World Colonial

22 hours ago, gmarguli said:

The idea that TPG are moving coin collecting from a hobby to an investment vehicle is ridiculous. There has always been a wide range in numismatics. Does anyone honestly think that 50 or 150 years ago the people who purchased expensive coins didn't think about the financial benefits of their investment?

I collect coins because I enjoy it. I like the history, the designs, the challenge of finding that one piece that is both rare and nice condition. However, I'd be a liar if I said that the investment portion of it didn't weigh heavily on purchase decisions. 

I agree.

The one clarification I would add though is that TPG has brought in a lot more money into coins for the reasons you gave which inflates the price level and increases the importance to more buyers of viewing it as an "investment" because of the greater financial risk.

22 hours ago, gmarguli said:

My one strong disagreement with Mark Salzberg's letter is that he appears to believe the strong run up in bullion is signs of a vibrant market. Bullion is the purchase of the scared. It is a hedge against inflation. It is not a collectible, even if the mint stamps a pretty eagle on it and sells it for a premium. 

This wasn't as clear to me in the letter but I agree with you on this also.  I haven't read any claims and in my limited observations haven't seen any indication that metals run-up up to 2011 and more recently has had much of impact on the price level.

On 9/26/2020 at 11:16 AM, zadok said:

...I personally do not believe that MS letter is addressing any BU clad quarter collectors or circ Lincoln collectors....its all about the whales coming to eat the krill...

Of course he was not.

But I also don't believe it is just directed at the "whales" because while the coins are individually expensive, there aren't enough to make a material difference financially.  If you add up the estimated value of all the US coins listed in the PCGS "Million Dollar Club", It's the equivalent of a handful to very low number of the most expensive paintings.  What kind of financial scale is that?

It’s not even feasible if the inference is limited to the relatively low number of most elite (US) coins.  If will never last more than temporarily, as this coinage would be uncompetitive versus similarly priced objects in other areas, such as paintings and Faberge Eggs.  None of these coins are interesting enough to the non-collector where they will pay about the same price or a lot more.  

Here is the bottom line. The idea that there will ever be any financially meaningful scale with coins doesn't have any merit.  With US coinage, the amounts are meaningful to individual predominantly middle class collectors but not to the ultra wealthy, much less in the context of global financial flows.

It's even more extreme with world coinage and this is what I told those in South Africa.  On one occasion a few years ago, I provided a detailed estimate of the value of all "investment" eligible ZAR and Union coinage (their "classics") which was about $30MM to $50MM.

Why would any really wealthy individual or asset manager want to place any meaningful amount in such a shallow and illiquid asset, whether in US coinage and definitely not anywhere else? 

The answer is that they don't and won't.  We already have the 1980's TPG bubble in the US as a direct example and a similar thing happened when TPG financialized "collecting" in South Africa.  I observed it in real time and told participants there it wasn't sustainable and the reason it wasn't and isn't is because of what I wrote here earlier.

There can never be any meaningful financial scale without turning collecting into “widget” trading.  Even individual collectors such as Simpson and Partrick can noticeably inflate the price of most US series if they don’t “cash out” but instead buy something else,  as there is no market depth.  (The largest scale is in generic pre-1933 gold, Morgan dollars and NCLT.  The 1904 double eagle alone has more liquidity than all other series.)  It’s much easier to take an equivalent financial position in CLCT (holding company for PCGS) than most US series and it’s a lower tier small cap stock.  Same would be true of Heritage if it were a public company and maybe Certified Collectibles Group (parent of NGC).

On 9/26/2020 at 10:22 AM, cladking said:

Every collector is different and every collector has unique motivation.  If you can't understand this then you can never really understand a collection of people.  The only real measure of understanding of anything is the ability to predict.   It is irrelevant that the only thing that can't be predicted is the future because insights are possible.  I would read Mark Salzberg's words very carefully because I believe he has some real insights and a keen understanding of current conditions.  

This is really funny.  Your exaggerated claims bear no relation to how collectors actually collect yet you tell me this?  None of your claims will ever happen and your posts demonstrate that yuu understand virtually nothing about what motivates collector behaviour.

I read what MS wrote.  The only thing he described are the characteristics of a hyper financialized market where coins are traded as "widgets".  That's what claiming coins are a viable alternative asset class and fractional ownership represents.  What does this have to do with collecting?

8 minutes ago, cladking said:

I don't believe ANY collector is being pushed to the fringes and if mainstream collectors had embraced new coin collectors in 1999 rather than excluded them this wouldn't be an issue in all probability.  

Yes, this is how you once told me that there is no "shortage" of coins where collectors will endlessly go down the "food chain" to buy what they can still afford.  Supposedly, if collectors can't afford to buy what they do now or in the past, they will buy something with a much lower preference as a replacement.

The only reason you hold this view is because you don't understand collector motivation at all.  It's evident in our prior exchanges.  Collectors never acted as you claimed in the past, they don't act this way now, and I have never read one post of yours where you provided any reason to believe they will in the future.

No one is excluding anyone not now and not in 1999, anymore than they are "avoiding" the coinage you like most.  There have been plenty of new collectors since 1999.  This claim is unsubstantiated.

Most of these new collectors just didn't and don't prefer the coinage you think they should.  This is the internet age where anyone can collect anonymously and needn't care what anyone thinks of their collecting, which they mostly never did anyway other than how it impacts the price.

3 minutes ago, cladking said:

There's no wishful thinking involved.  

Perhaps Mark Salzberg is merely ahead of the curve here.  

Good luck with that.  I can easily explain why the level of financialization expressed in the letter is never going to happen.

But given what a hugely inflated opinion you have of the appeal of coin collecting to the noncollecting population where you project such inflated prices for the coins you like, I can see why you would believe otherwise.

A couple of points to the above post.

Since prices are set at the margin, a low proportion of primarily US collectors can still make the TPG pricing structure applicable elsewhere, even contrary to the preferences of everyone else.  This has already happened with some of the best world coinage, fortunately just almost never with the equivalent price spreads of US coinage.

Whether and where TPG will predominate in additional markets is mostly a function of US buyer preferences and the local collecting culture.  South Africa is a small market (probably ranked between #20 and #30 in financial scale) but a test case of what happens where a disproportionate percentage of financially motivated buyers with little to no interest in collecting dominate.  The price level is still higher (for now) but undoubtedly, the "hobby" has been negatively impacted by those who lost noticeable proportion of their investment during the bubble.

Also to be clear, I wasn't  criticizing the letter per the earlier above post.  I was pointing out that what MS wrote has nothing to do with collecting, at all.  I find the letter exaggerated and substantially wishful thinking of what the US coin industry (for lack of a better term) fervently wishes will happen but that's another consideration entirely.  It's no different than the predominant sentiments I read from South African "collectors" after TPG inflated that price level until it crashed and burned.

35 minutes ago, Alex in PA. said:

Personally, I found Mr. Salzberg's letter to be both interesting and informative.  As for WC's "TPG are attempting to replicate the US "collecting" culture elsewhere" I can't recall one instance where anyone twisted by army to buy a TPG slabbed coin or pounded my head with a mallet to buy an NGC or PCGS graded coin.  If I absolutely adore a slabbed coin but would rather it be raw and in my album I just take a pair of pliers to the very tip of the slab and 'crack' goes the weasel!  And then I can be just like the Euros and put all my gold coins in a paper bag.  

My congratulations also to NGC for helping make my coin collecting experience more profitable and fun.

If you are substantially motivated by money in your collecting like so many US collectors especially on both this forum and PCGS, obviously you will be in favor of increased financialization.  I am not but you are free to prefer otherwise.

Whether you choose to keep your coin in the holder or not, TPG has still inflated the price level.  No one can deny that it has brought in a large pool of financially motivated buyers into the US coin market.

The inflated price of US coinage isn't an issue for me because I do not collect any US coinage.  But one reason I made this decision back in 1998 when I resumed collecting is because I couldn't afford hardly anything I considered worth buying and bought something else.

Obviously, like anyone else I would prefer to sell my coins for more than less when I sell it but TPG also inflates the price of what I want to buy just as it helps at sale.  Since I am a collector and never started collecting with a profit motive, I would rathe pay less.  I did make good money off of my South Africa collection but the only reason I changed to what I collect now is because of what I wrote here, the inflated price level for financialization created by TPG.

50 minutes ago, zadok said:

I would ask u to expound on ur statement ..."attempting to replicate the US collecting culture elsewhere"......im not quite sure how u envision this is being attempted, the numismatic world needs to know....

By attempting to make TPG prevalent in other countries, just as it is in the United States.  It's my opinion most of the demand for TPG for world coins is driven by US collectors but the TPG have also opened submission centers around the world.

Not sure where you are from but at this point going by the population data, it's predominantly accepted in South Africa (a market I know very well though don't live there), China and maybe Canada.  With Canada, I suspect (but don't know) it's substantially US collectors driving TPG preference but this is an assumption only, as there is a local service.  Also somewhat in Australia (mostly NCLT but somewhat in predecimal) and South Korea, though once again, I can't tell you whether most of the submitters are US based or not.

Particularly what's been happening since the internet made most coins available is that US collectors are shifting somewhat (a low proportion to this point but noticeable) to world coinage and world NCLT from US coinage.  For some (though not necessarily most) they can't afford what they want from US coinage, so they buy the better coins from other countries and while they are at it, inflate the price level noticeably due to the limited supply and use of the Sheldon scale. 

Due to so much "investing" in the US market, the US has an outsized percentage of affluent buyers (versus elsewhere) who are used to paying a lot more because US coins are so much more expensive.  So they run up the prices of the coins elsewhere where traditional collectors either cannot or choose not to compete, leaving them to buy the "leftovers" from the most desirable coinage.  (This isn't true of developed country markets but is most everywhere else.)  Local collectors may choose not to compete because there is no market locally at US prices and contrary to this article, coins are not financial widgets which can be sold as easily but must frequently be shipped for sale to the US to get a US price.

The good news is that this financialization ultimately will fail because these inflated prices are conditioned on first, the existing credit mania (which will ultimately collapse) and second, there can never be any scale in most countries where TPG will be widely accepted anyway.  US collectors may succeed in turning collecting into "widget" trading for the most desirable world coinage but most collectors aren't going to waste their limited collecting budgets submitting predominantly low value coinage because it makes no sense.

$50 back in 1889?  That was a lot of money for the time, especially for a ocin.

2 minutes ago, Quintus Arrius said:

The United States Government owns my coins. They are simply blissfully unaware of that fact.  I have two choices, neither agreeable. Provide proof I relinquished my holdings irrevocably, or continue subsisting at less than one-half the Federal poverty line -- my wife's social security check is exactly $119.35/mo, mine is marginally higher; she is not eligible for disability payments though she was deemed as such by medical professionals; we live in subsidized housing and I have used a free Lifeline phone for the past five years though I suspect I am no longer eligible for one. No one I know approaches the actual cost of my living.

I wasn't aware of your situation.  I read your two posts here in the context of a prior exchange we had in another thread where you stated that you consider it preferable that certain coins (at minimum) should be available for public benefit. 

That's fine, depending upon how it happens.  The core of the Smithsonian's US  collection came from the US Mint Cabinet.  Potentially, some of these coins would not have survived but concurrently, most of this collection and the British Museum's aren't available for public viewing.  Both are so large with inadequate display space that most of it is stored where no one sees it.  When I visited the British Museum in early 2000, almost no coins were displayed yet years later I read they have one of the largest in the world.

Now the ANS, I'll agree they provide public benefit but that's because for an administrative fee, it's available for research.  I would like to view their holdings for the area I collect at some point.  I have thought that if don't end up giving mine to someone I know, I'd donate it to them.  

35 minutes ago, LINCOLNMAN said:

More words of wisdom. I give myself an out by believing that I'm not "pre-occupied" by cons or other possessions, not most of the time anyway, Actually, when it comes to coins it's the research and the chase for me, more so than possession. 

There is a difference between being "preoccupied" and the inference in both of his posts which is nonsensical.

It's like being a collector yet not having a collection is simultaneously equivalent.  This is an oxymoron.  Someone can be a numismatist while owning no coins but to claim you are a collector while either not owning any coins or even having an interest in ownership is a contradiction. 

What kind of "collecting" is that?

To go back to the post where I made the comment on SDB, I can see why someone may choose to not use a SDB because they want continuous access but that is another matter entirely.

Lastly, like many other collectors, I have aspirations and goals related to my collection but concurrently, if I never bought or owned another coin in my life, I'd get over it and survive.  I can find other interests and I certainly don't "invest" in coins.

2 hours ago, Quintus Arrius said:

For what it's worth, I again requote Lord Bertrand Russell:

"It is the pre-occupation with possession, more than anything else, that prevents man from living freely and nobly."

Why do you own any coins then?

No, another US Mint product of no interest to me.  If I don't see it on a coin forum, I'll eventually see it on Coin Week's site.

9 hours ago, Quintus Arrius said:

When I was very young, my mother would take me to places that no longer exist anymore one of which was the Chase Manhattan Bank Money Museum.  And she said something that stuck with me all these years:  "Everything you could possibly want is right here. You don't need to spend money on it. You can come visit it any time you want."  I never forgot that.

If I shared your view, I wouldn't be a collector.  I am a collector because I want to own the coins.  I am mostly interested in my collection precisely because it is mine, not someone else's.

This doesn't mean that I have to own every coin I like or want to buy, whether in my series or otherwise.  There are many coins (even in my series) that I have not bought since I intentionally limit myself to collect below my financial means. 

However, if I found viewing coins (whether in museums, online, at shows or at dealers) a satisfactory substitute to ownership, I'd quit collecting, as there is no point to it.

To your example of a museum, when I visited, I mostly ignored the limited coin displays because the other objects are actually a lot more interesting and I'm never going to own those objects.  Viewing those objects in museums is interesting precisely because I can't own it but I don't see hardly any coin this way, especially using the exaggerated criteria of significance used by US collecting.

17 minutes ago, Quintus Arrius said:

Why?  Are safe deposit boxes prettier than they used to be?  

I have the best part of my collection in a SDB.  Prudent risk management financially and in my case, I would actually never be able to replace many of the coins I own in anything close to the quality I have.

I would prefer to keep my collection where i have continuous access to it but don't have a home where I can do that.  

This thread reminds me of my correct decision to decline participation in such a fake competition.

On 9/17/2020 at 3:06 PM, VKurtB said:

Some serious geologists maintain ALL accessible gold came from meteoric bombardment rather recently, in epochal terms. More could still arrive. …   …   ... INCOMING!

They also posit that there's enough gold in the earth's interior core to flood the entire surface with it to a depth of about 8-9 inches.

Is this a theory or is there any actual verifiable evidence to support it?

This sounds like yet another example where scientists and historians pretend to know and claim things that are only conjecture or have no realistic probability of ever being confirmed.

The first one sounds somewhat plausible to me, as it would explain why ancient cultures originally held gold in high esteem, despite it's limited practical usefulness.

The second one...never mind.

On 9/17/2020 at 3:08 PM, VKurtB said:

THAT is the damnedest stupidest thing anyone ever said anywhere. Typical for PCGS. 

 

Just because MOST of PCGS' business is crack-out and resubmit, doesn't mean it all is. Some of what I buy on Saturday may very well cross our esteemed hosts' threshold.

Not that I consider it often accurate, but PCGS Coin Facts estimates contradict this thinking also.  Even though some coins in the highest grades have been resubmitted multiple times, there is still a large gap between the estimates and the populations, often or most of the time.  

The best example I can think of is the 1802 half dime where the combined population is 14, excluding any PCGS "details" (which if any aren't available for viewing) and including duplicates (3 NGC AU-50?).  The estimate is 35-40 and it's my understanding someone purportedly compiled an itemized census about 75 years ago.  So while some could have been lost, shouldn't be close to that many.

Previously in a Coin Week article, Jeff Garrett made a similar claim though he wasn't specific.  He's been around for a long time and presumably has more direct knowledge than most but Harvey Stack contradicted him by responding to the article.

As many coins and large collections as Garret has seen, I think Stack is right.  He's presumably seen more.

On 3/1/2020 at 7:30 PM, Revenant said:

I think you're going to see it hit prices. Just look at what's happening to gold. You'd normally expect gold to be heading higher as a safe-haven play but it tanked on Friday - probably because people are getting hit with margin calls.

How much? Your guess is as good as mine.

What you are describing is tied to the current asset mania.  When the financial levitation act ends, nothing is going to be spared.

Higher gold and silver prices did little if anything to lift coin prices at the 2011 peaks.  It doesn't appear to be any different this time.

Among the more affluent, except those who happen to have much or most of their money in privately held small to medium businesses or commercial real estate, the current environment isn't noticeably reducing their spending power.

For the rest, it mostly depends if they are still employed.  Based upon where the job losses have mostly occurred at least until a few months ago, I don't think collectors who work in those industries were bidding in auctions anyway; mostly lower income to "working class".  More recently, I am hearing of large scale (planned) playoffs among "white collar" professionals.  If true, this will eventually make a difference.

The reason coin prices did not crash during the GFC in 2008 is because the financial duress was temporary.

9 hours ago, Zebo said:

I like them better than the colorized basketball issue the mint just came out with. At least they are interesting. In the end, however - I just a classics guy.

It depends upon the coin.  Have you seen the 2013 Canada $50 Dimond Jubilee commemorative?  It's the one replicating  a painting showing the queen seated in one of her residences holding a scepter.  The obverse is the Gillick portrait.  I actually like that one.

I agree with you on the basketball coin though, more junk.

Doesn't seem like a strong price to me looking at prior sales in the listing.

4 hours ago, gmarguli said:

There is no reason to believe that these type coins will be sold to collectors. There are a lot of investors looking for places to invest. 

Look at the rich Chinese. They'll spend a few million on a house in the US that they haven't seen and won't live in, just to get their money out of China. Why not spend a few million on small items that can be safely stored in a bank box out of China's reach?

I can give you many reasons why neither non-collectors nor non-US collectors are going to buy it.  If it was anything other than a virtually zero probability random event, the price level would reflect it.

The first is that the overwhelming proportion (wealthy or not) have never even heard of these coins.  Contrary to what US collectors believe, neither are that prominent, except to US coin collectors.  Outside of coin collectors, maybe a few percent who can afford either have both heard of it and remember anything about it. 

Generically, you could ask any random number of Americans (never mind from elsewhere) and except for collectors, it’s possible none will even know dollars were minted in 1794.  You could ask different questions to elicit the same answer and they still won’t know.  They don’t care because the coin or numismatics is irrelevant to them.  They would only possibly know of either coin from exposure to the mountain of trivial facts dumped on them continuously through the internet.  Except for US coin collectors, those who study early US history, economic historians and maybe potential “Jeopardy” participants are the only others with a motive to know anything about these two coins.

Are the most affluent US collectors familiar with the thousands of equally or more prominent art objects and other collectibles?  Do they know most of these objects exist either?  The answer is obviously not, either at all or only in very low proportion, since most of them don’t know much if anything about the most prominent world and ancient coins.

I have read your similar posts before.  My inference is that what you describe is mostly limited to the Northeast.  Higher population density of families who have lived in the area for a long time.  Most of the rest of the country seems to have a much larger proportion of short termers.

Some interesting stuff for a local small town (?) auction.