World Coin Market is Hot ?

Details....?

 

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I've noted a significant uptick in the heat for the material I collect. Even some of the common stuff is selling for 2-3X what it would have brought a year ago. Then, of course, the real good stuff is fetching crazy money. I think it might be a good time for me to start selling some nonessential coins.

 

Who is buying this stuff -- the masses, or a few individuals with mucho dinero ?

The sellers/dealers must know who is driving their market.

 

I've noticed the same thing with the coins I collect, pre-1860 Italian and Sicilian coins.

 

Over the past several years, there just been a ton of cash out there looking for a place to park. Putting money into an interest bearing account just doesn't work, with interest rates near 0%. There is the stock market, and much of its run-up can be traced to hyper low interest rates.

So, coins, art, real estate and collectables in general have seen mostly significant price increases, as can be seen in auctions, but also in many private sales as well. Many folks with lots of cash put their money in coins that are slabbed, in particular, since they are deemed "safe" investments. They may not know a Peace dollar from an 8 reales or a tetradrachm, but that really isn't the point of this exercise for them.

I wouldn't even be surprised if money is being laundered through these "investments" by some shady characters as well, but that's another story.

The bottom line, though, is that this is a great trend for those who have coins held for many years to sell or consign, especially coins that have a lot of appeal and/or rarity. This trend is not so benign for collectors with limited budgets who are attempting to acquire additional coins.

 

The reason US coins have dropped/ stayed stagnant over past decade is simple.....
US coins where overpriced/ still are. A MS-65 1857-S Double Eagle/ thousands known in MS still go for 7K+
Most world coins from 1200AD -1850AD are far rarer, some known from less then 5 examples/ still these coins go for bargain prices compared to US coins with same known numbers. The 1933 $20 (21 known) sold for 7.3M.

 

Great answers and analysis as always, GDJMSP, let's explore a bit further, shall we ?

Undervalued in absolute or relative terms (compared to U.S. coins) ?

PM-related coins like Saints and Morgans must have been cheap in 2003 because metal prices were low back then.

Maybe the coins kids collected and then bought as adults -- SLQs, Franklins, Barbers, Coppers, etc. -- were the ones that were pricey or getting pricey in 2003 ?

Again, are you talking about the 2 big series, Saints (gold coins) and Morgans (silver coins) ? They would have been rising mostly because the underlying metal prices were rising.

Or perhaps ALL U.S. coins -- PM-related and pure numismatics like the series I listed above -- were rising ?

Interesting, you'd think the financial crisis hitting all stock and bond markets here would have impacted World coins just as it did U.S. Coins with lower gold/silver prices and less willingness to chase 100% numismatic coins.

There's less information and price transparency in world coins compared to the popular series in the U.S....and many times the coins are NOT graded/certified....wonder if that is helping blow up the bubble ?

Coin market is more like the commodities/PM markets: bear markets last LONGER. In stock market, bear markets are usually shorter than the bull markets.

Which U.S. coins are you focusing in on to say the U.S. market has bottomed -- Saints, Morgan, or the 100% numismatics (SLQ's, Walkers, Barbers, etc.) ?

Seems like you are the opposite of the value guys I see in the stock market who say that world/emerging markets are cheap and U.S. stocks are expensive: you are now saying that U.S. coins are "cheap" and you'd be a seller of World coins.

Verrrrrry interesting, as Arte Johnson used to say.

 

I think an apples-to-apples comparision would compare non-PM coins in the U.S. to these world coins since the world coins that seem to be going up are NOT bullion-related coins tied to gold and silver.

It appears -- and collectors and experts, feel free to correct me -- that as opposed to the publicized coin bubble of 1988-1990 involving gold and silver coins (i.e., Saints and Morgans), the bubble in the last decade or so in the U.S. was in numismatic, non-PM related coins like Barbers, Franklins, SLQs, etc. Those are the coins that I read on forums there's been a slow steady drip-drip-drip and before you know it a decade has passed and prices are 30-60% lower.

Am I right ?

 

This is an excellent point that I failed to specify in my original post. My observations have mostly been limited to graded material. The bulk of my new additions have always been raw in part because of the lower prices. I have seen a slight uptick in movement there, but not much. I imagine this is likely because the raw material I pursue does not attract these “investment” type buyers.

 

As both a coin collector and investment professional....I can't believe there are people (other than maybe lonely, at-hom elderly folks with lots of extra $$$) who think ANY coins (graded or not) are "safe" but that stocks and bonds are "risky."

 

Certification is a driver in coin markets (US Auctions) only. A MS-65 Double Eagle would be graded as fast st. in a Kunker Auction/ while Americans see it as a GEM UNC/ Europeans/ Brits see it as a About UNC.
Ancients/ World coinage are still underpriced when compared with US marketplace.
John

 

I agree with all of this, but I would argue that it's slowly starting to influence some European auction houses as well. If for no other reason to attract more bidders from across the pond. I spoke at length with a numismatist from a very notable European auction house about this very topic yesterday. I had a similar conversation with another about slabbed coins. He showed me a common date half-crown graded by NGC as PF-67 or something along those lines. He laughed because he had the coin in inventory for years with no interest, and now he can auction it with the realistic expectation of getting 6-7x the original asking price. When I asked why he thought that was, he said it draws in more bidders across the pond who favor graded material. From a business perspective, it makes sense to do so, and I imagine this will continue to gain traction in European auctions as TPGs become more accepted globally.

 

IMO its not so much TPG sells better but most people get on the band wagon of common coins in uncommon grades. To me this has been dangerous and I question profitability of your money moving forward. I will provide a simple example. Since some of you know I was big in U.S. Colonials in the 1970's-2000. When I sold my collections at Stacks from 2008-2010 owning raw coins was no issue. Many of my top end New Jersey Coppers went to slabs at higher grades over the next decade losing their pedigrees as a Stacks Bowers XF NJ would equate in many cases to an AU PCGS grade. Collecting now in U.S. Colonials seems to be that top quality sells bigger - rarity has taken a backdoor. Alot of people like you have said in this thread due to finances have switched to foreign including myself since 2010 - GOOD MOVE. I have not regretted it. Its a good upcoming market - but like coinsandmedals has said people do prefer TPG's so its never recommended ever to crack out coins IMO. Panzerman is also dead-on correct stating high grade common coins due seem to do much better. But even knowing that ... I still prefer lower graded rare coins. There is a good buying opportunities now for this class of item in Foreign. One last point - the middle or lower tier coins have been NEGLECTED. Believe it or not I recently purchased two NJ Coppers. A Maris 54-k with lamination marks on a poor made planchet and a terminal die obverse Maris 65-u both for around $75!!!!! My point - if not red and brown or a nice fully detailed XF common coin there is little interest! Although some specialist still pay for rare varieties in any grade. Crazy ... times. Although if I properly cataloged these NJs I could triple my money ... but the big FOCUS seems to be on common coins in uncommon grades - this IMO is driven by Heritage ... and Stacks/Bowers simply follows suit - in many cases where you are scratching your head on certain coins and the prices they have realized its common coins in MS. Unfortunately ... for us ... not so unfortunate for Heritage or Stacks/Bowers.

John Lorenzo
Numismatist
United States

 

I blame the multiple increases on predominantly US buyers that are driving this due to their obsession with label numbers. The thing that initiated my post yesterday about prices increasing by multiples was this listing going off in Heritage tonight.
https://coins.ha.com/itm/great-brit...-32681.s?ic4=ListView-ShortDescription-071515
It's a fairly non-descript Commonwealth halfpenny that has been given a massive boost by NGC putting it into a 65 slab. Currently sat at just under $1000 all in, I compared it with my own. If I sold mine I would expect to get around £200-250 for it and certainly not more than £300. It's a nice EF.


There's no way that the Heritage coin is being bid up based on aesthetic qualities, i.e it has to be the label.

 

My example is far superior and cost me £76 last year. Mind you I don’t buy slabs just coins.

 

You're saying it's gone up 6-fold in a year ?

 

No I’m saying that the buyer payed for the slab and label

 

As am I

 

Well said! I have had a good deal of success buying raw coins from major auctions (even in the U.S.), sending them to NGC, and subsequently making a nice profit after they come back. As of today, I have yet to lose any money doing so, and this has funded a fair share of my collection. The coins themselves did not change. The only thing new is the holder and label. I imagine the people who buy the stuff I sell are some of the same people bidding in the auctions and passing on the raw lots in favor of the already graded material.