Why coin sales flat

Just reread Jeff Garrett's article in the 5th editon of the Mega Red. He mentions several reasons why the coin market seems stagnant. (1) aging demographics (2) intervention of and ease of on-line shopping (3) a supply imbalance. Indeed all three are at work, but I suspect that aging demographics is primary. Many collectors, such as myself, began in the early or mid-sixties. Back then treasures could still be found in pocket change, and silver was everywhere. Finding a 1913 cent was a thrill (who, cared if it was only a VG-10 or whatever). Families could even coin hunt together. Since then over the decades, a full collection of Buffalo nickels or Liberty dimes cannot be accomplished unless each coin is purchased. Purchasing is not a challenge per se, rather grading looms large. Much of the fun is lost, hours sitting on-line, or walking the bourses can be interesting, meeting folks et al. It now boils down to a matter of disposable income. Garrett mentions several billionaires who spend 100's of millions of dollars per year on coins! [And that they see the coin business as a wise investment!].

Another reason, I suspect, is the lack of education most youngsters have. Who wants history, when you can choose a class on building hot rods, or cultivating mind blowing plants? Without a sense of place and history, coins are just base pieces of metal. Not to mention a probable lack of economic understanding, not knowing that coins can be an investment as well. Many kids today cannot even use a cash register, as they shunned math classes.

So the generation which really enjoyed coin collecting, for fun, for history and even for investment purposes is leaving the scene. Selling their collections, or passing them on family members or charities. Thus the supply side increases, as the demand side diminishes. Something must change, or coin collecting will follow the path the stamp collectors (or butterfly collectors, et al) followed. A slow death, at least for the time being, stagnant! Or is this just a slump, in which it is a good time to buy???
Any other thoughts??
Gary in Washington

 

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Gary.... I had been disillusioned with our hobby and ran a similar thread a while back. I was like you and started my Whitman books in the late 1960's. Marveling over every God sent wheat sent I received from the lunch lady's cash register. I was all in until it came time to raise a family. I took something of a twenty year hiatus and returned some years back befuddled and confused at what our hobby had become. Like yourself, I feared that coin collecting was now an old man's hobby and worried what may become of my collection when I leave this party....... Well, I started attending a few shows and was happily surprised at the number of events scheduled for youngsters at the shows and the number of youngsters attending the shows. Still yet, they were overshadowed by those of my generation. Yet they were still there. But here's what really got me the last month or so. I generally visit my dealer during the week while he is rather slow. I sit at the counter and we tell fishing lies. Last couple of months, I have gone to visit him on three separate Saturdays. And in each instance his place is busting at the seams with teenagers plugging holes in their Whitman books. No kidding. It has absolutely refreshed my belief in the future of coin collecting..... Go to your local dealers place next Saturday and see if you aren't wading through youngsters.

 

Just wait until the banks start including a 20% surcharge for all rolls of coins requested by non-commercial accounts. We'll probably see a large drop in the number of members asking, "What's it worth?" or "Is this an error?" and coins with ordinary die cracks will go the way of the dinosaurs.

Chris

 

And in 1962 (the first year I ever attended a coin show) the average collector was--wait for it--63 to 65. And he complained continuously about the lack of new collectors among youngsters. And then, if you pinned him down and asked about collecting when he got started in the early 1920s he would tell you that the average collector at that time was...that's right, in his 60s and was scared because it seemed very few kids were collecting.

And so it goes...the more things change--the more they stay the same.

 

What are you guys doing up this late. Are you on the east coast? Randy, I do go to shows, but yet to see a busy shop! I'll keep looking. I am not disillusioned, I am buying!

 

Hey man!! The day is now half over when you start at 5am!!

 

I'm retired. Why should I go to bed?

The old brick & mortar shops are becoming harder and harder to find. It's hard for them to compete with online shops when they have to pay so much in overhead, and run the risk of getting robbed.

Chris

 

Yeah, the lack of busy coin shops is irrelevant to me due to the rise of online sales. You are not seeing these like you did in the coin shops of yore, but they are out there.

IDK man, to me, ancient coins are hotter than they have ever been in the US. World coins are a little better, and paper money is simply on fire compared to what it was when I started in the late 70's and the "rag pickers" were in a dark corner of the shows. I think the internet makes it easy to collect other than US coins, and this is leading to slowdown of US coins.

US coins are too highly priced versus rarity, too commoditized, and too subject to manipulation of the slabbers. When I see the graphs of US coins being flat to down in terms of values, and then read industry veterans all proclaiming vast grade inflation, (David Bowers wrote how even circulated IHC are being vastly overgraded, cents that for decades grading a VG are being slabbed today as VFs), then it is clear as a bell to me. An entire generation evolved not learning to grade, so they have to rely on slabbers, yet slabbers keep lowering the bar and adding to the "supply" of coins by lowering grading standards. Of course this will lead to flat or lower prices, and this action will lower anyone's incentive to collect.

 

World coins are very much alive. The world markets have been correcting upwards for some time.

US coins are overvalued right now.

Also, we don't need youngsters to collect. They don't have much disposable income. They make new old folks every day that need a good hobby.

Honestly, it's like saying classic car collecting is dying because there arent enough pre-teens getting into it.

 

Ding, ding, ding ...

 

The US Mint is flooding us with too many new coins each year. That makes it very expensive and confusing. The normal attitude these days is instant gratification. That means we have to select what our specialty is and then buy most coins, because we want them now. Now most people don't want a coin unless it is in a slab. Instant gratification and being first is more important than the collecting. First Strike and First Release are more important attributes than filling that hole. A lot of people are just accumulating in the hopes that one of their selections hits pay dirt. I quit buying new coins from the US Mint for the same reason that I stopped buying new stamps from the USPS. The stamps are wallpaper and the coins are ballast. Not much fun anymore.

 

My already charges for rolled coins Even charges a fee for coin roll returns.

 

What gets me is when I hear someone say, "I order rolls from my bank, but I use another bank to dump the coins." Give me a break! What the heck do you think the account holders do at your "dump bank". What goes around, comes around!

Chris

 

It is encouraging that the average age of CT members is thirty. I think everyone uses their own experience to justify why they think our hobby is going one way or the other. Like some here I started collecting as a paperboy at age twelve, and now ask myself how many paper delivery persons are around today. (guessing few and far between). Also, from what I see with grandchildren, focus is on smart phones and gaming. I tried encouraging them with gifts of birth year proof sets, Silver Eagles, starter albums of Lincoln cents, Jefferson nickels and State Quarters, with no lasting interest shown. Perhaps some day one or two will see the light and become true blue numismatists.

 

Some people are born collectors, others aren't. Look for the collectors. It's much easier to get a born collector into coins than it is to make someone who isn't a collector into a collector or anything.

 

Demographics is really the least relevant aspect.

You mean the most educated generations in the history of the world? A college degree is what a high school diploma used to be because it's now expected. Record numbers of masters degrees and PHDs as well but sure lack of education.

Twitter isn't reality and the news is just trying to get you upset to draw numbers, anyone who thinks younger generations have a lack of education is completely out of touch with reality.

Neither can many boomers, what's your point?

 

Say the sky is falling if you must, but what I take from this is the good news that coins I want will be cheaper to add to my collection since demand is down. I don't really see that as a bad thing, from my point of view. This is only bad news if you're selling coins.

 

The love of coins and the history they represent make true history collectors of coins.

 

I have been saying this for years. Most people don’t start collecting (or restart if they have taken a hiatus) until well after the college days. This has been supporting the coin market for decades. Not the kids.

However, a new dynamic that might stunt coin collecting is the US student loan crisis. Kids with large student loans are stuck in life for several years until they pay off the loans, and only then can they start pursuing other goals (house, retirement, etc.). Coins would hardly be a priority until much later, or even neglected altogether. Coupled with the disillusionment with history, moving away from cash transactions, and the lack of personal financial education in schools, the US market is likely going to have serious corrections.

European/Chinese/Indian/etc. students do not have much student debt, if at all. Plus they live in the history they are taught in school, so they will have a deeper connection to it than Americans would. This means that the non-US coin markets would likely still thrive. If I was an investor, this is where I would put my money.