World Colonial

On 7/11/2022 at 8:20 AM, J P Mashoke said:

Price values may drop but coin sale prices will likely stay the same just not go up again until the market gets better. In most cases a dealer is not going to sell that ASE for any less than what he has been asking for it just because the price of silver went down. There is no profit in that only loss. Now if you have a silver tongue that may be worth something in this market..

Any dealer using this business model in an extended market decline risks involuntarily running an uninteresting coin museum or going bankrupt, especially now in the internet age.  Few dealers offer compelling enough inventory where the (prospective) buyer can't buy the (exact) same thing somewhere else.

Most dealers predominantly sell "widgets".

On 7/10/2022 at 8:51 PM, GoldFinger1969 said:

Yeah, I don't know if millionaire would mean EARNS $1 MM...or has a net worth of $1 MM (including homes)...or a liquid financial net worth or easily-liquidated assets that comfortably exceeds $1 MM even if given a haircut.

Sometimes the term is used interchangeably but to use it accurately, it has to be based upon net worth.  I have also seen it used as total net worth including primary residence or liquid net worth, but the source often isn't clear which one is being used.  I don't recall the definition ever being easily liquidated.

In the context of this discussion, what really matters is whether the owner is a "strong hand" or a "weak hand" which I'd use in two contexts.  First, real collectors are a lot less motivated to dump their collections in (anticipation of) a falling market.  That's what happened starting in 2012 in South Africa causing the price crash, though that market is a tiny fraction of the US.  Same thing in 1990 during the TPG bubble.

Second, whether the owner can afford to keep what they have or must sell under adverse personal circumstances.  That's what I was getting at earlier with employment and financial conditions.  Many US coin prices have crashed in both of our lifetimes, but I don't believe it's because the owner usually had to do it, only in relatively low proportion.  They just didn't like their coins enough to own it at a big unrealized loss.

The US price level in particular is at risk of both in an extended bad economy.  The only reason so many (US) coins sell for the current and prior price is due to the belief that the owner can get most of their money back at resale.  I state this obvious truism because the prices of the highest grades (and sometimes lower) are (totally) disproportionate to the merits as a collectible.

If it ever gets to the point where the public has to (or chooses to) conduct a "fire sale", the prices of a noticeable proportion of particularly US coins will completely collapse and never recover, adjusted for price changes.  An example is the 16-D Mercury in the lowest grades.

On 7/10/2022 at 4:11 PM, GoldFinger1969 said:

Wow....$60,000 for any home in 1962 -- let alone Atlanta area or Georgia -- was damn pricey.  Homes in the NY area when my parnets and relatives bought in the LATE 1960's were only $30,000 or so.

That's what my mom told me, but she might be wrong.  I didn't confirm in the county records.  But keep in mind, it was a 4BR house which now has 4000+ SQFT of living space with a finished basement and then maybe close to 3000.  It was large for its day.  The property also had nine acres originally until three acres (so my mom told me) were sold under eminent domain to build I-75 through ATL in the 50's.  When the property last sold in 1996, I think it sold for several million because of the additional acreage.

My grandfather wasn't rich but one of the "working rich" per your definition at the time.  Nothing left of the family money on our side though.

On another note, when Ferdinand Lundberg published "The Rich and the Superrich" in 1964, there were about 60,000 millionaires which was rich at the time.

How many are there now?  10MM? $20MM?  The table below only goes to 1988.  Hard as it is to save $1MM, it isn't even close to rich.

Summary of millionaire materials (oregonstate.edu)

On 7/10/2022 at 4:18 PM, GoldFinger1969 said:

I don't recall seeing that thread but I would have been alongside you.  Also, others who agreed with you might have thought that you said it better than they could and thus didn't post.

If a thread disappears due to inactivity, I wouldn't assume others agreed or disagreed with the posts or others.  They may have missed it like I did or they may have thought they couldn't improve on anything you said/typed. 

It was on the PCGS Forum.  Other have disagreed with my claims on world coinage here too.

On 3/3/2022 at 11:34 PM, The Neophyte Numismatist said:

I call this "extreme focused".  Each of those sets are extremely challenging, and the definitely do not complete themselves.  Nice work!

Agree

It's only unfocused if the collector doesn't have the money and interest to collect what they do simultaneously.  Being focused doesn't mean the collector has to only buy "finest known" or try to put together a high ranged registry set in one series.  

For me, I am down to one broader series.  It's the pillar coinage of Bolivia (1767-1770) and Peru (1752-1772): 1/2R, 1R, 2R, and 4R.  I also own some from Guatemala and Mexico along with a few 8s but don't buy it regularly.

That's all I have the money for if I am going to ever progress meaningfully.  I also have a few side collections, Spanish colonial quarter real (1790's to early 1820's) and Bolivia Republic decimals (1864-1909).  In the latter, I'm primarily interested in the crown sized Boliviano and "key" dates, though I will buy the more common ones if it's a reasonably priced very high quality example.

I used to collect several others, primarily South Africa Union but gave up due to lack of interest and funds.  I sold most of South Africa (value wise) and looking to get rid of most of the rest too.

I've occasionally thought about other sideline collections but won't ever do it.  First, it will take funds away from my primary collection. Second, I'm not interested in committing noticeable amounts of money (to me) for coins I don't even like that much and likely aren't that marketable. 

There are other coins I wouldn't mind owning as "one offs", but these are more expensive than those in my primary interest and above the financial level I collect: English medieval gold noble, US Assay Office $20, a few ancients (First Jewish Revolt) are examples

On 2/27/2022 at 3:00 PM, gmarguli said:

With prices so crazy, I'm actually finding it harder to justify keeping many coins I like. I just watched a coin hammer for $8000, where a few years back I bought a same grade example for $1100. Earlier this year an MS62 example of a coin I own sold for $4000. I paid $1200 for an MS65 example a few years back. How can you hold these when there is so much profit available...

I don't own any coins like this but totally agree.  Many of these coins are actually very ordinary, except under the inflated standards so widely used in the US.

On 7/10/2022 at 10:06 AM, GoldFinger1969 said:

Gold was the ONLY way to hedge or diversify in the 1970's as inflation soared.  That's why gold did well and new-trading in currencies (and falling Treasury bond prices) made the trading volumes more or less the same.  Today, currencies (and Treasury bond trading) dwarf gold.

Only way for the typical person, other than maybe real estate.

Gold exploded because its price was fixed for so long.

On 7/10/2022 at 10:01 AM, GoldFinger1969 said:

No doubt general and asset price inflation impacts billionaire totals and other income/wealth levels.

But there is also REAL income/wealth growth, particularly from U.S. dominance of certain key export sectors where we can not only sell to Americans but service the global community.

The net worths of folks around in both 1982 and today certainly outstrips inflation and even stock market returns for many.

Not saying there isn't any.

I'm telling you it's mostly caused by credit expansion where this "money" went into (financial) assets instead of consumer goods and services, so it doesn't show up in the CPI and fools practically everyone into believing it's real wealth when it isn't.

Look at outstanding credit today and recently versus 1980 or even worse, 1960.  The wealthiest don't hardly ever own large amounts of fixed income directly, but it's still predominantly why they are so much wealthier, as all debt shows up as someone's "wealth".  

I gave you the example of commercial real estate but let me draw an analogy with my grandparent's prior house, located on one of the best streets in Buckhead in ATL.  Built in 1940, they sold it in 1962 for $60K or so I was told.  It sold this year for about $1.1MM with 1.2 acres instead of the original six, long ago subdivided.  Some of this increase is explained by population which makes living closer to the city core more valuable and some of it is due to more real wealth.  Most of it is due to credit inflation, the vast majority.  It's the same house (updated) with no incremental utility other than a closer commute.

It's the same thing with commercial real estate.  Office buildings that would have been worth $10MM to $50MM (maybe) in NYC in the 60's are now worth hundreds of millions to over $1B.  Much higher rents now but this is also due to credit inflation and artificial prosperity, not real wealth.  It's the same building it was then with no incremental utility either, other than what I just told you for the house which doesn't even come close to explaining the price increase, even accounting for CPI.

On 6/22/2022 at 12:48 PM, The Neophyte Numismatist said:

Gold in general has been pretty interesting to watch.  Many collectors and experts have considered gold to be a hedge against inflation.  Also, some people think in terms of gold as a counterbalance to a sinking equity portfolio.  In 2009, gold soared in economic uncertainty.

Gold was correlated with other asset classes at that time.  It wasn't a hedge.

On 6/22/2022 at 12:48 PM, The Neophyte Numismatist said:

Today, we have record inflation, economic uncertainty, a war in Europe... and while gold has made some gains, is not behaving quite like we would expect.

You know what's "interesting" about these expectations?

First, gold had a big run up to August 7, 2020 ($2072).  Someone might claim it was in anticipation of something but whatever.  The point is, it already rose a lot (from March) and it was (and is) very expensive historically (and has been for a long time) versus the things that people need and want to buy, especially other commodities.  While I think (and attribute) this consistently high price to a higher risk premium, in no way is it remotely "cheap".  So, given this historical relative valuation and run-up, why would anyone think it unusual?

Second, gold isn't an inflation hedge like "metal bugs" claim.  It's entirely dependent upon when you bought it.  If you bought it in 1980, you're both underwater and had a huge opportunity cost.  Same story for 2011 but just less.  OTOH, if you bought in 1999/2001 or October 2008, you're up big.

My explanation for it?  Simple, people aren't robots but human beings, they have agency, and can act contrary to the expectations of "metal bugs".

Nothing hard to understand about it.

On 7/9/2022 at 12:07 AM, GoldFinger1969 said:

OTOH.....demand for numismatics and bullion will be impacted by any negative wealth effect that hits the middle-class, the upper middle class, and the so-called "working rich."  These are all distinct from the truly wealthy and ultra-HNW types who are worth hundreds of millions or billions and aren't impacted by a 20% or 40% drop in the stock market, falling bond prices, or even real estate drops. 

735 US billionaires last I checked and along with something like 20,000 worth $100MM+ according to the Ultra-Wealth Report.

I don't know how many are coin collectors but would guess somewhere in the vicinity of 1%.  Depending upon where they have their money, I expect to see a much higher percentage of this group get totally body slammed financially versus the past.

Aside from the much higher overvaluation and leverage, look at what most of these people actually own, not what it's worth.  I don't know what these people exactly own in every instance but of the ones where it's public knowledge, many own assets that I'd describe as a bag of hot air.

So, what I am telling you is that there aren't (or weren't) 735 billionaires in 2021 versus 13 in 1982 because the country is that much richer.  It isn't primarily because of inflation either.  It's substantially or primarily because assets that used to be worth relatively nominal amounts in the past now sell for ridiculously inflated prices, like professional sports teams or commercial real estate.

As long as circulating US coins continue to be minted, none in the future will be even close to scarce, absent a collapse in the economy to outright destitution.  As big of a bear market as I expect coming, even I'm not that pessimistic.

As for the prices of numismatic coins, big drops in the early 80's, early 90's, and somewhat after 2008.  It depended upon the coin or series.  Early 80's was tied to both the recession and the precious metals crash.  Early 90's I think more from the end of the TPG bubble.  As for GFC, I never heard that coin prices fell that much but I have never seen specific data or researched it myself.  I heard that it was more stagnation and persistent than a "crash", once again depending upon coin or series.  Some series like classic commemoratives have (mostly) been on a one-way trip lower, in this case since the end of the TPG bubble.

As to the future, to get what I would describe as a big decline is going to take extended unemployment and tight financial conditions.  In the first phase of the upcoming financial markets bear market (which may or may not have started), I'd expect much (but not all) of the post-COVID run-up to be reversed entirely.  An example would be ridiculous run-ups on common as dirt Morgan and Peace dollars.  Same thing for the premiums on bullion coins and to the extent it applies, on common collectible NCLT.

Longer term is another story.  I 've written about my expectation in prior threads, but this post is long enough.

On 7/9/2022 at 1:46 PM, zadok said:

...does that mean i should sell or hold my enron?....

Actually, I'd buy more if I were you.

On 7/9/2022 at 11:02 AM, Quintus Arrius said:

I caught a good 40 minutes of the broadcast listening to three professional women who, regrettably for me, spoke in terms I did not upstand in a cool, call and collected manner. None of the listeners who called in seemed to be upset or agitated. What am I missing here?

Not familiar with the broadcast to which you refer, but if it was focused on or primarily about crypto, it's consistent with the sentiments I infer.

Crypto (including BTC) crashed (close to) an equivalent amount from late 2017 to mid-2019, actually somewhat more percentage wise.  That probably accounts for part of any current complacency.

More generally, it's the best indication of manic psychology.  True believers still believing that nothing is something and that somehow, all who "hold the faith" will become rich, or something like that.

On 7/8/2022 at 11:01 PM, GoldFinger1969 said:

I think the losses are about $1 trillion, but point made.

I also heard $2T.

On 7/8/2022 at 11:01 PM, GoldFinger1969 said:

Web 3 is the next version of the internet which is something of a combination of the metaverse, blockchain, and open source -- and I have no idea what I just typed.   If Web 3 can put Google, Twitter, and Facebook out of business or re-do how we do e-commerce, I wanna see it first.

The "metaverse" is a farce.  It's a fantasy alternate "reality" where Meta (Facebook) pretends that nothing is something.  It's as bad as NFT (at least) and worse than crypto.  Entirely appropriate in a culture which is increasingly detached from reality.

On 7/8/2022 at 11:01 PM, GoldFinger1969 said:

As for the debate on crypto....ever notice that "regulation" is needed when prices DECLINE but not when they GO UP !!???!! 

It's only an amazing "coincidence".  I'm not against some regulation in principle but notice that it's yet another example of asking to close the barn door after the proverbial horses have bolted?  That's the history of financial regulation.  Anyone who doesn't believe me, go look it up.  Regulation is always passed to supposedly prevent the crisis that already happened. 

The worst aspect of modern regulation is the widespread (and in some segments of society, near universal) belief that it's a solution for mostly government created moral hazard in our guaranteed designed-to-fail financial system.

On 7/8/2022 at 11:01 PM, GoldFinger1969 said:

The investor who lost money should blame him or herself, not Elon Musk.  He just figured out NOW that crypto may be a Ponzi Scheme ?  

No, not maybe.  All crypto does is transfer wealth between participants.  It doesn't create anything and it's not even a real functioning currency.

On 7/8/2022 at 11:01 PM, GoldFinger1969 said:

Musk's environment tweet must have been on the electricity used to mine BitCoin and other cryptos.  I believe he made it a while back....not aware of any recent 15% drop in prices.  

That's what the first thing which makes BTC and any other crypto requiring "mining" such a farce.  It's idiotic to waste real resources (energy) for literally nothing.

On 7/8/2022 at 11:01 PM, GoldFinger1969 said:

Actionable  ?  Criminal charges ?  For what....offering an opinion ?  People need to look in the mirror when they are separated from their money.

Another farce

I haven't been able to go to the summer show since 2002.  I've been to the winter/spring show four times since: 2006, 2010 (or 2011), 2013, and 2020.

I almost always come up empty.  Nothing I want to buy.

On 7/8/2022 at 1:24 PM, GoldFinger1969 said:

Robb Report piece on the 1933 sale:

https://robbreport.com/shelter/art-collectibles/stuart-weitzman-1933-double-eagle-record-18-9-million-1234618240/

In the Coin Week article prior to the Weitzman sale, my recollection is it claimed that he had always "dreamed" of either owning this coin or other coins like it.  I don't remember if it explicitly stated he had been a collector in the past, but he wasn't just a random buyer either.

I inferred that he had been at least a casual one when he was a lot younger (in the 50's or 60's?), similar to others who ended up buying the 1804 dollar and 1913 LHN.

On 7/8/2022 at 12:27 PM, GoldFinger1969 said:

Interesting....yes, alot of people don't know Saint-Gaudens was an artist/sculptor.  But because he is most famous for designing the coin -- even thought he was very famous BEFORE doing that (hence why TR knew of him) -- that's what folks want to pay up for.  The prices for his patterns and experimental models also command a nice price.

Yes, but he isn't actually famous now or recently, except by the very low modern standards of today.   That's part of my point.

He was obviously a prominent artist in his day or else TR would not have selected him but other than coin collectors and art lovers of this particular period of American art, who else has any clue about him?  I'd guess even most US coin collectors know nothing about him, certainly not those from elsewhere.

The point I was trying to make is that his artworks (certainly his "major" ones whatever those are) are a lot more significant and culturally important than any Saint.  That's not even up for debate.

The only reason these two coins sell for so much more than any of his artworks is first, because there are far more affluent coin collectors who want it and second, because of the financialization of "collecting". 

I'm going to guess that these two coins have been more expensive for a long time or practically since the US went off the gold standard, but the variance has probably increased noticeably due to what I am telling you in this thread.

On 7/8/2022 at 12:29 PM, GoldFinger1969 said:

Is the Robb Report still around ?  I remember during the 1990's and with Robin Leach it was pretty popular.

I found this article on the internet.  I was dated either within the last 10 or 15 years.

On 7/8/2022 at 12:27 PM, GoldFinger1969 said:

Aren't there lots of those artists work?  I realize no two are alike and there are different prices/quality assigned to them....but if you want a Picasso and have the $$$ you can probably get it.  No 2 collectors can have a 1933 Saint (as of today) since there's only one.

Seriously?  Not trying to be difficult but that's a completely ridiculous comparison.

Why would anyone other than a coin collector want the 1933 Saint or any expensive coin like it, other than to make money off of it?

That's why I commented on all the coin attributes that especially US coin collectors think are so important.  In this case, it's primarily the date on the coin.

Non-collectors don't care about date rarity, except as it impacts the price.  It's irrelevant to them because they aren't coin collectors.  To the non-collector, the 1933 Saint is essentially identical to all the common widget Saints, other than financially.

On 7/7/2022 at 10:27 PM, GoldFinger1969 said:

Buying trophy real estate...a 6th home....art.....coins....vintage cars....if you can afford them, chances are you really don't care what they are worth or re-sold for in the future.  As someone who has worked in 2 Private Banks with HNW and ultra-HNW individuals, let me say everybody is different but you would be surprised what the super-wealthy blow their $$$ on without giving it a second thought.

One other comment on this extract.

I agree, except that by some amazing coincidence (no, it really isn't a coincidence), this doesn't translate to coins, except by coin collectors.

You're familiar with the Ultra-Wealth Report, right?

The 2020 or even 2021 is probably out now but the last one I read was 2019.  57,000+ estimated with a net worth of $100MM+ and 17,000+ at $250MM plus.  It also includes a breakdown by geography for the total but not by wealth bucket.  (I believe it estimates the number over $30MM which I recall is the general minimum for a "family office".)

Either of the two groups can afford practically any coin "comfortably".  (Obviously noticeably fewer for the 1933 Saint or 1794 SP dollar.)  Yet by an amazing "coincidence" (supposedly), they don't.  The number of "very wealthy" have increased over time (probably somewhat closely correlated to the increased coin price level too) but if you calculate the probability as a function of pure random chance, any of us here would be more likely to be struck by lightning on a clear day, in multiple. 

Over five decades - since the 1970's when coins were first widely bought as "investment" - hundreds of sales (at least) where thousands or tens of thousands could have bought each and yet literally almost none ever did.

I presume it's happened a few times, but the only one I specifically know is with the Brasher Doubloon profiled in a prior Robb Report article.

On 7/7/2022 at 10:43 PM, GoldFinger1969 said:

Only one 1933 Saint, as our fellow poster and colleague has told us.  

There are lots of Picasso's or Monet's or whatever. 

I presume this comment isn't serious.

On 7/8/2022 at 10:19 AM, GoldFinger1969 said:

The 7% Rule:  The MCMVII 1907 UHR that was sold last year went for a great price...but once again, the return maxxed out at about 7% even though Bob Simpson wanted a top price and the buyer clearly had the $$$ having bought the 1933 Saint a few months earlier.

But again....does Simpson really care ?  He owned the coin for 15 years...got to enjoy it...then sold it for almost $3 MM more than he paid.

Another point on these two coins.

On one occasion, I did a search on prices realized for St. Gauden's artworks.  I found about a dozen (mostly sold by Sotheby's or Christies) but none were even close to the price of these two coins.

The majority in the mid-five figures, a few in the lower to high six figures, and one for I believe $1.5MM.  The last one was a small lifesize statuette of Abraham Lincoln, something like three feet high in a sitting posture..

That's all anyone needs to know about what any non-collector thinks about these coins (or any others), relative to what they can buy with the same money.

On 7/7/2022 at 10:27 PM, GoldFinger1969 said:

For those of you who are sports/baseball fans, just look at how the New York Mets payroll has operated under the wealthy Wilpon/Katz families....vs. the wealthy Steve Cohen family. 

Long post, so replying to this extract.

No valid analogy.  We've discussed this before.  Sports teams are in a huge bubble but first, it's an actual business.  A real one.

Second, owners are willing to make less operating profit because of increasing franchise values.

Third, while they presumably don't expect it, they might be willing to lose some money and maybe a lot because of the status value ownership confers.  The same applies to any number of other "hobbies", such as race horses, race car teams, a T-Rex skeleton, multiple artworks..you get the idea.

No one outside of a coin collector gets any utility from coin ownership and non-collectors are virtually never impressed by the attributes which make most coins expensive.  They don't care about date rarity, the "history", the TPG label, "finest" known or registry points, CAC stickers, or whatever.  It's irrelevant to them.

To them, a 1933 Saint isn't really different than any other date, other than the price.  It looks identical to them and while they may be aware coin collectors care about dates and TPG (if they collect another field like sports cards), they aren't coin collectors so still do not care.

On 7/7/2022 at 10:11 PM, GoldFinger1969 said:

(4)  I don't know about an asset bubble....coins didn't really take off like tech stocks when the Fed kept rates pegged at 0.25%.  Gold did very little....major U.S. coin types didn't see any price spikes....and final sales for trophy coins like the 1933 Saint or the 1908-S Norweb Saint generated returns of around 7% (as I have posted here before)

Coins aren't in a bubble now, in the aggregate.  It's not 1989 all over again.

Concurrently, the current especially US price level is only made possible by the global asset mania.  No one would be paying $18MM for the 1933 Saint without it, any more than they would be paying hundreds of millions for some artwork.

On 7/7/2022 at 10:04 PM, GoldFinger1969 said:

But couldn't you say that collectors -- especially young and novice and non-dealers -- didn't KNOW which coins were the equivalent of 68's vs. 64's back then ?  And since one dealer writing "64" on a 2x2 meant as much as another one writing "68"....it wasn't until you had neutral (?) arbiters assigning grades that you had more transparency AND folks willing to pay more $$$.

No, I wouldn't say that, though I'm not sure the time period to which you refer.  My first awareness of Sheldon grading was from a 1978 advertisement in Coin World which was then a newspaper.  It was for Morgan dollars (I think) offering 60, 63, and 65.  I've since read that ANACS was grading using certificates but don't remember the specifics about numerical grades or if any were even used.

What I am telling you is that, while presumably all collectors preferred better coins, it wasn't based upon what is now part of the TPG grade.  They didn't give enough of a cr*p to pay big premiums for marketing because that's what it is, as the price difference for the now highest TPG grades is totally disproportionate to any difference in the coins as a collectible.  With no market for it, no one would pay for it at the time. 

This makes total sense, since these grade numbers have little to do with actual collecting.  If this seems so hard to believe, that's how it is practically everywhere else in the world now, the only exceptions being where TPG has also financialized collecting in places like China and South Africa,

On 7/7/2022 at 10:04 PM, GoldFinger1969 said:

And since many of these coins had always been affordable to young/novice/non-dealer collectors....once financialization began to creep in and then the grades got assigned later....prices rose.  For many, they were STILL affordable and hence you had all that demand for formerly "cheap" U.S. coinage and the price began to rise (at a faster rate than you saw during The Baby Boom years of 1945-1980).

Yes, something like that, but once again, not primarily because collectors experienced a collective epiphany where they miraculously discovered that the coins in the now highest TPG grades are so much better than slightly lower grades and as a collectible.  This, while all their predecessors operated in a "Dark Age" with a lack of "sophistication".

It's primarily a combination of financialization and marketing.