World Colonial

Current events are in no way positive for the coin price level.  Any such inference is ridiculous.  Coins are a combination of a collectible trinket which serves no functional purpose and an "investment" which is relatively illiquid even under much better circumstances.

The very bottom end of the coin market may hold during this period but then that's because it's overwhelmingly a substitute for alternative forms of low budget consumption.  

If anything close to courrent conditions persists for any extended period, I think the range which will be affected is much broader than included in above posts.  In US coinage for sure, probably 95%+ is available anytime, so there is certainly no reason to rush and buy into a (potentially falling market.  The higher end will hold up if the financial duress is temporary as it was in 2008-2009.  It won't if it's like the 1930's even if the economic environment is better.

Where it isn't a substitute for consumption, the only reason (and I mean it literally) most coins sell for current prices is due to the buyer's belief they can get most or all of their money back and only a low proportion of the supply is offered for sale at any given time.

If it gets to the point where a noticeable proportion have to sell whatever they have to raise cash, many coins are going to crash.  The first candidate is common US 20th century key dates in the most widely collected series.  

8 hours ago, leeg said:

When compared to the high's of the 1980's:  early commemoratives are vastly undervalued. They all have their own "story" to tell. Good and Bad.

The 1980's high was the result of the TPG bubble.  It was a one-shot deal and unlike the financial bubble (which is almost certainly bursting now), it's never coming back unless someone intentionally corners the market.

2 hours ago, GoldFinger1969 said:

Aren't they down bigtime from a few years ago ?

This is an example of what I was referring to in my last post.  I don't know what most of these coins cost now without looking it up but it's an example where the probability is at least 95% that most of this coinage will go nowhere financially.

Most Barber coinage in circulated grades (including fine) isn't considered particularly attractive.  Circulated coinage in general increasingly appears out of favor (and has been) because an increasing proportion of the collector base would rather buy higher quality coinage.  It isn't particularly common but isn't scarce either,

I consider common nice Barber quarters in MS-64 at a cost of $250 to somewhat more to represent good collectible values (among the best in US coinage IMO) but I wouldn't buy it with the expectation of making any money. 

Even if I thought the foreseeable future was positive for the US price level (which I don't and it has nothing to do with COVID-19), I wouldn't buy hardly any US circulated coinage with the expectation of appreciation.  Maybe from the series up to capped bust, a limited number of the scarcer or rarer dates from later series, and a few common but widely collected key dates.

1 hour ago, GoldFinger1969 said:

Wow, a 12-year old thread....wonder if some of the posts have aged well. 

I'll put in a plug for my favorites, the Saint-Gaudens DE's.  Specifically, I think a great value is to buy the common years in MS62-63 grade as a substitute for bullion.  Maybe even the AU58's.

You get exposure to gold...you pay a miniscule premium to gold to get a coin with a great historical and numismatic history....and it's affordable as an investment. 

Hey...who's to say some tech billionaire or social media trendsetter with a few million followers doesn't pull a Kim Kardashian and say he's buying something like generic Saints....gets tens of thousands of his/her follwowers to buy the coins over the next few weeks or months ?  You could see a stampede literally overnight.

Could happen, folks.  Not saying it will or predicting it will, but all you need is one afficionado or gold bug among a guy or gal with an active Twitter or Instagram account and.....POW !!!!!!!!!!!!!!! 

Common Saints are bullion coins, just like the common dates in the predecessor series.  US collectors may not like to hear this but that's how much scarcer but less preferred "world" gold has been priced for decades.

Going by the TPG data and unless the collector base is a noticeable multiple of my estimate, the vast majority of these coins are owned by bullion stackers and not collectors.  Some collectors will buy it for the reason you gave (as a hybrid "investment") but the overwhelming majority of the base cannot remotely afford it and won't ever own a coin in this price range for the rest of their life.

As for the prior posts, I already know without even reading all of it again that most are simply what the poster either likes or already owns.  95%+ of such claims are going nowhere financially unless the entire coin price level moves up noticeably.  I'll take the "under" on that outcome.

1 hour ago, cladking said:

The number of circulation  Ikes graded is a fraction of the number of Morgans.  I'd be surprised if this doesn't apply to other 19th century US coins as well. 

Yes, only the ASE, Peace dollars and a few pre-1933 gold have comparable populations to the Morgan dollar.

As a proxy for potential ungraded populations, I have looked at PCGS Coin Facts estimates for a reasonable cross section of US coinage.  On numerous occasions, I have also read comments that a much larger proportion of even more expensive US coinage is not graded.  These estimates support these claims.  As one example, the estimated survivors for the 1802 half dime is believed to be 35-40 based upon research performed about 75 years ago.  The combined TPG data (excluding PCGS Genuine which I haven't bene able to confirm) was 14 the last time I checked and this might even include duplicates.  (All three NGC coins are AU-50.)

Existing estimates (regardless of source) are also probably usually understated, especially for non-US coinage.  (I believe PCGS Coin Facts is vastly overstated for practically all US 1965-1998 MS-65.)

On ‎1‎/‎29‎/‎2020 at 7:05 AM, Kirt said:

I have a different opinion than both of you on this point. I think the diminishing submissions and profits would happen so far into the future that for all practical purposes it is not meaningful. Additionally, investment in digitization of parts of the grading process would reduce overhead long-term and therefore maintain profitability. The first effect would be a decrease in guarantees being honored, which would only be positive from a bottom-line perspective. TPGs would also then be capable of devoting their resources to developing additional revenue streams related to the graded coins; as the cost of grading decreases the number of coins being slabbed could be expanded into lower-graded circulation tiers through introduction of new super-economy service tiers at lower price points - if done well, you could make it worthwhile to slab coins in the $50-75 price range or even a bit lower, vastly expanding the number of slabbed coins.

However, where I completely agree is the short- to mid-term; that's gonna be a mess. The way my industry addresses mistakes is by understanding how they happened and training employees on what went wrong using real events. We show them using real documents, materials, whatever we have to hand where the error occurred. TPGs could easily do the same with a combination of high-resolution images and videos of the coin in hand. The problem with this is I strongly suspect - based on what I've experienced from collectors and dealers - that part of this hobby is holding strongly to one's subjective opinion in the face of overwhelming disagreement. That kinda makes learning from prior mistakes a difficult thing. 

It's my opinion that the TPGs are going to have a real longer term problem with submission volume that isn't fixable.

I have never seen a breakdown but my assumption is that a substantial minority or maybe even majority now and in the recent past is modern NCLT.  I expect a noticeable decline in the intermediate term since I concurrently expect silver prices to be much lower for several years.

World coinage aside from NCLT?  In most countries, there isn't enough supply worth grading because it doesn't exist.  In countries with longer term traditions of collecting where it does, it will take a culture change toward a preference for TPG.  Even if this happens, much of this coinage is so common that it isn't worth grading even at lower grading fees.

US coinage?  Same problem.  The largest supply outside of NCLT is in 20th century classics and moderns.  Most of this coinage apparently financially viable now will never be graded, as any noticeable increase in the populations would send the price level crashing, even from its supposedly low current level.  Decades from now, I expect most of it to sell for less than the grading fee even where it sells for a noticeable multiple now.

The problem for the TPGs is that a stagnant US price level (purportedly since at least 2008) and limited growth elsewhere combined with continuously increasing operational costs doesn't "add up".  I first submitted in 2005 and grading fees have increased noticeably which makes it uneconomical to submit coins I previously did.  This is also going to negatively impact prices as many coins aren't very marketable if sold outside of a holder.

As for this quarter, the buyer paid most of the price for the label.

9 hours ago, Coinbuf said:

Some great thoughts and perspectives everyone thanks for the replies.  My thinking in tying this to coin auctions and prices is that if the market falls further many people will see a reduction in asset wealth and that could (or could not) be a wet blanket on non-essential spending like collector coins.  And I'm only expecting this to affect (if there is any change) the upper end of the coin market, not the very tip top trophy coins that the super wealthy buy but the next level down.  We don't yet know how or if the coronavirus will have any significant direct impact on the US economy due to business shutdowns or the like; but there will be some impact due to supply chains from places like China being disrupted and that is behind some of the chaos we have seen in the last two weeks.  between this and an election year I think that factors are in place for some buyers to pump the brakes on spending in the near term, I'll be watching with curiosity.  

Expected outcomes depend upon individual assumptions.

For those who believe this will blow over and nothing else will change significantly, no reason to expect any adverse impact on prices.

This event might be the trigger, but even if it isn't, if the economy rolls over (led by the financial markets first as always) and it's noticeable (as it should be given the 10 year artificially induced expansion), it's going to effect practically all coins noticeably.

The lower end (especially US) has other longer term issues that aren't related to this incident and aren't going away either. "Lower end" is subjective but I'd describe it as the coins the lower 80% (budget wise) of the collector base buys.  As an example, I'm looking to sell a 17th century MS Spanish silver coin.  Somewhat comparable coins on Heritage sold for less than I paid for this coin (ungraded) 15 years ago.  This isn't some extremely common coin like practically every 20th century US  It's presumably primarily collected in Spain but with a very small collector base.

On the most elite US, I'd expect most of this low number to be held off market assuming the buyer can afford it.  It's very unusual for this coinage to sell at a loss since I have been a collector because the long term trend has been mostly up. For one level below, I probably wouldn't consider most of it to be "elite" while most other US collectors do.  Here presumably we are talking about coins with a preferred eye appeal or (near) the top TPG grade that are otherwise not that difficult to buy.  Or, something which is actually rare but is considered more esoteric.  Under extended adverse economic conditions, I expect the not really rare but very expensive coin to lose noticeable value.  I've seen it on occasion even without an extensive search.  Most of this coinage isn't really that interesting given the price.

Agree with the above post.  Buy what you like within your financial means for recreational purposes, not as a quasi "investment".

I wish I could find a way to take equivalent pictures with my phone.  That's really good.

3 hours ago, Revenant said:

If you want to talk about "normalization." I was born in 1986. Try living your entire life in this regime!

So true.

I also left out a fourth and most important reason.  A belief in something for nothing.  That's what a belief in a permanent never ending bubble represents.  Absurdly overpriced asset prices, lowest aggregate credit standards in history and artificially cheap credit.

13 hours ago, Revenant said:

I agree, but I find people tend to dismiss this view. I think when the bubble pops it will be very very bad but I'm not convinced this is the end yet. There's still too much optimism. That 1300 point dead cat bounce yesterday shows that plenty of people still want to believe and with easing this could yet continue 3, 5 or 10 more years.

Several reasons for this common belief.

One:  Lack of historical context.  No, history does not repeat itself exactly since people aren't robots but it's relevant because enough people (including decision makers managing others money) believe it and act on this belief.

Two: Hubris and false confidence in the ability of governments and central banks to prevent falling living standards and market declines.  They can't.

Three: Per the above post, it has been going on for so long that it's considered "normal".  I date the origin to August 13, 1982 and "lift off" to either April 20, 1994 or November, 1994.

I think you're right about the level of optimism but to a point only.  Market participants have been conditioned to "buy the dip" due to FOMO but concurrently, the two market crashes in the prior decade have also conditioned enough of them to sell under the theory that it's better to panic first and beat the rush.  It's easy enough to think of market declines or crashes having no real world consequences until it actually happens.  Those who managed to recover from 2008 or prosper since have 12 fewer years now.  This matters, except to those who ignore reality.

Coming back to coin prices, I keep hearing how weak the US market has been since 2008.  Considering that this is the 10th year of an economic expansion (an artificial one mirroring an increase in government spending but still in process anyway) with these bubble conditions, if coin prices are weak now, what's going to happen later?  (This is a rhetorical question.)

It isn't just US coins either.  Of those I follow, South Africa had it's own bubble which flamed out at YE 2011 or in 2012 and has since crashed.  Coins in other series I own or occasionally follow have also gone nowhere or lost value going on 15 years, despite that many (maybe most) seem to think that world coin prices are doing great.  Some have, but it depends upon what you collect or follow.  I'd guess a low minority have (the ones collectors want the most or been subject to financially motivated buying) since most collectors have no idea what most of these coins are worth, now or previously.  In this coinage, what I have seen is that a minimal increase in known supply weakens prices noticeably because there is little demand.  It's anecdotal but it isn't uncommon when I check a coin, it's selling for less or about the same as it was years ago.

21 hours ago, Revenant said:

If the market was otherwise healthy, I'd agree with you, but I don't think the market is healthy. I think we were close to a major recession - maybe something worse, like another credit crunch and financial crisis - before this happened. I think this has burst the mood of hope in the market and I don't think that's going to come back. But I could be wrong.

I'm with you except that I consider the current environment the biggest bubble in history.  Didn't have a proper opportunity to answer the last time someone else questioned this claim (was using a terrible Spanish language keyboard while out of the country).  However, this opinion is easy to support, whether the bubble is over now or not.

I don't remember a specific event coinciding with a major market top.  (Psychology - the real driver behind market movements - usually leads and never.)  But given the exorbitant historical relative over valuation, I agree with you.

As for coin auctions, I don't think this event is a particular factor either way.  If it's negative, I would expect it will be at the higher end due to falling asset prices.

Not sure it was this one, but I used to see one similar for 39c at my local coin stores at the time.

I can't set any collecting goals in advance.  I can only buy what comes up for sale which is unpredictable and infrequent.

In 2019, I was able to buy five coins I would describe as significant to my collection.  So yes, a successful year by my standards.

This month, there is one coin of particular interest to me coming up for auction.  I actually hope it fails to meet the reserve, as I think it is both over graded and not worth the minimum bid.  I want to buy it but only later and for less.

I have owned two from Bolivia in the past but none now.

As for US patterns which I presume is the intent of the OP, I have no interest in buying any.  Even as far back as 1987 when I considered buying what I recall as J-228 (1859 IHC with the shield reverse), all were too expensive.

Aside from a few elite pieces which are far above my price range, these transitional patterns are the only ones which interest me.  I consider the others disproportionately overpriced for what it actually is.

1 minute ago, SilverShilling said:

I participate in Chilean FB Numismatic groups, and cuartillas (which if you read my statement carefully, is what I was referring to), are posted there with some regularity, including some dates and a type which is seldom seen outside the country. Some of these may be MD finds, something which would not be unusual for these tiny coins. 

By the way, I would never make a statement which is 'untrue'. This statement is backed by my 35 year + experience with latin American coinage. 

Like I stated in my last post, I have not looked for the coins diligently.  Apparently, it is more common than I thought.

I was using Peru pillar coinage as a point of comparison, as it is one I do collect diligently and have for many years. It's possible that the coins are more common than I believe locally but it's irrelevant to the point I was making because most aren't collectible (by US standards) anyway.  Most are either damaged (an example being holed) or of such low quality that few (if any) "advanced" collectors will want it.

I was also using the other quartillo mints as a point of comparison.  The other mints appear to be more common but this is an inference only.  I don't have access to the mintage records and have only seen data in isolation.  (CoinWiki lists 403,000 for the 1818 and 224,000 for the 1814.) I presume (not actually knowing) that since this series is more recent than Peru pillar 1/2R and 1R, that the mintages aren't "low" but can't confirm it.  Most of the Peru pillar 1/2R have recorded mintages from slightly over 100K to somewhat over 400K and 1R from slightly over 100K to about 250K.

If so, then yes, I can see these coins existing disproportionately in low quality by the hundreds or maybe a few thousand on occasion because it's consistent with a very low survival rate but on a large mintage for the time.

On 12/29/2019 at 2:13 PM, Abuelo's Collection said:

I am sure even @World Colonial will agree these are key by any standard...

Happy New Year to all!

 

The 1832 CAR coin is certainly a key date.  I am not familiar with the scarcity of the other two but given what I have seen of your collection, agree with you.

On 12/17/2019 at 8:24 AM, SilverShilling said:

Thank you for your reply, @World Colonial, I collect Santiago mint coins, both Colonial and so am always searching for interesting pieces and I agree with you, nice So mint cuartillas are not easy to find. I do think, however, that they are more plentiful in Chile (among local collectors) than abroad.   

 

 

I will be surprised if this is true, except maybe in the lowest grades.  Most of the better Latin coinage seems to be owned elsewhere, mostly by US collectors since they have the affinity for it and find the coins cheap versus US coins.

As one example, on one occasion someone posted pictures (on another forum) of the Peru (equivalent) mint collection pillar coinage.  I can't tell you if the photos included all of it but the five denominations were of low quality, damaged or both.  Since I know the mintages disproportionately were not low, it should be evident that if the coins were available in any supply locally, this collection would have better examples.  The Mexico national collection is much better but much of it still consists of "problem" coins.  To my knowledge, much of it was donated by a prominent collector.

I have not searched diligently for this series but have looked for it, regularly.  A few of the dates are common or relatively common but that is all: 1813 Mo, 1821G and 1817So appear to be the most common and I own all three in MS-66/MS-66/MS-67.  I would describe a few additional dates as somewhat or occasionally available in better quality but that is all.

You are free to believe whatever you want.  It does´t change anything I told you.

Cycles do exist.  People get overconfident and make bad decisions which matter.  No different than any other area of life.  

If you don´t believe there is a bubble now, you´ll never believe there ever was one or ever will be.  No point in even debating someone who beluieves that. 

The concusion I draw from your posts in that it´s different this time.

2008 didn´t happen because anyone listetened to the pessimists.  It´s easy enough to show it.  People collectively changed their minds, the reason doesn´t matter.

Your reply displays your ignorance of financial and economic history.  No, of course there is no reason for it, for someone who believes people should behave like robots instead of real human beings and collectively awful economic decisions should have minimal or no consequences.  Under the logic you are using, there would never be an economic contraction anywhere since the same reasoning applies.

Every prior financial bubble has burst with negative consequences - no exceptions to date, not even one.  But this time is different, right?

I never claimed it was the "end of the US economy" as someone here once claimed.  I'm definitely not a metals bug, owning no gold or silver.  I have frequently argued against absurd claims on imminent hyper inflation or the USD losing reserve currency status.

I have claimed that most Americans (and by implication, most everyone else) are going to be poorer of a lot poorer when borrowing isn't an option under the lowest collective credit standards in history.  That's a reasonable inference confirmed by history.

To give everyone an idea of how weak economic conditions have been during the current US economic cycle, it has taken over $11T in incremental public debt and (near) zero target rates to achieve about 2.5% annual GDP growth since 2009.  Things are so great now, the Federal Reserve lowered its lending target three times this year and reinstated QE to the tune of $300B the last three months. If federal debt growth in this expansion approximated what it did immediately prior to the GFC, economic growth would have been (near) zero or negative most of the time.  

Unlike you, most people don't have effectively guaranteed jobs for life where their employer can raise everyone else's taxes to pay their salary, benefits and pension.  It's easy enough to be dismissive of the financial stresses most people face every day from your safe ivory tower.

24 minutes ago, Just Bob said:

The price that it is estimated to bring at auction - $20k - $30k - seems really low to me, considering there is only one other example known, and this one is, by far, the finer of the two.

My opinion too for a British coin.  I wasn't aware of the scarcity though and it may not be as well known as a coin like the 1930 or 1933 penny (can't remember which).

With the coins I have owned, NGC will also "net grade" a "details" coin.  I'd rather they just assign the numerical grade based upon the wear and add a description of the problem.

On ‎4‎/‎9‎/‎2019 at 1:45 PM, Matt_dac said:

There is a seller on Ebay who appears to have 10 of them remaining available for $100 and $139 depending upon the listing (seller has multiple listings).  I appreciate the enthusiasm it has created but I think 2M circulated quarters will be worth 25 cents very soon.  I'll check my change and maybe get lucky for a flip, or not. 

If the mintage is 2MM, even if only 1% survive "essentially as struck", that's still 20,000.  The survival rate will almost certainly be noticeably higher.  Far too common to support a price of $100 to $139 except for the condition census coin if the count is relatively low.

Congratulations.  I don't know how hard it is to complete but I don't perceive it as easy and I know it's quite expensive.

Now you can move on to King George V.  I know there are at least a handful of quite scarce (and expensive) coins here, starting with the 1923 South Africa circulation strike and one from Canada, I believe the 1916.

1 hour ago, Revenant said:

I think he's wrong about at least one thing: if a common Morgan is $200 in MS66, $750 in MS67 and $5,000 I don't think that will last forever and it will prove to be a bubble. There IS subjectivity and a one point move up or down is always possible and many of the people buying these can't tell the difference between a 68 and 66 consistently. That pricing won't last forever.

Didn't this same person write an article some time ago saying, essentially, ask yourself, if TPgrading went away tomorrow, would your purchase still have value / be smart. I think the answer there is a BIG "No" with condition rarities.

The example you gave is an example of how the "hobby" has been financialized. 

US collectors didn't experience a collective epiphany with the widespread adoption of the Sheldon scale in 1986 where they miraculously discovered that the highest TPG grades were so much better than slightly lower or even much lower quality coins.  Concurrently, most collectors elsewhere don't collect in ignorance where they fail to understand the supposedly compelling nature of these quality differences.  It's predominantly for the three reasons I gave here.

This is evident in the differences between US collecting and practically everywhere else.  It's also evident in South Africa (one of the few foreign markets to fully adopt TPG)  where "collectors" have created an even more irrational price structure.  The price level is much lower but the price spreads are even wider.

Accepting it as a bubble is difficult for most people first, because it's hard to convince someone of something when it's contrary to their personal interest and personal preference.  That's the reality for bigger budget US buyers generally.  Second, bubbles don't normally last decades but this micro bubble with the higher TPG grades (and CAC) is a symptom of the real mega bubble, the one in worldwide credit which is the greatest in the history of civilization.  

It has been a process to get to this point and it's end will be a process but when it does, the price structure and price level will return to more closely resemble what it used to be before the hobby was financialized.  In between though, there is likely be another massive gold and silver bubble when the financial system comes under stress.  That should provide noticeable price support temporarily, though I expect temporarily to last for quite some time.

Too late now but I would have bought these coins already graded in the holder I wanted and at the price corresponding to the grade acceptable to me.  I buy most of my coins ungraded but that's partly because it's the only option.