Vibrant Coin Market Looks Probable for Years To Come!

[cladking]

For this reason, I think we are adding a lot more than we are losing to the hobby, and with limited supply and increased demand, I think we all know where that leads...UP.  Anyways, as a collector, i'm not so worried about the "prices to sell" going up as I am worried about "cost to buy", but that is just a "small price to pay"(pardon the pun) to introduce others to this wonderful hobby.  I wish everyone a good day and happy collecting,

I'm sure you're right that the future of the hobby is virtually assured at least for the next few decades.  Things are much brighter than they were in 1995 when it looked like collecting was dying for lack of collectors and prices had hit their lowest point.  Indeed, the future is even brighter than in 2000 when it became apparent the sizes of the middle class were going to continue to bloom all over the world.  The increase in metals prices may bring in as many collectors as either of these events and even in this recession the middle class is continuing to make inroads in most countries and to grow in aggregate. 

We will still see some pressure on some coins because of the changing nature of the demand which is becoming more diverse and from a different and younger collector base.  This will continue to put pressure on the lower end of the US market until the economy turns around, I believe.  With good returns in the stock market people won't be putting much money into coins.  When the economy turns around the stock market will begin to level off and huge amounts of new (not yet existing) money will go into coins.  It could mean spectacular gains almost across the board. 

[coinsarefun]

For this reason, I think we are adding a lot more than we are losing to the hobby, and with limited supply and increased demand, I think we all know where that leads...UP.  Anyways, as a collector, i'm not so worried about the "prices to sell" going up as I am worried about "cost to buy", but that is just a "small price to pay"(pardon the pun) to introduce others to this wonderful hobby.  I wish everyone a good day and happy collecting,

I'm sure you're right that the future of the hobby is virtually assured at least for the next few decades.  Things are much brighter than they were in 1995 when it looked like collecting was dying for lack of collectors and prices had hit their lowest point.  Indeed, the future is even brighter than in 2000 when it became apparent the sizes of the middle class were going to continue to bloom all over the world.  The increase in metals prices may bring in as many collectors as either of these events and even in this recession the middle class is continuing to make inroads in most countries and to grow in aggregate. 

We will still see some pressure on some coins because of the changing nature of the demand which is becoming more diverse and from a different and younger collector base.  This will continue to put pressure on the lower end of the US market until the economy turns around, I believe.  With good returns in the stock market people won't be putting much money into coins.  When the economy turns around the stock market will begin to level off and huge amounts of new (not yet existing) money will go into coins.  It could mean spectacular gains almost across the board. 

I tend to agree with this cladking and jtabie.

[VDB Coins]

Very interesting reads everyone.  I'm new to the forums but have been collecting for 30+ years and it is my love.  I too have seen an influx into numismatics as well as "bullion buyers".  I am not a dealer, strictly a buyer.  I've introduced a few friends to collecting over the years and I'm now finding it easier to introduce new collectors.  From where I sit, I honestly believe this is due, at least in part, to the bull precious metals market and those looking to get in on it.  I too find those who started with gold & silver eagles now working on type sets as well as other coin sets.  In my opinion, this influx will probably increase in the future as more and more "money" seeks haven from "dollars".  Maybe i'm mistaken, but once you are into collecting, it's hard to get out.  For this reason, I think we are adding a lot more than we are losing to the hobby, and with limited supply and increased demand, I think we all know where that leads...UP.  Anyways, as a collector, i'm not so worried about the "prices to sell" going up as I am worried about "cost to buy", but that is just a "small price to pay"(pardon the pun) to introduce others to this wonderful hobby.  I wish everyone a good day and happy collecting,

Todd

Ha ha ... I like that distinction between "money" and "dollars" (I assume you carry it to other currencies as well) ... I have believed for many years but more lately that it really doesn't matter what the pundits say, whether gold is going up or going down ... if you hold it all the time and dollar-cost-average your way in, you will be fine. It is an alternative currency, pure and simple. With all the money-printing going on and the "race to the bottom," (imagine how much the U.S. national debt would balloon if we had to pay 7% on our debt rather than artificially keeping interest rates low), it is not a question of if, but a question of when gold will soar. Check what happened over the weekend in Cyprus and then check if your money market funds are guaranteed by the U.S. government.

[jtabie]

I have yet to disagree with anything in this forum so far.  The Cyprus incident should be an eye-opener, yet it seems to me like the reaction is subdued relief, due to the fact that a plan is on the way.  Well, whatever.  I'm more worried about what caused this so-called "rescue" and also, who else (ie Washington DC) noticed this diabolical "rescue".  Bottom line, some individuals will non-voluntarily pay down a debt that they didn't likely create.  This is troubling to me.  To those individuals, it is too late for "havens" or "shelters".  I'll keep my numismatics and precious metals...thank you.

[cladking]

I have yet to disagree with anything in this forum so far.  The Cyprus incident should be an eye-opener, yet it seems to me like the reaction is subdued relief, due to the fact that a plan is on the way.  Well, whatever.  I'm more worried about what caused this so-called "rescue" and also, who else (ie Washington DC) noticed this diabolical "rescue".  Bottom line, some individuals will non-voluntarily pay down a debt that they didn't likely create.  This is troubling to me.  To those individuals, it is too late for "havens" or "shelters".  I'll keep my numismatics and precious metals...thank you.

Look at what's going on right here in the US.  Savers haven't had any interest in years as the bankers and government continue their largesse.  They're essentially taking away our savings a couple percent at a time instead of the historical .5%. 

[jtabie]

:-)

[VDB Coins]

For this reason, I think we are adding a lot more than we are losing to the hobby, and with limited supply and increased demand, I think we all know where that leads...UP.  Anyways, as a collector, i'm not so worried about the "prices to sell" going up as I am worried about "cost to buy", but that is just a "small price to pay"(pardon the pun) to introduce others to this wonderful hobby.  I wish everyone a good day and happy collecting,

I'm sure you're right that the future of the hobby is virtually assured at least for the next few decades.  Things are much brighter than they were in 1995 when it looked like collecting was dying for lack of collectors and prices had hit their lowest point.  Indeed, the future is even brighter than in 2000 when it became apparent the sizes of the middle class were going to continue to bloom all over the world.  The increase in metals prices may bring in as many collectors as either of these events and even in this recession the middle class is continuing to make inroads in most countries and to grow in aggregate. 

We will still see some pressure on some coins because of the changing nature of the demand which is becoming more diverse and from a different and younger collector base.  This will continue to put pressure on the lower end of the US market until the economy turns around, I believe.  With good returns in the stock market people won't be putting much money into coins.  When the economy turns around the stock market will begin to level off and huge amounts of new (not yet existing) money will go into coins.  It could mean spectacular gains almost across the board.

Not sure I agree that the stock market and coin market work in counterbalance. Some people have their stock money, and their "alternative" money. I think the more bullion-related (risk-off) assets work that way, i.e. when stocks are gaining, some people invest less in precious metals, bullion, and so on. But I think we are finally seeing a market where the prices for Rare Coins are divorcing themselves from bullion. Bullion right now is down, yet prices for true rarities are up. This is a good thing for collectors who truly buy quality coins and for dealers who are not PM bullion sellers. For years now some of us dealers have made money or lost money at the mercy of the PM markets. Not a fun way to play. But now things are turning around. Collectors are buying again, and collector coins are selling because people are feeling better about the economy.

The U.S. coin market is becoming more international, in fact I think that probably applies to some other countries as well due to the democratization of selling via the Internet. American coins are seeing great demand from Asian buyers, especially Japanese and Chinese. Canadian coins are increasingly appealing to Americans. I am seeing considerable sales of Australian coins to Brits. Etc. And yes there is a younger generation of collectors coming up as well. But the unhooking of rare coins from precious metals, if it continues as stocks go up and PMs go down/waffle, to me is one of the brightest signs for future gains in truly rare coins. Time will tell if it continues or if we see a selloff in that market segment.

Finally, I have been waiting for years to see some non-numismatic money coming into coins. What do I mean? The folks who buy fine art. If some of that money ever comes into coins, watch out. I think Heritage, for example, is doing an increasingly masterful job of cross-marketing (trying to get people who buy rare wine to try coins, getting coin buyers to try rare books), and if any of the multi-hundred-million-dollar rare art money starts flowing into rare coins, it's Katie Bar the Door. Yes, the markets are different. But how different are they? There is only one Mona Lisa. But there are only a few superhigh-grade 1794 dollars --I have not researched this, it's merely for example, but that is the first coin to recently cross the US$10 million barrier. What is the record for fine art? Several hundred million dollars. I wonder what the first billion-dollar canvas will be? And what will be the first coin to trade for US$100 million? Just thinking out loud. I am 64 and may not live to see those records fall. But this is a great time to be a collector and a dealer. My 2c as always.

[VDB Coins]

So, the Heritage Central States auction is history. Despite a huge tank in the precious metals markets on April 15 (or perhaps, "regardless of"), the sale appears to have done quite well. Besides the $3.1 million-plus that the George Walton 1913 Liberty nickel brought, there were three other coins that EACH brought more than $1 million apiece. The 1783 Nova Constellatio Type II quint in AU53 bought $1.175 million, a 1796 Bust silver dollar in MS65 NGC brought $1.175 million, and the Eric Newman 1852 Humbert ten, MS68 NGC, ex: Humbert himself, brought $1.0575 million. The 1792 Silver Center cent in MS61+ Brown didn't fare too badly either, at $822,500.

And in our own backyard, we handled the sale of the finest 1964 SMS set certified by PCGS for a bit more than $150,000, likely a once-in-a-lifetime deal, but who knows?

What most reassures us is how the rare coin market -- and we mean, the market for truly rare coins -- is seemingly divorced from the dicey precious metals/commodities markets. In fact, given the current macroeconomic climate, where cash yields nothing and long-term bonds next to nothing, many investors are being forced into high-dividend-yielding stocks to stay ahead of inflation, which is so far almost nonexistent -- or deflationary. Perhaps some of them, in their search for alternative investments and higher returns, are looking at rare coins and other such to increase their percentage yields? This is just one man's theory, and you need to be really expert to try such a strategy. Purists would say that "rare coins" and certainly not gold are not investments in the purest sense of the word since they do not yield regular and predictable returns. But by the same token, have bonds yielded regular and predictable returns when the interest rate might stay the same but the net return is negative due to depreciation of the underlying asset? Do high-dividend stocks yield regular and predictable returns when many such companies have cut their unsustainably high dividend payouts? Can you say real estate?

I continue to suspect there are some new buyers and new money coming into the coins and collectibles markets for precisely those kinds of reasons. Personally, I am trying to concentrate on saving money for possible deflation (I have enough exposure to gold and PMs, thank you) and/or buying truly rare coins and high-dividend stocks with long histories of increasing and sustainable payouts. Time will tell.  Do your homework, make your own decisions, and you will be better off than listening to someone else tell you what is right for you. Good luck!

Best Regards, 

George

[coinsarefun]

Great report George. For some reason I was thinking that the 1913 Liberty Nickel would sell
for more although 3.1 million is pretty good.

All the other great numismatic coins did well too, which brings me to a question......
As the true collectable coins are doing well and the rest are basically lagging, most collectors can not afford these rarities and are left with collecting middle of the road coins, what will happen to this market?

Albeit the coins that are collected by the majority are much lower valued, these collectors are
the "middle class" of  the meat and potatoes of the collecting engine that keep this hobby/investment going.

[jpcienkus]

@jpcienkus One thing I have learned in, well, more than a half-century of collecting is, life is too short to collect coins you hate. If Barbers are not your thing, do not lose a second's sleep over it. There will always be plenty of coins you love. Unless I am buying an estate where you have to buy the "swillage," as a friend of mine terms it, along with the good, I never buy a coin unless it has eye appeal. I always think I will resell it some day, so if I don't like it, I don't think my customers will like it, and I don't buy it. (If the price is ridiculously low, that is another story, but it usually raises red flags for different reasons.)

So. Welcome to the forum, welcome to collecting, and welcome to buying coins you love! I too am glad that the ASE's have brought you into this fascinating hobby/vocation.

Best Regards, 

Thanks George.  Sorry for the late reply.  I plan to spend some more time on this site.