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The Count's OPINION on coin prices...

13 posts in this topic

For what it's worth.....an OPINION.

 

I think moderns will take a financial drubbing. They are not RARE. They may be FUN, but not worth big MONEY.

 

There will always be a market for SUPERLATIVE coins. However, I will say that having had NO money and having had lots MORE money, things change. The more money you have, the more opportunities are presented to you.

 

I believe we as a nation are going to enter a rapid and unprecedented decline which will touch all of us. Our debt is catastrophic and I believe the housing bubble is very close to popping. All of this will tend to push "hard" money towards gold and silver bullion for a while. It may also benefit numismatics but to a lesser degree.

 

My personal money is on key dates ONLY and in MID grades. The only high dollar stuff I have kept is rare gold. Hi Relief and early kinda stuff and CC gold.

 

I don't recommend high CONDITION common gold.

 

Nor CONDITION Morgans. I like DATE morgans.

 

I think that once some REAL bargains show up in rental housing areas, big money will stop watching coins for quite a while and be pursuing INCOME investments.

 

In fact, with the baby boomers about to retire, MOST of them will need INCOME. And I don't think they have any INKLING of how tough it will be to get. In their search for income, they will decide to let go of some coins.

 

But the collectors will always remain. Even the ones who might sell condition coins for investment money will probably still have the desire for more affordable coins in lesser condition.

 

While the old adage of condition will still be desirable, I think the people with disposable income will be few and far between.

 

household average retirement savings

 

Above is a link to the HOUSEHOLD average retirement savings.

 

24 grand ain't going far.

 

So, the Count's opinion is (for coins) rare dates, average condition, caution.

 

an OPINION.

 

The Count has been WRONG before (believe it or not)

 

wink.gif

 

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I have read your prediction and I must say I whole heartedly agree with you. I too view the future economy to be one of terrific burden, and maybe even despair. Americans are in debt like never before, and worse still they have no money to pay these debts. Also, tens of thousands are going to one day realize the 300K house they just bought isn't worth nearly that and because of the credit card and other debts they will fail to meet their mortgages, thus creating thousands of foreclosures. Sell offs of evrything will occur, including coins and precious metals, jewelry, and everything else tangible.

I agree totally on the key dates in mid-grades, fine thru MS60, tops. thumbsup2.gif Moderns are going to get decimated. I feel almost to the point where some will be worth more cracked out and spent at face value, 893whatthe.gif(ha ha, just kidding, not that bad, but bad!). 27_laughing.gif

Collectors will always be there. Coins of rarity, beauty, and originality will always be worth good money. And just as the sun will rise and fall, the market will drop, then rise, and then drop again.......and so on. It's the cyclical nature of everything that ever was, is, and will be.

893scratchchin-thumb.gif

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Interesting observation. To me it feels much like 1978. U.S. manufacturing was suffering then too, and the trade deficit was a pretty big concern following the oil embargo. Big steel was in trouble, and the U.S. auto manufacturers were on the skids. By 81, we were adjusting to double digit inflation, unemployment, and interest rates. That, coincidentally was the year the PC made it's debut. IMO technology rescued us and we were it's sole beneficiary for many years. That industry has finally migrated to cheaper labor and manufacturing. I wonder what we'll export that'll fuel our next big boom. The areas where we excel are currently medical technology, bio tech, entertainment, military hardware, aircraft manufacturing, etc., but none of them is viable enough alone to support our economy. We'll see. Unless we discover what it is that we do better and cheaper than the rest of the world, our standard of living will quickly match theirs. Second mortgages and cheap credit are only a temporary fix.

 

How will economics affect collectors? I think we're seeing a bifurcated market, where very high quality or rare coins are moving to strong hands at large prices, and the remainder of the market is softening. My personal approach to the hobby is perhaps different than many. I feel every coin I purchase is money spent, with no expectation I'll ever see a cent of the money again. Perhaps that sounds ridiculous, but it is analogous to my other hobbies. I play golf. As an active golfer, I estimate I spend about $100 a week on green fees. I spend about $500 per year on new equipment. I probably spend $500 a year on accessories. Once a year, I usually take a golf trip to the beach ($500). My annual hobby expense is $6700. The only thing I'll ever have to show for it is great memories, some expertise, and good friends. I collect because I enjoy it. I'm sure it's sensible to be concerned about the future value of my "investment", but when I count my return, I'll be sure to remember the value of the experience. I suppose it's all about perspective.

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Great points all...it does kind of feel like the late 70's. However as already pointed out, many of us are DEEP in debt. The wife and I are just about to purchase a home and I made sure all of my credit cards were down to nothing or almost nothing. Cut back on coin buying for now. I think we'll enter a time where we need to be careful with our finances. Some people will be hit hard. I hope that I am wrong but we'll see.

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I don't see any possibility of moderns taking a hit without classics taking a far higher hit. Moderns have been propping up the markets since '95, without the influx of fresh money and the anticipation of new collectors enterring the market few could justify spending money in a hobby where the average age is in the late 40's and increasing nearly nine months every year. Sure, there's an outside possibility that high grade coins could take some losses, but nothing happens in a vacuum. This would impact the entire market to a greater or lesser extent.

 

The modern market however is much larger than just the few high grade coins, and this market can not crash, at least not without the collapse of the entire market. It is an impossibility that every current newbie would suddenly decide that only classics have inherant value and immediately switch. Wishing doesn't move the world.

 

Actually this is all moot anyway. The economy has bottomed out, the stock market has also bottomed out and while it may not soar for years yet it will keep up with inflation. The dollar will continue to lose ground as it weakens and the imports will level off. Exports are unlikely to increase greatly but we'll be baled out of the mess with the inflation that the fed has artificially staved off for two decades. People will continue to be drawn to coins because of historic interests and a desire to have complete clad states sets. Many will go on to become serious collectors and these people will be the next generation of collectors.

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IMHO, modern Pop-tops are being held up in prices by the Registry phenomenom. This phenomenom is an artiface that can not be sustained indefinitely. The overinflated Registry moderns will have a price correction eventually. Most are becoming all the more common, with time. In fact, many believe that the price correction phase has already started for many modern series.

 

I have only one PCGS-PR70DCAM (a nickel) which I paid $xxx. for 2 years ago when it was tied for Pop-top with a couple others. Now there are 4 times as many graded and, guess what? My coin's value has tanked. Surprise!!

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.

 

I have only one PCGS-PR70DCAM (a nickel) which I paid $xxx. for 2 years ago when it was tied for Pop-top with a couple others. Now there are 4 times as many graded and, guess what? My coin's value has tanked. Surprise!!

 

You're quite possibly right, of course. But what would be the value of this PR70DCAM if it were a Morgan dollar or a large cent with a similar population? Obviously supply is only part of what makes up price, but what if this coin had the same demand as a buffalo or a wheat cent? And yes, it's entirely possible there will never be this kind of demand for it, this is merely a rhetorical question.

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Interesting thread. I feel the housing bubble has already slowly popped. I own property in Utah, and have spoken extensively with my listing realtor. Housing in the Salt Lake Valley in the entry level housing is near collapse with 30 year high foreclosures. So many homes are VHA owned, that they go begging for buyers. In a large town near SLC, Tooele, the town is littered with foreclosed homes causing blight. And Utah is only fifth on the scale of state foreclosures rankings. Indiana is first. In California, I talked with a very astute realtor who sold my home four years ago and who deals in West LA. Prices are firm, but escrows are falling through on new purchases at a dramatic rate. Seems many banks are getting nervous about lending $600,000 on two bedroom, one bath crackerboxes. Job security in many positions of $100,000 to $150,000 a year is waning. Imagine, you have to earn $150K per year to afford a $450,000 home, which is generally small by national standards. In addition, many foreign companies are buying long established companies, forcing investment capital out of the USA. The crisis hasn't affected the high end coin buyers, and probably won't. The net affect will be nicer coins taken off the marketplace and the junk left over. Unless you own super neat rare or dated coinage, the junk may take a licking in the next two years.

 

TRUTH

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If history is any indication, prices on better material will soften as well. What normally happens is that prices soften, but no volume of coins are sold at these lower prices. IMHO, this reason for this is that scarcer, higher value coins are often closely held by people that do not lose or worry much about liquidity in slow markets. They just wait it out.

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The real killer is the FACT that Social Security has ALREADY told everyone not to count on it.

 

At today's interest rates, you MUST have SAVED a MINIMUM of $100,000 per decade of your life.

 

Dat happens to be 400k at 40, 500k at 50, etc etc etc.

AND .....worst (best?) of all ......ASSUMES a paid off house. That measly amount will get (in T-bonds) an income of 600k x 5% = $30,000 per YEAR. That's if you quit at 60 or so. Add in the meager SS and you get a very MODEST income. AND there are taxes on that.

 

aaaaaargh!

 

Coins that have traditionally been held in "strong" hands will stay in those rare hands, but the same coins in that $10,000 + range are ALSO held by Joe Doakses who will find the NEED to sell. And the "strong" hands are not "kind" hands.

 

Opportunities will abound in foreclosures and forced sales.

 

This ain't yer gramma's depression a-headin our way. This is the BIG one. The United States no longer has any manufacturing to pull out of it.

 

Big BAD times on the way. Get ready. Inflation will ONLY happen in "services" because America has lost pricing power forever.

And, unless polygamy is legalized, the US is just about tapped at what only TWO people can earn.

 

Hope I'm wrong, but every bet I am placing is telling me I am right.

 

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Chinook....

 

Bonds.....yes, bonds......as I think the slight play they are going through now will end with any stock market crash. If I am wrong, a couple of 2 year out "puts" will protect them at a low cost but still think the long bond will go to between 3 and 4 %. I am in a minority.

 

Also gold bullion. About 50 oz is in generic $20's but the lion's share is in 1 oz bullion coins.

 

Silver in any form of .999...........no silver junk coins.

 

Stocks

siri and xmsr .........just as a plain ol gamble. When the car companies begin next year to install the digital radios, they plan to finance the service charges into the price of the car. I think those 2 companies will soar.

 

Other stock is "o" Realty Income for their good dividend and OUTSTANDING business plan.

 

FAX..........An asian and Australian closed end bond fund that moves inversely to the dollar. A bet against the good ol US greenback.

 

Rare coins: Medium grades of rare stuff. 93s, 89cc, ccgold, bust dollars in F-VF, seated dollars just cuz I like em. AND they are so underrated as to be silly. And of course any mispriced or undergraded ....rare......coin.

 

And ........... CASH ! To take advantage of whatever shows up.

 

Paid off house cuz it don't matter what it's worth. It just keeps me from having to pay rent. So it is like an income investment.

 

An that's about it for ....now.

 

Tomorrow I may find sumpin new.

 

(When I see General Motors with a market value of ALL of its stock at 23 billion as of today, with DEBT of 232 bill and a PENSION deficit of 18 billion and a LOAN to float the pension debt of 13 billion.......I just don't see roses.)

 

 

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Overstated retirement assets based on optimistic bond yields and collapsing corporate assets are jeopardizing many Pension Funds. Pensioners are not secured creditors of these pension funds. These pension funds are simply common assets of the corporations, based on a nonsecured promise of pensions to their employees. Every secured creditor is in line in front of pensioners for asset distribution during liquidation. The best that the employees of troubled corporations may get is a percentage via pension insurance.

 

This trend, along with the projected shortfall of the "BIG LIE" about keeping Social Security solvent, coupled with retirement of Boomers, may cause gross deflation (depression) of the US Economy in the future. The present administration has lost over 5 million US jobs in 3 years and are now claiming that they (with little substative historical proof) can add 200,000 jobs per month during the next year (until election). As we speak, the rate of new job monthly growth is almost zero.

 

Their massive Tax Cuts have done little to nothing about creating wealth or job growth, but have swollen the debt to highs that even Ronnie Raygun could not imagine. Remember that we had a balanced budget three years ago! Plus, this administration does not seem to have a sense of what their goals are, how to get there, or any coherent Economic Growth Plan that seems plausible to anyone outside of Bush's circle. This administration has lost all economic credibility. No wonder Greenspan wants out!

 

sign-rantpost.gif Pardon my rant!

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