when collectible stuff was still circulating. Nearly every circulating coin is minted in the billions, and a "rarity" like the 2009-P nickel or dime has a mintage of only forty or fifty MILLION.

Back to the other hand, you have the "close AM" Lincoln varieties, various inconsequential (to me) chips and gouges and outright illicit die modifications on state quarters -- and YouTube, to convince people riches might already be lurking in their pockets.

To me, though, the biggest shift is that people are losing interest in cash as a part of daily life. It's now quicker and easier to pay with a card or a phone than to pay with cash. For illegal or private transactions, or in disadvantaged communities, cash is still king -- but not coins, I'd think; only paper money, and probably mostly in larger denominations. Coins haven't kept up with inflation, and cents and nickels are hardly worth anyone's time at this point.

Sure, people still collect ancient coins and foreign coins that don't circulate locally. But that segment of the collecting community has never been as large as the segment that gets started by looking at pocket change, or by discovering that a dime that looks just like the ones you spend every day is actually worth hundreds of dollars. I think the cashless society is going to shrink our hobby sharply and permanently.

 

And CAC are raising their prices to a minimum of $15 starting December 1....

 

Paddy!! We singed an oath to never reveal our true intent!!

 

I will never understand why COLLECTORS complain so much about flat/falling prices. Just means your hobby dollars go further.

I would have no problem at all with a return to the prices I was paying when I started collecting...yes, even for the coins I already own.

 

Plus a mandatory $5 processing fee.

 

Is it generally agreed that CAC stickered coins sell at a premium because of the sticker, or is it possible that the same coin without a sticker would sell at a premium because of being an exceptional example?